Case 1:21-cv-09157 Document 1 Filed 11/05/21 Page 1 of 10
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`MANHATTAN
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`Anita Washington, individually and on behalf
`of all others similarly situated,
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`1:21-cv-09157
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`Plaintiff,
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`
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`- against -
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`Class Action Complaint
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`Uber Technologies, Inc.,
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`
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`Defendant
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`Jury Trial Demanded
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`Plaintiff alleges upon information and belief, except for allegations pertaining to plaintiff,
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`which are based on personal knowledge:
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`1. Uber Technologies, Inc. (“defendant”) operates a third-party food delivery service
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`under the Uber Eats brand.
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`2. Defendant issues significant promotional offers to gain customers, or market share,
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`based on the reasonable belief that once a customer begins to use its platform, this “stickiness”
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`will cause them to remain a user when the promotions eventually end.
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`
`
`
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`MANHATTAN
`
`Anita Washington, individually and on behalf
`of all others similarly situated,
`
`1:21-cv-09157
`
`Plaintiff,
`
`
`
`- against -
`
`Class Action Complaint
`
`Uber Technologies, Inc.,
`
`
`
`Defendant
`
`Jury Trial Demanded
`
`Plaintiff alleges upon information and belief, except for allegations pertaining to plaintiff,
`
`which are based on personal knowledge:
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`1. Uber Technologies, Inc. (“defendant”) operates a third-party food delivery service
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`under the Uber Eats brand.
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`2. Defendant issues significant promotional offers to gain customers, or market share,
`
`based on the reasonable belief that once a customer begins to use its platform, this “stickiness”
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`will cause them to remain a user when the promotions eventually end.
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`
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`
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`Case 1:21-cv-09157 Document 1 Filed 11/05/21 Page 2 of 10
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`3.
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`In issuing promotions, Defendant calculates sales tax based on the price of the food
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`items prior to applying the promotional discount, which overcharges its customers.
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`4.
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`Consider the food costing $30.23, supplemented by a $20 promotion.
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`Food
`Sales Tax (8%)1
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`30.23
`2.42
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`5. Defendant arrives at $2.42 in sales tax, based on the food’s price of $30.23.
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`6.
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`This overcharges customers by disregarding the effect of the $20 promotion.
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`7. When a purchase price is reduced through application of a coupon, of which
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`Defendant’s promotion is a type, it affects the way sales tax is computed.
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`8. A coupon is an instrument entitling the holder to a reduced purchase price based on
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`the amount of the coupon.
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`9.
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`There are two main types of coupons – manufacturers’ coupons and store-issued
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`coupons.
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`10. While both reduce the amount the purchaser pays, they affect the amount subject to
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`sales tax differently.
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`11. A manufacturer’s coupon (or manufacturer’s promotion) is issued by the
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`manufacturer.
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`12. When a customer uses a manufacturer’s coupon, the purchaser pays sales tax on the
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`full price of the item, not on the discounted price.
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`13. Since the seller is reimbursed from the manufacturer for the amount of the coupon,
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`the selling price is not reduced, even though the purchaser pays a reduced amount.
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`14. The amount of this coupon is part of the selling price of the item and is subject to tax
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`1 Eight percent is not the sales tax percent charged in NYC, but this is only an example, as the issue is present within
`NYC also.
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`2
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`Case 1:21-cv-09157 Document 1 Filed 11/05/21 Page 3 of 10
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`if the item purchased is taxable.
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`15. A store-issued coupon, in contrast, is issued by the store to the purchaser, and is
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`offered as an incentive to customers to shop at the store.
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`16. This discount is not reduced by a third-party, i.e., a manufacturer.
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`17. Since the seller is not reimbursed for the amount of the coupon, the seller receives a
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`reduced amount.
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`18. Since the seller receives a lower amount, sales tax is calculated on this lower price.
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`19. Defendant’s promotions are the equivalent of store-issued coupons, because it is
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`incentivizing purchasers to use its delivery service, instead of rivals.
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`20. Since the promotions issued by Defendant are not the equivalent of manufacturers’
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`coupons, the amount on which sales tax is calculated is less than $30.23.
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`21. Consider again the same figures, which include, as required, delivery and service
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`fees in the total taxable amount.
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`Food
`Service Fee
`Delivery Fee
`Promotion
`Taxable Amount
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`30.23
`4.57
` 0.99
`-20.00
`15.79
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`22. When sales tax is calculated on the taxable amount, purchasers should only pay $1.26
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`in sales tax.
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`Taxable Amount
`Sales Tax (8%)
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`15.79
`1.26
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`23.
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`In this example, the purchaser pays $1.16 more, or almost twice as much.
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`24. Reasonable users of Uber Eats would not expect they would be paying higher than
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`required, unlawful, and erroneous amounts of sales tax.
