The Federal Trade Commission is mailing checks amounting to almost $20 million to drivers for Uber as part of a settlement over allegations it grossly exaggerated the yearly and hourly income drivers could make in certain cities.
The FTC also alleged that the popular ride-hailing company misled prospective drivers about the terms of its vehicle financing options for drivers who do not possess a vehicle. The allegation was based on false claims Uber made to prospective drivers through marketing material.
According to the FTC complaint, Uber advertised that drivers could “own a car for as little as $20/day” ($140 per week) or lease a car for $119 per week. However, the complaint stated that drivers who joined between late 2013 and April 2015 had a median payment of over $200 per week.
False Claims about Driver Income
In the complaint, the commission alleged the Uber website falsely claimed that UberX drivers’ annual median income exceeded $90,000 in New York and $74,000 in San Francisco. However, drivers’ annual median income in these cities was much lower. In addition, less than 10 percent of Uber drivers earned the advertised yearly income, according to the FTC.
As part of the FTC settlement, Uber agreed to pay a $20 million fine.
The FTC is managing and disbursing the money. It is sending checks to 88,799 affected drivers. The average refund amount per driver is $222.96.
The figure is based on several factors, including the amount of remuneration recipients earned with Uber, in which cities and states they drove, and the total amount of money available in the settlement fund.
Epiq, the refund administrator for this matter, has already started to mail refund checks this month. The settlement checks must be cashed in 60 days, or they become void.