Uber to pay $20m fine to settle allegations it misled drivers

Uber has agreed to pay $20m to settle claims it misled drivers over how much they would earn by driving for its service and over how much it would cost them to finance a car.

The Federal Trade Commission (FTC) said drivers for the ride-hailing service provider in 18 major US cities earned a lot less than the company disclosed online, while they also ended up paying more for their cars than Uber claimed.

"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's bureau of consumer protection.

The agreement, which was reached late on Thursday (19 January), focused on a dispute covering statements the company had made between 2013 and 2015, as it stepped up its recruitment drive. Uber was found to have lured workers into driving for the company, but the FTC found the financial estimates published on Uber's website were inflated.

Following an investigation, the regulator found the mid-range income for New York drivers was approximately $61,000 a year, a third less than the $90,000 group chief executive Travis Kalanick mentioned in a statement published on the company's website.

Similarly, drivers in San Francisco made around $53,000 per year, 28% less than advertised, while the company was found to have deliberately overestimated average hourly earnings of its drivers in 16 other US cities.

However, in August 2015 Uber amended its stament, highlighting the figures simply reflected the "potential" income in the two cities.

The company said most of the proceeds of the settlement will be paid out to drivers, although it did not specify how many drivers will receive a payment nor what the average sum will be. It expressed satisfaction at having reached an agreement. "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 company said.