Ride-hailing giant Uber has agreed to pay $20 million to settle allegations from the Federal Trade Commission that it exaggerated how much drivers could earn on its website and through Craigslist job postings.
The FTC’s complaint, for instance, alleged that Uber claimed UberX drivers’ annual median income was more than $90,000 in New York City, when in reality, it was about $61,000. In San Francisco, the FTC says, Uber claimed the median income for drivers was $74,000, when it was closer to $53,000.
“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, in a statement.
In a statement, Uber said it was “pleased to have reached” the agreement.
“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,” the statement said.
The $20 million will be used to refund affected drivers across the U.S., the FTC said. The commission’s complaint also alleged that Uber’s Vehicle Solutions Program would provide drivers with the “best financing options available,” but the FTC claimed the medium weekly purchase and lease payments were inflated.
“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 said it alleged in its complaint.
In 14 cities, the FTC alleged, fewer than 30% of drivers averaged Uber’s promised pay.
The settlement allowed for Uber to neither admit nor deny the allegations.