Uber, an app based service that lets you rent a limo on demand from your smartphone is considered one of the best start-ups of 2013. It even received a gigantic investment from Google Ventures. However, that did not stop upset limo drivers from filing a lawsuit against it.
Two San Francisco limousine drivers filed a lawsuit against Uber for keeping 50% of the gratuities to itself. The app keep customers credit card information and charges automatically so there is never any interaction between the driver and the customer regarding the payments. The customers see the gratuity being added on the card so hardly any tip extra.
The drivers claim the app pockets the tip illegally. They claim Uber violates California labor law and a small amount of other laws. It is not the first legal action lawsuit taken against Uber by its drivers. Earlier this year a Boston driver sued the company behalf of all the Massachusetts drivers on the same grounds – for keeping tip money. Last summer, Chicago cab companies claimed that Ubers tip keeping policy was illegal (it was only the part of the bigger lawsuit against Uber Technologies)
The creators of the app responded quickly: “our technology platform has allowed thousands of drivers to generate an independent wage and build their own small businesses on their own time. Frivolous lawsuits like this cost valuable time, money and resources that are better spent making cities more accessible, opening up more possibilities for riders and providing more business for drivers.”
However, Uber failed to mention how many local limousine companies went under of filed for bankruptcy because their drivers left them to work for the app. Also, local companies lost a big portion of their clients because of the app.
The state laws generally do not allow tips to be cut by employees. However, there are some exceptions: for example in restaurants, where the tips are split up among the waiters. Uber does not explain the client their tip policies. If the customers knew only the portion of the tip reaches the drivers, maybe they would tip additional. Unfortunately tipping additional is discouraged by the app, because Uber sees it as interference with smooth ride experience.
Despite the lawsuits, Uber is getting more accepted both among the riders and chauffeurs. Whatever the outcome of that legal lawsuit is it probably won’t interfere with the popularity of the app. More about Uber read here.