Uber leasing arm agrees to pay $250G
An Uber subsidiary will pay a quarter of a million dollars to settle allegations it overcharged hundreds of drivers who leased cars from the ride-hailing giant.
“This is an example of a company that didn’t have the right practices in place, had shoddy policies,” Attorney General Maura Healey said. “As a result, some workers were hurt and were out to the tune of hundreds if not thousands of dollars.”
Under a settlement filed in Suffolk Superior Court yesterday, Xchange Leasing — Uber’s auto leasing arm — agreed to pay $210,000 to 336 lessees to resolve allegations the company overcharged drivers for tolls, and will pay another $40,000 penalty to the AG’s Local Consumer Aid fund.
According to the AG’s office, Xchange Leasing agreed to pay tolls incurred from Pay-By-Plate transactions that were mailed to the company and then charge the lessee. But Xchange sometimes made the payment late, triggering late fees, which it passed on to drivers. The company sometimes also charged drivers two or three times the amount of the actual payment. Still, Healey said she believes Xchange was simply negligent rather than malicious.
In the settlement, Uber denied any wrongdoing and a spokesman said the company has taken steps to improve its internal systems.
“Xchange offers a flexible option for people who don’t own a vehicle to drive and earn money with Uber. But as we’ve grown to help more people access vehicles, we’ve also made mistakes,” the spokesman said. “We have worked with Attorney General Healey’s office over the last several months to resolve these mistakes, make drivers whole for any errors, and invest in fixes that will prevent it from happening again.”
Although Uber said it sent an apology to affected drivers, the company refused to provide a copy of the letter, according to the settlement.
Xchange Leasing is meant to give potential Uber drivers who cannot make a down payment on a car or have poor credit the ability to lease a car. Xchange has also been criticized for preying on vulnerable customers. Lease payments are often deducted directly from a driver’s Uber earnings, and some industry experts see the cost of an Xchange lease as far higher than a conventional lease.
“This is a company that promised to help drivers earn a living, but set things up and ran things in a way that hurt vulnerable consumers,” Healey said. “A leasing company that runs its business in this manner is not one that’s going to help consumers in Massachusetts.”