Noah J Nelson on Monday, Mar. 25th
Car haling service Uber prides itself on being a market disruptor. They enter urban transportation markets with the kind of swagger reserved for the tech start-ups to which they owe their DNA. There have already been major confrontations between the company and city governments in New York and Washington D.C..
Now a class-action suit is being filed in Boston, alleging that the company is skimming tips from the taxi drivers it uses as part of their network in Beantown. As Josh Harkinson reports in Mother Jones:
According to the company website, Uber’s smartphone-based payment system automatically adds to the rider’s tab a $1 booking fee plus a 20 percent gratuity “for the driver.” But as Alemaythu and I drove through Chinatown, he told me that half of that gratuity actually goes to Uber. If that’s true—and Uber insists that it is not—then the company would be misleading consumers and breaking the law in some cities.
In Boston, for instance, Uber faces a class-action lawsuit over the tip-skimming allegation. Filed in late December on behalf of taxi driver David Lavitman, it accuses Uber of violating a state law stipulating that “no employer or other person” may take any portion of a worker’s gratuity. The lawsuit refers to a company document that explains how Uber and the driver divide the earnings: “We will automatically deposit the metered fare + 10% tip to your bank account each week,” it says.