Uber, the San Francisco-based ride-hailing giant, has agreed to pay $20 million to resolve Federal Trade Commission charges that it misled prospective drivers about potential earnings, the FTC said Thursday.
Uber also allegedly misled prospective drivers with claims about supposed low-cost financing through the company’s Vehicle Solutions Program. The $20 million will be used to provide refunds to affected drivers across the country.
The FTC alleges that Uber claimed 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 FTC alleges, however, that drivers’ annual median income was actually $61,000 in New York and $53,000 in San Francisco.
Overall, less than 10 percent 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.
“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.”
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. The FTC said Uber 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), and “starting at $119/week.”
Despite Uber’s claims, from at least late 2013 through April 2015, the median weekly purchase and lease payments exceeded $160 and $200, respectively, the FTC alleges.
Uber responded to the FTC settlement in a statement: “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.”
Uber claims it has more than 600,000 drivers in the United States.
The FTC’s complaint.