Dial-a-ride biz settles Cali background checks lawsuit
The ride broker told the California Northern District Court that it had struck a new settlement deal in the case over its “Safe Rides Fee.”
Under the deal, Uber will pay $32.5m into a rebate pool for passengers and will stop using the term “Safe Rides Fee” to describe the surcharge it passes on to customers for the cost of running background checks on drivers.
The deal settles a 2014 class action suit brought against Uber alleging violations of California truth in advertising and unfair competition laws.
Uber had been accused of misrepresenting to customers the quality of the background checks it had been claiming were the reason for a $1.14 (average) Safe Rides Fee it tacked onto each ride. The complaint accused Uber of pocketing those fees and then failing to deliver on the advertised claims of “industry-leading” background checks that made riders feel a little more confident that drivers would not pose a threat to them.
The settlement is actually the second to be struck by Uber in the case. A previous deal, calling for a $28.5m payout, had been rejected, forcing Uber to come back with a bigger payout purse.
“The final issue the Court raised was that Plaintiffs had not shown that the $28.5m settlement amount fell within the range of possible approval,” Uber said of the deal.
“In the Amended Settlement, the fund has increased to $32.5 million, even though the class size has decreased by almost 10 per cent.”
Should the settlement be approved, passengers who paid the fees will have 105 days (from the approval date) to file a claim to get a payout from the pool. The clock will also start on a 140-day window to file any objections to the claim and call for a “fairness hearing” on the settlement.
From there, presumably, those who filed would get a cut of the settlement package, after, of course, the attorneys took out their piece.
The case is one of many that Uber currently faces, and given the stakes in cases like the Waymo theft battle, there won’t be much of an impact on Uber either way. Still, it would present one less headache for a company that could sorely use that sort of relief right about now. ®