Uber agrees to settle DA Suits over safety practices

Uber Technologies Inc. will pay up to $25 million to settle a lawsuit brought by the San Francisco and Los Angeles district attorneys’ offices over how it has touted safety measures. The agreement follows the settlement of a pair of class actions in February over the same practices. San Francisco District Attorney George Gascón said the deal affects more than Uber.

“It sends a clear message to all businesses, and to startups in particular, that in the quest to quickly obtain market share, laws designed to protect consumers cannot be ignored,” Gascón said in a statement. “If a business acts like it is above the law, it will pay a heavy price.”

As part of the settlement, Uber agreed to change the way it describes its driver checks and safety practices and to cooperate with the Division of Measurement Standards to certify that ride charges are accurate and fair.

Uber will pay $10 million of its fee in the next 60 days, with a chance to have the remaining $15 million waived after two years if the company complies with all terms of the permanent injunction. Uber was represented by Morrison & Foerster partner William Stern, who referred comment to Uber, which did not return messages seeking comment.

In December 2014, Gascón and Los Angeles County District Attorney Jackie Lacey jointly filed a complaint against Uber in San Francisco Superior Court, claiming the San Francisco-based ride-hailing company misled consumers by advertising the “safest rides on the road,” coupled with “industry leading background checks.” The complaint argued that, without fingerprinting, Uber couldn’t make such a statement, and that the company’s $1-$2 “Safe Rides Fee” was misleading and should be returned to customers.

The prosecutors said the suit succeeded in forcing concessions from Uber. “It ended a years-long standoff between Uber and California regulators concerning Uber’s refusal to submit its fare calculation technology for an evaluation of its accuracy,” the release said. “It hastened Uber’s efforts to obtain permits to operate at California airports.” The release also mentions Uber’s agreement to pay $1.8 million to settle the “ ‘airport fee toll’ fraud scheme in California, in which Uber charged passengers going to or from airports for fake airport ‘tolls.’ “

In February, Uber agreed to settle two, separate class actions in San Francisco that also involved Uber’s “Safe Ride Fee.” Uber agreed to settle the complaints with a $28.5 million payment, the amount calculated for the 25 million passengers who paid a “Safe Ride Fee.” Uber also agreed to rename the fee a “booking” fee.

-RECORDER