Uber have agreed to a settlement, totalling just over $19.8 million, after the Federal Trade Commission sued the minicab giant.
The case, which was brought by the FTC in the U.S, centred around misleading claims by Uber as to how much Uber drivers could earn as well as misleading lease term agreements.
Uber had allegedly claimed, according to the FTC, that the average annual income for UberX drivers in New York was $90,000, whilst in San Fransisco it was $74,000.
The FTC argued that these claims were inflated quite significantly, by as much as $20,000 to $30,000 per annum. Therefore, the average income was in fact around $61,000 in New York and $53,000 in San Francisco, furthermore under Less 10% of UberX drivers were able to earn the amounts Uber claimed as its average.
Uber's vehicle solutions program also came under scrutiny. The scheme which assists drivers buying and leasing vehicles, had claimed it could get drivers into purchase agreements for as little as $560 per month and could arrange a vehicle lease for $476 per month. The reality was somewhat different, drivers had to pay $640 monthly for a leased vehicle and $800 monthly to purchase a car through the scheme, according to the FTC.
A settlement was agreed between the FTC and Uber, whereby Uber agreed to stop making unsubstantiated claims surrounding a drivers earning potential as well as the cost of its finance deals.
It was also agreed that Uber would compensate just under 89,000 drivers with a share of almost $20 million, amounting to around $223 per driver.
There are concerns from some quarters that the $223 figure will be nowhere near enough to compensate drivers, who have been struggling to cope with the debt attributed to the cost of the vehicles.
The refunds will start to be issued this week and will cover drivers working in 2014 and 2015, in cities where Uber recruited heavily.