If You Drive Uber, You Could Be Getting a Hefty Check (Average Is $222.96)
Some Uber drivers may get extra cash soon, but it won’t come from taking on extra fares.
Last year, the Federal Trade Commission (FTC) settled a complaint against Uber for allegedly exaggerating the income drivers could make as independent contractors for the ride-sharing service.
Uber agreed to pay $20 million to settle the complaint, and this week the FTC announced that more than 88,000 drivers will receive refund checks. The FTC said in a release that the average refund amount is $222.96, based in part on driver location and Uber earnings.
Refunds will be mailed by an administrator, Epiq, and checks hit the mail starting July 16. You must cash your check within 60 days.
How Uber Got in Trouble With the FTC
The FTC alleged that Uber routinely advertised gigs with the company by stating how much UberX drivers could earn. But those amounts were often inflated. For example, Uber’s website claimed that the median earnings for drivers in New York was more than $90,000 per year, the complaint states.
On Craigslist, Uber would advertise for drivers with statements like “Make $25/hour” for a post in Philadelphia. In 14 cities, the FTC found that fewer than 30% of drivers averaged the earnings rate that Uber promised; in Philadelphia, for example, fewer than 10% of drivers earned the advertised $25 per hour.
“In many instances, drivers have not made the promised amounts even when factoring in non-hourly earnings, such as payments for time-limited promotions or other incentives,” the complaint said. “These promotions and incentives often have been contingent on working specific late-night hours, accepting a minimum percentage of trip requests, completing a set number of trip requests within a limited time period, driving in a certain geographic area or fulfilling other requirements.”
The complaint also said Uber’s advertised costs of leasing vehicles through the company differed from the real costs of participating in its Vehicle Solutions program.
When The Penny Hoarder’s Alex Mahadevan examined Census Bureau data of driver earnings, he found that even in the top cities to drive for Uber or Lyft, annual earnings tend to cap out below $38,000 per year.
Lisa Rowan (@lisatella) is a senior writer at The Penny Hoarder.