Uber will pay $20 million to settle charges that it misled drivers about pay

2025-04-28 05:52:16admin

Uber has agreed to pay $20 million to settle a Federal Trade Commission lawsuit alleging that it exaggerated how much its drivers could earn.

The money will be put towards refunding the affected drivers, though the agency hasn't decided how exactly it will be apportioned. The ride-hailing service is expected to help with the process as part of the penalty.

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By settling out of court, Uber notably did not have to admit whether or not it was guilty of the charges.

"We’re pleased to have reached an agreement with the FTC," an Uber spokesperson said in an emailed statement. "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."

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The suit claimed that the company made misleading claims to drivers in 18 different cities. For instance, the company boasted that the average Uber driver could make $90,000 per year in New York City, but the FTC's probe found the actual number to be a little over two thirds of that. In San Francisco, Uber advertised the average earnings as $74,000, but the FTC pegged the actual number at $53,000.

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The agency also said that no more than 30 percent of drivers made the hourly wage Uber used to promote the job in Craigslist ads in any of the cities it investigated.

Credit: ftc

The lawsuit also took issue with the way Uber's car leasing program operated between late 2013 and the spring of 2015. The program was designed to provide drivers with car leasing deals offering generous terms through a network of partnering manufacturers and lenders.

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.

Because Uber failed to monitor the program, the agency said, drivers oftentimes ended up getting worse deals than they would have elsewhere with the same credit rating, despite the company's promise of "the best financing options available" regardless of personal financials.

In 2015, Uber cut ties with Banco Santander's car rental division, which was later accused of offering renters subprime loans.

"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," Jessica Rich, head of the FTC's bureau of consumer protection, said in a statement.

This isn't the first time Uber has settled a false advertising lawsuit. The company previously agreed to stop calling its cars "the safest ride on the road" or its background checks the "gold standard" after California regulators challenged those marketing claims.

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