The Stack Archive

Uber proposes $28.5 million settlement in California

Fri 12 Feb 2016

Uber has agreed to pay $28.5 million to settle two class-action lawsuits, which claim that Uber incorrectly identified its background checks as ‘industry leading’ and charged riders a ‘Safe Ride Fee’ of up to $2.30 per ride.

In a statement on their blog, Uber stated that in addition to paying $28.5 million to around 25 million customers who are part of the class-action suits, they will change the language used in their advertising and will rename the ‘Safe Ride Fee’ as a ‘Booking Fee’. Riders still have to pay the fee, just removing the implication that the ride will be safe.

While Uber does not officially admit any wrongdoing, they will change their advertisement from promising industry-leading background checks on drivers. While Uber does perform background checks, they do not include fingerprinting in their checks, which many other taxi services do. However, they were quick to point out all the ways that their service does enhance rider safety, particularly in smartphone-integrated safety features. “For example, by sharing driver information with riders–their license plate and photo ID–before they get into the car; by tracking trips using GPS from beginning to end; and by enabling riders to share their ETA or route with family and friends.”

Should the judge approve the settlement, after legal fees, the customers covered by the lawsuit can expect to recoup 85 cents each, which can be applied directly to their Uber account.

In December 2014, Lyft agreed to settle a similar lawsuit in San Francisco for $500,000 in which Lyft’s claims to industry-leading background checks were disputed. Half of that settlement was waived if Lyft complied with the restrictions of the suit, meaning that Lyft paid one tenth of the sum proposed yesterday by Uber to settle a similar suit.

This is not the only legal battle that Uber faces: in another class-action suit set to go to trial in June 2016, in which drivers have requested that Uber pay gas and other expenses. Just last month, Lyft agreed to settle a similar suit for $12.25 million, in which they agreed to pay for some expense reimbursement and overtime, Lyft drivers are still classified as independent contractors rather than employees under the law. In a statement about the Lyft settlement, Shannon Liss-Riordan, who was an attorney for the Lyft drivers and is heading up the upcoming Uber suit, said that she receives many more complaints about mistreatment from Uber drivers than from Lyft drivers, including problems with cutting fares.


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