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Uber Eats Discount Sales Tax Class Action Lawsuit

Consumer Class Actions

Uber Eats Discount Sales Tax Class Action Lawsuit – Ignoring New Yorkers’ Discount Codes And Charging Taxes On The Original Price…

Uber Eats Allegedly Miscalculates Sales Tax for New York Promo Code Users, New Class Action Says

According to a proposed class action, Uber Eats overcharged New York consumers who used a promotional discount by computing sales tax on the price of food before the discount was applied.

Anita Washington v. Uber Technologies Inc.

Click to access Anita-Washington-v.-Uber-Technologies-Inc..pdf

Uber Eats Disregards Promo Codes when Calculating Sales Tax

According to the Uber Eats Discount Sales Tax Class Action Lawsuit, by calculating sales tax on an order’s price prior to applying a promotional discount, Uber Eats basically disregards the promotion. According to the argument, despite the small amount involved, this practice favors defendant Uber Technologies due to the volume of business going through Uber Eats.

The lawsuit claims that reasonable Uber Eats users would not anticipate paying more than needed, unlawful, or erroneous sales tax. Given the size of its operations, the defendant profits from these small charges.

According to the claim, Uber Eats makes numerous promotional offers in order to attract customers as well as market share. In addition, the food delivery company does so on the reasonable assumption that once a customer signs up for Uber Eats, they will continue using it even after promotional offers expire, the claim states.

According to the complaint, Uber Eats collects sales tax in New York based on the overall price of an order prior to using a promotional code. For instance, the Uber Eats Discount Sales Tax Class Action Lawsuit says that on a $30.23 food purchase with a $20 promo applied, Uber Eats charges $2.42 sales tax on the initial $30.23 price, not the discounted amount.

The complaint asserts that when Uber reduces a purchase price via a promotion, it effectively gives a “store-issued” coupon. As a result, the sales tax is calculated differently when a store-issued coupon is applied instead of a manufacturer’s coupon. 

Moreover, a manufacturer’s coupon enables a seller to collect sales tax on the total price of a product because the manufacturer reimburses the seller for the cost of the coupon. A store-issued coupon, on the other hand, such as Uber’s promotion, is intended to encourage customers to buy at the store, therefore, results in the seller not getting the entire purchase amount, the suit argues.

This means that a customer should pay sales tax based on the promotion’s reduced price, the complaint asserts.

Anita Washington et al., v. Uber Technologies

Plaintiff Anita Washington lodged the class action against Uber Technologies, Inc. in a federal court in New York on November 5, alleging violations of the New York consumer protection laws.

According to the Uber Eats Discount Sales Tax Class Action Lawsuit, consumers end up paying more than expected when Uber taxes the total price of their orders instead of the discounted price plus applicable service and delivery costs. Using the same hypothetical scenario, the complaint claims that if Uber calculated the tax correctly, the purchaser of the $30.23 meal order only pays $1.26 in sales tax rather than $2.42.

Further, consumers are more likely to choose Uber Eats in a highly competitive mobile food delivery app market because of Uber’s brand recognition and trust, which is crucial when having strangers deliver food to your home. Unfortunately, the suit alleges, this confidence enables the defendant to overcharge customers who would have no way of discovering or disputing the practice.

The Uber Eats Discount Sales Tax Class Action Lawsuit seeks to represent all individuals who used Uber Eats in the state of New York throughout the applicable statute of limitations periods.

Washington is suing for consumer protection and unjust enrichment under New York’s consumer protection laws. According to the lawsuit, there is a controversy over more than $5 million.

Washington is seeking class certification, an order requiring Uber to cease the claimed conduct, damages, expenses, and attorneys’ fees, as well as a jury trial.

Editor’s Note on Uber Eats Discount Sales Tax Class Action Lawsuit:

This article is written to inform you of the class action lawsuit filed against Uber Eat over allegations that it is overcharging New York customers who take advantage of a promotional discount through calculating sales tax on the price of food before the discount is applied. 

You might also be interested in the Lularoe Alaska Sales Tax Lawsuit.

Case Name & No.: Anita Washington v. Uber Technologies Inc., Case No. 1:21-cv-09157

Jurisdiction: U.S. District Court Southern District of New York Manhattan

Allegations: Uber Eats is alleged to overcharge sales tax to New York customers

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