Uber Seeks Dismissal of Upfront Pricing Class Action Lawsuit

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Beleaguered ride-share company Uber asked a federal court judge to dismiss a class action alleging the company underpays its drivers through its new “upfront” pricing model.

Lead plaintiff, Martin Dulberg, alleged in his class action lawsuit filed earlier this year that Uber does not pay what is due under its contract. The plaintiff claims that Uber overestimates what to charge riders, but only pays drivers for the actual mileage and time then pockets the difference.

“Plaintiff’s claims rest on a misreading of the agreement,” said the ride-share company in its motion to dismiss. “The contract itself is before this court, and its written terms provide no support for plaintiff’s contentions. Adopting plaintiff’s interpretation would alter the bargain that the parties actually made.”

Uber argues that the drivers’ contracts do not support the claim that they should receive the fare that Uber actually charges customers. “Fare” in the contract, argues Uber, is not changed by the use of “fare” in a promotion, like upfront pricing.

“Contrary to the mischaracterization of the agreement set forth in the complaint, the agreement itself does not base driver payments on ‘whatever money passengers pay’ or get ‘charged’ (whether ‘upfront’ or at the ‘end of the ride’),” continued Uber in its motion to dismiss. “Plaintiff’s contention — that the ‘fare’ assessed to riders, or paid by riders (whether upfront or otherwise), constitutes the ‘fare’ owed to drivers — is irreconcilable with the contract’s actual terms.”

The center of this controversy, the so-called upfront pricing model, is also not targeted to drivers, says Uber in its motion. Uber argues that upfront pricing is a promotional statement, not a contract term for drivers as alleged by the class action plaintiff.

Further, contends Uber in its motion to dismiss, the driver contact does not discuss how much of the upfront pricing they will be entitled to.

“The Agreement does not say that the rider’s payment belongs to the Driver. It says that the ‘Fare’ produced by the ‘Fare Calculation’ belongs to the Driver,” argues Uber in its motion to dismiss.

The class action should be dismissed, says Uber, because there is no way the plaintiff could amend the complaint to make a claim based on the express reading of the contact.

“Drivers have the contractual right to negotiate a lower fare amount with riders, but they disclaim any right to receive any amounts over and above the Fare produced by the Fare Calculation,” notes Uber in its motion.

Uber also points out that drivers are contractually obligated to allow Uber to engage in promotional activity, like the upfront pricing model, to attract new riders. The promotional activity, even though it generates higher fares, does not entitle the drivers in the class action to additional payment, contends Uber.

Dulberg is represented by attorneys Jennifer Liakos, Paul B. Maslo and Andrew Dressel of Napoli Shkolnik PLLC.

The Uber Driver Upfront Pricing Class Action Lawsuit is Martin Dulberg v. Uber Technologies Inc., et al., Case No. 3:17-cv-00850, in the U.S. District Court for the Northern District of California.

UPDATE: On Aug. 1, 2017, a California federal judge rejected a motion by Uber Technologies Inc. to dismiss a driver compensation class action lawsuit accusing it of using a pricing model that shortchanges drivers.

UPDATE 2: On Feb. 14, 2018, claims that Uber drivers were shorted compensation after a change in Uber fare calculations will proceed as a class action lawsuit, following a federal court’s grant of class certification.

UPDATE 3: On Aug. 24, 2018, an Uber driver is seeking approval of a settlement deal that would end a class action lawsuit over the company’s upfront pricing model.