Uber Class Action Lawsuit Challenges New ‘Upfront’ Pricing Model

The popular ride-hailing company Uber Technologies Inc. is facing yet another class action lawsuit over the methods it uses to pay its drivers.

According to the Uber class action lawsuit, which was filed last week in California federal court, the ride-hailing company shorts drivers by using a pricing model that charges passengers a higher fare for longer routes, but which requires drivers to drive the shortest route.

This pricing plan allegedly allows Uber to keep the difference in price, a practice plaintiff Sophano Van claims is unfair to drivers.

“This case represents a shocking example of an active, extensive, methodical scheme implemented worldwide specifically to defraud drivers,” Van alleges in the Uber class action lawsuit.

Van claims Uber manipulates the navigation data that is used to determine the fare paid by passengers and the amount reported and paid to Uber drivers.

The Uber class action lawsuit takes issue with the “upfront” pricing model, which was reportedly implemented sometime between June to September 2016. This upfront pricing model calculates an Uber app user’s total fare before the Uber driver provides any transportation services.

Van says that Uber represented to both drivers and passengers that the amount identified in the upfront pricing was equivalent to the “fare” and that the price was determined by considering a base fare amount plus a per-mile and per-minute charge for the estimated mileage and duration of the travel period.

“In the overwhelming majority of transportations,” this upfront price amount is the amount a passenger is actually charged for the transportation services provided by the Uber driver.

Van claims that, when a driver accepts a request for transportation, the passenger’s destination is entered into the driver’s application, and the driver receives navigation instructions that provide the best route to the destination.

However, Van claims that the software that calculates the upfront price displayed to Uber app users calculates the expected distance and time by using a route that is longer than the one displayed in the Uber driver’s application.

Van alleges Uber intentionally designed the software to utilize a longer route to increase the price that passengers pay for the fare. According to the class action lawsuit, Uber collects the upfront rate from the passenger but fails to transmit the full fare collected to the drivers.

“Instead, the Uber Defendants often transmit or provide the driver with a fee based on a reduced fare amount,” the Uber class action lawsuit states. “The Uber Defendants retain the difference in the fare charged to the User and the fare reported to the driver, in addition to the service fee and booking fee disclosed to drivers.”

Van says this upfront pricing model deprives drivers of the full wages they are entitled to receive under California labor law. In addition, the lawsuit claims that although Uber classifies its drivers as independent contractors, they should actually be considered employees.

According to the Uber class action lawsuit, drivers “are required to follow a litany of detailed requirements imposed on them by Uber and they are graded, and are subject to termination, based on their failure to adhere to these requirements (such as rules regarding their conduct with customers, the cleanliness of their vehicles, their timeliness in picking up customers and taking them to their destination, what they are allowed to say to customers, etc.).”

Van has filed the Uber class action lawsuit on behalf of himself and a Class of all other individuals who have worked as Uber Black, Uber Pool, Uber SUV or UberX drivers in California.

The Uber class action lawsuit asserts claims for breach of contract, unjust enrichment/restitution, fraud by concealment, violation of the Lanham Act, unfair competition and independent contractor misclassification.

Van is represented by Bobby Saadian and Daniel B. Miller of Wilshire Law Firm.

The Uber Upfront Pricing Model Class Action Lawsuit is Van v. Rasier LLC, et al., Case No. 2:17-cv-02550, in the U.S. District Court for the Central District of California.

Join a Free California Wage & Hour Class Action Lawsuit Investigation

If you were misclassified as an independent contractor or were forced to work off the clock within the past three years in California, you have rights – and you don’t have to take on the company alone.

GET A FREE CASE EVALUATION NOW