A group of consumers brought a class action against the New York Black Car Operators’ Injury Compensation Fund–a statutorily created fund that provides workers’ compensation benefits to New York’s black car drivers. The consumers argued that the fund had unlawfully collected a surcharge on noncash tips they paid to drivers (generally, through the Uber App), and the district court agreed. On appeal, the Second Circuit reversed, relying on the statutory language that allowed the surcharge to be levied on “payments for covered services.” A tip, the court held, is plainly such a payment, even if it could also be characterized as a gift.
Class Actions, Consumer Litigation
Are tips payments for services? Second Circuit says yes
