When Uber’s new CEO Dara Khosrowshahi took up the reins last year, he faced an intimidating to-do list. Uber had legal quarrels with everyone from Google to the federal government, and since taking control, Khosrowshahi has been on a mission to settle as many disputes as possible.
So, it makes perfect sense that Uber has chosen to settle with 2,421 New York drivers who accused the company of taking excessive fees from their fares.
According to a preliminary settlement filed in federal court in Brooklyn, Uber has agreed to pay up to $3 million to the drivers. As part of the settlement, Uber has not admitted any wrongdoing, and is simply settling to avoid the cost, inconvenience (and bad press!) of a trial.
The settlement in Uber’s second major payout in New York. In May, the company admitted that it had underpaid drivers for nearly two and a half years, leading to settlement payments totalling $80 million.
In this particular case, Uber was accused of a breach of contract for including sales tax and a “Black Car Fund” fee in its deductions from drivers’ fares. Uber also ran into trouble for its advertising, which claimed that drivers were guaranteed $5,000 in their first month of driving, without disclosing all conditions.
The settlement is still subject to approval from District Judge Nicholas Garaufis, who has to sign off on the settlement before any funds are disbursed.
