Liu v. Uber Technologies Inc.

Background

Thomas Liu brought a Title VII disparate-impact claim alleging racial disparity in Uber’s terminations of drivers. The court had previously dismissed the claim because Liu had not provided a plausible factual basis for asserting that Uber terminated drivers on a racially disparate basis. The ruling addressed Liu’s second amended complaint and Uber’s motion to dismiss.

Court’s analysis

The second amended complaint relied on a survey of approximately 20,000 Uber drivers who were clients of Liu’s counsel. The survey asked drivers who had been deactivated whether their star ratings were too low and asked them to identify their race. The complaint alleged statistically significant differences between white drivers and Black and Asian drivers, as well as drivers who identified their race as “Other.” It did not allege a statistically significant difference between white and “Latinx” drivers.

The court held that the survey did not plausibly show that minority drivers were disproportionately terminated for low ratings compared with white drivers. The survey examined the racial breakdown of drivers who had already been deactivated, rather than comparing deactivation rates across Uber’s overall driver population. The court described this as using the wrong denominator and gave a hypothetical example showing that this method could produce racial differences in survey responses even when there was no racial difference in deactivation rates or star ratings.

The court also identified a likely problem with the survey’s use of the term “Latinx.” The court stated that Latino drivers may not have understood the term, and the complaint said many Latino respondents selected “Other” because of that confusion. Although the court recognized that a survey in a complaint does not need to meet the same rigorous standards that might apply at the summary-judgment stage, it held that the survey still had to provide some information from which racial disparity could plausibly be inferred. The court found this survey essentially meaningless for that purpose.

Disposition

Judge Vince Chhabria granted Uber’s motion to dismiss. The dismissal was with leave to amend because the court found it conceivable that a more sophisticated effort—through a survey or another method—could adequately allege racial disparity in driver terminations. Any amended complaint had to be filed within 28 days of the ruling. If Liu failed to file one by that deadline, the dismissal would be with prejudice.