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Uber Deductions from Driver Pay New York City Class Action

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The claims raised in this class action, the complaint says, “seek to provide redress to more than 96,000 New York City Uber Drivers … for breaches of contract affecting every member of the largest private sector workforce in New York City…” The class action concerns, first, deductions from Uber driver pay, purportedly for sales taxes and a surcharge for the Black Car Fund (BCF), which provides Workers’ Compensation to drivers. Second, it claims Uber kept two sets of books and charged passengers higher rates than it reported to drivers.

The complaint argues that Uber’s contracts do not permit such deductions: “Uber’s contracts promised drivers a set percentage of each fare paid by the passenger, with only Uber’s commission, or ‘Service Fee[,]’ deducted from each fare.” 

The complaint alleges that the case has already been made elsewhere: Uber’s “practices of deducting amounts represented as the consumer sales tax and the BCF charge from driver earnings ended shortly after other Uber driver Plaintiffs in [another case against Uber] cited to specific tax regulations making clear the unlawful nature of Uber’s deduction practice.”

However, in May 2017, Uber amended its contract. The new contract no longer promised drivers the full fare minus only Uber’s service fee.

At the same time, “Uber claimed to have just discovered that it was underpaying its New York City drivers, and remitted tens of millions of dollars to the drivers.” The complaint says, “such payments by Uber, however, amounted to only a fraction of the total deductions Uber made in violation of its contracts.” This class action is seeking to recover the full amounts owed, minus the May 2017 payback.

In addition, the complaint alleges that Uber has been keeping a double set of books in a scheme called Upfront Pricing. Under this scheme, the complaint claimed Uber charged higher fares to riders than those it reported to drivers and pocketed the difference. The complaint claims, “This practice was expressly forbidden by the contract until May 22, 2017 when Uber amended its contract to permit it.” Unfortunately, the deductions were made based on the higher amounts.

Two classes have been proposed for this action. 

  • The Tax and BCF Class is Uber drivers who were parties to the July 2013, June 2014, November 10, 2014, April 3, 2015, and/or December 11, 2015 contracts who did not opt out of the arbitration clause of the contracts, who provided trips in New York City before May 23, 2017.
  • The Upfront Pricing Class is Uber drivers who were party to the April 3, 2015 and/or the December 11, 2015 contracts who did not opt out of the arbitration clause of those contracts and who provided trips in New York City from about April 2016 to May 22, 2017.
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