Uber Settlement
Ever see the Uber commercials that are floating around promising their drivers high earnings? Don’t have a car? No problem! Uber even offers to lease you a car so that you can start earning money right away. But how true are these allegations?
Uber Allegations On The Front Page
Uber has been accused of making false promises to drivers about how much they would earn and how much they would have to pay to finance a car. The FTC alleged that most Uber drivers were earning far less in 18 major U.S. cities than Uber published online. Regulators also asserted that drivers wound up paying substantially more to lease cars than the company had claimed. “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,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.
A Settlement For Uber
Uber has settled out $20 million to settle these allegations. In a statement, Uber said it’s pleased to resolve the dispute. “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,”
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the San Francisco company said. The agreement was announced Thursday. These allegations came from statements Uber made from late 2013 until 2015 in the effort to attempt to recruit more drivers to expand its service and remain ahead of its main rival, Lyft.
A statement published on Uber’s website from May 2015 through August 2015, CEO Travis Kalanick boasted that the mid-range annual incomes of the service’s New York city drivers exceeded $90,000 and the mid-range annual earnings of its San Francisco drivers topped $74,000, according to the FTC. The agency’s investigation determined that the mid-range income for the New York drivers was nearly one-third less, at $61,000, 28 percent less in San Francisco, at $53,000, during the year leading up to Kalanick’s statement. In August 2015, Uber revised its statement to specify its estimates reflected drivers’ “potential” incomes in those two cities. The FTC says less than 10 percent of Uber drivers in New York and San Francisco hit the income levels circulated by the company.
Another allegation was that Uber referred people to car financing programs that charged more than what the company promised.
The settlement was approved by the FTC in a 2-1 vote. The dissenting voter, FTC Commissioner Maureen Ohlhausen, objected because she didn’t believe Uber’s actions harmed consumers.
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