The Strategist

Uber to pay $ 20 million for misleading drivers in the US

01/20/2017 - 13:37

Uber will pay $ 20 million to settle lawsuit of the US Federal Trade Commission (FTC). The latter is claiming that the company misinformed its drivers about their likely earnings, CNN Money reports.

Núcleo Editorial via flickr
Núcleo Editorial via flickr
According to the FTC, Uber has been making false, misleading or unsubstantiated claims about earnings of drivers and car financing program.

Uber claimed that average annual income of a driver in New York could be more than $ 90 thousand, and more than $ 74 thousand in San Francisco. However, FTC says that just less than 10% of drivers were able to earn the amount announced by the company.

As for the vehicles leasing program, Uber declared unlimited mileage, but actually the lease agreement assumed limitations. The complaint states that the company had no reason to meet these requirements.

The lawsuit alleges that Uber received "significant revenue" from fares, as well as "tens of millions of dollars" from drivers involved in the leasing program.

This settlement will be on hand to drivers since it is likely to make the company more transparent. Uber consider drivers as contractors, not employees, and this practice has already resulted in many complaints.

The lawsuit has been settled. Uber did not admit or deny cheating drivers, yet agreed to change approach to payment and leasing terms. All $ 20 million will go to compensate for drivers across the country.

"We are pleased to have reached agreement with the FTC. We have done a lot to improve the driving experience in the last year. We will continue to focus on the fact that Uber … is the best option for those looking for an opportunity to earn money on their own schedule," - said Uber in a statement.

This is not the first time when Uber is accused of violating labor laws.

Previously, court in the UK ruled that the American company was obliged to pay their Uber drivers holiday allowance and minimum wages. 

According to Reuters, two Britons who worked at Uber filed the claim against the taxi service to the Labour Court. They pointed out that the company illegally considers its taxi drivers as self-employed workers. The complaint stated that because of this the applicants had no rights enjoyed by regular employees. Their interests in court were represented by the UK drivers union.

The court, in turn, agreed to the plaintiffs' arguments that they are full-time employees, and their fundamental rights, guaranteed by the British legislation, have not been respected by the employer. Thus, the court ruled that Uber must pay drivers their minimum wage at the rate of $ 8.8 per hour, as well as to provide paid sick and vacation. 

The agency notes that this decision can affect all drivers working with Uber. There are about 40,000 of them in the UK.

Uber Technologies, founded in 2009 in San Francisco, created a number of online taxi services applications. Currently, Uber is available in dozens of cities around the world, and is considered the most profitable private startup; its cost is estimated at $ 62.5 billion.


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