SAN FRANCISCO (Legal Newsline) - Popular rideshare and taxi service Uber has announced it will pay $28.5 million to about 25 million riders to settle litigation filed against it for allegedly misleading customers about its safety procedures and fees.
The company, based in San Francisco, has asked Judge Jon S. Tigar for the U.S. District Court for the Northern District of California to approve two class action lawsuits: Philliben v. Uber Technologies Inc. and Mena v. Uber Technologies Inc.
The lawsuits allege Uber, which uses a smartphone app to receive ride requests and then sends the requests to its drivers, charged an extra “safe rides fee” to cover what the company called “industry-leading background checks” on its drivers.
According to the stipulation of settlement filed with the federal court Thursday, in addition to the $28.5 million to be placed in a settlement fund, the company will implement various changes.
Among those changes, it will not describe or title any fee that it charges for its services, including any charge for its rideshare services, as the “safe rides fee.”
In any commercial advertising, Uber also agreed it will not use the terms “best available,” “industry leading,” “gold standard,” “safest” or “best-in-class” in connection with its background checks.
It also agreed not to use the phrases “safest ride on the road,” “strictest safety standards possible,” “safest experience on the road,” “best in class safety and accountability,” “safest transportation option,” “background checks that exceed any local or national standard” or “safest possible platform” to describe its rideshare services.
While it refused to admit liability for any of the allegations, Uber said it decided to settle “in the interest of minimizing the costs inherent in any litigation.”
“Technology enables us to focus on safety for riders and drivers before, during and after a trip in ways that were simply not possible before smartphones. 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,” the company said in a statement. “However, no means of transportation can ever be 100 percent safe. Accidents and incidents do happen. That’s why it’s important to ensure that the language we use to describe safety at Uber is clear and precise.”
Going forward, Uber said it will rename the safe ride fee a “booking fee.”
“It will be used to cover safety as well as additional operational costs that could arise in the future,” it explained.
The proposed settlement did not specify how much class counsel will be paid.
“Class Counsel will make an application to the Court for an award of Attorneys’ Fees and Expenses in the Action incurred up to the submission of the application to the Court prior to the Fairness Hearing,” the stipulation states. “The amount of the Attorneys’ Fees and Expenses will be determined by the Court, and in no event shall Defendants be obligated to pay any amount in excess of the Settlement Fund.”
Any attorneys’ fees and expenses awarded by the court will be deducted from the settlement fund and paid by the settlement administrator from the escrow account.
Each class member could receive about $1 after attorneys’ fees, given the size of the pot.
If Tigar approves the settlement, members will be notified by email and given the choice to be paid by credit card or to their rider account. The class includes passengers who took a trip in the U.S. between Jan. 1, 2013 and Jan. 31, 2016.
“We are glad to put these cases behind us and we will continue to invest in new technology and great customer services so that we can help improve safety in the cities we serve,” Uber said in its statement.
West Hollywood law firm Ahdoot & Wolfson PC, Los Angeles firm Arias Sanguinetti Stahle & Torrijos LLP and Detroit firm Liddle & Dubin PC served as class counsel; Irell & Manella LLP in Los Angeles represented Uber in the litigation.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.