Uber agrees to pay $28.5 million over safety claims lawsuits
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.