Uber Pays $20 Million for Settling a Government Lawsuit

The popular transportation service provider Uber recently agreed to pay $20 million to the Federal Trade Commission in the U.S, over a lawsuit about claims for driver compensation and its auto leasing program.

The U.S  Federal Trade Commission sued Uber on Thursday, stating that the online cab service provider made misleading, unsubstantiated or false claims about the amount which drivers could make on the service. The FTC also alleged that Uber made similar false claims regarding its auto  leasing program. In the complaint filed by the FTC, it stated that the management of Uber “have caused its drivers to suffer millions of dollars of injury.”  Uber didn’t deny or admit their practices in the allegations during the settlement.

Matt Kallman, an Uber Spokesman, wrote in a statement through e-mail that “We’re pleased to have reached an agreement with the FTC.” He further stated that “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.”

Uber values at $69 billion and is present in almost every country. It has changed the game of cab services and created what is known as a gig-economy. Enabling Smartphone owners to be the contractors rather than being an employee for somebody. Uber promotes flexibility and says that drivers can create their own work schedule no matter how big or small the hours are.

Many labor advocates and governments around the world have challenged Uber, by saying that Uber takes advantage of the drivers by not giving them the rights given normally to other official employees.

The FTC complaint stated several other examples of false and misleading claims. “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,”  Said Jessica Rich, Director of the FTC Bureau of Consumer Protection. She further stated that “This settlement will put millions of dollars back in Uber drivers’ pockets.”

The FTC also mentioned that Uber used to recruit drivers from Craigslist ads, many of which said “$20 per hour”, while in reality less than 10 percent of the drivers actually earned this much.

This case is Federal Trade Commission v. Uber Technologies, 17-00261, U.S. District Court for the Northern District of California (San Francisco)