Uber has agreed to pay US$28.5 million to settle a class-action lawsuit that took issue with the company’s claims that its driver background checks were “industry leading.”
The terms of the settlement, filed on Thursday in the US District Court in the Northern District of California, require Uber to pay roughly 25 million riders across the US and to reword the language around the fee the company charges for each ride.
Uber will rename the fee, called the “safe ride fee,” to a “booking fee.” The ride-hailing company said it would use the fee to “cover safety as well as additional operational costs that could arise in the future.”
RIVAL
Lyft, a main Uber rival, has made a similar change, Uber said.
“No means of transportation can ever be 100 percent safe. Accidents and incidents do happen,” Uber said in a statement. “That’s why it’s important to ensure that the language we use to describe safety at Uber is clear and precise.”
The settlement brings to a close a suit that was filed by Matthew Philliben and Byron McKnight in 2014 over whether Uber misrepresented the level of scrutiny it uses when recruiting drivers, who must pass background checks conducted through a third-party service.
Earlier in 2014, a New York Times article found that Uber and Lyft were actively lobbying against fingerprint-based background checks in courthouses across the country. At the time, lawmakers said that in the rush to add drivers to their services, Uber and Lyft chose speed over quality in background checks.
Uber uses Hirease, a private company that said it had an average turnaround time of “less than 36 hours.” Sterling, Lyft’s private background check service, said its turnaround time averaged two business days.
State background checks for taxi drivers vary by jurisdiction, but lawmakers said they were often more rigorous than either of these services.
Uber has also been sued in civil court by two California district attorneys on similar charges of misleading consumers about the company’s safety practices. It is unclear what impact, if any, the potential settlement may have on that case.
IMPROVED TECH
In the past, Uber has said it will invest more in researching improved safety technologies like biometric identification and voice verification. The company added that the Uber app currently shares a significant amount of driver information with riders, such as the driver’s license plate and photo identification. Uber also tracks trips using GPS technology.
If the settlement is approved by the court and accepted by riders, Uber passengers who used the service in the US between Jan. 1, 2013, and Jan. 31 this year will be notified by e-mail and have the option to accept a refund in the form of a rider credit or a charge back to their credit card on file.
“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 our cities,” Uber said.
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