A federal judge in San Francisco on Monday let a class action lawsuit move forward on behalf of Uber drivers who claim the company takes an oversized chunk of the fees charged to passengers.
Lawyers from the El Segundo and New York offices of Napoli Shkolnik sued Uber in February on behalf of a North Carolina driver claiming the company continues to pay them based on actual ride times and distances even though it moved to a so-called “upfront pricing” model in autumn 2016 that charges passengers based on “aggressive” estimated ride lengths, which tend to be longer. According to the complaint, the new pricing model has led Uber to keep a larger cut of the overall charges to passengers while underpaying what it contractually owes drivers.
Uber’s defense lawyers at Coblentz Patch Duffy & Bass argued in their motion to dismiss that Uber’s driver agreement hasn’t changed since 2015 despite the company’s shift to the upfront pricing model. The Coblentz lawyers claimed that if calculating the driver’s portion of fares based on actual ride time and distance didn’t violate the driver agreement prior to shift to upfront pricing, it doesn’t violate the same driver agreement now.
But U.S. District Judge William Alsup of the Northern District of California denied Uber’s motion to dismiss, calling the company’s argument “counterfeit logic.”
“The bottom line is that, whatever method Uber chooses, it must apply that same method to determine time and distance amounts for both charging its passengers and remitting payments to its drivers—or so the amended complaint plausibly alleges,” wrote Alsup, who is also overseeing Uber’s blockbuster trade secrets dispute with Waymo.
A spokesman for Uber said the company “respectfully” declined to comment on Monday’s decision.
In an emailed statement, Paul Maslo, a partner in Napoli Shkolnik’s New York office who is leading the plaintiff’s case, said Uber’s driver agreement requires the company to use the same fare both to charge passengers and calculate driver payout. “Today’s ruling recognizes that the agreement supports drivers’ position and allows them to move forward with their case,” he said.