The Federal Trade Commission (FTC) has mailed checks to Uber drivers as part of a settlement over allegations that the ride hailing company made inflated and exaggerated claims as to how much drivers could earn. This was done in an effort to entice more people to sign up with the service.
Checks were sent to 88,799 current and former Uber drivers and the average check is $223 per driver. The amount each driver receives will be determined by how long each driver worked with Uber, what cities and states they drove in and the total amount of money available in the settlement fund.
Could You Be One of the Drivers Receiving a Refund?
Uber drivers are eligible for a check if they began driving during the period when Uber was running the deceptive ads, promising far more in income than they knew drivers were making.
If you began driving for Uber approximately in 2014 and 2015, in the following cities, you could be receiving a check soon, so keep an eye out for it.
- 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.
If you have questions, the FTC advises you to call the refund administrator at 888-506-8281. And if you’re one of the lucky ones who will receive a check, the FTC says you must cash it or deposit it within 60 days.
What Did Uber Do Wrong?
The FTC’s Consumer Education Specialist described laid out the FTC’s case against Uber in this post from January, 2017:
When you’re on the hunt for income, the last thing you want is to be misled about the earnings and benefits that a business opportunity offers. Today, the FTC announced that Uber agreed to a $20 million settlement of the FTC’s charges that the company made false or unsupported claims regarding its drivers’ likely income and the benefits of its Vehicle Solutions Program.
The FTC says Uber made several misleading claims about the annual and hourly wages its drivers were likely to earn. For example, Uber’s website claimed that the median yearly income for Uber drivers in New York is $90,000. Similarly, Uber ads in Boston and Philadelphia claimed that the average driver would “make $25/hour,” while San Diego and Phoenix drivers could expect to make $20/hour. According to the FTC, most of Uber’s drivers were not likely to earn the claimed annual and hourly wages.
To attract new drivers, Uber also created the Vehicle Solutions Program, which claimed to “connect drivers with any kind of credit history to the best financing options available.” Uber advertised “payments as low as $17 per day” and “starting at $119/week,” as well as unlimited mileage on leased vehicles.
In reality, drivers who participated in the Vehicle Solutions program paid more than the weekly advertised amounts and were offered higher interest rate loans than the industry average. Also, even though Uber claimed leases had “unlimited mileage,” the leases did have mileage limits.
The settlement requires Uber to pay $20 million and prohibits the company from making false or misleading claims about its drivers’ likely income and the benefits of its Vehicle Solutions Program.
The FTC alleged that Uber falsely claimed that New York City uberX drivers’ annual median income was more than $90,000. Keep in mind that “median” means that $90,000 was the half way point. Uber claimed that while half of all New York City uberX made less than $90,000, the other half made $90,000 or more.
Uber used the same playbook in San Francisco where they claimed drivers’ median income was $74,000. But the reality was, according to the FTC, something less than 10 percent of drivers in these cities made what Uber claimed most drivers were making.
The FTC says the reality is that drivers in both New York and San Francisco had a median income that was some $20,000 to $30,000 less than what Uber claimed. In New York, the median income at the time these claims were made, was $61,000 per year. And in San Francisco it was $53,000.
Uber’s Vehicle Solutions Program
The FTC also cited Uber’s vehicle leasing program called Vehicle Solutions. In this program, Uber told prospective drivers that they could lease a car with “any kind of credit history” and that they would get the best financing options available.
Their advertising materials said the car leasing program was Uber’s way to “connect drivers with any kind of credit history to the best financing options available.” They also advertised “payments as low as $17 per day” and “starting at $119 per week” (or $476 per month). And they promised unlimited mileage. Uber also advertised the purchase of vehicles for as little as $140 per week (or $560 per month).
Today, Uber is still offering this program and it is advertising cars starting with a weekly cost of $130 (or $520 per month). And they’re still advertising unlimited miles.
It offers the program through other companies such as Hertz Rental Car or new online companies, Getaround and Fair.
However, the reality was that drivers who used Vehicle Solutions to lease a car – “paid more than the weekly advertised amounts and were offered higher interest rate loans than the industry average. Also, even though Uber claimed leases had ‘unlimited mileage,’ the leases did have mileage limits”, according to the FTC.
According to the FTC, “The settlement requires Uber to pay $20 million and prohibits the company from making false or misleading claims about its drivers’ likely income and the benefits of its Vehicle Solutions Program.”
Will the Amount Drivers Receive Compensate for Damages?
No. The amount drivers receive in this settlement will not come anywhere close to compensating them for actual damages they have suffered.
Many drivers bought new vehicles to drive for Uber. What they paid for the vehicles was determined by how much Uber told them they could make. When they got into the job and found out that, in many cases, they weren’t making even half of what they had been told, it became nearly impossible to make their car payments. Many drivers lost their cars and others filed for bankruptcy.
The FTC even admits that the settlement amount is not enough to cover the actual damages drivers suffered. FTC Commissioner Maureen K. Ohlhausen objected to the terms of the settlement, when it was reached, for this reason.
Ryan Price, the executive director of the Independent Driver’s Guild in New York City said, “Drivers are stuck with massive debt from buying vehicles under these false promises. So $222 is not going to cut it.”