California has proven to be perilous legal territory for both ride sharing companies Uber and Lyft. Uber owes $10 million in a settlement centered on the lax nature of the company’s background checks in Los Angeles and San Francisco.
Thursday saw a San Francisco judge order Uber to pay the settlement by June—60 days—or end up paying an extra $15 million. The penalty is dropped if Uber keeps to its deal after two years.
This particular case dates back to 2014 when Uber promoted its background check system as the safest of ride sharing services. It turned out that a failure to take fingerprints resulted in a few criminals ending up as Uber drivers. Since then Uber claims to have made improvements to its background check system and paid out a class action suit.
Uber—along with Lyft—also had trouble with airport fees dating back to 2013 and 2014, but this seems to be cleared up. There’s still the independent contractor-employee issue that needs to be resolved.
Speaking of Lyft, it is looking at legal trouble in the way of the treatment and classifying of drivers. It boils down to a driver’s status as employees or independent contractors and what was owed to those drivers.
Originally Lyft offered a settlement to the tune of $12.25 million, but that was turned down by some drivers with a U.S District Judge saying that drivers were shortchanged by the offer. As a matter of fact, Judge Vince Chhabria feels that they were shortchanged by over $113 million for a period of four years.
As expected, Lyft wasn’t pleased with the decision and feels that the agreement presented was a fair one. The company will take the agreement back to the drawing board to see if it can come up with something that works for all parties.