Uber Faces Driver Pay Class Action Over Upfront Pricing

From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...

By Jon Steingart

Uber faces a larger challenge in a lawsuit over its pay practices as a judge granted class action status to a set of drivers who say they’re shortchanged as a result of how the company calculates fares.

“Like in most class actions, it would not make financial sense to bring these claims on an individual basis,” Paul Maslo, a lawyer for the drivers, told Bloomberg Law by email Feb. 15. “Accordingly, without this decision, it would have likely been the end of the road for drivers seeking to recover for Uber’s breach.”

Martin Dulberg, who filed the lawsuit in February 2017, asked the court to certify a class that includes drivers who worked for UberX and Uber Select services. UberX is a lower-cost plan that uses economy vehicles. Uber Select uses high-end automobiles. He chose these services from Uber’s offerings because he didn’t drive for the others, according to his motion.

There are 2,197 drivers in the class, according to the motion. In support of this number, it cited a redacted declaration filed by another lawyer for the class.

Dulberg’s lawsuit alleges a breach of contract resulting when the company switched to “upfront pricing” in 2016. Under this feature, the app provides customers with an estimate of what a trip will cost at the time they book it.

But driver pay is based on a calculation involving time and distance, Dulberg says. This sometimes results in a discrepancy that means a driver gets shortchanged, he says.

Dulberg’s claims, if proven, could constitute a breach of contract between Uber and drivers, Judge William Alsup of the U.S. District Court for the Northern District of California wrote in a July 31 order. Uber moved for dismissal of the case on the theory that Dulberg’s complaint failed to articulate a violation.

Company Planned More Disclosure

Uber planned to start reporting the price a passenger pays on each ride in an effort to ease drivers’ concerns, Bloomberg News reported last May. It also planned to send drivers an updated terms-of-service agreement that would reflect the new fee system, according to the report.

An Uber spokesman declined to comment Feb. 15.

Class certification means Dulberg and his lawyers will have an opportunity to contact class members to alert them about the case and offer them an opportunity to opt out. If the parties agree to a settlement, class members will have an opportunity to comment on its terms or exclude themselves to preserve their right to litigate their own claims.

Alsup’s order granting class certification is published under seal. A notation in the docket says the motion was granted Feb. 14.

“The parties cited some confidential material in their briefing,” Maslo said. “I am guessing that Judge Alsup incorporated it into his decision, which I have yet to see because there are some issues with the docket.”

Maslo and Dressel are with Napoli Shkolnik PLLC in New York.

Randall Edwards, Matthew Powers, Damali Taylor, and Adam Kaplan with O’Melveny & Myers LLP in San Francisco represent Uber Technologies and subsidiary Rasier LLC.

The case is Dulberg v. Uber Techs, Inc., N.D. Cal., No. 3:17-cv-00850, class certified 2/14/18.

Request Labor & Employment on Bloomberg Law