On September 17, 2014, Judge Edward M. Chen of the Northern District of California denied the majority of Uber’s motion to dismiss claims brought against it by a putative class of customers. The lawsuit alleges that Uber charges a 20% fee above the metered fare for each ride that it misrepresents as a “gratuity” that is automatically added “for the driver,” but instead retains a substantial portion of this “gratuity” as an additional unlawful revenue source.
The Court allowed Plaintiff’s unfair competition law claims to proceed, finding that “[a]llowing standing in the case at bar – where a false representation is made to raise the price of a service which the plaintiff would not have agreed to pay had the truth been told … furthers [the purpose]” of those laws. Plaintiff sufficiently “allege[d] that a reasonable consumer would be deceived and, as a result of this deception, they expended more money than they otherwise would have but for the misrepresentation,” according to the order. The Court further found Plaintiff’s allegation that “Uber represented that the 20% gratuity fee would be remitted to drivers [] sufficient to allege the existence of an obligation on the part of Uber – an obligation that Uber misrepresented by using the charged fee as a revenue source.”
A copy of the order is available here.
News coverage of the lawsuit and recent decision can be viewed here and here.
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