Uber agrees to pay $28.5 mil­lion over safety claims law­suits

The Pak Banker - - COMPANIES/BOSS -

Uber Tech­nolo­gies Inc. has agreed to pay $28.5 mil­lion and change its mar­ket­ing lan­guage tout­ing "safe rides" to set­tle a pair of clas­s­ac­tion law­suits af­fect­ing 25 mil­lion pas­sen­gers of the ride-hail­ing ser­vice.

The set­tle­ments, which now await ap­proval from a judge in the U.S. District Court for the North­ern District of Cal­i­for­nia, seek to re­solve two suits filed by cus­tomers in late 2014, which claimed Uber mis­led con­sumers about the safety of its ser­vice in mar­ket­ing ma­te­ri­als and by col­lect­ing $1 for a "safe rides fee" on ev­ery trip on its ser­vice since spring of 2014.

Uber in­tro­duced its safe- rides fee in April 2014, say­ing in a blog post it would go to­ward the cost of an ex­panded in­sur­ance pol­icy and im­prov­ing safety fea­tures such as back­ground checks of driv­ers. The plain­tiffs chal­lenged Uber's as­ser­tion that its back­ground checks were "in­dus­try lead­ing," be­cause it doesn't take driver fin­ger­prints or use a tech­nol­ogy called "Live Scan" that is now used by many taxi com­pa­nies and other in­dus­tries for ac­cu­rate, up- to- date in­for­ma­tion about crim­i­nal records.

Uber plans to keep the $1 fee, but change its name to a "book­ing fee" and ded­i­cate some por­tion of that rev­enue to cov­er­ing op­er­a­tional costs, in ad­di­tion to safety mea­sures, ac­cord- ing to Uber's state­ment about set­tle­ment. The com­pany has also agreed to re­frain from us­ing lan­guage such as "the safest ride on the road" in its mar­ket­ing ma­te­ri­als.

Re­solv­ing th­ese class-ac­tion suits could set a prece­dent rel­e­vant to an­other case Uber is cur­rently fight­ing in its home state of Cal­i­for­nia. The com­pany is still fight­ing a law­suit brought by the district at­tor­neys of San Fran­cisco and Los An­ge­les in 2014, which al­leged the com­pany was mis­lead­ing cus­tomers into be­liev­ing they screen out driv­ers who have ever com­mit­ted crim­i­nal of­fenses.

In their case, the district at­tor­neys of San Fran­cisco and Los An­ge­les claim that Uber per­mit­ted reg­is­tered sex of­fend­ers, iden­tity thieves, bur­glars, and a con­victed mur­derer to drive for the ser­vice, in part be­cause their back­ground checks were in­suf­fi­cient.

Mean­while, Rus­sian bil­lion­aire Mikhail Frid­man's in­vest­ment ve­hi­cle Let­terOne in­vested $200 mil­lion in Uber Tech­nolo­gies Inc., bet­ting in ride-hail­ing tech­nol­ogy af­ter sell­ing bil­lions of dol­lars worth of oil as­sets.

"We aim to in­vest in young but proven busi­nesses," Alexey Reznikovich, man­ag­ing part­ner at Frid­man's fund, said in a state­ment. "We don't want to fo­cus on any spe­cific sec­tor, but on tech­nolo­gies, be­cause they can jump from one sec­tor to an­other."

Let­terOne, owned by Frid­man and his part­ners, holds stakes in Euro­pean telecom­mu­ni­ca­tions car­ri­ers Vim­pelCom Ltd. and Turk­cell Iletisim Hizmet­leri AS. The in­vest­ment ve­hi­cle re­ceived about $ 14 bil­lion from sell­ing the oil com­pany TNK- BP to the Rus­sian govern­ment in 2013.

Uber, a US ride-hail­ing startup seek­ing to ex­pand glob­ally, was val­ued at more than $60 bil­lion, peo­ple fa­mil­iar with the mat­ter said in De­cem­ber, mak­ing it the world's most valu­able startup. Rus­sian bil­lion­aire Alisher Us­manov in­vested in Uber last year, ac­cord­ing to a re­port last month by Rus­sian pub­li­ca­tion RBC, which didn't give a value.

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