New York – Page 2 – Uber Scandals

June 20, 2017August 1, 2017

Recruited drivers with exaggerated earnings claims

The Federal Trade Commission flagged Uber exaggerating the yearly and hourly income drivers could make in certain cities. For example, Uber claimed on its site that uberX drivers’ annual median income was more than $90,000 in New York and more than $74,000 in San Francisco — but the FTC found that the actual medians were $61,000 and $53,000 respectively, and that less than 10 percent of all drivers in those cities earned the amounts Uber touted.

The FTC also alleged that Uber made false hourly earnings claims in job listings on Craigslist and elsewhere. In eighteen different cities where Uber advertised hourly earnings on Craigslist, fewer than 30% of drivers earned the promised amount. In some cities, as few as 10% of drivers earned the promised amount. Details in the FTC’s complaint.

Uber paid $20 million to settle these claims (along with claims about vehicle financing terms). The funds were used to provide refunds to affected drivers.

June 20, 2017June 20, 2017

Lobbied against NY $0.50/ride fee to fund public transit

New York City taxis are obliged to collect a $0.50/ride fee which helps support public transit. But Uber lobbied against this fee applying to Uber rides, instead proposing that the city divert other public funds to support public transit.

June 15, 2017May 9, 2018

Refused to honor taxi strike protesting Trump travel ban

When taxi drivers at JFK Airport went on strike to protest President Trump’s travel ban targeting seven Muslim-majority countries, Uber continued service. While Uber claimed that continued service would assist passengers in completing their journeys, critics saw Uber profiteering and failing to honor an important principle.

Criticism was sharpened because Uber CEO Travis Kalanick at the time served as a strategic advisor to Trump, suggesting that he supported the travel ban or Trump’s policies more generally. (Kalanick later stepped down from that advisory role.)

June 14, 2017July 16, 2017

Underpaid New York drivers

By retaining commissions 2.6% beyond the amount specified in the applicable contract, Uber underpaid drivers in New York. Jim Conigliaro, founder of the Independent Drivers’ Guild, called Uber’s actions “theft.” Engadget reported that the amount averaged $900 per driver, yielding a total overcharge of more than $40 million.

2015 contract revisions indicate that Uber knew it was wrongly taking commission on gross fares, thereby overcharging drivers, though the company denied that allegation.

June 14, 2017September 28, 2017

Blocked regulators’ investigations by sending bogus data

Through its “Greyball” system, Uber attempted to identify officials investigating its methods, including noting accounts created from within or near regulators’ offices and rides requested from those areas. When a user was classified as affiliated with a regulator, Uber intentionally denied that user’s requests, declining to send a driver—preventing the regulator from finding drivers and bringing enforcement actions against drivers or Uber.

The US Department of Justice launched a criminal probe into Uber about this practice.

The New York Times reported that at least 50 people inside Uber knew about these tactics, and that the program was approved by then-General Counsel Salle Yoo.

Litigation by Uber investor Benchmark Capital reported that, as of August 2017, Uber faced Greyball-related regulatory inquiries in Portland, Oregon; subpoenas from US Attorneys in California and New York; various other city and state inquiries; and an inquiry from the European parliament.

In September 2017, Portland finished its investigation, finding that Uber had used Greyball to block 29 ride requests by 16 government officials whose job it was to regulate Uber.

Portland Bureau of Transportation Audit of Greyball including full audit report