Uber must face lawsuit over gratuity charge: court ruling

Features Reuters

A U.S. judge rejected a bid by the online for-hire car service Uber to dismiss a civil lawsuit that accuses the company of charging customers a 20 percent driver gratuity but pocketing most of the additional revenue instead.

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In a ruling late on Wednesday, U.S. District Judge Edward Chen in San Francisco said Uber must face multiple civil counts, including an allegation the company violated California's unfair competition laws.

A company representative could not immediately be reached for comment.

San Francisco-based Uber raised $1.2 billion from mutual funds and other investors in a June funding round, which valued the fast-growing service at $18.2 billion at the time. Uber faces an array of regulatory and legal challenges, however, as it seeks to expand into new markets.

An Uber customer filed a proposed class action lawsuit against the company earlier this year, saying the 20 percent rider gratuity is "false, misleading, and likely to deceive members of the public" because Uber keeps a substantial portion of the money.

The judge's ruling dismissed a breach of contract claim against Uber, but ruled there was sufficient detail in the lawsuit for it to move forward on other counts.

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The case is Caren Ehret vs. Uber Technologies Inc in U.S. District Court, Northern District of California, No. 14-0113.