Feds Fine Uber $20 Million for Misleading Ads About Potential Driver Earnings
Last week, the Federal Trade Commission came down hard on Uber — in the form of a $20 million fine.
In a complaint the feds lodged against the San Francisco-based ride-share company, officials accused Uber of misleading drivers about their potential hourly or yearly income by exaggerating figures. The FTC claimed Uber overstated earnings in advertisements in various media or on Craigslist, coaxing drivers with estimates of, for example, $91,000 annual median income in New York or $74,000 in San Francisco, when really the correct figures were closer to $61,000 and $53,000, according to the FTC.
In Houston, the feds found Craigslist advertisements telling drivers they'd make $17 an hour — which Uber drivers the Houston Press spoke with found to be far out of range. The feds found less than 30 percent of drivers were actually making that rate.
Uber has agreed to pay the $20 million as part of a settlement, reached in the U.S. District Court for the Northern District of California. The money will go back to Uber drivers who were misled.
In a statement, Uber spokesman Travis Considine said, "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.
Jawad Ansari, a full-time Uber driver in Houston, said he makes about $10 an hour — and that's if he sticks exclusively to picking up passengers at the airport. He says he did not feel personally misled by Uber about the pay, but said he thinks Uber could be doing more to ensure drivers are getting paid fairly. Ansari said Uber takes 20 percent out of the fare for each trip (another driver, who signed up more recently, said it was 29 percent) — but if they're going to take such a big cut, Ansari said they need to provide passengers with a tip option, just to help him pay expenses. That $10 an hour, he said, does not include gas money or car maintenance, as he puts hundreds of miles on his car every week. When a passenger stained the seats in his backseat, he says, Uber gave him only $20 to pay to clean it.
"I asked them, do you know anybody who will clean my seats for $20 bucks? Just let me know and I'll take my car over there," Ansari said.
Another driver, Daryl Woodard, said he tried once to see if he could manage to make a living doing Uber full-time, calling into work sick for several days. But he gave up on that idea quickly, preferring to see it only as a way to make some extra cash.
"I was under the impression I would be able to do that," he said. "But in order for me to make any real money, I would have to put in [10 to 12 hours] five to six days a week."
Woodard said potential drivers should best view Uber the way the company describes itself in one of its TV commercials: a "side hustle" — perhaps its most accurate representation.