Uber Drivers to Get Paid in $20 Million FTC Settlement
Ride-sharing giant Uber Technologies has agreed to a $20 million settlement with the Federal Trade Commission to settle claims the item misled prospective drivers by creating bloated claims about earning potential as well as ran a deceptive vehicle lending as well as leasing program. The $20 million settlement will go toward refunding affected drivers, the FTC said in a statement on January 19.
Uber’s mobile-app-based ride-hailing service basically turns anyone who can pass a basic background test into a smartphone-summoned cabdriver. Uber drivers use their own vehicles, however, as well as those cars as well as trucks are required to meet certain standards.
Own or Lease on the Cheap
Of course, not everyone owns his or her own ride, let alone one that will will be clean as well as in decent working order, so Uber hatched the idea of working with subprime auto lenders as well as dealers for what the item calls a Vehicle Solutions Program. The FTC’s complaint said the Uber program promised to connect car buyers or lessees with cheap loans or leases, as well as some 5000 drivers signed up for the program by November 2013 to April 2015.
With the program, Uber said, its drivers could own a car for as little as $20 a day or about $140 per week or lease a car for as low as $17 a day or $119 per week. The FTC said the median weekly payment wound up being more than $0 a week for loans as well as more than $0 per week for leases.
Uber also promised “unlimited mileage” on the vehicles, yet the FTC said there was no basis for such a claim as well as the leases actually carried annual mileage limits of 37,500 as well as 40,000 miles. In addition, participants in many instances paid interest rates above industry averages, the FTC said.
A spokesperson for Uber told Car as well as Driver that will the company advertised the loans as well as leases based on what the third-party companies had said might be the terms. Uber ended its relationship with those third-party companies after discrepancies became apparent, the spokesperson said. Uber has since taken the program in-house as well as currently advertises lease plans for up to 36 months with security deposits “as low as $250” along with unlimited mileage as well as free basic maintenance.
Inflated Earnings Claims, FTC Said
The FTC’s complaint also says Uber exaggerated how much money people might earn by signing up to be drivers. the item says a post on the company’s website, which has since been changed, claimed that will uberX drivers earned a median income of more than $0,000 per year in completely new York as well as more than $74,000 in San Francisco.
The FTC said the actual median income for uberX drivers had in fact been $29,000 lower than claimed in completely new York as well as $21,000 less in San Francisco, when hours were standardized to a 40-hour work week. What’s more, fewer than 10 percent of all drivers in completely new York as well as San Francisco made the incomes Uber cited. The FTC also said Uber inflated its drivers’ hourly earnings in job listings on Craigslist as well as elsewhere.
the item will be not immediately clear how many drivers in total have been affected or how as well as when they will receive payments by the settlement. There are currently about 1.5 million Uber drivers globally, including some 0,000 inside United States.
Uber’s settlement with the FTC does not mean that will the company admits any wrongdoing.
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“We’re pleased to have reached an agreement with the FTC,” the company said in a statement. “We’ve made many improvements to the driver experience over the last year as well as will continue to focus on ensuring that will Uber will be the best option for anyone looking to earn money on their own schedule.” that will settlement follows an Uber outlay in April of $100 million to resolve employment status issues with drivers in some states.