Uber Class Action Lawsuit Challenges ‘Actual Fare’ Pricing

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Uber, a popular ride sharing company, was hit with a class action lawsuit alleging that it misleads its “X” riders about the “actual fare” it charges.

Plaintiff Jacqueline Gayed claims in her class action complaint that Uber X riders are given material misleading and deceptive representations about the “actual fare” charged by Uber under their “upfront fare” scheme.

The plaintiff alleges that she noticed that the upfront fare pricing seemed to increase the costs of her Uber rides in 2016 and that her husband, an Uber X driver, also compared the fares and discovered that the price being charged to the rider was greater than he was being paid, minus Uber’s fees.

Unlike a regular taxi service, Uber charges more for its service when demand is high. Uber X riders are connected to vehicles operated by livery-licensed individuals and transportation companies offering low cost rides. In June of 2016, alleges the plaintiff, Uber introduced “upfront fares” that were supposed to let riders know in advance what their fare will be; however, Uber, on average, charges $1.98 more than the “actual fare,” says the plaintiff.

“With 250,000 Uber trips made per day in New York City, and with Uber X rides constituting the majority of rides, Uber is taking an additional $247,500 per day ($1.98 times 125,000, or half the daily trips) or $7.43 million per month ($1.98 times 125,000 trips times 30 days) from the Uber X riders in New York City alone,” points out the class action complaint. “Uber, moreover, does not permit riders to opt-out of the Upfront Pricing model.”

According to the class action lawsuit, an investigation conducted in February and March of 2017 revealed that Uber charged Uber X riders extra fees averaging $1.98 per trip in New York City than the fare paid to the Uber X driver for the same trip.

Gayed further alleges that the Technology Services Agreement, or the legal agreement between Uber X drivers and the Uber company, does not state that the fare charged to the Uber X rider using the Upfront Pricing model would be different and higher on average than the fare represented to the Uber X driver for the same trip.

“To the contrary,” alleges the plaintiff. “Uber actively represented to Uber X riders and Uber X drivers that the Fare charged to the rider for the ride was the same Fare remitted to the driver for that ride, less Uber’s fees and taxes.”

The class action complaint also alleges that Uber has restricted the means by which Uber drivers and riders can contact each other and does not simultaneously display the fare charged to the rider and the payment received by the driver.

“Uber knew, and failed to disclose, that the Upfront Pricing model was causing the Uber X rider to be over charged when compared with the actual fare incurred by the Uber X driver for the same ride,” says the class action. “[T]his is because Uber’s Upfront Pricing model uses a different, and longer and/or less efficient route, to calculate the Uber X rider’s fare and instruct the Uber X driver to use a more efficient route.”

Additionally, alleges the plaintiff, “Uber pockets the difference between the higher fare it charges the Uber X rider and the lower Fare which it represents to the Uber X driver as having been actually incurred for that ride.”

The plaintiff seeks to represent a Class of Uber X riders in New York who were charged under Uber’s Upfront Pricing Model for Uber X rides. The plaintiff alleges Uber is in violation of New York business law and has been unjustly enriched by the pricing scheme. She is seeking damages, refunds, statutory damages, and attorneys’ fees.

Gayed is represented by Catherine E. Anderson of Giskan Solotaroff & Anderson LLP.

The Uber X Upfront Pricing Class Action Lawsuit is Jacqueline Gayed v. Uber Technologies Inc., et al., Case No. 1:17-cv-03139, in the U.S. District Court for the Eastern District of New York.