The Strategist

Uber Will Spend a Total of $ 28.5 Million To Settle Two Lawsuits

02/12/2016 - 14:30

Uber taxi service agreed to pay $ 28.5 million to participants in two class actions filed against the company in connection with introduction of its special "Commission for a safe ride." The total number of claimants eligible for compensation is about 25 million people.

Mark Warner via flickr
Mark Warner via flickr
On Thursday evening, it became known that the taxi service Uber has agreed to settle out of court two class action filed against the company in connection with collecting additional fee for safe driving. According to the company, it has already appealed to the US Court for the Northern District of California with a request to approve terms of settlement for claims ‘Philiben v Uber Technologies’ and ‘Mena v Technologies’.

Under the terms of the settlement, the company is ready to pay the plaintiffs $ 28.5 million. Total number of people who may be covered by the claim’s settlement is 25 million. Those are people used the Uber service in the United States in the period from 1 January 2013 to 31 January 2016.

Claims to Uber were filed in connection with the fact that, as claimed by the complainants, despite the fact that the company charges a fee for the security, it was not capable to carefully check their drivers.

Despite the startup’s relative youth, the company already has a great experience in litigation. Recall that in early October 2015, London authorities asked the court to find out whether the software installed on Uber drivers’ smartphones is taximeter. Two weeks later, the court ruled that a mobile application, which Uber drivers use to calculate cost of trip, has some fundamental differences from the classical taximeter. Thus, for example, Uber application tracks cars location via GPS. The data are sent to an external server, and from there the application receives the fare calculation. In general, the app’s work is quite different from a usual taximeter.  

This decision means that Uber does not fall under regulations of conventional taxi services, which means that the company will not have to make changes in their activities. According to British law, only licensed drivers of traditional taxis (‘black cabs’) can own and use a taximeter in London. Under their pressure, the Department of Transport in London filed the appeal to the court with a request to give a legal assessment to the Uber app.

At the time of filing the lawsuit, the company itself noted that this case is devoid of any legal effect, and any decision of the court would not affect the service’s work in the British capital. Uber regarded the resolution of the High Court as a victory for common sense.