Uber Will Pay $20 Million Over Misleading Claims to Drivers
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Uber misled prospective drivers about how much they could earn by signing up for its ride-hailing service, according to the Federal Trade Commission, which announced Thursday that the company agreed to pay a $20 million settlement to resolve the charges.
Uber claimed on its website that the median annual income for drivers in New York City was more than $90,000, when in reality less than 10 percent of all drivers in the city made that much, according to the FTC's complaint. Uber's leasing program is also misleading, the FTC said, with median lease payments above $200 per week from 2013 to 2015, despite the company's claim that cars could be leased for $119 per week regardless of an applicant's credit history.
Uber knew that the information in its website claims was false, according to the FTC complaint, which said that Uber had communicated with at least one auto company about payment terms and conditions that were inconsistent with promises to drivers.
"Many consumers sign up to drive for Uber, but they shouldn't be taken for a ride about their earnings potential or the cost of financing a car through Uber," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "This settlement will put millions of dollars back in Uber drivers' pockets."
The FTC said that the $20 million would be used to offer refunds to drivers around the country.
"We're pleased to have reached an agreement with the FTC," an Uber spokesperson said in a statement. "We've made many improvements to the driver experience over the last year and will continue to focus on ensuring that Uber is the best option for anyone looking to earn money on their own schedule."
Thursday's settlement is the latest penalty in a string of worldwide enforcement actions against the ride-hailing startup, including many that have dealt with how it treats drivers. Uber tried to settle a class-action suit last year that claimed it was incorrectly classifying its drivers as contractors, rather than employees, but a judge rejected the $84 million settlement as unfair to the drivers involved.
Another lawsuit over the improper use of background checks to fire drivers was also settled last year for $7.5 million.