By Jessica Fruchtermann and Jordan Slapcoff
Uber, an international ride-sharing company, has garnered a lot of attention and has found itself in the center of multiple controversies in recent years. Class action lawsuits have been launched against the company by consumers and competitors alike. This article will focus on recent cases from each of these perspectives.
Jean-Paul v. Uber Technologies Inc.
A Québec Superior Court judge recently authorized a class action lawsuit against Uber. Wilson Jean Paul, the lead plaintiff representing thousands of taxi drivers, seeks to reclaim the loss of revenue and diminished value of taxi permits in interest damages.
The class action was authorized upon an examination of four requisite criteria outlined at article 575 of the Code of Civil Procedure. The court found that, as required by the first criterion, “the claims of the members of the class raise identical, similar or related issues of law or fact”. More specifically, the plaintiffs share common legal issues and their situations raise similar questions: is the defendant at fault because its commercial activities in Québec violate the Act Respecting Transportation Services by Taxi? Does Uber’s presence decrease each class member’s revenue and diminish the value of his/her taxi permit? The court also found that, as required by the second criterion, the facts alleged by the lead plaintiff appear to justify the conclusions sought. The court, in accordance with the third criterion, considered that it would be impracticable to consolidate the individual proceedings. It would also be difficult to confer a mandate to a representative to act on behalf of thousands of taxi owners and drivers. Lastly, the court considered that, as per the fourth criterion, Mr. Jean Paul could adequately represent the class given his status as both taxi owner and driver. The class action was therefore authorized.
In 2013, the Supreme Court of Canada confirmed in Infineon Technologies AG v. Option consommateurs that article 575 of the Code of Civil Procedure requires a lower threshold of review, specifically “one of demonstration of an appearance of right”. The lighter burden placed on the plaintiff at the authorization phase illustrates that Québec is a class action friendly jurisdiction. In Jean Paul v. Uber Technologies Inc., the Superior Court judge did not require a quantification of damages incurred by Uber’s presence, exemplifying the application of the lighter burden.
One could argue that this low threshold of review facilitates access to justice because it favors the authorization of class action lawsuits. These lawsuits, in turn, lead to victim compensation. Is this really the case? Even if evidence supports the use of class action as a means to pursue this objective, do the ends outweigh the significant drain class actions present on the judicial system? Researchers must evaluate whether this procedural vehicle favors both access to justice and judicial efficiency in practice…
Ben-Dor v. Uber Canada Inc., Uber Technologies Inc., and Rasier LLC
In September 2016, the Consumer Law Group launched a Canada-Wide class action lawsuit against Uber Technologies Inc. This lawsuit was filed on behalf of all Uber passengers that were charged between $1.00 and $2.50 for a “Safe Rides Fee” that started in 2014. Firstly, this “Safe Rides Fee” is not disclosed when consumers ask for a “Fare Estimate” of the cost of their ride and is only disclosed in the receipt that is received via e-mail after the ride. Secondly, the consumer is charged this mandatory fee so that Uber can “support continued efforts to ensure the safest possible platform for Uber riders and drivers, including an industry-leading background check process, regular motor vehicle checks, driver safety education [and] development of safety features in the app…”. However, their claims to be an industry leader in background checks rings hollow. Unlike the taxi industry, they do not require fingerprints and cannot confirm that the information obtained from a background check is actually representative of the driver in question. Further, a similar lawsuit has been filed in the United States. The most recent development in that case came in August when a 28.5 million dollar settlement was rejected by a US District Judge. The 0.82 cents compensation per rider was considered disproportionate to the 449 million dollars Uber had received in revenue from the “Safe Rides Fee”. Will the class action lawsuit filed in Canada follow a similar path to its American counterpart? Despite the fact that the American judge rejected the settlement, these concerning events raise another important question: who are the real beneficiaries of class action lawsuits?
In conclusion, class action lawsuits are accessible for consumers and competitors. However, it remains debatable whether victim compensation outweighs the costs of a class action, namely the legal fees incurred and the burden placed on the judicial system. Even if class action is not a means to achieve adequate victim compensation, does deterrence and negative PR associated with these lawsuits justify its use? Does the looming threat of a class action lawsuit restrict companies and protect society as a whole? It remains to be seen how class action lawsuits against Uber will influence the public’s perception of the company.
This content has been updated on March 8, 2017 at 3:11 pm.