More than a year after a Chicago resident filed a class-action lawsuit against Uber, claiming the company violated federal law by sending unsolicited text messages to people who want nothing to do with the service, the ride-hailing company has agreed to pay $20 million to put the legal challenge behind it.
Under the proposed settlement [PDF], which will be heard by an Illinois District Court judge in January, Uber would pay each of the six named plaintiffs $10,000 and about $6.7 million in attorneys fees and expenses, leaving around $13.2 million to be split between an undetermined number of class members.
According to the settlement, the amount of payment these customers will receive depends on the number of people who submit a valid claim by Dec. 15. The original lawsuit had sought $500 per class member.
The settlement comes nearly 13 months after Uber was first accused of violating the Telephone Consumer Protection Act and invading consumers’ privacy.
According to the lawsuit [PDF], Uber’s practice of contacting potential customers via text messages and phone calls violated the TCPA because the company did not ensure the accuracy of the telephone numbers it was provided when customers signed up for service. This led individuals to routinely receive unsolicited messages from the ride-sharing service.
Getting Phone Numbers
As an ordinary business practice, when enrolling new customers Uber collects phone numbers and informs those consumers they can expect to receive text messages to the number provided.
For instance, the company sends text messages confirming the creation of an account and routinely informs customers their ride is on the way via text.
However, the lawsuit claimed that the ride-sharing company didn’t employ procedures to confirm the accuracy of the telephone numbers submitted by potential customers before dispatching text messages.
As a result, the plaintiff believed that many of the numbers in Uber’s possession are inaccurate, resulting in the company routinely sending unsolicited text messages to individuals who never provided consent to be contacted, according to the lawsuit.
That was the case for the lead plaintiff, who claimed to have received at least nine unsolicited text messages from Uber since June 2016.
According to the lawsuit, beginning on June 14, she received messages from an Uber-identified phone number that read: “Your Uber account verification number is: 9274. Enter this in our app to confirm your Uber account.”
Several days, later the woman says she received a similar message. Then in early August, she received at least six more text messages from the ride-sharing company.
“At no time did Plaintiff attempt to acquire the Uber application, become a customer of Uber or otherwise use Uber,” the lawsuit states. “Moreover, at no time did defendant confirm the ownership of the phone number to which Defendant was transmitting text messages or otherwise confirm that Defendant had obtained Plaintiff’s consent to send any such text messages.”
The lawsuit claimed that Uber’s practice of sending unsolicited text messages violated consumers’ privacy and resulted in monetary losses, because individuals frequently had to pay for text messages and calls they did not authorize.
Uber has denied the lawsuit’s allegations and any wrongdoing. However, to avoid continued litigation the company negotiated the $20 million settlement.
Consumerist has reached out to Uber for comment on the proposed settlement. We’ll update this post if we hear back.
In addition to providing compensation to affected customers, Uber agreed to not send server-assisted driver-referral text messages from the Uber app for two years, and to maintain an opt-out protocol for text message recipients.
The company will also implement a system to verify that the phone numbers collected during the sign-up process are accurate. To do so, the company will display the phone number submitted on the app screen where a new verification text can be requested with the note “Did you enter the correct number?”
Uber will also delete from its records any phone number entered during the sign-up process that is not verified within 15 minutes.
How To File A Claim
The settlement applies to any individual who received one or more unsolicited text message from Uber between Dec. 31, 2010 and Aug. 17, 2017.
Valid claims include those related to Uber’s Refer-A-Friend program, individuals who started Uber’s driver application process but did not become an “active” driver, and those who were not party to a contract with Uber or did not provide their phone number to the company.
Class members must submit a claim form by Dec. 15 to receive a payment or to exclude themselves from the settlement. Claims can be filed online or by mail. Information about filing a claim can be found at www.UberTCPASettlement.com.