By Jay Landers
Parking reservation platform SpotHero Inc. is facing a federal class action lawsuit alleging the company engaged in deceptive pricing practices by hiding mandatory service fees until late in the checkout process.
An extra $1.09
The lawsuit, filed April 4, 2025, in the U.S. District Court for the Central District of California, was brought by plaintiff Edward Galvez of San Pedro, California, who seeks to represent California consumers who purchased parking reservations through SpotHero’s platform and paid hidden service fees.
According to the complaint, SpotHero engaged in so-called drip pricing by advertising parking spots at one price but then adding mandatory “processing” or “service” fees only after customers had already selected their parking spots.
Galvez purchased a parking reservation in December 2024 that was initially advertised for $15, the complaint notes, but ultimately cost $16.09 after SpotHero added a $1.09 service fee at the end of the checkout process.
“SpotHero’s practice of adding fees at the end frustrated comparison shopping, impeded competition, and led consumers to pay more for their parking spots than they otherwise would,” the complaint states.
According to the complaint, SpotHero changed its pricing practices around April 1, 2025, after receiving a notice letter from the plaintiff’s attorneys, and now discloses the full price including service fees upfront.
“Through at least March 2025, SpotHero used drip pricing, and hid the true price of the parking spot until the purchase was almost complete,” the complaint says. “In late March, Plaintiff sent SpotHero a notice letter regarding its drip pricing practices. In response to receiving the notice letter, on or about April 1, 2025, SpotHero appears to have changed its practices, and now discloses the full price including service fees, upfront.”
Class could include thousands of consumers
The lawsuit alleges that SpotHero’s practices violate California’s Consumer Legal Remedies Act (CLRA) and Unfair Competition Law (UCL) and constitute quasi-contract violations. California strengthened its anti-drip pricing laws in 2023 with Senate Bill 478, which specifically prohibits advertising prices that don’t include all mandatory fees, effective July 1, 2024.
The proposed class includes California residents who purchased parking spots from SpotHero and paid hidden service fees, with a subclass covering transactions after July 1, 2024, when the enhanced CLRA provisions took effect.
Galvez seeks damages, restitution, injunctive relief, and attorney’s fees on behalf of the proposed class, which the complaint estimates could include thousands of consumers.
Defending the industry
Todd Tucker, an attorney and the chief operations officer for Parking Revenue Recovery Services (PRRS), which provides services related to compliance, access monitoring, and dispute processing, contested the complaint’s allegation that the fees charged by SpotHero and other parking apps are in any way fraudulent or illegal. “These are simply fees that businesses add, quite reasonably, to cover their admin costs of selling via alternative channels for customer convenience,” Tucker told Parking Today. This convenience is “extremely popular with drivers,” he said.
Tucker noted that the U.S. Federal Trade Commission (FTC), in its January 10, 2025, final rule titled “Trade Regulation Rule on Unfair or Deceptive Fees,” indicated that the use of such fees is legal as long as businesses “clearly state and articulate them in the transaction journey,” he said. The FTC’s final rule became effective May 12, 2025.
Given this position by the FTC, “most operators out there will likely only need to ‘gross up’ their pricing earlier in the transaction search [versus] checkout and clearly break out the added fees and why they exist to be considered legal,” Tucker said. Ultimately, companies should “err on the side of transparency and clarity” to limit their chances of attracting legal action like what SpotHero is facing, he noted.
More broadly, parking industry leaders need to work with the appropriate regulatory agencies to “craft reasonable guidelines for us to follow as an industry,” Tucker said. “We need to hold our parking industry trade organizations accountable to take up these efforts on our behalf with their reach and resources.”
Looking ahead
The case against SpotHero was filed by attorneys Christin Cho and Simon Franzini of Dovel & Luner LLP in Santa Monica. Cho did not respond to requests for comment.
SpotHero declined to comment on the lawsuit, citing the pending litigation. The company also declined to answer questions whether it changed its payment policies because of the case.
SpotHero has until June 27 to respond to the complaint, according to a May 13 order from Judge Michael W. Fitzgerald.
Jay Landers is the editor-in-chief of Parking Today. He can be reached at [email protected].
