Documents recently filed by the U.S. Federal Trade Commission revealed that the company will pay $20 million to settle claims that it exaggerated potential earnings in order to recruit more drivers.
In a press release, the FTC said:
The FTC alleges that Uber claimed on its website that uberX drivers’ annual median income was more than $90,000 in New York and over $74,000 in San Francisco. The FTC alleges, however, that drivers’ annual median income was actually $61,000 in New York and $53,000 in San Francisco. In all, less than 10 percent of all drivers in those cities earned the yearly income Uber touted. The FTC also alleges that Uber made high hourly earnings claims in job listings, including on Craigslist, but that the typical Uber driver failed to earn those advertised hourly amounts in various cities.
In its lawsuit, the FTC also alleged that Uber misrepresented its vehicle financing program.
It explained in its press release:
The complaint also alleges that Uber claimed its Vehicle Solutions Program would provide drivers with the “best financing options available,” regardless of the driver’s credit history, and told consumers they could “own a car for as little as $20/day” ($140/week) or lease a car with “payments as low as $17 per day” ($119/week), and “starting at $119/week.” Despite Uber’s claims, from at least late 2013 through April 2015, the median weekly purchase and lease payments exceeded $160 and $200, respectively, the FTC alleges. Uber failed to control or monitor the terms and conditions of the auto financing agreements through its program and in fact, its drivers received worse rates on average than consumers with similar credit scores typically would obtain, according to the FTC’s complaint. In addition, Uber claimed its drivers could receive leases with unlimited mileage through its program when in fact, the leases came with mileage limits, the FTC alleges.
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In its filing, the FTC said Uber “caused its drivers to suffer millions of dollars of injury” because of its practices.
Though the company agreed to settle, it didn’t deny—nor admit to—any wrongdoing in its dealings with drivers.
Its statement to reporters was equally devoid of any indication that it was right or wrong.
“We're pleased to have reached an agreement with the FTC," Matt Kallman, an Uber spokesman, wrote in an e-mailed 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.”
Uber is no stranger to crises, and its newest bout of negative coverage isn’t doing anything to lift its reputation in critics’ eyes.
Its chief executive responded to safety concerns in February 2016 after one of its drivers went on a shooting spree. In June 2016, a court in France fined the company $1.1 million for operating illegally. In 2014, Uber contented with a slew of PR crises, which included backlash over surge pricing, negative data about its drivers and its unsavory interactions with reporters.
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