Uber Drivers Granted Class Cert. in Underpayment Class Action

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

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.

U.S. District Judge William Alsup entered an order on Wednesday granting certification to a Class of potentially more than 9,000 Uber drivers who may have been shortchanged by a February 2016 change in the way the company calculates passenger fares.

Judge Alsup appointed plaintiff Martin Dulberg as class representative and his attorneys as class counsel.

In opposing class certification, Uber’s economics expert testified that most of the putative Class Members actually received more compensation under the upfront pricing method. Dulberg’s theory of how driver compensation should be calculated would actually leave most putative Class Members worse off, Uber argued, creating a conflict of interest between Dulberg and the rest of the Class.

Dulberg countered by refining the proposed Class definition to cover only Uber drivers who were paid less because of the difference in fare calculation.

Dulberg, who began driving for Uber in May 2014, filed this Uber class action lawsuit last year. He claims a pricing change that Uber implemented in 2016 breached the agreement between Uber and its drivers, resulted in lower driver compensation. The new pricing formula determines the fare for an Uber ride before the ride happens, charging riders based on an estimation of time and distance.

Dulberg says this upfront pricing formula aggressively overestimates time and distance amounts, generally resulting in a higher fare than would have been calculated based on actual time and distance.

Yet Uber continued to calculate the driver’s portion of the fare based on the actual time and distance of the ride, which Dulberg says was more often than not lower than the estimated numbers. As a result, Dulberg claims, Uber drivers are getting less than their proper share of fare revenues under their agreement with Uber.

Dulberg’s claims survived Uber’s motion for dismissal in July 2017. Uber had argued that the method of fare calculation was not a term of the driver agreement but instead was just a promotional statement directed at Uber riders. By its terms, the driver agreement does not entitle drivers to a cut of the fare actually charged, Uber argued.

Judge Alsup disagreed. He noted that under the driver agreement, both driver compensation and the fee that Uber takes for each ride are tied to the same fare calculation.

As certified by the court, the plaintiff Class will represent all persons in the U.S. who drove for UberX or UberSelect, opted out of arbitration, transported a passenger who was charged an upfront fare before May 22, 2017 – the date on which Uber issued an updated fee addendum – and made less money overall on such rides because their compensation was based on actual time and distance.

Dulberg and the plaintiff Class are represented by attorney Paul B. Maslo of Napoli Shkolnik PLLC.

The Uber 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. 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.