SAN FRANCISCO (CN) - A federal judge in San Francisco said Thursday he'll preliminarily approve a $345,622 class action settlement between Uber and a class of drivers accusing the ride-hail of shortchanging them using its "upfront" pricing model.
But U.S. District Judge William Alsup said in an afternoon hearing he'd sign off on the deal only if Uber agrees to release only the specific contract claim certified in the case, brought by North Carolina driver Martin Dulberg in February 2017.
"You're only releasing the breach of contract claim asserted here," Alsup told Uber's attorney Randall Edwards of O'Melveny & Myers. "If you don't want to do that, I'm going to reject your deal. I'm not going to let Uber get away on wiping the slate clean on claims not litigated in this case."
In his complaint, Dulberg claimed Uber stopped giving drivers the 80 percent of fares it had promised them in a 2015 driver contract when it switched to its upfront pricing model the following year.
The 2016 pricing model calculated fares before a ride so riders knew how much they would be charged. Uber previously calculated a rider’s fare at the end of a ride based on actual time and distance driven.
Dulberg alleged the upfront pricing model used “aggressive” time and distance estimates to calculate fares, often resulting in fares higher than what a passenger would have paid under the old model.
But instead of giving drivers the higher payments they were owed for the higher upfront fares, Dulberg said, Uber performed a separate calculation after the ride was over based on actual time and distance driven, and paid drivers 80 percent of that lower fare. Ultimately, drivers got less than the 80 percent of the rider-assessed fare promised them under their contract, he said.
Uber, however, insisted drivers were paid based on actual time and distance driven. It said drivers' fare calculations remained the same under the upfront model, and that most drivers got more money under it.
In Thursday's hearing, Alsup said he was concerned with the claim-release language in the proposed settlement agreement. The language states the release covers only claims related to contract cause of action related to the alleged breach of the driver agreement based on Uber's upfront pricing model.
And Edwards said Uber was entitled to release of good faith, unjust enrichment and other claims brought in the original complaint.
But Alsup ordered the parties to redo the release language to specify only the certified contract claim would be released, so Uber wouldn't try to get similar class actions dismissed.
"I'm not going to let you wipe the slate clean of future contract cases," Alsup reiterated to Edwards, adding that otherwise, "some other class gets the shaft."
The judge also said he would likely deny Dulberg's request for a $5,000 award for prosecuting the case.
"If it's not good enough for the plaintiff, it's not good enough for the class members," Alsup said.
The class contains 4,594 members nationwide, according to the proposed settlement agreement.
After the hearing, class counsel Samuel Moorehead of Napoli Shkolnick was optimistic Alsup would green-light the settlement.
"We have a full and fair settlement of these claims, the judge recognizes that," he said. "The judge, in extra consideration of other non-related claims that might come up, has asked us to basically tighten up the language, but it does appear the settlement is going through and that the drivers who were prejudiced by Uber's pricing scheme will be fully compensated for their damages."
An Uber spokesperson did not return an email seeking comment Thursday afternoon.
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