The on-demand ride service Uber Technologies Inc. has agreed to pay $28.5 million to settle two San Francisco class actions over the way it advertises its services.
Uber announced on its website Thursday that it is asking U.S. District Judge Jon Tigar for approval to settle Philliben v. Uber and Mena v. Uber. The cases were brought by Uber passengers over the company's "safe ride fee," which Uber claimed went to support its "industry leading" background checks process.
Passengers represented by West Hollywood's Adhoot & Wolfson; Los Angeles' Arias, Sanguinetti, Stahle & Torrijos; and Detroit's Liddle & Dubin argued that Uber's background checks are in fact "woefully inadequate and fall well short" of what's required of taxi drivers and other commercial providers of transportation.
The fee of roughly $1 to $2 is charged to passengers on premium Uber rides such as UberX and UberXL, according to the latest complaint filed in the cases.
Uber is represented in both actions by Irell & Manella. The company said on its website Thursday that as part of the settlement Uber has agreed to rename the "safe ride fee" a "booking fee" and apply it to both safety and operational costs. "This is similar to the approach that Lyft has taken," the company noted.
Uber will refund $28.5 million to about 25 million passengers who used the service from 2013 until January of this year, according to the announcement, which did not mention attorney fees. The parties agreed to the settlement in principle last month following several rounds of mediation last fall, court documents indicate.
Two related class actions brought by taxi companies and taxi medallion holders alleging false advertising and unfair competition remain pending before Tigar.