Car2Go settles class action lawsuit over 'driver protection fee' for $1 million

If you had a Car2Go membership before the company left North America in 2020, you could be in line for some money from a class action lawsuit that was recently settled. 

Just don't go changing your vacation plans. 

"No one's getting rich off of this one," said Alexia Majidi, a lawyer with Hammerco, representing plaintiffs in the suit. 

"[But] it all comes down to keeping corporations accountable."

The lawsuit was settled for $1 million, but Majidi said less than two-thirds of the total funds recovered will be available to claimants on a pro-rated basis after fees are removed. 

'Paying for something you didn't need'  

The lawsuit centred around the "driver protection fee" created by Car2Go in 2015, which added an extra dollar to the cost of every trip. 

When it was created, Car2Go said the fee was the tradeoff for lowering the insurance deductible for crashes to $250 from $1,000. In a statement at the time, the company said the fee would "reduce our members' financial exposure in the unfortunate event that they are involved in an accident or damage a Car2Go during their trip."

But Majidi said forcing that change for every customer wasn't necessary, because many people would already be protected through credit card insurance. 

"Not necessarily double dipping, but it was paying for something you didn't need," she said. 

More than 450,000 Canadian users

The settlement only applies to users in B.C., Alberta and Ontario who paid at least $10 in the fee after March 25, 2018 (or March 25, 2017 in Quebec). Users were informed about the process in an email sent Monday.

Prior to ending their North America operations in 2020, Car2Go operated in several large Canadian cities, with more than 450,000 users across the country.      

The German company merged with car-share service DriveNow and continues to operate under the name ShareNow in several European cities. 

While Majidi acknowledged that individual compensation will be minimal, she said it is a positive development.

"That was money that they didn't need to charge, and that they profited off of," she said. 

"This has been one of the main reasons why we've been going forward with class actions, is because these corporations have gone and gotten away with situations like this for too long. They've been getting richer and richer. So someone's got to hold them accountable." 

The accounting firm hired to oversee the payment process is expected to provide compensation by May 2022.