Uber to pay $20 mn for duping drivers with false earning and vehicle financing claims

Uber Technologies Inc. yesterday agreed to pay $20 million to resolve the US Federal Trade Commission (FTC) charges that it misled drivers about potential earnings and vehicle financing while working for the ride-hailing service.

The FTC said that the $20 million will be used to refund Uber drivers affected by the company's exaggerated claims.

According to the FTC, Uber exaggerated the yearly and hourly income drivers could make in certain cities, and about the terms of its vehicle financing options, in its efforts to attract prospective drivers.

The FTC alleges that Uber claimed that uberX drivers' annual income was more than $90,000 in New York and over $74,000 in San Francisco, however drivers' annual income was actually $61,000 in New York and $53,000 in San Francisco.

In all, less than 10 per cent 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.

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).

Despite Uber's claims, from at least late 2013 through April 2015, the weekly purchase and lease payments exceeded $160 and $200, respectively, the FTC alleges.

In addition to imposing a $20 million judgment against Uber is now prohibited from making false, misleading or unsubstantiated statements about drivers' income.

''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,'' said Jessica Rich, director of the FTC's Bureau of Consumer Protection. ''This settlement will put millions of dollars back in Uber drivers' pockets.''

Uber is one of the biggest ride-hailing services in the world with operations in more than 450 cities in more than 70 countries.