Photo via senatormarkwarner/Flickr (CC BY 2.0)
Settling a consumer protection lawsuit brought against it by the district attorneys of San Francisco and Los Angeles, Uber has agreed to pay $25 million to the two cities for allegedly misleading customers about its drivers' background checks.
The lawsuit, which was filed in 2014 and alleged that Uber told customers that the background checks for its drivers were superior to that of taxi drivers, also said the company didn't comply with state laws about airport rides and the fares they should be charging.
“The result we achieved today goes well beyond its impact on Uber,” San Francisco District Attorney George Gascón said, via SFGate.com. “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.”
Gascón had found 25 Uber drivers in San Francisco and L.A. with criminal backgrounds that included serious crimes like sex offenses, burglaries, and a murder. Uber drivers do not undergo fingerprint checks; taxi drivers do.
Included in the settlement, Uber will no longer say that its background checks are the toughest in the car-service industry and it won't use the phrase "safest ride on the road."
The complaint also said that San Francisco Uber drivers charged an additional $4 fee for riders heading to the airport, but the company didn't actually pay any of that money to the airport.
Uber, which is based in San Francisco, will pay the first $10 million within the next 60 days—it'll be split between the two cities. But the remaining $15 million would be forgiven after two years if Uber fully obeys the settlement.
As part of that agreement, Uber said it will only operate in airports where it has permission to pick up and drop off passengers. That includes the three major Bay Area airports along with Los Angeles International Airport.
Rival car service Lyft had to pay $500,000 in 2014 to both district attorneys for similar issues.
“We’re glad to put this case behind us and excited to redouble our efforts serving riders and drivers across the state of California,” an Uber spokesperson said.