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Uber will repay thousands of riders for misleading them about tips

Uber won preliminary approval to settle a claim that it misled riders about a 20 percent gratuity for drivers. According to Bloomberg, US District Court Judge Edward Chen in San Francisco gave an early thumbs up to a deal that would have Uber repay $384,000 to 47,000 customers.

For over a year, users claimed Uber charged them a 20 percent tip for drivers, but then would only pass along less than half the tip amount to those drivers. Uber collected about $860,000 from users for the gratuity charge, according to the court filing.

Uber has been the target of dozens of lawsuits, almost none of which have actually gone to trial. With billions of dollars in capital raised, Uber can afford to settle most of these cases rather than risk a damaging discovery phase in trial that could see some of its internal communications made public. One such lawsuit has already exposed the company’s habit of hiring a secretive, CIA-linked firm to dig up dirt on its plaintiffs.

The district court judge Chen is also presiding over a lawsuit against Uber by a class of drivers who claim they are being misclassified as independent contractors by the ride-hail company. Uber and the drivers reached a $100 million settlement in April, but Chen rejected the deal last month, claiming it was neither fair nor adequate. The company and the drivers have since resumed negotiations over a new settlement.


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