Uber pays $25 million for inflating safety claims
Uber settled a civil enforcement case brought by prosecutors in San Francisco and Los Angeles for up to $25 million Thursday, agreeing to adjust its business practices to remove misleading language and comply with state law, according to the San Francisco District Attorney’s Office.
San Francisco District Attorney George Gascón said in a statement:
“The result we achieved today goes well beyond its impact on Uber. … 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.”
The case against Uber was filed in December 2014, alleging that the transportation network company’s claims of industry-leading background checks were false, that the company made exaggerated claims about safety and that Uber had continued to operate at airports when it didn’t have permission to, among other allegations.
Uber will have to pay a $10 million penalty within 60 days, and $15 million more if it is not in compliance with the terms of the suit within two years.
The company said in a statement that other settlements in class action lawsuits reached since the district attorneys filed the enforcement action have brought Uber into compliance with some of the settlement terms.
In February, Uber settled two class action lawsuits in federal court for $28.5 million and agreed to stop using language in its advertising calling the service the “safest ride on the road” or describing its background checks as “the gold standard.”
Uber has also agreed to operate only at airports where it has permission — including San Francisco, Oakland and San Jose — and is reviewing its fare system to be more consistent.
Before the suit against Uber was filed, the district attorneys reached a similar settlement with competitor Lyft, which agreed in 2014 to revise its language on safety, submit its fare calculation system for regulation and only operate at airports where it had permission. Lyft’s civil penalty was only $250,000.