Uber hit with complaint and lawsuit over $4 SFO surcharge; Lyft settles legal issues 

click to enlarge San Francisco District Attorney George Gascon, at podium, answers questions while standing with members of his staff and the Los Angeles District Attorney's office during a news conference about the ridesharing companies Uber and Lyft on Tuesday in San Francisco. California prosecutors have filed a lawsuit against Uber over the ridesharing company's background checks and other allegations, adding to the popular startup's worldwide legal woes. Meanwhile, Gascon said Tuesday that Uber competitor Lyft has agreed to pay $500,000 and change some of its business practices to settle its own lawsuit. - AP PHOTO/ERIC RISBERG
  • AP Photo/Eric Risberg
  • San Francisco District Attorney George Gascon, at podium, answers questions while standing with members of his staff and the Los Angeles District Attorney's office during a news conference about the ridesharing companies Uber and Lyft on Tuesday in San Francisco. California prosecutors have filed a lawsuit against Uber over the ridesharing company's background checks and other allegations, adding to the popular startup's worldwide legal woes. Meanwhile, Gascon said Tuesday that Uber competitor Lyft has agreed to pay $500,000 and change some of its business practices to settle its own lawsuit.

The District Attorney's Office on Tuesday announced that it was filing a complaint against Uber for alleged unlawful business practices, including charging customers a $4 airport fee but pocketing the money.

For years, Uber customers bound for or leaving San Francisco International Airport paid a $4 surcharge meant to cover airport fees. But, according to a lawsuit, the company instead pocketed the money.

Uber and other mobile-app-based ride services, along with taxis, are charged a fee for the right to pick up or drop off passengers at the airport. Permitted taxis pay $4 per trip, and under a deal announced last month, Uber, Lyft and other similar services are charged $3.85.

For years before Uber received its permit, passengers had a $4 surcharge on their bills that was ostensibly there to cover the airport fee - money that the airport never collected, according to a class-action lawsuit filed by an Uber customer Dec. 3 in San Francisco Superior Court.

In the lawsuit, Uber passenger Vamsi Tadepalli details how he paid $27.57 for a ride to the airport July 23. The bill included a $4 surcharge "to reimburse drivers for any airport fees they are charged," according to Uber's terms and conditions.

But since Uber did not start paying a $3.85 fee until November, that $4 fee, charged to Tadepalli and "tens of thousands" of other passengers, is "fictitious," Tadepalli's alleges.

Uber started ferrying passengers to the airport in June 2010, according to the suit, which seeks unspecified damages.

Uber did not immediately respond to a request for comment Tuesday.

It's not known how many trips Uber drivers made to the airport before the fees were imposed, but as far as the airport is concerned, the ride service is square.

Both Uber and Lyft paid a flat $100,000 fee to settle unpaid surcharges for rides made this year from April to November, SFO spokesman Doug Yakel said Tuesday.

After its latest fundraising round brought in over $1.2 billion, San Francisco-based Uber may be worth as much as $40 billion. However, controversy - evading regulations, controlling the privacy of its user data, sexist behavior by CEO Travis Kalanick and other executives - continues to dog the company.

Among the other violations the District Attorney's Office listed in its complaint are Uber's declaration of having so-called "industry leading" background checks, which District Attorney George Gascón disputes; misleading information on the measures it takes to ensure customer safety; charging customers a $1 safe ride fee and telling customers that was paying for its "industry leading" background checks; using fare technology without approval from the state agency that measures the technology's accuracy; and unlawfully operating at airports without their permission.

Also on Tuesday, Gascón announced a settlement with Lyft, which faced similar complaints as Uber about unlawful business practices.

Lyft agreed to pay civil penalties of $500,000, with the first $250,000 due in 30 days. The second half would be waived if Lyft complies with all the terms of the injunction.

In September, the San Francisco and Los Angeles district attorney's offices sent letters to Uber, Lyft and Sidecar about their alleged unlawful business practices. Actions against Sidecar are pending.

S.F. Examiner Staff Writer Rob Nagle contributed to this report.

About The Author

Chris Roberts

Chris Roberts

Bio:
Chris Roberts has worked as a reporter in San Francisco since 2008, with an emphasis on city governance and politics, The City’s neighborhoods, race, poverty and the drug war.
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