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.

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