BAY AREA, CA – A federal judge in San Francisco has granted preliminary approval of a lawsuit settlement that would refund $344,000 to 47,000 passengers who were allegedly led to believe that drivers were receiving all of a 20 percent gratuity.

U.S. District Judge Edward Chen granted the preliminary approval Thursday of the proposed agreement in a 2014 lawsuit filed against the ride-booking company by Chicago passenger Caren Ehret.

The settlement must win final approval from Chen following a not-yet-scheduled fairness hearing before the refunds can be given.

Ehret claimed in her lawsuit that San Francisco-based Uber Technologies Inc. misled her and other passengers in 2012 and 2013 by stating on its website and in emails that the fee charged to riders’ credit cards
would include “the metered fare plus 20 percent gratuity.”

Ehret contended that passengers believed the tip was for drivers, but that in fact, Uber allegedly kept 40 to 50 percent of the amount.

Chen later certified the lawsuit as a class action on behalf of 47,000 customers who received the emailed advertisement and then bought rides via Uber’s online app between April 20, 2012, and March 25, 2013.

The settlement amount represents 40 percent of the total gratuities paid by those passengers during those 11 months.

Ehret’s lawyers said in their motion for approval that the proposed payments are “virtually a full refund of the amount of the gratuity charge that plaintiff claimed was retained by Uber.”

The attorneys are seeking an additional $431,000 in fees.

An Uber spokesman was not immediately available for comment.

In a filing, Uber’s lawyers said the company supported the settlement as being fair and reasonable, but that it was not admitting any wrongdoing.

In an earlier brief filed in an unsuccessful bid to have the lawsuit dismissed, the company’s attorneys argued that Ehret had received exactly the transportation services she bargained for when she booked the
ride.

Chen is also presiding over a separate lawsuit in which Uber drivers are seeking to be classified as employees rather than independent contractors. Last month, he rejected a proposed settlement that would have
given drivers up to $100 million.

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