Uber hit by $20m fine over misleading claims to drivers

A court in San Francisco has handed Uber a $20m (£16.2m) fine after the US Federal Trade Commission claimed the ride hailing app company misled its drivers about the potential amounts they could earn.

Uber: this is the latest of several large fines for the company in the US
Uber: this is the latest of several large fines for the company in the US

The sum was agreed to by Uber to settle the case; the company did not admit wrongdoing. The $20m will be distributed to drivers who have been affected.

The FTC stated that the actual median income for Uber drivers was only two-thirds of the figures it claimed, of $90,000 a year in New York, and $74,000 in San Francisco.

The lawsuit also contained an accusation that Uber had lied about the terms of its vehicle finance programme for drivers, the Financial Times reports.

A spokesman for Uber said: "We’re pleased to have reached an agreement with the FTC. 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."

Jessica Rich, head of the FTC’s bureau of consumer protection, said: "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."

According to the FTC statement, Uber had claimed its drivers in New York had a median income of more than $90,000, while drivers in San Francisco made over $74,000. Instead, the FTC found that the drivers’ actual median income in those cities was just two-thirds of what Uber had claimed.

Jim Conigliaro, founder of the US Independent Drivers Guild, said in a statement: "The reality of being a ride-sharing driver is a far cry from the rosy picture these apps describe and it is encouraging to see the FTC take them to task and refund drivers.

"Drivers deserve the fair pay they were promised, tips like other workers in the service economy, and unbiased data on the earnings and expenses of ridesharing."

Topics