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Businesses The Almighty Buck The Courts United States

Uber Will Pay $20 Million For Exaggerating Drivers' Earnings (engadget.com) 79

Uber is paying $20 million to settle allegations that it duped people into driving for its ride-hailing service with false promises about how much they would earn and how much they would have to pay to finance a car. From a report: The FTC claimed that Uber was advertising an annual median income of over $90,000 per year for uberX drivers in New York and more than $74,000 for uberX drivers in San Francisco. But, as the commission found out, less than 10 percent of all drivers in those cities actually make that much. The complaint also alleges that Uber was inflating the hourly earnings on job boards like Craigslist. New drivers who financed a new car through Uber's Vehicle Solutions Program found out the company's claims were too good to be true as well. Although Uber told new drivers they would be able to lease a new car for around $119 per week, the actual lease rates never dipped below $200 from late 2013 to April 2015. And, despite its promise of delivering "the best financing options available," it turns out that Uber's rates were actually worse than consumers with similar credit scores could have gotten elsewhere. Adding insult to overpriced injury, Uber tacked on mileage limits to lease agreements that were advertised with unlimited mileage.
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Uber Will Pay $20 Million For Exaggerating Drivers' Earnings

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  • How (Score:5, Insightful)

    by ISoldat53 ( 977164 ) on Friday January 20, 2017 @01:25PM (#53704137)
    How is this not criminal? Why hasn't someone been arrested. Will UBER admit wrong doing?
    • by pla ( 258480 )
      The only part of that that sounds potentially unkosher is the unlimited miles on the leases. Everything else looks like just a matter of people failing to do their own damned due diligence.

      Every employer brags about their awesome compensation package; any employee making $20.50/hour (the average for a NYC Uber driver) who thinks they'll make $90k a year damned well better plan on working 12 hours a day, 7 days a week. And their leases sucked? Hey, maybe shop the fuck around before you pay someone (espe
      • Re: (Score:2, Informative)

        Really Potsy....

        "Uber told new drivers they would be able to lease a new car for around $119 per week, the actual lease rates never dipped below $200 from late 2013 to April 2015"

        "despite its promise of delivering "the best financing options available," it turns out that Uber's rates were actually worse than consumers with similar credit scores could have gotten elsewhere."

        You might want to try reading sometime. It will help you look less like an ass.
      • If your "brag" is demonstrably false - that is more commonly known as "fraud" - which is illegal when us mere mortals do it.

    • Thanks to corporate lobbying, laws have been amended and made so that individuals are hardly held responsible for corporate fuck ups.
      • An idea I had the other day was to also fine executives personally for their companies missbehaviour.
      • Yes, laws were indeed made so that a corporation itself could be sued, rather than trying to prove which individual employee was responsible and trying to recover from that person. Specifically, this occurred during the reign of Justinian the Great, around 534 AD.

        • You're rather misrepresenting history - seeing as corporations weren't invented yet when Justinian was alive, in fact they were only invented about a thousand years later. The Dutch East India Corporation was the first such entity to exist. It had a private army and navy - both among the largest in the world at the time. It came to own about 25% of the land-surface of the earth. People in those places were not "citizens", you know having rights and such, they were divided between "slaves" and "employees".
          Th

          • The Roman Republic issued government contracts to build aquaducts, chariots to publicani (publicly held corporations) who bid on the projects. One publicana had a contract to handle the geese on the capital. Roman publicani could have numerous investors (stockholders), and be run by a few managers. Some employed thousands of workers and had limited liability.

            Did the Roman corporations attract a lot of investors, like today' stock market does? Polybius wrote:
            __
            There is scarcely a soul, one might say, who d

            • So these publicani came into being for one specific government-issued contract, and was disbanded immediately after it's completion... yes that's *just* like a corporation... oh wait, no, it's NOTHING like a corporation.

              • So these publicani came into being for one specific government-issued contract, and was disbanded immediately after it's completion... yes that's *just* like a corporation... oh wait, no, it's NOTHING like a corporation

                Wrong again. This is exactly how Donald Trump has made money while the projects with his name on them go bankrupt one after another. Same is done for other buildings, condo complexes, shopping malls, and other projects. Each is set up as its own corporation as if it has no connection to anything else that the developer, producer, and constructor has ever done or will ever do, and the project originators are now hired as subcontractors (instead of being the bosses). The project is done to some point of c

    • How is this not criminal? Why hasn't someone been arrested. Will UBER admit wrong doing?

      Most of the time, a company will agree to pay a settlement in exchange for actually admitting any fault whatsoever.

      This of course, allows executives to do the same thing over again and again without ever actually admitting to being an unethical bunch of lying shitbags running a company.

