Uber Agrees to Cough Up $10 Million to Settle California Suit on Misleading Customers
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Uber Technologies Inc. agreed to a $25 million settlement to end a civil lawsuit in California that accused the ride-sharing company of misleading customers about the strength of its background checks on drivers, prosecutors in Los Angeles and San Francisco said on Thursday.
Uber must pay $10 million within 60 days, and the remaining $15 million will be waived if Uber complies with the terms of the agreement for two years, the San Francisco and Los Angeles County district attorneys said in statements.
"It sends a clear message to all businesses, and to startups in particular, that in the quest to quickly obtain market share laws designed to protect consumers cannot be ignored," San Francisco District Attorney George Gascón said.
Uber welcomed the settlement. "We're glad to put this case behind us and excited to redouble our efforts serving riders and drivers across the state of California," it said in a statement.
The case was filed in December 2014 by the two district attorneys, who alleged that Uber misled its customers about the strength of its background checks on drivers.
The civil complaint also contended that Uber drivers work at airports without obtaining authorization, and in the case of San Francisco, charged a $4 extra fee to passengers traveling there, without paying anything to the airport.
The agreement bars Uber from making untrue statements about its background checks and from charging airport "tolls." In addition, the company must ensure that its fare calculations meet state measurement standards.
Uber said it has already made many of the changes, including no longer callings its service the "safest ride on the road" or calling its background checks "the gold standard."
(Reporting by Anet Josline Pinto in Bengaluru and Curtis Skinner in San Francisco; Editing by Fiona Ortiz)