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`3
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`Case 1:21-cv-09157 Document 1 Filed 11/05/21 Page 4 of 10
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`25. Defendant benefits from these small charges, given the high volume of its business.
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`26. Had Plaintiff and proposed class members known the truth, they would not have paid
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`Uber Eats excess sales tax, and would have kept that money for themselves.
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`Jurisdiction and Venue
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`27.
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`Jurisdiction is proper pursuant to Class Action Fairness Act of 2005 (“CAFA”). 28
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`U.S.C. § 1332(d)(2).
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`28. The aggregate amount in controversy exceeds $5 million, including any statutory
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`damages, exclusive of interest and costs.
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`29. The small amounts charged to each individual customer, when multiplied by the
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`thousands of orders placed with promotions each day, are upwards of $10,000.
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`30. Based on this practice continuing for several years, the amount in controversy
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`exceeds $5 million.
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`31. Plaintiff Anita Washington is a citizen of New York.
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`32. Defendant Uber Technologies, Inc., is a Delaware corporation with a principal place
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`of business in San Francisco, San Francisco County, California.
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`33. Plaintiff and defendant are citizens of different states.
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`34. Defendant transacts business within this district, through the marketing, advertising,
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`and contracting with various restaurants and independent delivery personnel, to transport food
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`from restaurants to the addresses of customers.
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`35. Venue is in this district because plaintiff resides in this district and the actions giving
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`rise to the claims occurred within this district.
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`36. Venue is in the Manhattan Courthouse in this District because a substantial part of
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`the events or omissions giving rise to the claim occurred in Bronx County, i.e., Plaintiff’s use of
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`Case 1:21-cv-09157 Document 1 Filed 11/05/21 Page 5 of 10
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`Uber Eats and her overpayment of sales tax.
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`Parties
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`37. Plaintiff Anita Washington is a citizen of Bronx, Bronx County, New York.
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`38. Plaintiff has used the Uber Eats app to order food and has done so increasingly during
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`the COVID-19 pandemic.
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`39. Plaintiff has used promotions issued by Uber Eats, which have made her more likely
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`to continue to use Uber Eats instead of competitors.
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`40. Plaintiff has been overcharged sales tax in the manner described herein.
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`41. Defendant Uber Technologies, Inc., is a Delaware corporation with a principal place
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`of business in San Francisco, California, San Francisco County.
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`42. Defendant is known for its eponymous ride hailing service, Uber.
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`43. Defendant began Uber Eats six years ago, and its annual revenue is close to $5
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`billion.
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`44. Uber Eats allows customers to search local restaurants and have food delivered.
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`45. Uber Eats works with thousands of restaurants in New York City alone to deliver
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`food.
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`46. Uber Eats is in a fiercely competitive market and backed by billions in venture capital
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`investment, allowing it to spend heavily to bring customers to its service.
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`47. Uber Eats’ market share compared to competitor food delivery providers is above
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`25%, with over sixty-six million customers nationwide, with these figures increasing rapidly due
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`to its promotions.
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`48. Consumers are likely to use Uber Eats, based on brand recognition and trust of Uber.
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`49. This level of trust is critical when it comes to having strangers bring food to your
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`5
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`Case 1:21-cv-09157 Document 1 Filed 11/05/21 Page 6 of 10
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`home.
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`50. Unfortunately, this trust allows Defendant to overcharge customers, who would not
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`even know how to discover or dispute this practice.
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`51. Plaintiff used Uber Eats because it was convenient and offered her promotions, and
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`she expected that she was paying the correct amount of sales tax as part of her transactions.
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`52. Plaintiff intends to, seeks to, and will use Uber Eats as much as she previously did,
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`should it cease overcharging customers for sales tax.
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`53. Plaintiff is now reluctant to use any similar services, because she does not want to be
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`taken advantage of.
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`Class Allegations
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`54. Plaintiff seeks certification under Fed. R. Civ. P. 23(b)(2) and (b)(3) of the following
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`classes:
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`New York Class: All persons in the State of New York who
`purchased the Product during the statutes of limitations for
`each cause of action alleged.
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`55. Common questions of law or fact predominate and include whether defendant’s
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`overcharging of sales tax was permitted, and if plaintiff and class members are entitled to damages.
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`56. Plaintiff's claims and basis for relief are typical to other members because all were
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`subjected to the same unfair and deceptive overcharges.
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`57. Plaintiff is an adequate representative because her interests do not conflict with other
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`members.
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`58. No individual inquiry is necessary since the focus is only on defendant’s practices
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`and the class is definable and ascertainable.
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`59.
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`Individual actions would risk inconsistent results, be repetitive and are impractical
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`to justify, as the claims are modest relative to the scope of the harm.
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`6
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`Case 1:21-cv-09157 Document 1 Filed 11/05/21 Page 7 of 10
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`60. Plaintiff's counsel is competent and experienced in complex class action litigation
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`and intends to protect class members’ interests adequately and fairly.
