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Uber Eats Sales Tax Overcharge Class Action Lawsuit Overview:
- Who: A New York Uber Eats customer is suing Uber
- Why: The customer says Uber has been overcharging food delivery customers on sales tax when customers use a promotion.
- Where: The plaintiff is seeking to represent New York Uber Eats customers.
Uber Eats illegally overcharges its New York food delivery customers on sales tax when using promotions, raking in more than $5 million in additional benefits for itself at the customer’s expense, a new class action lawsuit alleges.
Plaintiff Anita Washington filed the class action lawsuit against Uber Technologies, Inc Nov. 5 in a New York federal court, alleging violations of New York consumer protection laws.
Washington, a Bronx resident who used promotions issued by Uber Eats during the pandemic, alleges thousands of customers have been overcharged on sales tax while using promotions.
She says Uber issues significant promotional offers to bring customers to its platform.
However, Uber has been charging sales tax on those promotions based on the full price of the order, causing customers to pay more sales tax than they should have, Washington alleges.
“In issuing promotions, Defendant calculates sales tax based on the price of the food items prior to applying the promotional discount, which overcharges its customers.”
For example, if a food order costs $100 and there is a $20 promotion on the food, Uber will still charge 8 percent sales tax on the original amount, thus charging $8 in sales tax, when the tax should have been $6.40.
“This overcharges customers by disregarding the effect of the $20 promotion,” the class action alleges.
Washington says, under New York consumer protection laws, when a purchase price is reduced through a store-issued coupon, sales tax is to be computed on the reduced price, not the original price.
Uber Eats Costs Customers Thousands of Dollars by Overcharging for Sales Tax, the Class Action Lawsuit Claims
“Defendant benefits from these small charges, given the high volume of its business,” the lawsuit states, alleging Uber probably rakes in more than $10,000 in the small overcharges made each day to thousands of consumers.
She’s seeking to represent anyone in New York who used Uber Eats and was overcharged on sales tax using a promotion. She’s suing under New York’s consumer protection laws, and for unjust enrichment. The lawsuit alleges more than $5 million is in controversy.
Washington is seeking certification of the class action, an injunction forcing Uber to stop the alleged practice, damages, costs, fees and a jury trial.
The lawsuit comes as customers are questioning the cut third-party delivery services are taking on each delivery, with some launching class action lawsuits over issues like fees being charged for “free delivery.” Click here to learn more.
What do you think about the fees third-party delivery services charge? Let us know in the comments!
The plaintiff is represented by Spencer Sheehan at Sheehan & Associates, P.C.
The Uber Eats Sales Tax Class Action Lawsuit is Washington et al., v. Uber Technologies, Case No. 1:21-cv-09157, in the U.S. District Court Southern District of New York Manhattan
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9 thoughts onUber Eats Overcharges New York Customers on Sales Tax, New Class Action Alleges
Yes I agree that this is unfair and unjust and happens to me multiple times
Oooooh this company just made me so mad dealing with them on Friday. Discount offers are a joke, so many added fees and nonsense. Add me!
How do I join this class action
So does this law apply to every state or just New York? I have just started using uber eats and paying for there “membership service” they claim it gives you free delivery fee, 5% of service fee on select orders – which I’ve never gotten. And 5% on select rides(which depend on distance I think) but I’ve never gotten that discount either. Even though the three rides I have taken were a 6 mile ride, a 0.5 mile, and a 0.7 mile away. All drivers were able to pick me up with in 2 minutes of placing that request. And yet I was charged over $11.00 for the one ride, and $8.00×2 for the other rises. Which also didn’t include my tip I added to the ride. I never recieved a 5% discount on any of them. And because It is so vague on if that is even going to happen , its a membership paid for without any responsibility to uber to actually provide anything with the service.
According to one of my orders I was charged taxes by uber eats, but according to the restaurant receipt I also had the sales tax the restaurant charged $2.76 (8%) tax while my invoice states $2.94 for uber eats sales tax —
$5.36 service fee (16.7% of my subtotal)
$0.49 delivery fee
And then prior to adding my promotional discount and fee discounts according to uber one membership. My tip 15% was applied to the full total.
It also said $5.75 of uber cash was applied to the order, which would have been a $5.75 deduction to my order.
But when it all settled my account showed
The total+ ubers 8.9% sales tax + service fee (42.49)
Promotional-$ 10.00, -$0.49 – $6.40 = $25.60 deducted from account
Then Second charge deducted was $6.40 for tip.
And $5.75 uber cash was applied to my invoice as an extra payment to something I’m not sure, but it wasn’t applied as a partial amount removed from total. Since uber cash is cash payment. I have another order like this. Sales tax was different than the restaurant (8.76% of order $$), service fee $5.91 (17.6% of order $$ added. But 5% discount was not applied)delivery fee $0.99 added but never discounted at no fee per membership order total pre-tip was $44.07
Add 15% tip $6.61
After all that then they deducted my promotional discount of -$25.00 off my first order. And charged my account $19.07 (that is with my tip still on that. But then I got a second charge posted to my bank account of $6.61 delivery tip.
So again I was charged 2 times $6.61 for a delivery tip
Once pre promotional discount. Then 2nd as a seperate charge on my bank account.
Is this normal for them.to do? And most people just don’t do the math ?
Is this even legal to do??
They are so shady! They separated my order total from my tip total. The tip was charged wrong, for a higher amount. When I contacted them they told me I only had an hour to dispute a tip but they waited more than an hour to put the tip through. Disgusting fraudulent practices from a Sammy company!
To clarify:
After I placed the order, they immediately charged everything to my debit card except the tip. I contacted them and asked to see what they charged me for the tip. They waited until an hour + to charge the tip under a seperate debit transaction. By the time they charged the tip, it was already too late to dispute it under their rules. They are scammy, not Sammy.
Please add me
add me
Please add me