In promotional materials to attract prospective drivers, ride-hailing company Uber Technologies touted how much money drivers would earn and the favorable terms they could get by financing a car through Uber’s Vehicle Solutions Program. But according to an FTC complaint, Uber exaggerated those earnings claims and misrepresented the terms of its Vehicle Solutions Program. A $20 million settlement stands for the proposition that established truth-in-advertising principles apply to any company making earnings or auto financing claims – and that includes Uber.
Uber said on its website that uberX drivers’ “median income is more than $90,000/year/driver in New York and more than $74,000/year/driver in San Francisco.” The FTC alleges that for at least the year before, the median income earned by uberX drivers in those cities was thousands less than that. Other ads touted hourly rates of $25 for drivers in Boston and Philadelphia, but the FTC says fewer than 10% of them made that much.
In addition, Uber told drivers, “[O]wn a car for as little as $20/day” ($140/week) or lease a car with “payments as low as $17 per day” ($119/week). Uber also promised that the company’s Vehicle Solutions Program “connects drivers with any kind of credit history to the best financing options available” and that drivers who lease cars through its program would have “unlimited miles.”
The complaint challenges those claims as deceptive. The FTC says that from at least late 2013 through April 2015, 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.
In addition to a $20 million financial remedy, the order puts protections in place to prohibit false or unsubstantiated claims about drivers’ earnings, auto financing, or leasing terms.