In response to accusations by the Federal Trade Commission that the company lied about driver income, Uber has agreed to pay a 20 million-dollar settlement. The car service claimed on its website that their driver’s median incomes could reach 90,000 dollars in New York and 74,000 in San Francisco. One of the company’s Craigslist ads said that drivers in Washington D.C. would make 21 dollars an hour. The reality is that drivers in New York had a median income of 61,000, and drivers in San Francisco a median income of 53,000. In D.C., only 20 percent of Uber drivers made 21 an hour or more.
Uber boasted of “the best financing options available” for cars, yet drivers often wound up with worse rates than average.
Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said the settlement will go towards refunds for drivers who had been misled.
“This settlement will put millions of dollars back in Uber drivers’ pockets,” she said.
Uber did not concede in the settlement that workers had been misled, arguing that the incident arose out of a disagreement with the FTC about how to calculate wages for a set of employees with such varied work schedules. The company also attributed such problems to third party financing partners, a matter Uber now handles itself.
A spokeswoman from Uber said “We’re pleased to have reached an agreement with the FTC. 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.”
The FTC authorized the complaint with a 2 to 1 vote, with commissioner Maureen K. Ohlhausen representing the dissenting vote. Ohlhausen said in 2015 that drivers for the company earn more than 3.5 billion dollars, and that “earnings vary based on the effort of the participant.” She said the use of a simple median as a metric could “disguise the true range of possibilities.”
However, founder of the Independent Drivers Guild Jim Conigliaro Jr., said: “Drivers deserve the fair pay they were promised, tips like other workers in the service economy, and unbiased data on the earnings and expenses of ridesharing…It’s time to give working drivers a raise.”
The organization claims to represent over 45,000 New York City Uber drivers.