Uber To Pay $25M To Settle Allegations It Misled Passengers On Drivers’ Safety, Fees

Less than two months after Uber agreed to pay $28.5 million to settle a class-action lawsuit accusing the company of misleading consumers about its “industry leading” safety procedures, the ride-hailing company is ready to put another case behind it. The company will pay $25 million to settle a civil lawsuit with the district attorneys in Los Angeles and San Francisco over nearly identical allegations. 

The two prosecutors announced the settlement on Thursday, putting an end to a lawsuit that accused Uber of giving customers a “false sense of security” by overstating the safety measures it uses to screen drivers.

The suit, filed in Dec. 2014, contended that Uber, which uses an outside private firm to screen prospective nonprofessional drivers, was in violation of California law for its alleged mischaracterization of the extent to which it vets its drivers.

The district attorneys argued that Uber’s background checking practices, which rely heavily on the use of information supplied electronically by prospective drivers, can easily be compromised if applicants use stolen or false identifications.

“Uber continues to misrepresent and exaggerate background checks on drivers,” Los Angeles District Attorney Jackie Lacey said at the time the lawsuit was filed. “It’s not our goal to shut them down. What we’re saying is their advertising is false.”

In addition to accusations about mischaracterized background checks, the lawsuit claims that Uber charged passengers an additional $4 for trips to and from San Francisco International Airport even though the company lacks a permit to do business at the airport and the company doesn’t pay the airport fee.

The company was also accused of failing to obtain approval from state regulators on how to calculate fares.

Under the settlement, which was filed on Thursday in the United States District Court in the Northern District of California, Uber is required to pay $10 million to be split between Los Angeles and San Francisco counties within 60 days. The remaining $15 million civil penalty will be waived in two years if the company complies with all of the settlement’s terms.

Additionally, the company, which admits no wrongdoing in the settlement, must revise the safety-related language around the fees that the company charges for each ride, and ensure that its fare calculations meet accuracy standards set by the California Department of Agriculture’s Division of Measurement Standards.

The company must also receive approval from airports in California to have its drivers drop off and pick up passengers and can no longer charge an airport “toll” unless it or its drivers pay the entire fee to the airport, according to the agreement.

“We’re glad to put this case behind us and excited to redouble our efforts serving riders and drivers across the state of California,” Uber said in a statement.

The company outlined how it has changed or will change its practices as a result of the settlement.

For example, Uber says it has agreed to allow ridesharing only at airports in California where it has explicit permission and has already changed the way it describes airport fees.

Uber says it has agreed to no longer use terms like “safest ride on the road” or describe its background checks as “the gold standard.”