Judge OKs Class Settlement on Uber Tips

SAN FRANCISCO (CN) - Uber won preliminary approval Thursday of a settlement with riders who claim it misrepresented how much drivers receive from gratuity charges.

Led by Caren Ehret, passengers claimed Uber advertised a charge for metered fare plus a 20 percent driver gratuity on its website and other marketing materials, but kept a substantial portion of that 20 percent.

Ehret said she would not have paid the fare had she known that Uber was pocketing the lion's share of drivers' tips.

Ruling from the bench Thursday, U.S. District Judge Edward Chen said the roughly $343,000 settlement seemed fair, as it amounts to a full refund of what the class of 46,882 riders claimed Uber kept.

"This is a 100 percent recovery. It appears this is a very reasonable settlement and a good settlement for the class," Chen said.

Class attorneys will seek roughly $431,000 in fees.

At a class certification hearing last year, Chen said he was concerned that not all members of the proposed class had seen Uber's alleged misrepresentations.

Chen told class attorney Michael Ram: "I think there's a real problem here in that it was certainly possible that some riders would not have seen the representation that 20 percent charge is for gratuity and for a gratuity and service charge that was going to go into Uber's pocket and not the driver's pocket.

"Here, it's possible to get to the product without seeing that. I don't know how one can prove from these facts that there was exposure for all members of the class, so you've got a predominance problem."

In December, Chen certified a class of "all individuals who received Uber's email with the representation that the 20 percent charge would be gratuity only, who then arranged and paid for taxi rides through Uber's service from April 20, 2012 to March 25, 2013."

On Thursday, Ram told Chen he was not sure certification could survive. "At the class certification hearing, I was sweating," he said.

"There was a substantial risk of us not being able to maintain class certification after trial and after appeal," he said.

Follow @MariaDinzeo

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