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Uber’s Deceptive Advertising Scandal

Gennah Tyles

MGMT 201-002

News Talk

Professor Chidamber

The article I found was on Business Insider and is titled, Uber to pay $20 million to FTC to settle claims that it exaggerated how much drivers would make by Biz Carson. It is about how Uber has just settled a case about being involved in a deceptive advertising scandal. Uber was accused of misleading drivers on how much they would make if they were to become a driver for Uber. They were inflating its drivers rate on how much they would actually make hourly. The FTC who caught onto this, which is the federal trade commission which is an independent government agency organization that basically promotes consumer protection and the elimination and prevention of unethical business practices. The FTC has been investigating Uber since 2015, and on this past Thursday they announced the settlement. Uber drivers only noticed what was going on once they received their paychecks and saw that they were substantially less than Uber had advertised. The FTC also saw that Uber had another program that was deceptively hurting its drivers. Uber has a program known as the vehicle solution program. That helps drivers find vehicles to lease or own and it is advertised as the best financing option available. This however was false because drivers who leased their vehicles through that platform received worse rates than customers with the same credit score would typically receive.

The settlement Uber is required to pay is $20 million. The company is also barred from misrepresenting drivers’ earnings and financing the lease terms through their vehicle solution program. This settlement is said to put millions of dollars back into Uber drivers’ pockets. Uber has hired a team of economists that will make sure the numbers best reflect the average driver’s earnings. Uber came out with the statement, “we’ve made many improvements to the driver experience over the last year and will continue to focus on ensuring that Uber is the best option for anyone looking to earn money on their own schedule.” I thought this quote was interesting because Uber has turned a blind eye to this scandal and let it happen. I find it puzzling and after all these news reports of Uber it makes me not want to trust their company. I think they have to really re do their code of conducts and re look at their company’s ethics because things like this should not be happening. Deceptive advertising is a serious issue and Uber even though has been caught, what makes the public think they will not do it again. They got away with it for a while and it is scary to me to think that a company that large got away with it and only got caught a couple years ago. Uber drivers are not treated fairly and this settlement is the first step being taken to help reimburse those drivers who have been affected by this horrible crime.

 

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