Uber loses bid to withhold CEO emails in gratuity lawsuit

January 2, 2015, 4:38 PM UTC
Travis Kalanick, co-founder and chief executive officer of Uber Technologies Inc., speaks during a Bloomberg Television interview in Hong Kong, China, on Thursday, July 17, 2014. As Uber disrupts the transportation market around the world, Kalanick said he sees a huge amount of growth for the car-booking service in Hong Kong. Photographer: Brent Lewin/Bloomberg via Getty Images
Photograph by Brent Lewin — Bloomberg via Getty Images

A federal judge rejected Uber Technologies Inc’s bid not to disclose emails from Chief Executive Travis Kalanick in a California lawsuit accusing the popular ride-booking service of deceiving customers about how it shares tips with drivers.

U.S. District Judge Edward Chen’s ruling in San Francisco was the latest setback for Uber, which has drawn criticism around the globe over whether its service complies with local licensing and safety laws and whether its drivers have been adequately vetted.

Chen said a Nov. 26 ruling by federal Magistrate Judge Donna Ryu that the plaintiff in the lawsuit can receive emails from Kalanick and global operations chief Ryan Graves about Uber’s tipping practices was neither “clearly erroneous” nor legally wrong.

“That Judge Ryu’s order may require defendant to review approximately 21,000 documents does not represent an improper burden given the potential role of defendant’s CEO and vice president of operations in defendant’s challenged conduct,” Chen wrote in an order issued Wednesday night.

Uber and its lawyers did not immediately respond on Friday to telephone, email and online requests for comment.
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The lawsuit was filed Jan. 8, 2014 by Caren Ehret, an Uber customer from Illinois, and seeks class-action status.

Ehret accused Uber of misleading customers by advertising that a 20 percent gratuity on fares is “automatically added for the driver” when the San Francisco-based company instead retains a “substantial portion” for itself.

She said this caused her and other customers to overpay, amounting to breach of contract and violating California consumer protection laws. The lawsuit seeks unspecified compensatory and punitive damages.

Uber contended that Ehret did not need the emails she sought and that other evidence, including from general managers in cities where the company operates, would offer a “complete understanding” of its tipping practices.
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Last week, authorities in South Korea indicted Kalanick on charges he violated local licensing laws. Other cities, including Amsterdam, Berlin, New Delhi and Portland, Oregon have banned or sought to ban Uber services.

Founded in 2009, Uber now operates in about 250 cities on six continents. Uber obtained financing last month that valued the privately held company at roughly $40 billion.

The case is Ehret vs. Uber Technologies Inc, U.S. District Court, Northern District of California, No. 14-00113.