Up-and-coming transportation service Uber finds itself in a sticky situation with a lawsuit filed against it by two San Francisco Uber drivers that claim the company takes 50 percent of their tips, The Verge reports. The practice of taking a share of employees' gratuities is illegal in California, so Uber's handling of tips could be violating California labor laws if it is established that drivers are actual employees. But Uber views drivers as contractors, and if that's the case the tip-taking practice isn't illegal.

This isn't the first such lawsuit, either. Earlier this year drivers in Chicago and Massachusetts reportedly filed similar complaints against Uber.

Uber makes a mobile application with which drivers-for-hire can connect with passengers and schedule rides. Google recently invested $250 million in the company, part of an investment round totaling $360 million. Following the investment, Uber was valued at $3.5 billon.

In a statement provided to The Verge, Uber says it "values its partners above all else," and calls lawsuits like this latest one frivolous. We're not sure how the case is going to play out, but complaints about business operations don't look good in the face of massive investments from major tech companies.



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  • 13 Comments
      Jonathan Wayne
      • 1 Year Ago
      Tip people cash so their crappy employers can't steal from them.
      piggybox
      • 1 Year Ago
      Google recently invested $250 million to Uber. In another news Uber to purchase 2,500 driverless cars from Google. I can't help but wonder if there's any connection between two numbers...
      Steve
      • 1 Year Ago
      I avoid Uber at all costs after they gouged people in Toronto when we were hit with flash flooding. There were reports of $60 minimums. I support the locals. http://www.theglobeandmail.com/news/toronto/taxi-app-company-faces-legal-troubles-over-raising-prices-during-flood/article13214169/
      ChrisDPrice
      • 1 Year Ago
      City Council in Dallas, Texas has been trying to sneak through new restrictions to put the hurt on Uber. No surprise most of the councilmembers have received meaningful donations from the owner of Yellow Cab...
      John
      • 1 Year Ago
      Use Planet Tip to leave a gratuity - goes right to the driver from the passenger. www.planettip.com and they have a mobile web site
      ELG
      • 1 Year Ago
      Uber says on its website that tips are not needed....... solution: I wont tip
      BC
      • 1 Year Ago
      If the drivers are contractors, then taking their tips may not be illegal under labor law, but it might just be theft, unless Uber claims they need a 50% service charge for collecting and disbursing the payments.
      AL Rasheed
      • 1 Year Ago
      Dude in the picture looks like David Garrison
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