Uber agrees to pay $28.5 million to end lawsuit about safety ads
On Thursday, Uber agreed to pay $28.5 million to 25 million riders to settle a class-action case surrounding its safety practices advertisements.
After expected lawyer's fees, that will leave riders with a whopping 82 cents each.
As part of the settlement, Uber must refrain from using certain superlatives like "industry-leading" or "best in class" when describing its background checks.
Plaintiffs in two separate lawsuits argued that the company misled its customers about its safety practices in its consumer advertising when it said it was "safer than a taxi" or had "industry-leading" background checks.
Uber does perform background checks for all of its drivers, but it does not fingerprint its drivers like other transportation services, including some taxi companies. While the company initially described its background checks as "industry-leading," it's since backed away from that language and endeavors to be more precise as part of the proposal.
The settlement won't have any bearing on how Uber conducts its safety checks, as the lawsuit only covered its advertising.
Uber also agreed to rename its "Safe Rides Fee," which charged anywhere from $1 to as high as $4.50 in some places, to a "Booking Fee." Uber had originally started charging a $1 Safe Rides Fee in April 2014 as a way to recoup the cost of its background checks and 24/7 support. The money from the booking fee will be used for both safety and operations costs.
Uber isn't the only one to face this change. Its rival, Lyft, also quietly re-named its "Trust and Safety Fee" to "Trust and Service Fee" after being sued in San Diego Superior Court for a similar reason.
The settlement is the conclusion of two cases, Philliben vs. Uber Technologies Inc. and Mena vs. Uber Technologies Inc, which were filed in December 2014 and January 2015 respectively. The combined plaintiffs plan to file the settlement agreement in U.S. California Northern District court on Thursday. In the proposed settlement, Uber admits no wrongdoing in its advertising practices.
The judge still needs to approve the proposed settlement, which will likely happen in mid-March.