Uber to pay $20 mln to settle U.S. claims it misled drivers

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By Diane Bartz | WASHINGTON

WASHINGTON Ride-hailing company Uber
Technologies Inc has agreed to pay $20 million to
settle claims by the U.S. government that it exaggerated
prospective earnings in seeking to recruit drivers and
downplayed the costs of buying or leasing a car, documents filed
with a federal court on Thursday showed.

The company said on its website that some Uber drivers made
more than $90,000 in New York and $74,000 in San Francisco when
the real earnings were $61,000 and $53,000, respectively, the
Federal Trade Commission said in a statement. It said Uber’s
Vehicle Solutions Program gave inaccurate prices for leasing or
owning a vehicle.

“This settlement will put millions of dollars back in Uber
drivers’ pockets,” said Jessica Rich, director of the agency’s
Bureau of Consumer Protection.

Under Uber’s business model, consumers use an app to hail a
ride and pay Uber for it. The ride is provided by an independent
contractor, who is paid by Uber.

“When Uber’s promised earnings have not materialized, and
drivers have attempted to cancel their auto agreements, they
have incurred significant monetary harm,” the Federal Trade
Commission said in its complaint. “Uber’s practices have caused
its drivers to suffer millions of dollars of injury.”

Uber, which operates in 74 countries, said in a statement it
was “pleased” to have reached an agreement with the Federal
Trade Commission.

“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 said.

Company spokesman Matt Kallman said Uber has more than
600,000 drivers in the United States.

In addition to the $20 million payment, Uber would be barred
under the agreement from misrepresenting its drivers’ earnings
or payments for automobiles.

Chairwoman Edith Ramirez and Commissioner Terrell McSweeny,
both Democrats, voted for the settlement while Republican
Commissioner Maureen Ohlhausen dissented. Ramirez has announced
that she will step down Feb. 10.



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