Wow! Uber fined $20 Million and confesses it exaggerated potential drivers’ earnings!

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  • Wow! Uber fined $20 Million and confesses it exaggerated potential drivers’ earnings!

The Federal Trade Commission (FTC) sued Uber alleging that it “misled prospective drivers with exaggerated earning claims and claims about financing through its Vehicle Solutions Program.”  The January 19, 2017 lawsuit filed in the US District Court for the Northern District of California FTC v. Uber Technologies, Inc. requested a permanent injunction and includes claims violations of Section 5 of the FTC Act for: Deceptive Income Claims, Deceptive Auto Finance Claims, and Deceptive Unlimited Mileage Claims. The FTC News Release entitled “Uber Agrees to Pay $20 Million to Settle FTC Charges That It Recruited Prospective Drivers with Exaggerated Earnings Claims” included these allegations in about the lawsuit:

The FTC alleges that Uber claimed on its website that uberX drivers’ annual median income was more than $90,000 in New York and over $74,000 in San Francisco.

The FTC alleges, however, that drivers’ annual median income was actually $61,000 in New York and $53,000 in San Francisco.  In all, less than 10 percent of all drivers in those cities earned the yearly income Uber touted.

The FTC also alleges that Uber made high hourly earnings claims in job listings, including on Craigslist, but that the typical Uber driver failed to earn those advertised hourly amounts in various cities.

The complaint also alleges that Uber claimed its Vehicle Solutions Program would provide drivers with the “best financing options available,” regardless of the driver’s credit history, and told consumers they could “own a car for as little as $20/day” ($140/week) or lease a car with “payments as low as $17 per day” ($119/week), and “starting at $119/week.”

Despite Uber’s claims, from at least late 2013 through April 2015, the median weekly purchase and lease payments exceeded $160 and $200, respectively, the FTC alleges.

Uber failed to control or monitor the terms and conditions of the auto financing agreements through its program and in fact, its drivers received worse rates on average than consumers with similar credit scores typically would obtain, according to the FTC’s complaint.

In addition, Uber claimed its drivers could receive leases with unlimited mileage through its program when in fact, the leases came with mileage limits, the FTC alleges.

Jessica Rich (Director of the FTC’s Bureau of Consumer Protection) made these comments in the News Release:

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.

This settlement will put millions of dollars back in Uber drivers’ pockets.

Uber’s confession is significant and hopefully will influence other companies who make fraudulent claims to potential workers

Click here for the original article.

Peter Vogel
https://www.foley.com/peter-s-vogel/

Peter Vogel is renowned as both a trial and transactional lawyer who deeply understands technology, science and intellectual property, and the opportunities and problems they pose for clients. Governments and administrative agencies, as well as major corporations and emerging businesses, rely on Peter to get right to the heart of an information technology or e-discovery dispute; he knows what to expect and how it will play out in the courtroom. This eliminates unproductive rabbit trails and reduces the cost of litigation for all parties. When negotiating agreements for IT implementation projects for ERP or development projects for healthcare and other companies, his knowledge of technology enables his clients and their vendors to reach consensus faster. CEOs and other C-suite executives consult with Peter on the confluence of technology, business and law. He advises on cyber-security and identity protection, international privacy laws and global technology disputes, combining complex enterprise systems after a merger or acquisition, and counsels with clients when they are upgrading IT platforms. In every instance, his technical experience, background, and understanding of relationship dynamics streamline the pathway to the right answer and best approach or solution. Peter is often appointed a Special Master representing the court in IT and eDiscovery disputes. In addition, a court-ordered mediator in eDiscovery and ESI, internet, e-commerce, intellectual property and IT litigation, and has represented numerous states, counties and municipal governments inside Texas and throughout the U.S.



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