Uber faces class claims of hidden fees, false advertising

Uber Technologies is accused of false advertising and bait and switch pricing schemes that allegedly tack hidden fees to customers' orders in violation of California law.

The matter arises from the Uber One subscription service, which allegedly tells subscribers who pay $9.99 per month or $96 per year that they will not be charged delivery fees on eligible food and groceries. But when Uber One subscribers use Uber Eats or Postmates, they are allegedly charged delivery fees which appear for the first time on the checkout page.

"These mandatory fees are imposed by Uber through drip pricing, a form of bait and switch advertising designed to give customers the false impression of a lower price," states the class complaint signed by Thomas D. Warren of Warren Terzian LLP.

"Consumers who are not provided the total price until checkout are likely to proceed with their purchase even if continuing to search for a cheaper price would be more optimal for them because consumers want to avoid the cost of the time and cognitive effort involved in continuing to search for a product or service. They are also junk fees, 'charged for goods or services that have little or no added value to the consumer,'" Warren continued, quoting from a Federal Trade Commission economic analysis of hotel resort fees published in January 2017. Lauren Abedini v. Uber Technologies Inc., 24STCV34485 (L.A. Super. Ct., filed Dec. 30, 2024).

Uber representatives did not respond to a request for comment.

The complaint claims two causes of action: unfair competition - violation of California Business & Professions Code Section 17200 - and false advertising - violation of California Business & Professions Code Section 17500.

It notes that the arbitration agreement to which Uber One subscribers are bound makes it "all but impossible" for plaintiffs to get relief. The agreement is unconscionable and unenforceable, Warren said in the complaint: It violates California's Unfair Competition Laws and California's False Advertising Laws.

The arbitration clauses typically say that plaintiffs can only bring a case for themselves, Warren said in a telephone interview on Monday.

"It's very unlikely you're going to go to arbitration over the amount of fees that are involved in your personal situation," he said. "Uber is very aggressive about their arbitration clauses. I just happen to be unafraid of challenging them head on."

Grubhub paid the Federal Trade Commission $25 million in December to settle similar charges in the Northern District Court of Illinois. Federal Trade Commission v. Grubhub Inc., et al., 1:24-cv-12923 (N.D. Ill., filed Dec. 17, 2024).

The Consumers Legal Remedies Act, which went into effect on July 1, 2024, made it illegal to advertise or offer a price for a good or service that does not include all mandatory fees or charges other than those imposed by a government. The bill's text notes that bait and switch advertising including drip pricing is prohibited by existing statutes, including the Unfair Competition Law. It does not require food delivery platforms to include in the menu price the fees they charge for providing their services.