Uber Agrees To Pay $10 Million To Settle Lawsuit Over Driver Background Checks
LOS ANGELES (CBSLA.com) — Uber agreed to pay $10 million to settle a lawsuit filed by Los Angeles and San Francisco counties.
Prosecutors claimed the ride-hailing service made false or misleading statements about the background checks it conducts on its drivers.
"We are pleased that Uber has agreed to comply with state consumer laws," Los Angeles County District Attorney Jackie Lacey said. "With this settlement, the ride-sharing company has pledged to communicate honestly about its driver background checks and airport fees, important steps to protecting the residents of California."
Uber denied any wrongdoing, but has agreed to avoid using terms such as "safest ride on the road" or describing its background checks as "the gold standard."
Besides the $10 million penalty, Uber will have to pay an additional $15 million if it fails to comply with other settlement terms over the next two years, prosecutors said.
The terms of the settlement mirror those reached in 2014 with Lyft. However, the competing ride-hailing service paid only $500,000 in civil penalties.
Prosecutors also claimed the company's drivers did not have authorization required to work at airports.
The settlement "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 Gascon said. "If a business acts like it is above the law, it will pay a heavy price."
