Uber offers millions to settle passenger lawsuits

Uber Technologies Inc. and six passengers asked a federal judge in San Francisco Thursday to approve a $28.5 million settlement of two lawsuits in which the passengers accused the ride-hailing company of misleading customers about the use of its “Safe Rides Fee” and the quality of its background checks of drivers.

The settlement must be approved by U.S. District Judge Jon Tigar to become final. A date for a fairness hearing on the proposal has not been set.

Under the plan, San Francisco-based Uber will change the wording in its safety-related advertising. It will also pay $28.5 million to a class of about 25 million passengers who bought rides through Uber’s smartphone application or website between Jan. 1, 2013, and Jan. 31, 2016.

After the plaintiffs’ attorneys are paid, individual class members would each receive a little less than $1, which could be paid to either their credit card or their rider account.

Uber began charging a $1 “Safe Rides Fee” for each ride in 2014 and in 2015 changed the fee to a variable amount ranging from $1.35 in San Francisco to $2.30 in Detroit.

Under the proposed settlement, Uber will drop the title “Safe Rides Fee,” but may continue to charge an assessment called a “Booking Fee” that can be used for safety initiatives and other operational costs.

The company will eliminate phrases in its online and app advertising such as “industry leading,” “best available,” “strictest safety standards possible” and “safest ride on the road” to describe its background checks and ride services, according to the settlement document.

The settlement also provides that for as long as Uber does not require the use of fingerprints or government databases in background checks, it must post a disclaimer in the safety section of its website stating:

“The screening process of drivers does not require fingerprints, Live Scan, or the Department of Justice or FBI databases.”

The two lawsuits were filed in 2014 and 2015 and were consolidated into a single lawsuit in January of this year.

They alleged that Uber misled consumers by saying its safety measures exceed what is required of taxi companies, by using phrases such as “safest rides on the road” and, until the fall of 2014, by stating its background checks were “industry leading.”

Unlike most taxi companies, Uber does not require fingerprint identification to verify the identities of drivers, said the lawsuits, which also alleged Uber’s driver training is “substandard.” The suits also claimed Uber used the safety fee as “a profit center” and did not spend all of the money collected on background checks, driver training and other safety measures.

Uber said of the settlement in a statement Thursday:

“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. … 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.”

Lawyers for the passengers could not be reached for comment.

Similar challenges to Uber’s advertising claims about safety have been made in a lawsuit filed in San Francisco Superior Court by the San Francisco and Los Angeles County district attorneys and in a lawsuit filed in federal court in San Francisco by 19 taxi companies.