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Uber to pay $10 million for misleading customers about its drivers

By Mason White 2:00 PM April 8, 2016
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By: Tanya Malhotra
(Scroll down for video) Uber has agreed to pay a fine of $10 million after being accused of misleading the public about the way it conducted background checks on its drivers, according to court documents in California.

Los Angeles County District Attorney Jackie Lacey and San Francisco District Attorney George Gascon announced a $25 million settlement today with Uber Technologies Inc., over allegations the ride sharing company misled the public about background checks on its drivers.

“We are pleased that Uber has agreed to comply with state consumer laws,” District Attorney Lacey said.

“With this settlement, the ride sharing company has pledged to communicate honestly about its driver background checks and airport fees, which are important steps to protecting the residents of California,” Lacey added.

“The result we achieved today goes well beyond its impact on Uber,” said San Francisco District Attorney George Gascon.

“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. If a business acts like it is above the law, it will pay a heavy price,” Gascon added.

As part of the stipulated judgment approved today by San Francisco Superior Court Judge Mary Wiss, Uber agreed to pay a civil penalty of $10 million to Los Angeles and San Francisco counties within the next 60 days.

Uber will have to pay an additional $15 million civil penalty if the company does not comply with the terms of the settlement over the next two years.

The agreement follows a prior settlement reached with Lyft, Inc. Both companies are subject to a permanent injunction, barring them from making untrue or misleading statements about their background checks.

The injunction also requires Uber to ensure that its passenger fare calculation app meets accuracy standards set by the California Department of Agriculture’s Division of Measurement Standards.

In addition, Uber must receive approval from airports in California, to have its drivers drop off and pick up passengers, according to the agreement.

The company also can no longer charge an airport “toll” unless it or its drivers pay the entire fee to the airport. The company admitted no wrongdoing in the settlement.