The Federal Trade Commission brought charges to Uber on behalf of the drivers who claimed to have been misled about how much money they could expect to make and how much it would cost to buy or lease a car through the company. The ride-sharing company agreed to settle these claims for $20 million.
The money from the settlement will be distributed to the drivers affected by Uber’s alleged deceptive claims. The settlement also prohibits Uber from making claims about drivers’ potential income that are false, misleading, on unsubstantiated.
In an email, an Uber spokesman said “We’re pleased to have reached an agreement with the FTC. 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 drivers have previously staged protests and filed lawsuits to bring attention to the fact that their pay is too low. While Uber previously said that drivers can make up to $30 and hour, most drivers say they do not make anything close to that figure.
There are conflicting studies that reflect the varying wages of drivers. According to a November study by Uber employee and shareholder Jonathan Hall, drivers make an average of $20.19 an hour. A June report by Buzzfeed News, however, shows that drivers make an average of less than $13.25 an hour in urban areas like Detroit, Houston, and Denver.
In the FTC’s complaint, the agency says Uber claimed drivers could earn $90,000 annually in New York and $74,000 annually in San Francisco, yet drivers actually make an average of $61,000 and $53,000, respectively. Uber, the FTC alleged, attempted to attract new drivers to sign up by exaggerating their potential salaries.
The FTC’s complaint continues, “When Uber’s promised earnings have not materialized, and drivers have attempted to cancel their auto agreements, they have incurred significant monetary harm. Uber’s practices have caused its drivers to suffer millions of dollars of injury.” Another part of the agency’s complaint was that Uber’s car financing program turned out to be more expensive for drivers than marketed.
In a statement, director of the FTC’s Bureau of Consumer Protection Jessica Rich said “This settlement will put millions of dollars back in Uber drivers’ pockets.”