Class action alleges that Uber charges consumers for longer route than it pays drivers

Posted on: April 11th, 2017 by Steve Larson

A proposed class action filed in California federal court alleges that Uber’s upfront pricing model charges passengers a higher fare based on a longer route, but requires drivers to take the shortest route, allowing Uber to pocket the difference. The plaintiff alleges that Uber instituted the new “upfront” pricing model sometime between June and September 2016. The upfront pricing model gives prospective riders using the Uber app a fare estimate based on a longer than intended route. Upon conclusion of the ride, the Uber defendants collect the upfront rate from the user based on the longer route and time calculations but do not transmit the full fare collected to the drivers (minus the per transport service fee to which the Uber defendants are entitled).

The complaint also alleges that the fare discrepancy is equivalent to workers being denied proper wages under California labor law. The complaint argues that although many Uber drivers are classified as independent contractors, they are actually employees based on the operating parameters that Uber places on drivers using its app, the complaint alleges.

The suit alleges claims for breach of contract, unjust enrichment, fraud by concealment, unfair competition, Lanham Act violations and independent contractor misclassification on behalf of a proposed class of all Uber drivers.

Uber has recently been successful at compelling drivers to litigate their claims in individual arbitrations, because of Forced Arbitration Clauses in its independent contractor agreements, so it is unclear if the public will ever know if Uber is engaging in this alleged bad conduct.

The case is Van v. Rasier, LLC et al., case number 2:17-cv-02550, in the U.S. District Court for the Central District of California.