Category: regulators

Disputes with regulators or about regulation

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Driver names and license numbers improperly secured

In September 2014, Uber experienced a data breach resulting from an Uber engineer posting an access code which let an unauthorized third party accessed driver names and driver license numbers. Uber failed to notify affected drivers or the state of New York for seven months.

The New York Attorney General described the breach and Uber’s handling of the situation:

The Attorney General found that in early 2014 an Uber engineer posted an access ID for Uber’s third-party cloud storage on Github.com, a website designed to allow software engineers to collaborate. The post was accessible to the general public. On May 12, 2014, someone unaffiliated with Uber accessed the database that included Uber driver names and driver license numbers. Uber discovered the breach in September 2014 but did not provide notice to the affected drivers and Schneiderman’s office until February 26, 2015. General Business Law § 899-aa requires notice be provided to affected individuals and various government agencies including Schneiderman’s office “in the most expedient time possible and without unreasonable delay.”

As part of a settlement with the New York Attorney General’s office, Uber promised to implement multi-factor authentication for any employee could to access especially sensitive rider personal information, among other improved data security practices. Uber also paid a $20,000 penalty for failing to timely notify drivers and the State of New York.

A subsequent FTC investigation and settlement found that more than 100,000 drivers were affected. The FTC reported that in addition to 100,000+ names and driver’s license numbers, Uber also revealed 215 names and bank account numbers with routing numbers, and 84 names and security numbers. Furthermore, the FTC found that Uber’s efforts to notify affected drivers were piecemeal and incomplete: The company initially notified less than half of the drivers affected, whereas others were notified some 16+ months later.

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Refused to provide driver names to San Francisco city government

When the city of San Francisco demanded that Uber provide it with drivers’ names and contact information so the city could demand that drivers obtain business licenses and pay applicable fees, Uber claimed that disclosures would violate drivers’ right to privacy. In a June 2017 ruling, Superior Court Judge Richard Ulmer disagreed, ruling that the city Treasurer and Tax Collector had legal authority to demand the information.  He said compliance would not be unduly burdensome, and that any drivers who wished to challenge license requirements could do so on their own.

Lyft provided the data to San Fransisco without litigation.

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Vehicle financing terms inferior to company marketing promises

The Federal Trade Commission flagged Uber providing drivers with financing terms inferior to what its marketing materials promised. The FTC said drivers received worse rates on average than consumers with similar credit scores would otherwise obtain. Uber further promised that its leases provided unlimited mileage, though there were actually mileage limits. Details in the FTC’s complaint.

Uber paid $20 million to settle these claims (along with claims about exaggerated annual and hourly earnings). The funds were used to provide refunds to affected drivers

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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.

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Obstructed government raids

Former Uber employee Samuel Spangenberg alleged that when regulators raided local Uber offices, Uber’s standard response included severing all network connections so that law enforcement could not access documents stored on Uber servers outside the premises.

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Continued operation when ordered to cease

In multiple cities, Uber continued operation despite duly-empowered regulators ordering it to cease.

For example, in litigation, the City of San Francisco and City of Los Angeles reported a 2010 incident in which the San Francisco Municipal Transit Agency noted that Uber’s system for “measure[ing] time and distance” had not been submitted to appropriate regulators for testing and approval, contrary to applicable law.  Four years later, Uber had still not done so and, the cities alleged, was in violation of the law each time it used its unapproved technology.

More details coming soon.

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Untrue or misleading representations about safety measures

In litigation, the City of San Francisco and City of Los Angeles alleged that Uber falsely claimed to offer the “safest ride on the road” with the “strictest safety standards possible,” which, the cities argued, was “likely to mislead consumers into believing Uber does everything it can to ensure their safety” when in fact better methods were available.

The cities further alleged that Uber’s claim to be “doing everything we can to make Uber the safest experience on the road” was inconsistent with the company’s lobbying against certain safety requirements then being discussed in the California legislature.

The People Of The State Of California v. Uber Technologies Inc A Delaware Corporation Et Al – litigation docket

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