Uber to pay $28m to settle safety lawsuit

Uber has agreed to pay $28.5m in fines and change its marketing language touting "safe rides" to settle a pair of class-action lawsuits affecting 25 million passengers. The settlements, which now await approval from a California judge, 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. 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. The company has also agreed to refrain from using language such as "the safest ride on the road" in its marketing materials, because “no means of transportation can ever by 100% safe…”

Uber may be about to owe a lot of users money.

The ride-sharing service announced a $28.5 million class action settlement proposal Thursday in response to lawsuits by riders alleging its "Safe Ride Fee" constitutes false advertising.

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The proposal will attempt to settle Philliben v. Uber Technologies, Inc. and Mena v. Uber Technologies, Inc., which seek restitution for Uber's $1 "Safe Ride Fee." Complainants argue the name is misleading and that the company's driver background checks are not "industry leading," as Uber previously claimed. Uber allowed drivers with felony convictions to work for the ride-sharing service, according to legal records.

"No means of transportation can ever be 100 percent safe," Uber said in a statement Thursday(opens in a new tab). "Accidents and incidents do happen. That’s why it’s important to ensure that the language we use to describe safety at Uber is clear and precise."

If approved by the U.S. District Court for the District of Northern California, the settlement's damages would be divided among the 25 million riders who paid Uber's $1 Safe Ride Fee in the United States between Jan. 1, 2013 and Jan. 31, 2016. The payout would be a little more than $1 per rider, before legal fees, to be reimbursed to a user's credit card or Uber account.

Regardless of whether the class action settlement proposal is approved, a decision that could take several weeks, Uber said it will relabel its "Safe Ride Fee" as a "Booking Fee," which the company notes is similar to competitor Lyft's "Trust & Service Fee."(opens in a new tab)