Uber Agrees to $20M Settlement After Claim it Falsely Advertised High Income to 'Entice' Potential Drivers

[MacRumors]

The Federal Trade Commission recently filed a complaint against popular ride-hailing app Uber for posting inflated yearly wages on various job-seeking websites, which "enticed numerous consumers to become Uber drivers" under false pretenses, according to the FTC. Uber isn't fighting the allegations placed against it, and has instead this week quickly agreed to a settlement deal in the way of paying $20 million as equitable relief to the FTC.

As reported by BuzzFeed News, the FTC's complaint explains that from May 2014 through August 2015 Uber published a statement on its website which included various annual earning rates for its drivers. In the post the company mentioned that for UberX drivers the "median income is more than $90,000/year/driver in New York and more than $74,000/year/driver in San Francisco."

According to the FTC, the truth is that the median income is $29,000 less than Uber claimed in New York, and $21,000 less in San Francisco, specifically when looking at hours locked to a standard 40-hour work week. In total, less than 10 percent of drivers in New York and San Francisco have reached Uber's $90,000 and $74,000 yearly income claim, respectively.

"To induce individuals to become Uber Drivers, Uber has advertised and marketed the earning potential of its Drivers on Craigslist, its company website, and other advertising and marketing media. Uber has publicized high annual and hourly earnings to entice consumers to become Uber Drivers. However, once Drivers have begun to receive their paychecks, Drivers have discovered their actual earnings were substantially less than Uber has claimed."

The complaint specifically mentions a collection of job postings published by Uber in cities across the United States, all backing Uber's inflated earnings rate that the FTC sees as a false tactic to get drivers onto the service.

Uber also has "made numerous claims" regarding the cheap cost and unlimited mileage of its Vehicle Solutions Program, which lets drivers buy or lease a car they can use to drive for Uber. According to the FTC's complaint, the company "has had no basis with which to make these claims," saying that Uber has had zero oversight or even monitored the terms and conditions of any driver entering into the Vehicle Solutions Program.

"Further, Drivers in Uber's Vehicle Solutions Program - which has connected Drivers with subprime auto companies and dealers - have in many instances received worse than industry average rates, made payments for hundreds of dollars more per month than advertised, and entered into leases imposing costs for mileage."

Uber CEO Travis Kalanick has acknowledged the FTC's complaint in the settlement agreement, and a company spokesperson said the following in a statement:

"We're pleased to have reached an agreement with the FTC," an Uber spokesperson said in a 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."

The ride-hailing company has hit a few rocky patches over the past few months, most recently hearing concerns from users after an update introduced background GPS tracking that follows a rider up to five minutes after their trip ends and even if the app is closed. A company spokeswoman told BuzzFeed News in December that one of the biggest advantages of the five minute tracking update is that it "could also help customer service representatives investigate complaints or safety issues" raised by users following a ride.

Article Link: Uber Agrees to $20M Settlement After Claim it Falsely Advertised High Income to 'Entice' Potential Drivers

 

[Jeremy1026]

I guess Uber will pay that settlement with all that money they aren't making.

 

[Quu]

Scumbags.

 

[Crosscreek]

Important Apple news???????

 

[dwaltwhit]

Important Apple news???????

Uber is a heavily downloaded app from the app store, which means a huge portion of iPhone users are uber users, which means uber news is important to many people with iPhones

 

[smacrumon]

Class action. Sue this company, sue it badly.

 

[MacknTosh]

Uber is a heavily downloaded app from the app store, which means a huge portion of iPhone users are uber users, which means uber news is important to many people with iPhones

I hope not, since by that logic MacRumors would be filled with Facebook stories about cats, Twitter stories about the Kardashians, Amazons latest deals, eBay specials, the unusual weather in Europe, stock market fluctuations etc. I personally have lots of apps downloaded (including Uber) that I rarely use (the advantages of 128GB).

And out of interest, what is classed as a 'huge portion of iPhone users'?

 

[69Mustang]

I hope not, since by that logic MacRumors would be filled with Facebook stories about cats, Twitter stories about the Kardashians, Amazons latest deals, eBay specials, the unusual weather in Europe, stock market fluctuations etc. I personally have lots of apps downloaded (including Uber) that I rarely use (the advantages of 128GB).

And out of interest, what is classed as a 'huge portion of iPhone users'?

MacRumors isn't filled with stories about those companies. However, MacRumors has had stories about Facebook, Twitter, Amazon, Ebay, weather apps, and stock market stories. All lending credence to @dwaltwhit assertion that it's relevant to iPhone users... just like those other popular apps that have had posts.

 

[itsmilo]

I miss Uber so much everytime i come back to my backwards Country of Germany after a vacation #neuland

 

[Kaibelf]

I know people want to hate uber, but how exactly is this different from any company that promises potentially vast riches on what is essentially a commission-based job? Salespeople have this too, and waiters, and any number of other jobs.

 

[unplugme71]

I know a lot of classmates and friends that work for Uber. When they found out you can make more money working at Costco, some of them quit.

The economy will get better and drivers will soon learn that Uber isn't the money making place they thought it would be.

 

[chinesedemo]

What an absolute piddly fine for the level of their deceit.

 

[MacknTosh]

MacRumors isn't filled with stories about those companies. However, MacRumors has had stories about Facebook, Twitter, Amazon, Ebay, weather apps, and stock market stories. All lending credence to @dwaltwhit assertion that it's relevant to iPhone users... just like those other popular apps that have had posts.

