The biggest ride-hailing company in the world was forced to settle for $20 million with the Federal Trade Commission after multiple drivers complained they were receiving less pay than initially promised. Not only the drivers were underpaid, but Uber also gave out false information on how much it costs to either lease or purchase a vehicle through the company.
The Federal Trade Commission will now distribute the money to Uber drivers affected by the company’s false claims. Furthermore, the ride-hailing company is now prohibited from misleading or making unsubstantial statements about its drivers’ income.
A spokesman for the company declared Uber was satisfied with the agreement via an e-mail. He then added the company had been constantly evolving through the years with a focus on its drivers’ experience, ensuring Uber remains the best option to make a substantial profit for people who are looking to work on their own schedule.
At the moment, Uber is regarded as the largest ride-hailing company worldwide, operating in over 450 cities in more than 70 countries. Even though approximately one million people chose to drive for Uber, the relationship between the company and its employees has not been good at all times. Uber drivers have been known to file lawsuits and stage multiple protests, arguing their pay is too low.
As the company claimed in the past, Uber drivers could earn up to $30 per hour. However, many drivers said they never reached that number. An Uber shareholder and employee, Jonathan Hall, conducted a study in November last year and discovered that the company’s drivers make on average about $20.19 per hour. Another study conducted in the summer of 2016 found that drivers operating in Houston, Detroit, and Denver make even less, about $13.25, or even less, per hour.
Moreover, the company claimed that a driver could earn up to $90,000 per year in New York and $74,000 in San Francisco. However, the Federal Trade Commission discovered that, on average, a single Uber driver only makes about $61,000 a year in New York and $53,000 in San Francisco. According to the FTC’s report, Uber lured in new drivers by exaggerating how much they could earn and threatened to take legal action against those who attempted to cancel their agreement with the company.
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