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Uber Settles FTC Case for $20 Million

By William Vogeler, Esq. on January 24, 2017 5:56 AM

The FTC filed its complaint in federal court on Thursday, and Uber settled the case before the court closed the same day. That's about as fast as Uber gets, no disrespect intended to many Uber drivers out there.

To show its good faith, Uber will pay $20 million to be distributed to those drivers who received less than the average pay that the company has advertised. The FTC alleged the company falsely advertised on Craigslist and other websites that drivers earned between $15 and $29 an hour. In cities like Boston, Minneapolis, and Philadelphia, however, fewer than 10 percent of Uber drivers earned as advertised.

Keep on Driving

"We're pleased to have reached an agreement with the FTC," an Uber spokesman told the Wall Street Journal. "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."

Uber did not admit to any wrongdoing in the case, which included allegations the company also mislead drivers about its "Vehicle Solutions Program." The company advertised that drivers could own vehicles for as little as $20 a day or lease them for as low as $17 a day.

In its complaint, the FTC said that the median payments for purchasing or leasing a vehicle turned out to be significantly more. The median lease payment in April 2015, for example, was almost $29 a day.

Signs Ahead

The company still faces litigation elsewhere, and has fought more 70 lawsuits around the country. Last year, the company reached a settlement in a significant class action.

In that case, lawyers in California and Massachusetts resolved the isssue of whether Uber drivers are contractors or employees. In the proposed settlement, Uber agreed to pay $100 million while retaining the driver's designation as independent contractors.

However, the judge would not approve of the settlement. The case has been stayed pending interlocutory appeals.

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