Uber have agreed to pay a $20 million settlement to resolve claims that the company had misled drivers about prospective earnings and car financing.
The online taxi service app has been accused by the The Federal Trade Commission (FTC), who has found that over the period between late 2013 to 2015, the company had deliberately misled drivers to encourage more recruitment. According to the commission, drivers across 18 major US cities had in fact been earning significantly less than the figures that Uber had published online. In addition, drivers had also faced unforeseen lease expenses for cars.
Welcoming the settlement, Uber 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 San Francisco company said.
It had found culpable of exaggerating drivers’ earning potential in a bid to facilitate its rapid expansion. Statements released between May 2015 and August 2015 on the company website by CEO Travis Kalanick suggested that the mid-range annual incomes of drivers in New York city drivers topped $90,000. The company said that the mid-range annual earnings of its San Francisco based drivers exceeded $74,000.
However, following FTC investigations, mid-range income for New York drivers was uncovered as almost a third less, at $61,000, with 28 percent lower in San Francisco, at $53,000, across the period.
The ruling follows a similar setback last year, when the service was taken to court by employment union GMB over a dispute regarding whether drivers could indeed be regarded as “self-employed” or “employees”, and thus entitled to worker’s rights.
The taxi company has dominated the industry in recent years due to its low prices compared to market averages, and functional App. Back in October, the San Francisco based firm announced plans to look into the development of the ‘flying taxi’, in a bid to save commuters traffic time. Whilst the idea is still in early stages, the eventual project is intended to be unmanned, and thus a revolutionary invention for the car service industry.
The majority of the funds will be paid directly to drivers as the company looks to rectify the situation.