The Uber ride-hailing service will pay $10 million to settle a lawsuit filed by Los Angeles County and San Francisco prosecutors alleging the company made false or misleading statements about the quality of background checks it conducts on its drivers, authorities announced Thursday.
Uber officials said the company did not admit any wrongdoing, but agreed to avoid using advertising terms such as “safest ride on the road” or describing its background checks as “the gold standard.”
Prosecutors sued the company in 2014, alleging not only improprieties over background-check advertising, but claiming the company’s drivers did not have authorization required to work at airports.
“We are pleased that Uber has agreed to comply with state consumer laws,” Los Angeles County District Attorney Jackie Lacey said. “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.”
In addition to the $10 million penalty, which must be paid in the next 60 days, Uber Technologies Inc. will have to pay another $15 million if it fails to comply with other settlement terms over the next two years, prosecutors said.
According to Uber, the company will also:
— continue working with the state Division of Measurement Standards to ensure its GPS-based smartphone app accurately calculates fares;
— eliminate the use of certain language in its safety-related advertising;
— operate only at airports where it has explicit permission to do so, including Los Angeles International and Burbank Bob Hope; and
— clearly describe and disclose airport surcharge fees.
“… No means of transportation can ever be 100 percent safe,” according to Uber. “Accidents and incidents do happen. That’s why we need to ensure that the language used to describe safety at Uber is clear and precise.”
The terms of the settlement mirror those reached in 2014 with competing ride-hailing service Lyft. That company, however, paid only $500,000 in civil penalties.
The settlement “sends a clear message to all businesses, and to startups in particular, that in the quest to quickly obtain market share, laws designed to protect consumers cannot be ignored,” San Francisco District Attorney George Gascon said. “If a business acts like it is above the law, it will pay a heavy price.”
