Ride hailing service Uber, has agreed to pay $20million to settle drivers who were misled about their earnings.
The company said its settlement didn’t constitute an admission of guilt, disputing the way the FTC calculated its figures.
The company said it has modified the way in which it advertises potential earnings to new recruits – but would not go into further detail.
Between January and March 2015, ride-sharing service Uber put out ads on Craigslist in the hope of attracting new drivers by offering attractive hourly rates of pay.
In Boston, for example, it told potential drivers they would earn $25 an hour.In truth, fewer than 10% of drivers in the city actually managed to bring in that amount, according to a lawsuit brought by the US Federal Trade Commission.
In separate statements pushed out to the media and posted on its own site, Uber said “the potential income a driver on UberX can make in a year is more than $90,000 in New York and more than $74,000 in San Francisco”.
The FTC said the median amount earned in those cities – for drivers working a 40 hour week – was significantly less ($29,000 and $21,000 less, respectively).
The FTC listed 18 cities across the US where it said Uber was painting a far more lucrative picture than was realistic. In Baltimore, fewer than 20% of drivers earned $16 an hour. Chicago – fewer than 20% earned $21. Minneapolis – 10%, $18. And so on.
Drivers complain, however, that the improvements to the driver experience do not extend to covering the costs of running and maintaining a car.
The FTC also criticised Uber over the financing options it gave to drivers interested in leasing a car via the company.
The regulator said drivers were paying an average of $200 per week – higher than first advertised. Money to pay the lease is automatically taken from a driver’s earnings.