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article imageUber, accused of illegal background checks, opts to pay fine

By Claudio Buttice     Jul 3, 2016 in Technology
The U.S. giant of ride-sharing applications is in the eye of the storm again. This time several of its drivers filed a lawsuit claiming they got their accounts terminated illegally. The company opted out for a cash settlement.
Uber mobile app allows drivers who use a smartphone to submit a trip request to other travelers in order to share their vehicles. Since its launch, the app’s model has been replicated by many more companies (Uberification), allowing the US company to grow into one of the most valued startups worldwide. However, Uber’s ride-sharing applications have been blocked in several countries around the globe such as Hungary, where the government acknowledged the complaints raised by traditional taxi drivers. Lately, the company had to face many legal issues caused by their purported questionable operations.
In this instance, thousands of San Francisco drivers filed a class-action lawsuit claiming the company conducted background reports without their consent. Charges against the company include failing to comply with the Fair Credit Reporting Act (FCRA), a law that protects consumer’s right from illegal background investigations that may violate their own privacy. According to plaintiffs’ accusations, Uber hired Hirease to run some background checks on many of its contractors, but the third-party company failed to notify them before abruptly terminating their contracts. The drivers had no chance to dispute the information, as the applicant’s consumer report that was supposed to be sent along the adverse action notice was never received by them. Hirease explained that their service was regularly provided, but Uber never took advantage of it and only sent the employees a termination email lacking a proper report of their rights under the FCRA.
Uber initially tried to let the class action part of the lawsuit to be dropped by providing at least 400 driver witnesses that said they were working as independent contractors. However, the court refused the company’s appeal defining these testimonials as “statistically insignificant”. The app giant has then agreed to pay a $7.5 million dollars fine to settle down the lawsuit. Last February, Uber already agreed to pay $28.5 million to settle another class-action lawsuit in which passengers alleged they were misled on the quality of safety practices and the “safe ride fee” they had to pay. In April, the company also settle down a third class action with a $100 million payment after drivers complained about their status of independent contractors instead of regular employees.
More about Uber, Lawsuits, fair credit reporting act, ridesharing, Mobile
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