Uber ‘Gratuity’ Charge Class Action Lawsuit Moves Forward

On Dec. 2, the court granted Class certification in a class action lawsuit against Uber for its gratuity charge practices.

In the Uber class action lawsuit, lead plaintiff Caren Ehret alleged that she used Uber to hire a taxi, and paid a 20 percent “gratuity” assuming that the entire 20 percent would go to her taxi driver. However, Uber allegedly kept 10 percent of the charge for itself, and another 2 percent for credit card fees, leaving just 8 percent to the driver.

Ehret included with the class action lawsuit a screenshot of Uber’s webpage from December of 2012, which said “No need to pay your driver – the metered fare + 20% gratuity will be charged to your credit card on file.” In addition, Ehret alleged that she received specific emails from Uber advertising its taxi service and its included, automatic gratuity fee.

The Uber gratuity class action lawsuit claims that calling the 20 percent fee a gratuity “is false, misleading, and likely to deceive members of the public,” because “the term ‘gratuity’ suggests a sum paid to the driver/owner in recognition of transportation service that is distinct and different from the actual fare.”

The “UberTAXI” service is separate from Uber’s typical service of connecting non-taxi drivers with riders.  In March of 2013, Uber discontinued automatically adding the 20 percent “gratuity” charge.

Previously, the Uber class action lawsuit survived a motion to dismiss. Now, the class action lawsuit will move forward and represent a Class of: “All individuals who received Uber’s e-mail with the representation that the 20% charge would be gratuity only, who then arranged and paid for taxi rides through Uber’s service from April 20, 2012, to March 25, 2013.”

By filing the Uber class action lawsuit, Ehret sought to represent a Class of everyone who paid for a taxi ride through Uber between April of 2012 and March of 2013. However, Uber argued that the specific advertising that lead plaintiff Ehret cited in the class action lawsuit was not sent to all Uber users, and the plaintiff could not prove that all users were deceived by the “gratuity” fee.

Ehret disagreed, pointing to alleged misrepresentations on Uber’s website, blog, and email advertising. The Uber class action lawsuit argued that class-wide notice of Uber’s advertising could be inferred because it was everywhere.

U.S. District Judge Edward M. Chen somewhat disagreed. He ruled that class-wide exposure to the potentially misleading advertising could not be assumed, because the Uber app did not advertise the gratuity fee, and the app is the only necessary part of using Uber.

However, Judge Chen did find that some of the emails Uber sent supported Ehret’s claims, and agreed “that there was a uniform and consistent misrepresentation throughout the class period.”

Judge Chen ordered the parties to determine how best the Class could be determined and notified, and agree on a timeline for the rest of the case.

Ehret is represented by Myron M. Cherry and Jacie C. Zolna of Myron M. Cherry and Associates, Hall Adams III of Law Offices of Hall Adams LLC, and Michael Ram of Ram Olson Cereghino & Kopczynski LLP.

The Uber Gratuity Charge Class Action Lawsuit is Ehret v. Uber Technologies Inc., Case No. 14-CV-00113-EMC, in the U.S. District Court for the Northern District of California, San Francisco Division.

UPDATE: On July 25, 2016, a proposed settlement has been reached in the Uber Gratuity Charge class action lawsuit.

UPDATE 2: The Uber gratuity charge class action settlement is now open. Click here to file a claim!