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Wow! Uber fined $20 Million and confesses it exaggerated potential drivers’ earnings!

The Federal Trade Commission (FTC) sued Uber alleging that it “misled prospective drivers with exaggerated earning claims and claims about financing through its Vehicle Solutions Program.”  The January 19, 2017 lawsuit filed in the US District Court for the Northern District of California FTC v. Uber Technologies, Inc. requested a permanent injunction and includes claims violations of Section 5 of the FTC Act for: Deceptive Income Claims, Deceptive Auto Finance Claims, and Deceptive Unlimited Mileage Claims. The FTC News Release entitled “Uber Agrees to Pay $20 Million to Settle FTC Charges That It Recruited Prospective Drivers with Exaggerated Earnings Claims” included these allegations in about the lawsuit:

The FTC alleges that Uber claimed on its website that uberX drivers’ annual median income was more than $90,000 in New York and over $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.  In all, 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.

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, and 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 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, according to the FTC’s complaint.

In addition, Uber claimed its drivers could receive leases with unlimited mileage through its program when in fact, the leases came with mileage limits, the FTC alleges.

Jessica Rich (Director of the FTC’s Bureau of Consumer Protection) made these comments in the News Release:

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.

This settlement will put millions of dollars back in Uber drivers’ pockets.

Uber’s confession is significant and hopefully will influence other companies who make fraudulent claims to potential workers

Click here for the original article.

Peter Vogel

Peter S. Vogel has been involved with the computer industry and electronic data since 1967. Mr. Vogel worked as a mainframe programmer, systems analyst and management consultant for companies acquiring computer technology and related services, and received a Masters in Computer Science. As a lawyer for the more than 30 years, Mr. Vogel combines his technical and business background with his legal expertise to help companies with IT and Internet litigation, dispute resolution and contract negotiation.

Mr. Vogel's clients often seek his advice about practical business issues relating to electronic technology and the Internet, which often include social media, ERP implementation projects, Internet security, website business management, outsourcing, software patents, copyrights and trade secret protection. Because he is a seasoned IT professional with an accounting and marketing background, Mr. Vogel also often advises clients about financial and marketing issues regarding IT and the Internet. His experience as an Adjunct Professor in the Law of eCommerce keeps him current on the fast moving evolution of the Internet and social media. As a result, Mr. Vogel is often quoted in the media about Internet issues and crises. His blog on Internet, IT and eDiscovery is widely recognized for timely topics and thought-provoking ideas: www.vogelitlawblog.com.

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