January 20, 2017
Uber is shelling out $20 million to refund drivers affected by the company’s so-called exaggerated earning claims.
The online transportation firm agreed to payments to settle charges that it misled prospective drivers. The FTC, in its complaint, said Uber exaggerated the yearly and hourly income drivers could make in certain cities, and misled prospective drivers about the financing options available through its Vehicle Solutions Program.
“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,” FTC Bureau of Consumer Protection director Jessica Rich said. “This settlement will put millions of dollars back in Uber drivers’ pockets.”
The FTC complaint accuses Uber of posting on its website that uberX drivers’ annual median income was more than $90,000 in New York and more than $74,000 in San Francisco. The agency said, however, actual annual salaries were more like $61,000 and $53,000 respectively.
Fewer than 10 percent of all drivers in New York and San Francisco actually made the yearly income Uber advertised. Uber also allegedly listed high hourly rates on sites such as Craigslist but, as the FTC pointed out, the majority of Uber drivers did not earn those advertised hourly amounts.
With its Vehicle Solutions Program, Uber bragged it offered drivers the “best financing options available,” despite credit history, saying drivers could “own a car for as little as $20/day”or lease a car with “payments as low as $17 per day.” The FTC alleged, however, from late 2013 through April 2015, the average weekly purchase and lease payments were more than $160 and $200.
“Uber failed to control or monitor the terms and conditions of the auto financing agreements through its program and in fact, its drivers received worse rates on average than consumers with similar credit scores typically would obtain,” the FTC complaint said.“In addition, Uber claimed its drivers could receive leases with unlimited mileage through its program when in fact, the leases came with mileage limits.”
Aside from the $20 million Uber must pay, the settlement also prevents the company from misrepresenting drivers’ earnings and auto finance and lease terms as well as drivers’ income.
Jennifer Cowan is the Managing Editor for SiteProNews.