Uber to pay out $40m to settle ‘safe’ ride lawsuit

WHEN you pay extra for a ‘safe’ ride home, you really don’t want a convicted murderer at the wheel.

(FILES) This file photo taken on March 25, 2015 shows an UBER application being shown as cars drive by in Washington, DC. Quebec taxi drivers went to court February 2, 2016 seeking a permanent injunction banning Uber in the Canadian province, in just the latest legal challenge against the ride-sharing app in several countries.The union representing 4,000 taxi drivers in Quebec says Uber is illegal and wants it shut down locally and is also considering launching a class-action lawsuit against the startup to recover lost revenue. / AFP / Andrew Caballero-Reynolds

UBER has agreed to pay $40 million ($US$28.5 million) to settle two lawsuits alleging that the ride-hailing firm had misled customers about its safety procedures and fees.

The company told a United State Federal Court judge in San Francisco that it wanted to settle the class-action lawsuits by paying about 25 million riders who made trips between January 1, 2013, and January 31, 2016. The judge must still approve the deal.

“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 the cities we serve,” the San Francisco-based company said in a statement.

The lawsuits attacked Uber for charging a fee of up to $3.24 ($US2.30) per trip for what it called ‘industry-leading background checks’ on would-be drivers.

However, Uber didn’t do the kind of fingerprint checks required of taxi drivers — and prosecutors claimed this had allowed murderers and sex offenders to sign up as drivers.

Under the settlement, Uber also would stop using certain “safety-related” advertising language and would rename its “Safe Ride Fee” as a “Booking Fee.” Uber said its technology does provide safety features, such as track trips through GPS and sharing a driver’s photo identification and license plate number before the passenger gets into the car. “However no means of transportation can ever be 100 per cent safe. Accidents and incidents do happen,” Uber said. “That’s why it’s important to ensure that the language we use to describe safety at Uber is clear and precise.” Similar lawsuits filed by the district attorneys of San Francisco and Los Angeles are still pending.

The prosecutors settled a similar lawsuit with Uber competitor Lyft in 2014. Lyft agreed to pay $250,000 and to stop claiming its background checks were among the best in the industry.

Uber and its competitors have encountered various political hurdles as they expand services.

Government entities around the globe are grappling with how to regulate and monitor ride-hailing companies. Taxi and limousine drivers and companies complain that the app makers should be subjected to the same regulations and fees they face around the world.

The ride-booking companies counter that their drivers are private contractors who use the start-ups’ technology to find customers in need of rides.

Originally published as Uber to pay out $40m to settle ‘safe’ ride lawsuit