Limo driver sues Uber over tips
By adamg - 2/4/13 - 8:46 am
David Lavitman, a Milton driver who signed up for Uber, has sued the car service, claiming its illegally keeping half drivers' tips.
Lavitman filed his suit in state court in December, but Uber had it moved to federal court this month.
Lavitman alleges the company collected a 20% gratuity fee on all rides, but only gave half that to drivers.
Uber tells the Boston Business Journal drivers keep all the gratuities, but that it does take a percentage of the meter fee plus $1 per trip.
Comments
Sorry....
These guys knew what they were signing up for when they joined Uber. That it's not the most profitable method of being in the livery business, but then again, if they were any good, they wouldn't have needed Uber.
I haven't joined and I own two cars that still moved during the slow times of December and January. Most of the good drivers I know only use Uber to supplement their incomes and don't depend on it for a living. Most of the guys I know who devote themselves full time to Uber only do so because they're not good enough to get work from most of the major companies around.
"knew what they were signing
"knew what they were signing up for' is not an excuse to violate the law. You cannot pay less than minimum wage or siphon off wait staff tips to management because people agreed to it.
Well...it depends
This depends entirely on the situation Uber has worked out with its drivers (I don't know). If they're independent contractors, they are not required to pay them minimum wage. If they're employees of Uber, then, yes, they do.
They're independent contractors
or I/O's as the livery business calls them I am one and it's made clear that I am by every company I do business with. Same with Uber.
Again, this is an arrangement that every driver knows the details of before they do their first pick up for Uber. The old school owners of livery companies are all up in arms over Uber and it would not surprise me one bit if one of them was behind this lawsuit.
I mean think about it, if you want a pre-arranged Town Car from one of the major livery companies in this town just to go to Logan from the Back Bay, you're paying a minimum of $70.00 base fee for the ride (and as high as $105.00 base!). Add to that a 20% gratuity for the driver. The company then adds an 8-10% fuel charge and a ridiculous fee called STC (Surface Transportation Charge) that can go as high as an additional 12%!
So you're paying close to a hundred bucks minimum just to go through the tunnel. Uber charges $45.00 all inclusive and you have to wait a few minutes for the car instead of it waiting for you. It's great for the consumer, that's for sure.
How much of that $100+ goes
How much of that $100+ goes to the driver (under the traditional non-Uber arrangement)?
If you are an employee
of a livery company, you get between 18-30 dollars for that run at that rate. Depending on the arrangement I have with the companies I do business with I can get anywhere from $56.00 to $82.00 for that run, as I have my own cars.
Agreed.
Gotta' side with Uber here. I'm sure Uber doesn't leave any compensation split arrangement murky.
Lavitman's complaint is vague
Lavitman's complaint is vague and short on facts.
In the BBJ article, Uber says passengers pay a base fare, a 20% tip, and a $1 fee. Uber keeps 10% of the base fare, and the $1 fee, but drivers keep the entire tip.
That sounds perfectly clear, reasonable, and legal to me.
The complaint, however, says, "Uber...retains...as much as 50% of that gratuity", without providing any further details, or actual numbers.
If I were trying to make this case, I would have said something like, "On X date, my passenger paid Uber a $Y fare, plus a 20% tip and a $1 fee, for a total of $Z. From that money, I should have received at least $W according to the tip law, but I only received $V."
They are taking a commission
They are taking a commission on the fare, from what I can tell. Is that illegal?
The drivers get a passenger who has their credit card already on file, so there is almost zero risk of losing the fare (or getting mugged, for that matter). Is this a worthwhile tradeoff for the drivers?
What do other service (such as Hailo) do?
I'd be curious to hear what other drivers think about this arrangement.
Uber has to take some amount
Uber has to take some amount of money. They're a for-profit business, what they do costs money, and they provide customers to the drivers.
The question is how much, and what are the different fees called (which affects the legal requirements, as well as the customer's expectations of who gets the money).
Sounds like half of the tip
Sounds like half of the tip is being taken aside from the 20% commission they take from the base fare. The fact is uber poses as an lead generating company that sends leads to independent contractor/drivers(this is the gray area the send in to defy regulations). Sounds good but misleading due to the fact that to be classified as an independent contractor you must be in charge of your own hours and 'RATES' for services rendered über rates are made up by uber not the drivers. they are not telling the consumer that we have abc limo 5mins away from you that charges xyz they are telling them there is a car 5mins away and you will be charge by our rates. Tips are suppose to be broken out and exclusively to the driver it should also be at the consumers discretion the option should be there for consumers to decide to tip more, less are not at all. Square has the option to choose tip amount I don't see why a technical innovative company like uber can't incorporate something like that.