Published: Mon, January 23, 2017
Business | By Patricia Jimenez

Uber to pay $20M for claims it lied about drivers' pay

Uber to pay $20M for claims it lied about drivers' pay

"We've made many improvements to the driver experience over the previous year and will continue to focus on ensuring that Uber is the best option for anyone looking to earn money on their own schedule". Additionally, Uber is now prohibited from making false, misleading or unsubstantiated statements about drivers' income.

According to the document, the company advertised rates of $120 or $140 from these partners, but the FTC found the actual price to be more than $200 per week on average. In the post the company mentioned that for UberX drivers the "median income is more than $90,000/year/driver in NY and more than $74,000/year/driver in San Francisco".

Similarly, drivers in San Francisco made around $53,000 per year, 28% less than advertised, while the company was found to have deliberately overestimated average hourly earnings of its drivers in 16 other United States cities. The agency's investigation determined that the actual mid-range income for the NY drivers was almost one-third less, at $61,000, and 28% less in San Francisco, at $53,000, during the year leading up to Kalanick's statement.

An Uber spokesperson told WSJ, "We're pleased to have reached an agreement with the FTC".

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Uber settled a lawsuit filed by the Federal Trade Commission today for $20 million. The drivers are considered independent contractors, which is another contentious issue because the classification excludes them from numerous benefits and protections given to full-time employees.

But Jim Conigliaro Jr., founder of the Independent Drivers Guild, which says it represents more than 45,000 Uber drivers in New York City, said "drivers deserve the fair pay they were promised, tips like other workers in the service economy, and unbiased data on the earnings and expenses of ridesharing..."

However, the financing program reportedly turned out to be more expensive for drivers. According to the complaint, the "vehicle solutions" program directs drivers to three specific auto companies to get their cars.

Uber also promoted the Vehicle Solutions Program as a low-priced way for drivers to buy a vehicle, saying drivers would get the "best financing options available" and have "unlimited miles". For this financing program Uber outsourced to a company named Banco Santander, which it no longer uses. The company said that the mid-range annual earnings of its San Francisco based drivers exceeded $74,000. "This settlement will put millions of dollars back in Uber drivers' pockets".

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