Judge Rejects Uber’s |Safety Fee Settlement

     SAN FRANCISCO (CN) – Uber is back at square one in its bid to settle claims it charged riders a safety fee without their permission after a federal judge rejected its proposed $28.5 million settlement.
     In refusing to preliminarily approve it, U.S. District Judge Jon Tigar ruled in a late Tuesday order that the settlement did not protect potential class members.
     He also refrained from officially certifying a class for the lawsuit.
     He noted that the $28.5 million gross settlement fund was too small to repay what putative class members paid Uber in “safety fees” — undisclosed fees that Uber allegedly used to cover the cost of making riders safer.
     “Because the proposed settlement fails to allocate compensation among class members according to the type and number of Uber services purchased, the Court finds it would unfairly provide preferential treatment to certain class members at the expense of others,” Tigar said in his 19-page ruling.
     In July, Uber agreed to settle claims that it charged riders a “Safe Rides Fee” without notifying them until after their first ride and that it misrepresented its efforts to keep them safe.
     The six named plaintiffs who filed the federal consolidated suit further claimed that Uber did not use the fees to pay for safety-related services such as driver background checks.
     Uber denies the allegations.
     Under the July settlement, each class member would have received the same $0.82 payout whether or not they paid a Safe Rides Fee. This was because the proposed class included all Uber customers who used the service between January of 2013 and January of 2016, with no differentiation for those who did not pay the fee or who paid multiple fees.
     The plaintiffs were on board with the settlement, arguing that paying each member the same amount was appropriate. Frequent Uber riders were not likely to have suffered more damages than riders who used the service less, especially since the Safe Rides Fee was disclosed after the first ride, they said.
     But Tigar noted in his ruling that “a substantial portion of the class” didn’t pay a Safe Rides Fee and that another portion paid several fees.
     He said the settlement funds should have been allocated based on how many safety fees a class member paid.
     “If the claimed injury is the payment of a fee, it stands to reason that the appropriate compensation for each injured party would depend on the number of fees that party paid,” Tigar said.
     “They were just as damaged by the last Safe Rides Fee they paid as by the first one,” he added.
     In denying class certification, Tigar again flagged the safety fee. The named plaintiffs are not typical of the class, he said, because they all paid the fee while many class members had not.
     Tigar further noted that the plaintiffs’ contract claims are based on the fee, finding that “the distinction between members who paid no fee — or, conversely, members who paid numerous fees — introduces individualized questions that would threaten to override whatever issues could be commonly resolved.”
     In a separate ruling issued Wednesday, Tigar ordered the parties to show cause as to why the total amount Uber earned from its Safe Rides Fee should remain sealed in light of its agreement under the settlement to stop charging it.
     That figure was redacted from Tigar’s order denying preliminary settlement approval.
     The plaintiffs are represented by Alfredo Torrijos of Arias Sanguinetti Stahle & Torrijos in Los Angeles. Uber is represented by Matthew Ashley of Irell & Manella in Newport Beach.
     Neither attorney nor a representative for Uber responded to requests for comment Wednesday.

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