Uber to Pay $20 Million for Misrepresenting Driver Earnings
The ride-sharing app Uber has agreed to pay drivers $20 million for misrepresenting potential earnings. The Federal Trade Commission will use this money to issue refunds throughout the United States to drivers who may have been falsely lured into working for the company.
This ruling mostly impacts workers in major cities. Uber advertised that drivers in New York earned a median amount of $90,000 a year or more and $74,000 a year in San Francisco. In reality, average earnings were closer to $61,000 and $53,000 annually. Only 10% of drivers fell into the high earnings categories that the company was promoting. The FTC has banned Uber from making “false, misleading, or unsubstantiated representations about drivers’ income,” in addition to paying the $20 million judgment.
The FTC’s complaint also involves the leasing and financing options available through Uber, which are designed to help new drivers get a vehicle if they do not already have one. Uber claimed that drivers could finance a vehicle for as low as $20 a day or lease one for $17 a day through their Vehicle Solutions Program. The FTC found that the median daily price from 2013 to 2015 to be $22.85 a day for financing and $28.57 for leasing.
Uber must update the advertising and terms of their vehicle leasing and financing programs to better represent the money drivers may pay for their vehicles. The Vehicle Solutions Program does still offer opportunities for drivers regardless of credit history, but it costs more than what many workers were led to believe.