Company to pay $20 million to FTC to settle claims

pulse

January 19, 2017 11:08 PM

The FTC said Uber had "inflated" its hourly drivers' earnings in online advertisements to attract drivers to its platform.

Uber CEO Travis Kalanick

Uber will pay $20 million and alter various business practices in order to settle claims brought by the FTC that the ride-hailing company mislead drivers on how much they would make driving for Uber.

The FTC said Uber had "inflated" its hourly drivers' earnings in online advertisements to attract drivers to its platform. "However, once Drivers have begun to receive their paychecks, Drivers have discovered their actual earnings were substantially less than Uber claimed," the FTC complaint says.

For example, Uber advertised on Craigslist that drivers in Minneapolis could make $18 per hour and Boston drivers could make as much as $25 an hour. In both cases, fewer than 10% of Uber drivers in that city ever made the advertised hourly rate.

The FTC also claimed that Uber's vehicle solutions program, which helped drivers find vehicles to lease or own, advertised the "best financing options available." Yet, drivers who leased through the platform received worse rates than customers with the same credit score would typically obtain.

The FTC started investigating Uber in 2015 and announced its settlement on Thursday. In addition to paying $20 million, the company is barred from misrepresenting drivers' earnings and financing and lease terms for its vehicle leasing terms.

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