The company also made false claims when advertising its service that sold and leased vehicles to drivers.

The United States Federal Trade Commission has fined Uber $20 million for exaggerating drivers’ potential earnings and misrepresenting the terms of its Vehicle Solutions Program. According to a statement by the FTC, “established truth-in-advertising principles apply to any company making earnings or auto financing claims – and that includes Uber.” The agency will use the money to refund affected drivers.

“Many consumers sign up to drive for Uber, but they shouldn’t be taken for a ride about their earnings potential or the cost of financing a car through Uber,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, when announcing the settlement.

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The complaint against the popular ride-hailing company alleged that the firm’s Website advertised that UberX drivers in New York had a $90,000 a year median income and those in San Francisco made over $74,000 annually. However, the FTC found that the average driver earned $61,000 in New York and $53,000 in San Francisco. Fewer than 10 percent of workers made the advertised rate.

"We’re pleased to have reached an agreement with the FTC. 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,” an Uber spokesperson told Motor1 about the settlement.

In addition, the company's ads claimed that workers made $25 an hour in Boston and Philadelphia. The FTC found that drivers made thousands less per year in those cities than Uber claimed and fewer than 10 percent of them achieved the advertised hourly rates.

Uber also marketed its Vehicle Solutions Program as letting drivers own a car for as little as $20 a day or lease one with $17 per day. The FTC found this to be untrue, though. “Drivers who participated in the program paid more than advertised, received worse rates on average than consumers with similar credit scores, and are bound by leases with mileage limits,” according to the regulator’s report.

Source: Federal Trade Commission, Uber

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