Payments Innovation

Uber Settles NY Driver Fees Lawsuit For $3M

Ride-hailing app company Uber reached a settlement with more than 2,000 New York drivers, agreeing to pay $3 million.

Reuters, citing a court filing in federal court in Brooklyn, New York, reported that Uber agreed to pay the $3 million to settle what was a proposed class-action lawsuit brought on behalf of 2,421 drivers who contend the company took too many fees out of their fares.

The lawsuit alleged a breach of contract for adding sales tax and a fee to the total fare amount, which then boosted the amount of service fees owed to the company. The drivers also claimed that Uber misled drivers with guaranteed compensation of $5,000 in the first month of employment.

The settlement includes drivers who worked for the ride-hailing company starting from Dec. 29, 2009 and aren’t currently in arbitration with Uber.

In May, Uber agreed to pay up to $80 million to 96,000 drivers in New York after admitting to not paying them enough, reported Reuters.

In July, a federal court in North Carolina gave conditional certification to the class-action suit brought by Uber drivers in that state. The suit came under the Fair Labor Standards Act; with the ruling, the plaintiffs can find the roughly 18,000 drivers who decided against arbitration and can join the case.

Uber currently has more than 600,000 U.S. drivers. The ride-hailing company and its drivers have had a contentious relationship for some time, and it isn’t only in New York and North Carolina. Early this year, Uber agreed to pay $20 million in a settlement with the U.S. government over charges that it exaggerated potential earnings when trying to recruit drivers. In addition to fights with drivers, Uber is embroiled in a scandal over a data breach that it hid for a year, in which it paid the hackers hush money. That has prompted more lawsuits to be lodged at the startup.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.