Uber Accused of Skimming Tips and Unfair Labor Practices (Update)
Update: Uber's response. (See bottom).
Update: Clarification: The adjustable tip rate (see screenshot below) applied to Uber taxis as of March. At this point Uber says it adds a 20 percent gratuity automatically after taxi drivers input their metered fare. The company advises passengers not to tip for Uber town cars and UberX.
Just as Uber tries to stave off a personal injury suit from a bystander hurt by one of its hired cars, it's embroiled in two more -- and these ones might have national reach.
Two San Francisco drivers filed a class-action complaint on Aug. 16, alleging that the livery start-up skims their tips. They also contend that Uber misleads customers into thinking that a gratuity is included as part of the fare, which means that many customers leave no tip at all.
"Thus, drivers do not receive the tips that are customary in the car service industry and that they would otherwise receive were it not for Uber's communication to customers that they do not need to tip," plaintiffs Douglass O'Connor and Thomas Colopy wrote in their court filing.
Passengers actually pay a flexible gratuity for
all Uber Taxi rides -- the suggested rate is 20 percent, but they can adjust it down to zero, as shown in the screenshot below:
That's separate from the 10 percent cut that Uber cribs from each driver's metered fare, and the $1 booking fee it charges riders. Since tips are by definition optional, Uber's management doesn't believe it's doing anything wrong.
But the problem, according to O'Connor and Colopy, is that Uber misleads customers into thinking a tip is already included. As a result, many do indeed set their gratuity meters to zero. The plaintiffs also allege that because Uber has "misclassified" its drivers as independent contractors, rather than employees, the drivers have to cover their own work-related expenses for gas and vehicle maintenance.
Uber has maintained, repeatedly, that it's a technology start-up rather than a cab fleet, and that as such, its only employees are developers and engineers -- its drivers are merely hired guns. It used that claim to fend off the July lawsuit filed by injured bystander Claire Fahrbach, which is still pending in San Francisco Superior Court.
Yet the current class action complaint coincides with an uncannily similar suit in Boston, filed by a driver who believes the booking fee and fare surcharge allow Uber to filch half his tips. And Boston driver David Lavitman managed to enlist famed labor lawyers Shannon Liss-Riordan to help him, which could give the case some legs.
Defendants Uber Technologies Inc. and CEO Travis Kalanick have yet to file their response, but an Uber spokesman issued this statement:
"The allegations made against our company are entirely without merit and we will defend ourselves vigorously. Uber values its partners above all else and our technology platform has allowed thousands of drivers to generate an independent wage and build their own small businesses on their own time. Frivolous lawsuits like this cost valuable time, money, and resources that are better spent making cities more accessible, opening up more possibilities for riders and providing more business for drivers."
And here's the complaint: