Uber will shell out as much as $20 million for misleading its drivers. Uber reached this settlement after Federal Trade Commission (FTC) charged the company on behalf of the beleaguered Uber drivers. According to FTC, Uber misled its drivers on two occasions. Firstly, it gave them a wrong picture of the earnings they could make as an Uber driver. Secondly, the ride-hailing service also misled them by promising them best vehicle financing program. In reality, it was worse and more expensive for the drivers.
However, according to Uber’s settlement with the FTC, the ride-hailing service will not confess to wrongdoing. Secondly, it will issue semi-regular compliance reports. These will cover documents such as marketing material and driver earning information. Thirdly, it is not allowed to misrepresent drivers’ earnings and financing and leasing terms for its vehicle financing program. In the meantime, FTC will now distribute the $20 million to the affected drivers.
An article in the Business Insider Australia states that FTC started investigating Uber in 2015. According to Jessica Rich, Director of the FTC Consumer Protection Bureau, many consumers signed up to drive for Uber. Hence it is only fair that they are not misled about their earning potential with the company or about the cost of financing a car with Uber.
Uber too released a statement saying that the company is pleased to have reached a settlement. It added that going forward, the company will continue to ensure that Uber is the best option for those wanting to earn money as per their own schedule.
What went wrong with Uber?
An article in CNET states that Uber misled its drivers by saying that they could earn up to $30 per hour. In reality, drivers made $20.19 on an average, revealed a study by Jonathan Hall. Drivers from urban areas such as Denver, Houston and Detroit made even less. They earned $13.25 per hour on average, revealed a Buzzfeed news report.
— BuzzFeed News (@BuzzFeedNews) January 20, 2017
An article in Verge states that Uber also said that its drivers in New York and San Francisco made $90,000 and $74,000 respectively. According to FTC, the drivers made $61,000 and $53,000 in New York and San Francisco. The publication adds that Uber tried to entice new consumers (drivers) by blowing up the earnings.
With regards to vehicle financing program, Uber said that its drivers could own a car for less than $140 per week. According to Uber, they could lease it for $119 per week. In reality, Uber drivers’ car purchase payments reached $160 per week. Leasing payments stood at $200 per week.
Also Read: Is Uber To Be Banned In Taiwan
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