Uber has agreed a $20m deal with the US Federal Trade Commission to settle claims of driver deception

 
Rebecca Smith
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It hasn't announced how the $20m will be split between drivers yet (Source: Getty)

Uber has agreed to pay $20m (£16m) to settle allegations it duped people into driving for its ride-hailing app with false promises regarding how much they'd earn.

According to a lawsuit brought by the US Federal Trade Commission (FTC), the company made exaggerated claims about how much drivers could earn and how affordable its vehicle financing plans were.

Messaging on Uber's site said UberX drivers brought in a median income of over $90,000 a year in New York and over $74,000 in San Francisco. According to the agency's findings, fewer than 10 per cent of drivers in the city managed to bring in money on that level.

It said the annual median income was $61,000 in New York and $53,000 in San Francisco.

The FTC also alleged that drivers ended up paying considerably more to lease cars than Uber had claimed.

Read more: How Uber-style ride-sharing could dramatically reduce city traffic

The agreement with the FTC covers statements the firm made from late 2013 to 2015 as it sought to boost recruitment to drive expansion.

“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.

This settlement will put millions of dollars back in Uber drivers’ pockets.

Uber said in a statement: "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."

Read more: Uber takes its self-driving cars to the streets of Arizona

The company says its appeal to many drivers is the flexibility and freedom of being able to drive "when and where they want" and make money when works for them.

The debate over whether its drivers are self-employed or workers also rages on. A landmark employment tribunal hearing found Uber drivers were entitled to basic workers' rights such as holiday pay last October, though Uber is appealing the decision.

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