The lawsuit says 96,000 drivers are owed money for two violations. The drivers allege that Uber deducted money from their paychecks for both the state’s sales taxes and a surcharge meant to apply to rides between states. They claim their contract with the company requires them to be paid the passenger’s full fare minus Uber’s service fee. The lawsuit also alleges that the company used a manipulative system of payments in which customers were paying a higher fare than what was being reported to drivers, with Uber pocketing the difference.
“This surreptitious use of double definitions of the ‘Fare,’ a defined term under the contract, resulted in Uber charging higher fares to passengers than those it reported to drivers,” a complaint filed in the case states. “Uber then pocketed the difference, depriving drivers of their contractual share of the full fare charged to customers.”
The company did not respond to a request for comment.
The lawsuit, which was first reported by Bloomberg Law, says the group of drivers is owed an estimated $5 million. The three Uber drivers named in the suit, Levon Aleksanian, Sonam Lama and Harjit Khatra, asked a federal judge to approve class action for the nearly 100,000 drivers affected.
The lawsuit is part of a wave of attempts to strengthen the hands — and bolster the wages — of so-called gig economy workers, the most prominent class of which is ride-hailing drivers. Where companies such as Lyft and Uber were once heralded for disrupting stodgy industries, attention has turned to the ways in which workers on largely unregulated digital platforms can be exploited, misled and subject to wage theft and misuse.
Companies such as Instacart and DoorDash, whose business models rely on workers using their apps, have drawn harsh criticism in recent years for deducting customer tips from the payment given to them — essentially pocketing the funds.
In New York City, attention has swelled on the plight of drivers, more than 78,000 of whom do work for the ride-hailing apps. In 2018, eight professional drivers committed suicide, including one, Doug Schifter, who fatally shot himself in front of City Hall after writing a Facebook post about his financial hardships.
The city approved minimum-wage protections for app-based drivers at the end of the year, requiring they get paid $17 an hour for their work, the first for any major city in the United States.
In California, a state bill recently signed into law by Gov. Gavin Newsom (D) expanded rights and protections for ride-hailing drivers and would force companies such as Lyft and Uber to classify their workers as employees rather than individual contractors. The move came after months of organizing among ride-hailing drivers.
Uber, Lyft, DoorDash, Postmates and Maplebear, the parent company of Instacart, spent $110 million fighting the law, Bloomberg Law noted.
Similar proposals are being considered in other states, including New York and New Jersey.
The New York Taxi Workers Alliance has been involved in many of these efforts.
Bhairavi Desai, the executive director of the organization, has watched as public awareness has grown around the ride-hailing industry. In 2015, New York Mayor Bill de Blasio’s ideas about regulating the industry were so unpopular that he quickly retreated in the face of a robust public relations campaign from Uber.
Other officials in the state ignored the group’s pleas to try to ensure drivers were eligible for benefits such as unemployment when the work dried up Desai said in an interview.
“Politically, we were just frozen out,” she said.
But the tide has been turning in recent years, and multiple lawsuits have documented the ways in which workers were treated by the company.
“Once the drivers started organizing, all the reports started to come out about what the drivers were facing,” Desai said. “That’s when consumers and the public at large really started to take a second look.”