SAN FRANCISCO (CN) – Uber has agreed to pay nearly $1.8 million to settle claims it wrongfully charged passengers toll fees for rides to California airports.
Founded in 2009, Uber Technologies is a San Francisco-based “ride-sharing” service company that markets the mobile “Uber” app, which allows consumers to summon a ride and pay for it using the app.
The company doesn’t provide the transportation service directly, instead routing its transportation requests through Raiser-CA, a transportation network company that hails third-party drivers who transport customers using their own vehicles.
The service is now available in 58 countries and 300 cities worldwide.
On July 23, 2014, lead plaintiff Vamsi Tadepalli used the Uber app and paid $27.57 for a ride to San Francisco International Airport. The cost included an alleged $4 airport toll fee.
Tadepalli sued Uber in December 2014 for breach of contract, breach of good faith and fair dealing, unjust enrichment and restitution, accounting, conversion, fraudulent concealment and constructive trust, all under California’s unfair competition law.
Specifically, he alleges that California airports do not charge ridesharing drivers taxes, fees, tolls or surcharges for drop-offs and pick-ups and that Uber shouldn’t be charging customers for fees that don’t exist.
Uber admits to charging the fees, but denies that it does so “wrongfully.”
The estimated $62 billion company removed the case to Federal Court in San Francisco this past September, the plaintiff ultimately filing a motion for preliminary approval on Nov. 20 following “exhaustive arm’s-length negotiations.”
U.S. District Judge Maria-Elena James preliminarily granted the motion on Dec. 17.
“Based on the parties’ written submissions, the settlement in this case appears to be the product of serious, informed, noncollusive negotiations,” she wrote in a 23-page order. “The parties reached terms on the proposed settlement through a series of negotiations between experienced counsel that were conducted at arm’s length and in good faith over the course of 45 days. In light of the analysis, the motion for preliminary approval of class settlement is granted.”
Under the settlement, Uber agreed to pay class members “100 percent of the aggregate amount of the California airport fee tolls each class member paid during the class period,” which comes to $1,785,912.85.
Tadepalli stated in his motion for preliminary approval that “the proposed settlement is remarkable in that Uber has agreed to credit or otherwise refund all settlement class members for 100 percent of those fees.”
Under the settlement, Uber will no longer “describe passenger fees for trips to or from California airports as ‘airport toll fees’ or in like manner as fees paid to California airports unless the fees are remitted to the airport.”
Uber has also agreed to pay attorney fees, which are yet to be determined but which James said must not “exceed class counsel’s lodestar, or 10 percent of the settlement amount, whichever is less.”
Tadepalli’s attorney, Todd Schneider of Schneider Wallace Cottrell Konecky Wotkyns in Emeryville, Calif., was traveling and not available for comment. His associate, Michael McKay, could not be reached for comment.
The class has until March 24, 2016 to file a motion for final approval and scheduled a fairness hearing for April 21, 2016.
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