I agree... I'm not saying stories concerning Uber aren't deserving of a story on Macrumors. It's like you said - the site isn't filled with stories about these companies since many of said stories would not be especially relevant to Mac users. I'm saying this is one of those stories that IMO could have been skipped over, unless it's been a slow news day (and let's face it - I imagine that US users have more engaging things on their minds today...).

 

[whyamihere]

Hating this company more and more I recently got an email from Uber that they noticed I had turned off location services for my Uber app and that I should go back in and turn them on. Seriously?? I bet they are sending out a lot of these emails lately due to their lack of concern for user privacy.

My response to that is the same I continue to list in my review on the App store every time they push a BS update to try and clear out the 1-star reviews... as soon as you put the option back to allow location only when using the app, I'll start using your service again. Until then, Lyft it is.

 

[EM2013]

"anyone looking to earn money on their own schedule"
Too bad there were no requests on my schedule. Tried this on a weekend afternoon and got nothing. I know there are requests during the mornings or nights but mornings don't work for me and nights are way more riskier.

 

[macTW]

It isn't the ride sharing that could ruin Uber but Uber itself.

 

[Cordorb]

$90,000/year/driver in New York take away $29,000 less than Uber claimed = $61,000


or is $29,000 the median ?

 

[C DM]

I agree... I'm not saying stories concerning Uber aren't deserving of a story on Macrumors. It's like you said - the site isn't filled with stories about these companies since many of said stories would not be especially relevant to Mac users. I'm saying this is one of those stories that IMO could have been skipped over, unless it's been a slow news day (and let's face it - I imagine that US users have more engaging things on their minds today...).

Seems like this might be affecting plenty of people one way or another, even just those who use Uber. Ultimately it's a "side-story" essentially in the iOS Blog section and can easily be skipped by anyone not interested (as plenty of people skip all kinds of stories about all kinds of directly Apple related things that they aren't really interested in).

 

[dysamoria]

Class action. Sue this company, sue it badly.

On one hand, yeah, that might be appropriate. On the other hand, the money would go almost entirely to the lawyers, not the drivers. Class action lawsuits aren't what they're supposed to be.

I know people want to hate uber, but how exactly is this different from any company that promises potentially vast riches on what is essentially a commission-based job? Salespeople have this too, and waiters, and any number of other jobs.

So it's okay to entice all these people with inflated earnings then?

 

[ikramerica]

This isn't salary. It's contractor pay. You have to take out gas, insurance, cost of the car (depreciation, tires, extra maintenance) and self employment taxes on top of any actual income tax you might be left paying after so much is taken out.

 

[dwaltwhit]

I hope not, since by that logic MacRumors would be filled with Facebook stories about cats, Twitter stories about the Kardashians, Amazons latest deals, eBay specials, the unusual weather in Europe, stock market fluctuations etc. I personally have lots of apps downloaded (including Uber) that I rarely use (the advantages of 128GB).

And out of interest, what is classed as a 'huge portion of iPhone users'?

I think your logic and my logic are different. My logic has to do with the company with the number 11 free app in the app store just settled a lawsuit for $20 million dollars. Your logic has to do with fairly minor content on other platforms.

 

[4jasontv]

Seems like this might be affecting plenty of people one way or another, even just those who use Uber. Ultimately it's a "side-story" essentially in the iOS Blog section and can easily be skipped by anyone not interested (as plenty of people skip all kinds of stories about all kinds of directly Apple related things that they aren't really interested in).

By side story, do you mean its "off topic" or literally on the side of the website? Because both seem to be true. Unless they used their iPhone or iPad to read Mac Rumors. For those users only one of them would be true.
[doublepost=1484973700][/doublepost]

On one hand, yeah, that might be appropriate. On the other hand, the money would go almost entirely to the lawyers, not the drivers. Class action lawsuits aren't what they're supposed to be.

We need a class action lawsuit against lawyers!

 

[littyboy]

I know a lot of classmates and friends that work for Uber. When they found out you can make more money working at Costco, some of them quit.

The economy will get better and drivers will soon learn that Uber isn't the money making place they thought it would be.

Uber is a job for people who don't want to apply themselves. I don't feel sorry for the drivers at all. However, I do hate that Uber takes too much commission from them.

 

[macmikey2]

I drove fro these guys for about 6 months here in Philly area. Lost a lot of money driving for these guys. Even had a customer complain about my service one day and they refunded him the fare, and told me I was on notice. 1 person. And it wasn't justified. Construction in center city had the road closed where he wannted to go and I could not get him there. Dropped him as close as I could but he complained I 'left him on a corner no where near his destination. Uber would not defend me at all.
All other customers left tips, liked my ride (06 f150 4door FX4) because it was quiet, roomy and comfy. Always had papers/magazines, water, even gave free, cheap umbrellas on rainy days.

But car washes almost every day, time sitting in parking lots, cell phone lots at airports, etc... was just too much. In the end, I never made enough to cover costs let alone made a profit.

They lie to get you in, and then they don't support you at all. Hate them, very much.

 

[smacrumon]

On one hand, yeah, that might be appropriate. On the other hand, the money would go almost entirely to the lawyers, not the drivers. Class action lawsuits aren't what they're supposed to be.



So it's okay to entice all these people with inflated earnings then?

It is also about creating precedent though, setting the tone for future company behaviors.