Uber hasn’t been faring too well with settlement offers this year. In August in San Francisco, a District Court judge rejected a $100 million settlement with Uber drivers in a suit addressing the question of whether the drivers should be classified as employees or contractors. Now a different judge in the same courthouse rejected Uber’s $28.5 million settlement offer in a lawsuit relating to safe rides fees, according to Bloomberg.
Starting in April 2014 Uber instituted a safe rides fee of $1 per trip. The fee was charged to passengers and was supposed to compensate Uber for driver background checks, vehicle checks, and insurance. In some cities the fee eventually got as high as $2.50 per trip.
In the class action lawsuit, riders alleged that driver background checks weren’t as stringent as Uber promised. In a similar suit in April, which was settled for $10 million, prosecutors said drivers who got through the background checks included thieves, burglars, a kidnapper, and a convicted murderer.
Uber’s $28.5 million offer was rejected because it fell far short of the revenue Uber realized from the fees. Bloomberg reported that, as a result of improper redaction, a copy of the court rejection order revealed that Uber took in $448,598,018 in safe rides fees. That amount is 16 times the amount of the settlement offer. The plaintiffs’ attorneys estimated they would recover $132 million if they won the case, or a full third of the fee revenue Uber took in during the period at issue.
If the offer had been accepted, it would have resulted in approximately 82 cents for each of class action member. U.S. District Judge Jon Tigar ruled that a positive portrayal of that amount in comparison to the average $1.12 charged for safe ride fees “rings hollow” since many in the group paid multiple fees and some passengers paid nothing.
“In sum, the proposed settlement does not fairly and reasonably protect the class,” Tigar wrote.
The next step in the case is for the lawyers to present briefs on why the revenue figures should be sealed. Although the judge gave the attorneys five days to prepare their arguments, the improperly redacted document let the cat out of the bag.
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