Uber Settles False-Advertising Lawsuit for $10 Million

Uber Settles False-Advertising Lawsuit for $10 Million
File photo by Kendrick Hang/Flickr

Uber's going to send checks worth a total of $10 million to the people of Los Angeles and San Francisco.

In late 2014 the district attorneys of L.A. and San Francisco sued the ride-hail company for allegedly lying to consumers about the strictness of its driver background checks.

Critics have long decried ride-hail companies' lack of fingerprinting for drivers, arguing that would-be drivers with criminal records could pose as upstanding citizens and the app firms might never know.

Uber admitted no wrongdoing, but it did agree to $10 million upfront along with a guarantee of an additional $15 million if it didn't adhere to terms of the settlement in the next two years, Los Angeles County District Attorney's Office officials said. The settlement was reached April 7.

Prosecutors cited past Uber advertising that claimed the company was "setting the strictest safety standards possible" with background checks that used "industry-leading standards." One company rep was quoted as saying Uber's checks were "often more rigorous than what is required to become a taxi driver."

Taxi drivers are required to be fingerprinted, and those prints are checked against federal and state criminal records. Such Live Scan fingerprinting tends to be more expensive and time-consuming.

At the time the suit was filed, L.A. district attorney Jackie Lacey said Uber "put consumers at risk by misleading the public about the background checks of its drivers."

Lyft settled a similar suit, agreeing not to exaggerate the efficacy of its background checks and submitting to local rules for airport pickups and dropoffs.

Likewise, Uber must adhere to pickup and dropoff rules at all California airports, pass along all airport fees it charges passengers, and submit to California Department of Agriculture's Division of Measurement Standards for free calculations, L.A. prosecutors said.

The deal is part of a stipulated judgment approved by a San Francisco Superior Court judge, they said. Uber also was barred from making false or misleading statements about its background checks under a previous injunction.

"With this settlement, the ride-sharing company has pledged to communicate honestly about its driver background checks and airport fees, important steps to protecting the residents of California," Lacey said.

Uber said in a statement, "We're glad to put this case behind us and excited to redouble our efforts serving riders and drivers across the state of California."

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