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Class Action Lawsuit Against California Company Uber Alleges Fraudulent Fees

Uber_ride_Bogota_(10277864666).jpgUber, the San Francisco-based company that matches users of its mobile application with a network of drivers, is no stranger to controversy and legal troubles. In California, it is currently facing a lawsuit from taxi companies alleging anti-competitive practices, an effort by the state’s Public Utilities Commission to shut down a new carpooling service, and a lawsuit by the San Francisco District Attorney over allegedly fraudulent surcharges. It has faced employment law claims from its own drivers, whom it claims are independent contractors, not employees. A new lawsuit, filed in an Oakland federal court, pits Uber against its own customers. Philliben, et al v. Uber Technologies, Inc., et al, No. 3:14-cv-05615, complaint (N.D. Cal., Dec. 23, 2014). The putative class action alleges that the company charges its customers a fraudulent $1 “Safe Rides Fee.”

Two platforms offered by the company, UberX and UberXL, allow a wide range of drivers “to provide transportation in exchange for compensation” through the app. Philliben, complaint at 2. According to the plaintiffs, the company tacks a $1 “Safe Rides Fee” onto every ride obtained through UberX and UberXL, purportedly to cover the cost of “industry leading” background checks that it runs on drivers using those platforms. Id. The plaintiffs claim, however, that Uber’s procedures are “woefully inadequate and fall well short of what is required for other commercial providers of transportation.” Id.

Uber reportedly removed claims about its safety standards “lead[ing] the industry” from its website, but the plaintiffs claim that it still asserts that its standards “are often more rigorous than what is required to become a taxi driver.” Id. at 5 (internal quotations omitted.) The plaintiffs note that the UberX app might give drivers access to more information about customers than taxi drivers would normally have, and argue that this requires a greater level of background screening. However, they state that the company has always resisted state and local transportation regulations, including those affecting taxi drivers. They allege that numerous aspects of the company’s background check procedures are insufficient, including a lack of direct inspections of drivers’ cars by the company, a lack of any fingerprinting or other “unique identifying information,” id. at 6, and no requirement that driver applicants even appear in person for background screening.

The two plaintiffs state that they were charged the “Safe Rides Fee” on multiple occasions in 2014. Since, in their account, Uber’s background check procedures fall short of any sort of industry standard for transportation providers, the plaintiffs claim that the “Safe Rides Fee” is fraudulent. They allege a class consisting of “tens of thousands of riders” who paid “hundreds of thousands of Safe Rides Fees.” Id. at 12. They are asserting two causes of action against Uber under state law: untrue or misleading statements, Cal. Bus. & Prof. Code § 17500 et seq.; and unfair competition and unlawful business practices, Cal. Bus. & Prof. Code § 17200 et seq.

If you or your business is involved in a consumer complaint, contract dispute, or other legal matter, you should seek the assistance of a knowledgeable and experienced business and commercial lawyer. James G. Schwartz has represented individuals and businesses in the Bay Area since 1976, and can advise you of your legal rights and help you prepare the best possible case. To schedule a free and confidential consultation to see how we can help you, please contact us today online or at (925) 463-1073.

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Photo credit: By Alexander Torrenegra from Secaucus, NJ (New York Metro), United States [CC BY 2.0], via Wikimedia Commons.