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Uber to pay $20 million to settle claims it misled drivers about pay, financing

Photo by Amelia Holowaty Krales/The Verge

Uber will pay $20 million to settle a complaint by the Federal Trade Commission that it misled drivers about earnings and vehicle financing, the Wall Street Journal is reporting. The consumer protection agency alleged that Uber publicized misleading statements about the amount of money drivers could earn in 20 cities. For example, Uber said drivers could earn up to $90,000 a year in New York City and $74,000 in San Francisco.

As part of the settlement, Uber is not admitting any wrongdoing, but has agreed to pay $20 million. That sum will be distributed to drivers affected by the FTC, which did not respond to requests for comment.

The FTC also claimed that Uber promised to provide drivers with the best-available financing options to own or lease a car, but that the rates drivers received were worse than those that could be obtained by consumers with similar credit scores. In 2015, Uber ended its relationship with Banco Santander’s auto loan division, which later was accused of issuing subprime loans for vehicle financing.

“We’re pleased to have reached an agreement with the FTC,” an Uber spokesperson said. “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.”

As part of the settlement, Uber agreed to issue semi-regular compliance reports to the FTC, including marketing material and driver earning reports, according to court documents.

This isn’t the first time Uber has agreed to settle claims alleging it made misleading statements to drivers and customers. Last year, Uber agreed to settle two class-action lawsuits for $28.5 million that allege the ride-hail company improperly marketed its safety record to passengers by charging them a flat fee for "safe rides." A few months later, Uber agreed to settle a class action lawsuit with drivers for $100 million, but that was later rejected by a judge as an insufficient amount. Last September, Uber won preliminary approval to settle a claim that it misled riders about a 20 percent gratuity for drivers.