Uber Technologies Inc agreed to a US$25 million settlement to end a lawsuit in California that accused the ride-hailing company of misleading customers about the strength of its background checks on drivers, prosecutors in Los Angeles and San Francisco said on Thursday.
An Uber car is seen parked with the driver's lunch left on the
dashboard in Venice, Los Angeles, California, United States July 15,
2015. REUTERS/Lucy Nicholson/Files
SAN FRANCISCO: Uber Technologies Inc agreed to a US$25 million
settlement to end a lawsuit in California that accused the ride-hailing
company of misleading customers about the strength of its background
checks on drivers, prosecutors in Los Angeles and San Francisco said on
Thursday.
Uber must pay US$10 million within 60 days, and the remaining US$15 million will be waived if Uber complies with the terms of the agreement for two years, the San Francisco and Los Angeles County district attorneys said in statements.
"It sends a clear message to all businesses, and to startups in particular, that in the quest to quickly obtain market share laws designed to protect consumers cannot be ignored," San Francisco District Attorney George Gascón said.
Uber welcomed the settlement. "We're glad to put this case behind us and excited to redouble our efforts serving riders and drivers across the state of California," it said in a statement.
Uber said it had already made many of the changes, including no longer calling its service the "safest ride on the road" or calling its background checks "the gold standard."
Lyft, another ride-hailing company, settled a similar lawsuit filed by the district attorneys in December 2014, agreeing to pay civil penalties of up to US$500,000.
Critics have said the background checks by Lyft and Uber and are not thorough enough to weed out potentially dangerous drivers.
Houston was among the first U.S. cities to require drivers for ride-hailing firms to undergo fingerprint-based background checks using the FBI's database.
Uber must pay US$10 million within 60 days, and the remaining US$15 million will be waived if Uber complies with the terms of the agreement for two years, the San Francisco and Los Angeles County district attorneys said in statements.
"It sends a clear message to all businesses, and to startups in particular, that in the quest to quickly obtain market share laws designed to protect consumers cannot be ignored," San Francisco District Attorney George Gascón said.
Uber welcomed the settlement. "We're glad to put this case behind us and excited to redouble our efforts serving riders and drivers across the state of California," it said in a statement.
The case was filed in December 2014 by the two district
attorneys, who alleged that Uber misled its customers about the strength
of its background checks on drivers.
The civil complaint also contended that Uber drivers worked
at airports without obtaining authorization, and in the case of San
Francisco, charged a US$4 extra fee to passengers traveling there,
without paying anything to the airport.
The agreement bars Uber from making untrue statements about its
background checks and from charging airport "tolls." In addition, the
company must ensure that its fare calculations meet state measurement
standards.Uber said it had already made many of the changes, including no longer calling its service the "safest ride on the road" or calling its background checks "the gold standard."
Lyft, another ride-hailing company, settled a similar lawsuit filed by the district attorneys in December 2014, agreeing to pay civil penalties of up to US$500,000.
Critics have said the background checks by Lyft and Uber and are not thorough enough to weed out potentially dangerous drivers.
Houston was among the first U.S. cities to require drivers for ride-hailing firms to undergo fingerprint-based background checks using the FBI's database.
Since the ordinance took effect in 2014, authorities have
found driver applicants cleared by Uber who had been charged with crimes
including murder, fraud, robbery and sexual assault.
The Atlanta City Council is also considering an ordinance
that would require fingerprinting of Uber drivers who want to get
licensed to pick up passengers at the airport.
(Reporting by Anet Josline Pinto in Bengaluru and Curtis
Skinner in San Francisco; Additional reporting by Heather Somerville;
Editing by Fiona Ortiz and Peter Cooney)
- Reuters
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