A total of 88,799 checks totaling $19,798,233 will be mailed by the Federal Trade Commission (FTC) to drivers for Uber Technologies Inc. that allegedly exaggerated the yearly and hourly income drivers could make in certain cities and misled prospective drivers about the terms of its financing options.
The refund was part of a settlement that was agreed upon after the FTC filed a complaint with the U.S. District Court for the Northern District of California after the Commission voted 2-1 authorizing the staff to file the complaint and proposed stipulated order. Commissioner Maureen K. Ohlhausen was the lone dissenter.
The complaint alleged that Uber falsely 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 to attract more prospective drivers.
“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,” stressed Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “This settlement will put millions of dollars back in Uber drivers’ pockets.”
FTC found out that drivers’ annual median income in said cities was actually much lower and only less than 10 percent of the drivers earned the yearly income Uber publicized, according to the FTC.
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.
In their settlement with the FTC, Uber agreed to pay $20 million which FTC will use to send a refund an average amount of $222.96 each to some 88,799 drivers depending some factors including how much recipients eared with Uber, in which cities and states they drove and the total amount of money available in the settlement fund.
In addition to imposing a $20 million judgment against Uber, the stipulated order prohibits the company from misrepresenting drivers’ earnings and auto finance and lease terms. The order also bars Uber from making false, misleading, or unsubstantiated representations about drivers’ income; programs offering or advertising vehicles or vehicle financing or leasing; and the terms and conditions of any vehicle financing or leasing.
Uber drivers are eligible for a check if they started driving when the allegedly deceptive ads ran in certain cities and states (generally in 2014 and 2015), and they did not make the promised income. The eligible areas are:
- Atlanta, GA
- Baltimore, MD
- Boston, MA
- Chicago, IL
- Dallas, TX
- Denver, CO
- Houston, TX
- Los Angeles, CA
- Miami, FL
- Minneapolis-St. Paul, MN
- New Jersey
- New York City, NY
- Orange County, CA
- Philadelphia, PA
- Phoenix, AZ
- San Diego, CA
- San Francisco, CA
- Seattle, WA
- Washington D.C.
The checks will be mailed by refund administrator Epiq and are supposed to be cashed within 60 days or they will become void.
FTC reminds everyone that they never require anyone to pay money or provide information to cash refund checks even as they advised recipients to direct their questions to them directly at 1-888-506-8281.