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Uber Drivers Win Settlement Over Improper Payment

By Lisa M. Schaffer, Esq. | Last updated on

An Uber class action settlement is now in front of a federal judge, with the two sides set to meet on October 29th. The settlement agreement in Duhlberg v. Uber requests Uber to pay $345,622 to over 4,500 Uber drivers for being consistently underpaid, according to the 2015 Technology Service Agreement (TSA) in force between Uber and the drivers. This will amount to about $75 per driver.

Changes to Pricing Model Led to Underpayment

Uber agreed to pay drivers 80% of the fares they collect, but, according to plaintiffs, the pay actually turned out to be between 70% and 80%. At issue was the way in which Uber calculated fares from which the 80% was taken.

Originally, rides were calculated on miles traveled and time of travel, and charged at the end of the ride. But in August 2016, Uber switched over to "upfront pricing", which quoted and charged higher fares upfront once the rider entered the car. However, Uber continued to pay drivers under the originally calculated formula. This resulted in drivers being underpaid. 'The Fare that Uber calculates on actual values is generally smaller than the upfront Fare that passengers pay,' the plaintiffs claim. 'Uber pays class members based on this lower amount and pockets the difference.'


In order to be a member of this class action, drivers had to opt out of the arbitration clause in their original TSA agreement. Employers like using arbitration because it usually favors them. In fact, research proves that individual arbitration leads to fewer wins and less monetary rewards for workers. Because this is a widely held belief, arbitration clauses lead to very few complaints even being filed by employees.

Uber has been involved in multiple suits with its drivers. Another class action was filed in April 2018, alleging the upfront pricing model was a breach of contract. Drivers also sued Uber over pocketing tips. Multiple drivers in Austin, Texas sued for backpay and benefits after Uber abruptly stopped servicing the city. And it faces multiple state lawsuits over whether its drivers are actually employees, not contractors, and therefore owed drivers expense reimbursement and benefits.

If you are concerned about your employment agreements or payroll formulas, contact a local employment lawyer, who can review your documents, and ensure they align with current laws.

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