Uber to pay $20 million to FTC to settle claims that it exaggerated how much drivers would make
The FTC said Uber had "inflated" its hourly drivers' earnings in online advertisements to attract drivers to its platform. "However, once Drivers have begun to receive their paychecks, Drivers have discovered their actual earnings were substantially less than Uber claimed," the FTC complaint says.
For example, Uber advertised on Craigslist that drivers in Minneapolis could make $18 per hour and Boston drivers could make as much as $25 an hour. In both cases, fewer than 10% of Uber drivers in that city ever made the advertised hourly rate.
The FTC started investigating Uber in 2015 and announced its settlement on Thursday. In addition to paying $20 million, the company is barred from misrepresenting drivers' earnings and financing and lease terms for its vehicle leasing terms.
"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, in a statement. "This settlement will put millions of dollars back in Uber drivers' pockets."
While Uber is still advertising earnings in advertisements, the company has a team of economists making sure the numbers best reflect average driver earnings.
"We're pleased to have reached an agreement with the FTC," 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."