Our team travels a lot, so we talk about many transportation options including rental cars and ridesharing firms such as Lyft and Uber. We also talk about legal settlements that impact travelers, such as the AvisBudget Group settlement in Florida. The most recent traveler settlement is for customers of Uber, which has recently agreed (for a second time) to settle a class-action lawsuit related to their "Safe Rides" fee after the proposed 2016 settlement was dismissed by the court. Our team members will be among the travelers who are eligible for a settlement to either our Uber accounts, Paypal, or eCheck, pending court approval. And like most class-action settlements, there's no windfall for anyone except the attorneys and payments won't come until next year.
The case is McKnight et al. v. Uber Technologies, Inc. et al. The plaintiffs alleged that Uber's Safe Ride Fee wasn't used as advertised:
The lawsuit alleges that Uber made misrepresentations or omissions regarding the “Safe Rides Fee,” safety measures, and the background check process for potential drivers. The lawsuit asserted a number of causes of action, including Breach of Implied Contract, alleged violations of California’s Consumers Legal Remedies Act (Cal. Civ. Code § 1750 et seq.), California’s Unfair Competition Law (Cal. Bus. & Prof. Code § 17200 et seq.), California’s False Advertising Law (Cal. Bus. & Prof. Code § 17500 et seq.), and other violations of law.
The Defendants vigorously deny and continue to dispute all of the claims and contentions alleged in the lawsuit, and they deny any and all allegations of wrongdoing, fault, liability, or damage of any kind. Defendants further deny that they acted improperly or wrongfully in any way, and they believe that the lawsuit has no merit.
This follows the pattern of most class action lawsuits. It's common for the defendant to deny all wrongdoing but to offer a settlement rather than face a trial. And like all other class action lawsuits, the attorneys for the plaintiffs do very well while the class members get a modest settlement.
How bad is the settlement?
Whether you're a frequent or infrequent Uber rider, the settlement is bad. An assumption that a customer who frequently used Uber for the three-year class period might be in line for a sizable payout would be horribly wrong. In fact, an Uber user would have to incur 196 Safe Rides fees in order to get a $10 payout. No, that's not a typo. The 40 Safe Ride fees I personally incurred in the timeframe would entitle me to a $2.20 payout. I spent $44 on Safe Rides Fees (mostly in Boston) and will get back precisely 5% of the objectionable fee. It's all spelled out in the official long-form notice to class members.
The total settlement amount is $32.5 million and there are 22.4 million class members. A class member who doesn't select Paypal or eCheck will automatically receive Uber credits instead. The average settlement is expected to be $1.07. So Uber's maximum possible "payout" -- even though most of the payments will likely be Uber credits, is $24 million of that $32.5 million for users. And this is somehow (marginally) better for Uber users than the original proposed settlement from last year, when the total pool was $28.5 million.
Where does the unaccounted for $8.5 million go? Well, the attorneys have until December 7, 2017 to formally request their cut but given the number of rides and class members is already known, we already have the answer at hand ...
What else do Uber users get?
Not much. If you look at any receipt after January 2016, you will notice that the "Safe Rides Fee" no longer exists. In addition, Uber is precluded from some forms of advertisements about their background check processes. So a curious customer will see that some Uber background check documents have been intentionally deleted and replaced with a policy that's based upon the California laws the company was accused of violating. So there's a change afoot at Uber -- we just don't know if it will do us any good.
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