Uber agrees to its largest settlement ever, but your cut will be pitifully small

Uber is seeking to settle two class-action lawsuits that allege the ride-hail company improperly marketed its safety record to passengers by charging them a flat fee for “safe rides.” It says it will pay $28.5 million to around 25 million passengers who paid “safe ride fee,” which will amount to less than a dollar per passenger. Still, if approved by a judge, the settlement would be the largest in the San Francisco-based company’s six-year history.

Uber has long-touted its safety record as compared to other for-hire vehicle services like taxis and black cars. But under this agreement, Uber will now have to avoid using certain language when marketing itself, such as “safest ride on the road” and “gold standard in safety.” It will also change the name of the tax it charges each rider, from “safe ride fee” to “booking fee.” The fee will remain on every passenger’s bill, just under a new name.

“Technology enables us to focus on safety for riders and drivers before, during and after a trip in ways that were simply not possible just nine years ago before smartphones,” Uber says in a blog post today. “Unfortunately, however, no means of transportation can ever be 100 percent safe. Accidents and incidents will happen. That’s why it’s important to ensure that the language we use to describe safety at Uber is clear, precise and accurate.”

Safe ride fees, which were first rolled out by Uber in the spring of 2014, vary from market to market, but they generally amount to a buck and some change. In San Francisco, they’re about $1.35 per trip. Philadelphians pay $1.25, while Los Angelinos pay $1.65. The fee is used by Uber to pay for operational costs associated with safety, such as marketing, driver screening, incident response, and technology upgrades. Uber says it needs to charge riders a separate fee to prevent it from being affected by surge pricing.

So who’s eligible for an extremely meager payout? If you took an Uber ride in the US anytime in the last three years, you’re entitled to a refund, which averages to about $0.82 per customer. As soon as the settlement is approved — which is still months away, most likely — Uber will start sending out emails to its customers asking how they’d like their money. Eight dimes and two pennies? Three quarters, a nickel, and two pennies? Eighty-two pennies? (Actually, credit card refund or credit to their Uber account are the only two options.)

Riders may just be getting a handful of change, but the lawyers representing the plaintiffs will be the big winners here. Typically attorneys in class-action cases such as these request the judge approve a certain percentage of the final settlement as their legal fee, which can be as high as 25 percent. Lawyers for the plaintiffs in these two cases — Philliben v. Uber Technologies, Inc. and Mena v. Uber Technologies, Inc. — did not immediately return requests for comment.

Lyft is facing a similar class-action suit regarding its “trust and safety fee,” which the company has already renamed “trust and service fee.” Other “gig economy” companies have user fees that they say help pay for safety costs; Airbnb has around five or six.

Uber has agreed to other settlements in the past, but no where near as pricey. Last November, it agreed to reimburse California passengers $1.8 million for improperly collected airport tolls. But all of these class-action suits pale in importance to the one that will go to trial in June, which seeks to reclassify Uber drivers as employees, rather than independent contractors. If Uber settles that case, like Lyft recently did in a similar class action, it may be able to avoid having to reclassify its drivers. But so far, the case is barreling toward a jury trial, the outcome of which could change Uber forever.