Uber Settles Class-Action Lawsuit over Background Checks

A class-action lawsuit disputing Uber’s claims that the background checks it conducts on its drivers are “industry-leading” has been settled. The company has agreed to pay a total of $28.5 million to about 25 million riders across the country and to reword the language related to a fee.

The settlement was filed on February 11 in the United States District Court in the Northern District of California. It still needs to be approved by the court and accepted by riders. If that happens, people who were passengers from January 1, 2013 to January 31, 2016 will be able to accept a refund as a rider credit or a chargeback on a credit card. After attorneys’ fees are deducted, each passenger is only expected to receive about $1.

The lawsuit was filed against Uber in 2014, claiming that it misrepresented the extent of the background checks it conducts on potential drivers. The plaintiffs said that Uber falsely claimed to run “industry-leading background checks.” The company charged a “safe ride fee” of $1 to $2 that it said it used to offset those costs.

Uber’s background checks do not use fingerprint verification to make sure that the person submitting to the background check is actually who he or she claims to be. The plaintiffs argued that background checks using fingerprints were an industry-leading background check process.

Uber uses a third-party service to conduct the checks. Uber and its rival, Lyft, have fought against background checks using fingerprints across the United States. Lawmakers said the companies were choosing speed over providing quality background checks. Background checks for taxi drivers vary by location, but lawmakers said they were often more in-depth than the ones conducted by Uber and Lyft.

Uber and its subsidiary denied the allegations and did not admit any wrongdoing. The charge will now be called a “booking fee” and will be used to cover safety and future operational costs. Lyft has made a similar change to its policy.

Uber said that it plans to invest more money to research improved safety technologies such as biometric identification and voice verification. The company said it currently shares information such as drivers’ license plates and photo identification with riders and tracks trips with GPS technology.

Uber is also facing another civil lawsuit filed by two California district attorneys alleging that the company misled customers about its safety practices. It is unclear whether the lawsuit that was just settled will affect that other case.