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`61. Plaintiff seeks class-wide injunctive relief because the practices continue.
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`New York General Business Law (“GBL”) §§ 349 & 350
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`(Consumer Protection Statute)
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`62. Plaintiff incorporates by reference all preceding paragraphs.
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`63. Plaintiff and class members used Uber Eats and expected they would pay the sales
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`tax amount they were required to, instead of a higher amount.
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`64. Defendant’s false and deceptive representations and omissions of inflated sales tax
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`amounts caused Plaintiff and class members to pay more than they were required to.
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`65. Plaintiff and class members relied on Defendant to accurately and lawfully calculate
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`the sales tax they were required to pay.
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`66. Plaintiff and class members were injured by the payment of the difference between
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`what they were overcharged and what they were required by law to pay.
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`Breach of Contract
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`67. Plaintiff incorporates by reference all preceding paragraphs.
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`68. Plaintiff and class members entered into a contract with Defendant when they made
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`their purchases with added promotions.
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`69. This contract required Plaintiff and class members to pay a set amount of sales tax,
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`according to requirements of New York City, New York State, and any other jurisdiction within
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`this State.
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`70. The contract prohibited Defendant from making Plaintiff and class members pay
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`more than that amount.
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`7
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`Case 1:21-cv-09157 Document 1 Filed 11/05/21 Page 8 of 10
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`71. Plaintiff performed under the contract when she paid money to Uber Eats for her
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`food and the accompanying delivery and service fees, and what she thought was an accurate
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`amount of sales tax.
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`72. Defendant breached the contract by charging Plaintiff more sales tax than she was
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`required to pay.
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`73. Plaintiff’s damages are the difference between the sales tax she paid Defendant and
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`the sales tax she was required to pay.
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`Conversion
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`74. Plaintiff incorporates by reference all preceding paragraphs.
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`75. Defendant took possession and control of the difference in sales tax it charged
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`Plaintiff and the amount Plaintiff was required to pay.
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`20 N.Y.C.R.R. § 534.8
`Refunds or credits based on erroneous, illegal, or unconstitutional
`payment or collection of tax.
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`76. Plaintiff incorporates by reference all preceding paragraphs.
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`77. 20 N.Y.C.R.R. § 534.8 provides a mechanism for customers to receive refunds or
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`credits based on erroneous, illegal, or unconstitutional payment or collection of tax.
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`78. This rule allows authorizes Defendant to repay such tax to Plaintiff, and in turn claim
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`a refund or credit of such tax from the Department of Taxation and Finance, provided the tax has
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`been paid to the Department of Taxation and Finance. 20 N.Y.C.R.R. § 534.8(a)(2).
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`79. Plaintiff and class members demand that Defendant invoke 20 N.Y.C.R.R. § 534.8
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`and refund or credit the sales tax they paid above what they were required to.
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`Unjust Enrichment
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`80. Defendant obtained benefits and monies by overcharging sales tax, to the detriment
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`8
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`Case 1:21-cv-09157 Document 1 Filed 11/05/21 Page 9 of 10
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`and impoverishment of plaintiff and class members, who seek restitution and disgorgement of
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`inequitably obtained profits.
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`Jury Demand and Prayer for Relief
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`Plaintiff demands a jury trial on all issues.
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` WHEREFORE, Plaintiff prays for judgment:
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`1. Declaring this a proper class action, certifying plaintiff as representative and the
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`undersigned as counsel for the class;
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`2. Entering preliminary and permanent injunctive relief by directing defendant to refund
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`and/or credit Plaintiff and class members, and to correct the challenged practices to comply
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`with the law;
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`3. Injunctive relief to remove, correct and/or refrain from the challenged practices and
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`representations, and restitution and disgorgement for members of the class pursuant to the
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`applicable laws;
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`4. Awarding monetary damages, statutory and/or punitive damages pursuant to any statutory
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`claims and interest pursuant to the common law and other statutory claims;
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`5. Awarding costs and expenses, including reasonable fees for plaintiff's attorneys and
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`experts; and
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`6. Other and further relief as the Court deems just and proper.
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`Dated: November 5, 2021
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`Respectfully submitted,
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`Sheehan & Associates, P.C.
`/s/Spencer Sheehan
`60 Cuttermill Rd Ste 409
`Great Neck NY 11021
`Tel: (516) 268-7080
`Fax: (516) 234-7800
`spencer@spencersheehan.com
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`9
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`Case 1:21-cv-09157 Document 1 Filed 11/05/21 Page 10 of 10
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`James Chung
`Law Office of James Chung
`43-22 216th Str
`Bayside NY 11361
`Tel: (718) 461-8808
`Fax: (929) 381-1019
`jchung_77@msn.com
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`10
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