Uber to pay US $20M to settle FTC suit over driver pay

SAN FRANCISCO • Uber Technologies Inc. agreed to pay US$ 20 million to settle a U.S. Federal Trade Commission lawsuit over driver compensation claims and its auto leasing program.

The FTC sued the San Francisco-based ride-hailing startup Thursday, saying Uber made false, misleading or unsubstantiated claims about how much drivers could earn on the service. The agency alleged Uber made similar misrepresentations about its vehicle financing program.

In its complaint, the FTC said Uber’s practices “have caused its drivers to suffer millions of dollars of injury.” Uber didn’t admit to or deny wrongdoing in its settlement.

“We’re pleased to have reached an agreement with the FTC,” Matt Kallman, an Uber spokesman, wrote in an emailed 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.”

With a valuation of US$69 billion and a presence in almost every country, Uber has helped define what’s become known as the gig economy, in which smartphone owners work as contractors rather than full- time employees. Uber advocates for the flexibility of this arrangement, saying drivers can set their own hours and work for as much or as little as they’d like. But governments and labour advocates around the world have challenged the company, saying it takes advantage of workers and doesn’t offer them the rights typically afforded to official employees.

The FTC complaint laid out several examples the agency said were false or misleading. In 2015, Uber’s website said the median annual income for a driver on its UberX service was US$90,000 in New York City and US$74,000 in San Francisco. The complaint alleged that the actual median income for drivers in New York was US$ 29,000 less than Uber claimed and US$21,000 less in San Francisco from May 2013 to May 2014.