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Uber Settles Class Action for $28.5 Million

Uber Technologies Inc. ("Uber" or the "Company") has agreed to settle a class action pending in California federal court that raised questions about the Company's "safe ride" fees. The proposed $28.5 million settlement will benefit roughly 25 million riders that utilized the ride hail company from January 2013 to January 2016.

The lawsuit alleged the Company deceptively used the term "safe ride" fees to mislead consumers into believing that the Company was using the fees on "industry leading" background checks. The "safe ride" fee was set at $1 per ride, but it was increased in certain geographic areas in late 2015. The Plaintiffs alleged that Uber simply pocketed the increase and failed to use the money to train drivers, provide motor vehicle checks, and/or implement a "industry leading" background check system, as Uber advertised. The Complaint noted that typically, taxi companies in some of the most populous cities in the country require their drivers to undergo criminal background checks that include fingerprint screening. Plaintiffs claimed that Uber's failure to use fingerprint screening makes its background check system deficient -- clearly, the "safe ride" fees were not being used on "efforts to ensure the safest possible platform for Uber rider and driver," as Uber claimed.

Uber's driver safety program has gained notoriety due to several news stories from cities across the country that have accused Uber's drivers of various crimes. In the past three months alone, there have been Uber drivers accused of murder, theft, assault, and aggravated assault. The lawsuit acknowledged the inherent vulnerability of a passenger in the backseat of a car and challenged Uber to take its role in providing safe drivers more seriously.

While a novel idea, the Company has seen its share of legal challenges in its young life. The most notable issue the Company has faced is the ongoing dispute as to whether the drivers working for the Company are "independent contractors" or "employees." If the drivers were to retain the classification of "employee," they would be entitled to certain benefits and protections including, for example, unemployment insurance, workers' compensation insurance, National Labor Relations Act protection, and overtime wages. That case is still currently pending in San Francisco Superior Court.

The legal team at SFMS has significant experience litigating class action matters. If you have any questions regarding this subject or this posting, please contact Alec Berin (aberin@sfmslaw.com) or Chiharu Sekino (csekino@sfmslaw.com). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

Sources:

https://www.law360.com/classaction/articles/758610/uber-to-pay-28-5m-to-end-class-action-over-safety-claims

Case 3:14-cv-05615-JST , Consolidated Class Action Complaint (Document 67)

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