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Uber Again Wins Race Bias Class Action Dismissal in California

May 23, 2022, 8:58 PM

Uber Technologies Inc. drivers who argued the rideshare giant’s star-rating process racially discriminates against its workers again lost their class action bid in a California federal court.

The lawsuit, which cited a new survey of 20,000 drivers, didn’t adequately allege facts to support that the star-rating system has a racially disparate impact, nor that the company intentionally discriminated against the would-be lead plaintiff, said Judge Vince Chhabria of the U.S. District Court for the Northern District of California ruled Monday.

He gave the drivers leave to amend their complaint again because “it is conceivable that a more sophisticated effort at alleging racial disparity in driver terminations could overcome a motion to dismiss.”

The survey didn’t show that drivers of color are terminated for low ratings compared to White drivers, partially because the survey results presented by plaintiffs’ counsel only surveyed terminated drivers and not a sample of Uber’s total driver population, Chhabria said.

“The survey methodology, in short, uses the wrong denominator,” he wrote. He later continued, “The survey described in this complaint is essentially meaningless. Which means that this complaint, like the prior version, does not plausibly allege racial disparity in terminations of Uber drivers.”

Chhabria, during a March 17 motion to dismiss hearing, questioned the reliability of a survey taken of Uber drivers, which was included in the most recent amended complaint.

Plaintiff Thomas Liu brought the case against the app-based ride-hailing company in October on behalf of all non-White drivers nationwide. He alleged that drivers were fired after customers racially discriminated against them by giving them unfavorable marks using the app’s built-in driver rating system, in violation of Title VII of the 1964 Civil Rights Act.

The survey received responses from roughly 4,000 drivers alleging evidence of disparity among drivers who were deactivated because of low ratings. Uber prompts customers to rate drivers on a scale of 1 to 5 stars, and then “deactivates” workers whose average rating it deems unsatisfactory, according to the lawsuit.

The survey found that 17.4% of White respondents indicated they had been deactivated by Uber, compared with 24.6% of Asian workers, 24.1% of Black, 24.9% who identified as other, and 16% who responded as Latinx. The survey asked drivers if they were “Latinx,” and many workers who identified as Latino, Hispanic, or Mexican American indicated as “other,” according to the complaint.

Liu also said that, while driving for Uber in San Diego, he experienced signs of bias such as customers canceling when they saw his photograph, or asking in an unfriendly manner “where he was from.” He claims Uber terminated him in October 2015 because his average customer rating fell below its minimum of 4.6.

Survey Questioned

The judge grilled the drivers’ attorney, Shannon Liss-Riordan, on whether the numbers in the survey were significant and what conclusions could be drawn from the results. She acknowledged it wasn’t a “perfect” survey but contained enough, before discovery, to show that a disparity potentially exists.

“How can I draw any meaning from the percentages,” he asked. “As far as I can tell you haven’t given me the information about the racial breakdown of the sample population you surveyed, it’s completely uninformative.”

Liss-Riordan said that the only percentages that matter are the racial breakdown of the number of drivers who were deactivated. The judge insisted that the sample size wasn’t helpful in making a determination on whether the case should move forward. He further said that the use of “Latinx” represented a disconnect and didn’t pass a “wokeness” test.

Uber’s attorney, Andrew Spurchise, argued that there would be problems down the road in determining class size and agreed that the survey didn’t prove a potential disparity issue existed.

“That’s the kind of thing you get to the bottom of in this case, we have a lot of questions to ask Uber,” Liss-Riordan said. “I think the results of the survey here are more than enough to survive a motion to dismiss.”

Chhabria previously granted Uber’s motions to dismiss in July and March 2021 but allowed the plaintiffs a chance to refile a complaint in both instances, acknowledging that Liu’s theory was plausible.

Littler Mendelson PC represent Uber. Lichten & Liss-Riordan represents Liu.

The case is Liu v. Uber, N.D. Cal., No. 3:20-cv-07499, motion to dismiss granted 5/23/22.

To contact the reporter on this story: Erin Mulvaney in Washington at emulvaney@bloomberglaw.com

To contact the editor responsible for this story: Melissa B. Robinson at mrobinson@bloomberglaw.com, Martha Mueller Neff at mmuellerneff@bloomberglaw.com