Uber Agrees to $20 Million Settlement For Deceiving Drivers
Uber has agreed to pay $20 million in response to a lawsuit from drivers who claimed the company exaggerated how much they could earn. The lawsuit also challenged the use of Uber’s low-cost program that allows drivers to lease cars, which the U.S. government has claimed was not a “low-cost” program.
The suit was brought by a group of drivers. The Federal Trade Commission (FTC) claims the company engaged in unfair and deceptive practices. Uber did not admit to wrongdoing but is settling with $20 million in payments, although it has not yet been determined how those payments will be made.
According to WUSA9,
The complaint, filed in U.S. District Court in San Francisco, said Uber claimed drivers could “earn specific high hourly and yearly earnings” but in many instances they did not.
In one post on its website, Uber said the median income of uberX Drivers was “more than $90,000/year/driver in New York and more than $74,000/year/driver in San Francisco.”
According to the FTC, the median income of an uberX driver in New York City was actually $61,000 and in San Francisco, $53,000.
The company also overstated the hourly earnings of its drivers in job listings, the FTC alleged, claiming drivers in Boston could earn $25 per hour, in Minneapolis, $18, and in Philadelphia, $25. The FTC said Uber’s own data on hourly earnings actually showed that in Boston, Minneapolis and Philadelphia in December 2014, fewer than 10% of drivers averaged the promised hourly rate.
Uber also took a hit for it’s “low-cost” leasing program that allows drivers to lease cars, which it said would only cost $17 to $20 a day. The FTC claimed that Uber never knew that to be true and it never collected data to prove that it was true. Additionally, when users of the program complained to the company, the company replied, “Please contact your lender to discuss your payments, accruals or amounts owed, as Uber does not keep track of this information.”
Uber did not admit to wrongdoing but is settling with $20 million in payments, although it has not yet been determined how those payments will be made.