  • by geekmux ( 1040042 ) on Friday January 20, 2017 @01:30PM (#53704169)

    What I'm now more curious about is the true impact of a $20 million dollar penalty against corporate lying. If it is a mere slap on the wrist financially, then the FTC is doing nothing but encouraging this kind of arrogant fucking behavior by organizations. They are literally perpetuating the concept that it's OK to bullshit and lie about products. If that's the case, you might as well abolish all regulatory agencies.

    The impact is becoming far too great to continue to ignore the fact that accountability does not exist within corporations anymore. Neither does ethics. Capitalistic greed has trumped all.

    • The correct solution would be to apply the fine and terminate any monies owing on existing vehicle financing, as well as possibly refunding monies already paid. After all, those monies and the contract are basically based on fraud and false advertising.

      • by Anonymous Coward

        The correct solution would be to force Uber to pay their drivers what they claimed they pay them.

    • by plopez ( 54068 )

      Well seeing how uber is already losing huge sums of money either none or the straw that breaks the camels back.

    • by plopez ( 54068 ) on Friday January 20, 2017 @01:47PM (#53704401) Journal

      Bullshit and lying is capitalist SOP. See wall street, defense contractors, oil companies, automakers (hello GM and Volkswagen!), and many many more.

      But the answer is obvious, deregulate! Let the invisible hand of The Free Market Prevail!. Just like it did in the 1800s!

      • All hail the invisible hand! May it's fingers be forever long and noodley!

    • If they where W2 then there may of been even more like DOL, civil cases, maybe even failure to pay wage = jail.

    • by Mitreya ( 579078 )

      What I'm now more curious about is the true impact of a $20 million dollar penalty against corporate lying.

      I am even more curious about where this $20 million goes.
      Perhaps to increase the salaries of all those Uber drivers? No?

      • by cstacy ( 534252 )

        I am even more curious about where this $20 million goes.
        Perhaps to increase the salaries of all those Uber drivers? No?

        Uber drivers do not get salaries. They are paid by the mile.

        It's only paid for miles while the passenger is in the car, of course. The miles getting to the pickup are not paid.
        And all expenses and vehicle cost and maintenance are paid by the drivers. There are no health care or other benefits.

        Operating cost is about 60-70 centers per mile; drivers are paid about 100 cents.
        Rides are usually 2 miles, (plus 1 to 10 miles of unpaid overhead) with between zero and 4 rides per hour.
        Most rides are the minimum far

        • Interesting. I am guessing that the half-billion per quarter is coming out of their investors' asses. So who is getting the money that UBER is losing? Is this true redistribution of wealth to the poor albeit at a high price to them?

        • What I don't quite understand is how Uber will make money at the end of the day!

          Rich asshats throw money at them en mass looking for the next yuge moneymaker. Whats not to understand.

          • by cstacy ( 534252 )

            What I don't quite understand is how Uber will make money at the end of the day!

            Rich asshats throw money at them en mass looking for the next yuge moneymaker. Whats not to understand.

            What's not to understand is the business plan which those investors are looking at, wherein they expect Uber to be a "yuge moneymaker".
            Do you have some insight into this? Because while it is obvious to you, slower people like myself don't get it.
            By what means will Uber become profitable so that the investors will get their money back and more?

        • I believe it's not just the investors who are subsidizing Uber rides. It's also the math-challenged drivers. And there seems to be excessive churn in the driver ranks, as evidenced by the increasingly abundant and aggressive recruiting ads I hear. Once drivers figure out they aren't really making money, they abandon the gig.

          A not too sharp friend of mine recently started driving for Uber. He was excited to tell me he made $1000 in his first month driving part-time. So I asked him how many miles he had to dr

          • by cstacy ( 534252 )

            . It shouldn't cost Uber much to just run a website and payment system, but as long as investors and drivers have to subsidize the fares to attract customers...

            It's a pretty complex and demanding "just run a website and payment system", but it's not billions of dollars a year hard.
            But if they have to subsidize the fares as they say (is that billions?), how will they eventually make money?
            Why won't Google or Apple or Ford or everyone else just come along with the self-driving cars and clean Uber's clock?

            Patents is all I can come up with.
            (But then to explain Lyft and other existing competitors.)

          • >>>> he made $1000 in his first month

            I keep being amazed at how many people can't distinguish between the "take" and the "net". I used to know someone who scalped tickets and would say that he "made" whatever he sold something for, completely ignoring what he had paid for them.
    • The correct fine would be to take literally all profit uber has made via these deceptive practices and treble it, applying ultimate responsibility for paying to top 10% shareholders and all executive level staff who held shares at any point during the practice without any regard whatsoever for the probability that debt causes the company to fold.

