Uber Agrees to Settle 'Safe Rides Fee' Lawsuit for $28.5 Million

Uber has agreed to pay $28.5 million to settle litigation brought by customers who alleged the ride hailing service misrepresented the quality of its safety practices and the fees it charged passengers, the company said on Thursday.

The two proposed class action lawsuits said Uber charged passengers a "Safe Rides Fee" of as much as $2.30 per trip to support its "industry leading background check process." However, Uber does not use fingerprint identification which is required by taxi regulators, court filings said.

The cases, filed in a Northern California federal court, were brought after district attorneys in Los Angeles and San Francisco made similar allegations in separate 2014 litigation. Uber asked a San Francisco state judge to dismiss most of that lawsuit, saying the prosecutors are improperly seeking "tens of millions of dollars" in penalties and restitution.

At a hearing on Thursday, San Francisco Superior Court Judge Mary Wiss said she had tentatively decided to reject Uber's dismissal request.

The cases are part of a range of legal and regulatory issues facing Uber. A lawsuit filed by Uber drivers seeking to be classified as employees and entitled to benefits is scheduled for trial in June.

As part of the $28.5 million (roughly Rs. 195 crores) rider settlement, Uber also agreed to rename the "Safe Ride Fee" a "Booking Fee." Around 25 million riders could qualify to participate in the settlement, Uber said. A San Francisco federal judge will have to approve the deal.

Uber said technology helps safety efforts but no means of transportation is 100 percent safe.

"Accidents and incidents will happen," the company said in a statement. "That's why it's important to ensure that the language we use to describe safety at Uber is clear, precise and accurate."

The consolidated class action lawsuit in US District Court, Northern District of California is Matthew Philliben et al vs. Uber Technologies Inc and Rasier LLC, 14-5615.

© Thomson Reuters 2016