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Uber deceived drivers with promise of lofty pay, FTC says

Uber has agreed to pay $20 million for exaggerating how much its drivers could earn and encouraging them to lease cars through a 'low-cost' program the government says was anything but.

Uber has agreed to pay $20 million for exaggerating how much its drivers could earn and encouraging them to lease cars through a 'low-cost' program the government says was anything but.

The agreement was made public Thursday in documents filed by the Federal Trade Commission in San Francisco. It alleges that Uber had engaged in unfair or deceptive practices.

Uber didn't admit to wrongdoing but did agreed to settle with the FTC. Affected drivers will be issued refunds, though the agency has not determined exactly how that will be accomplished.

The complaint, filed in U.S. District Court in San Francisco, said Uber claimed drivers could "earn specific high hourly and yearly earnings" but in many instances they did not.

In one post on its website, Uber said the median income of uberX Drivers was “more than $90,000/year/driver in New York and more than $74,000/year/driver in San Francisco.”

According to the FTC, the median income of an uberX driver in New York City was actually $61,000 and in San Francisco, $53,000.

The company also overstated the hourly earnings of its drivers in job listings, the FTC alleged, claiming drivers in Boston could earn $25 per hour, in Minneapolis, $18, and in Philadelphia, $25. The FTC said Uber's own data on hourly earnings actually showed that in Boston, Minneapolis and Philadelphia in December 2014, fewer than 10% of drivers averaged the promised hourly rate.

Uber also encouraged drivers to sign up for lease or lease-to-own car programs through its Vehicle Solutions Program, saying it was "low cost."

The program allowed drivers to lease cars, with the auto payments automatically deducted from the driver's weekly fares. At least 1,900 drivers entered into such contracts, the complaint said.

Uber's advertising told drivers that they could "own a car for as little as $20/day" or lease one with "payments as low as $17 per day."

However, according to the FTC complaint, Uber actually had no idea whether this was true, and never collected, received or monitored any data about the program's terms.

When drivers complained, the company send them notes that read, "Please contact your lender to discuss your payments, accruals or amounts owed, as Uber does not keep track of this information."

In a statement, the company said it was pleased to have reached an agreement with the FTC and that it had made many improvements to the driver experience over the last year.

A drivers' organization said it was good Uber had been taken to task for its treatment of drivers.

"The reality of being a ridesharing driver is a far cry from the rosy picture these apps describe," said Jim Conigliaro Jr., founder of the Independent Drivers Guild, which represents more than 45,000 Uber drivers in New York City.

"Companies like Uber shift cost, risk, and burden onto drivers and taxpayers," he said, leaving drivers stuck with the bill for their vehicle, gas, repairs, maintenance and insurance. Drivers deserve truthful data on the earnings and expenses of ridesharing, he said.

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