      Intentional wrongdoing should always cost a company treble everything it made via the wrongdoing and the debt follow the key players so they can't simply fold up an
    • You are missing the real point which is to provide some sort of income from the uber rich to the government of the United States. While the US will not "Tax" the corporations involved, they can still penalize the corporation and save face.
      • You are missing the real point which is to provide some sort of income from the uber rich to the government of the United States. While the US will not "Tax" the corporations involved, they can still penalize the corporation and save face.

        Sorry, but trying to "save face" is a rather stupid excuse for not taxing these corporations in the first place, as they should.

        Besides, that whole income-by-penalty plan doesn't always work for the government of the United States. See, they've legalized this whole get-out-of-jail-free system called bankruptcy...

        • >See, they've legalized this whole get-out-of-jail-free system called bankruptcy...

          Yeah... until ordinary people started using it, now there's a huge push (10 bucks says you can instantly guess which party's politicians are driving it) to make it much harder for individuals to go bankrupt - all filled with little exceptions so big corporations can still do it easily.

          You know, because paying your future earnings for the rest of your life on a fraudulent debt you can never pay off and basically being force

    • by Agripa ( 139780 )

      What I'm now more curious about is the true impact of a $20 million dollar penalty against corporate lying. If it is a mere slap on the wrist financially, then the FTC is doing nothing but encouraging this kind of arrogant fucking behavior by organizations. They are literally perpetuating the concept that it's OK to bullshit and lie about products. If that's the case, you might as well abolish all regulatory agencies.

      The impact is becoming far too great to continue to ignore the fact that accountability does not exist within corporations anymore. Neither does ethics. Capitalistic greed has trumped all.

      Think of it more as organized crime; only the government is allowed to cheat its citizens and if you want to do that also, then they expect their cut. The difference is that organized crime does not expect its victims to praise it while the government does; when the government cheats you, then it is for your own good.

  • Uber caught lying? (Score:4, Interesting)

    by smooth wombat ( 796938 ) on Friday January 20, 2017 @01:44PM (#53704367) Journal

    Why should we not be surprised? This is the same company which claims it's a "ride sharing" company, not a taxi company, yet as far as I know, not a single one of their drivers is picking up people who want to go the same direction as the driver.

    Instead, the people contact some random Uber driver to pick them up at a specific location then be driven to the location of their choice, all for a fee.

    That certainly is an interesting definition of "ride sharing" especially in one of the more recent incidents where an Uber driver drove someone from Virginia to New York and back. I highly doubt the driver was already going that route.

    That Uber should now be found guilty of duping people into believing they could make X dollars a year by driving for them (isn't that the way a cab driver works, they drive for a company?), or that Uber was deliberately fudging numbers on the costs involved to lease a vehicle from them shouldn't surprise anyone, especially when this company, despite all the money they're bilking from people, still can't turn a profit.

    • by gnick ( 1211984 )

      That Uber should now be found guilty of duping people into believing they could make X dollars a year by driving for them (isn't that the way a cab driver works, they drive for a company?), or that Uber was deliberately fudging numbers on the costs involved to lease a vehicle from them...

      These were huge mistakes by Uber IMO. By saying "You could make up to X or more annually!", they're abandoning their "get your side hustle on" mantra and acting more like an employer encouraging driving careers. If the drivers are indeed employees, Uber is in violation of all kinds of stuff.

    • ...not a single one of their drivers is picking up people who want to go the same direction as the driver.

      Not to disagree with your main point. I actually agree with you for the most part.

      But this is called a destination filter. As drivers, we're only allowed to use this feature twice a day. For a part-time driver who's only driving to work and back each day, this is ok. For a full-time driver, the idea is to use that destination filter once at the beginning of your shift and once at the end of your shift, so as to not waste gas when you're ready to go home. But in between, you don't want to move your car too

  • Work more, get poorer.

  • by ItsJustAPseudonym ( 1259172 ) on Friday January 20, 2017 @02:40PM (#53705157)
    This is the first I have heard of the "Uber's Vehicle Solutions Program". I guess they were inspired by "GMAC Financing", the lucrative money-lending division of GM.

    So far, they are "not a taxi company". Now I guess they are "not a bank". What's next, "not an arms dealer"?
  • After the lawyers take their cut, each driver can expect enough to buy an air freshener to hang on their rear view mirror.
    • by bws111 ( 1216812 )

      Huh? This was a government action, not a class-action suit by the drivers. The drivers will get nothing from this settlement. The drivers can bring their own suit if they want.

  • Buy you car and pay for it, and all maintenance, accept all risk, and give us 5%. There are a lot of rubes out there but I suspect also a lot of people who didn't exactly feel the amazing economy we are now all supposed to be benefiting from.
  • This is fraud and the people that committed it should be arrested, tried, and convicted. Having them pay "fines" won't stop this sort of activity, but sending corporate management to jail will most certainly stop it. This is just like the banks who pay the fines and chalk it up as a cost of doing business.

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