San Francisco and Los Angeles District Attorneys Announce $25 Million Settlement With Uber
News from the Office of District Attorney George Gascón
FOR IMMEDIATE RELEASE
April 7, 2016
Alex Bastian – 415-553-1931
Max Szabo – 415-553-9089
SAN FRANCISCO AND LOS ANGELES DISTRICT ATTORNEYS
ANNOUNCE $25 MILLION SETTLEMENT WITH UBER
San Francisco—Today, San Francisco District Attorney George Gascón and Los Angeles County District Attorney Jackie Lacey announced that Uber Technologies, Inc. and its subsidiaries, Rasier, LLC and Rasier-CA, LLC (“Uber”), will pay a $25 million civil penalty and be subject to a permanent injunction to settle the unlawful business practices action being prosecuted by the two District Attorneys. A stipulated judgment formalizing the agreement was signed by the Honorable Mary E. Wiss and filed today in San Francisco Superior Court.
“The result we achieved today goes well beyond its impact on Uber,” said District Attorney George Gascón. “It sends a clear message to all businesses, and to startups in particular, that in the quest to quickly obtain market share, laws designed to protect consumers cannot be ignored. If a business acts like it is above the law, it will pay a heavy price.”
“We are pleased that Uber has agreed to comply with state consumer laws,” Los Angeles County District Attorney Jackie Lacey said. “With this settlement, the ridesharing company has pledged to communicate honestly about its driver background checks and airport fees, important steps to protecting the residents of California.”
The enforcement action, which was commenced by the District Attorneys in December of 2014, had a profound impact on Uber’s business practices. It ended a years-long standoff between Uber and California regulators concerning Uber’s refusal to submit its fare calculation technology for an evaluation of its accuracy. It hastened Uber’s efforts to obtain permits to operate at California airports. And it led to an overhaul of Uber’s safety advertising in which Uber no longer makes a wide variety of representations calculated to convince the public that its background checks are the “best” in the industry.
The District Attorneys’ enforcement action also contributed to Uber’s agreement to pay restitution to victims of its unfair business practices through several private class action settlements. In the months after the District Attorneys filed, Uber agreed to pay 100% restitution, totaling $1.8 million, to settle the claims of all victims of its “airport fee toll” fraud scheme in California, in which Uber charged passengers going to or from airports for fake airport “tolls”. The District Attorneys’ enforcement action also spawned a series of class actions regarding Uber’s safety claims. Uber and representatives for the class plaintiffs recently filed court papers to approve a nationwide settlement totaling $28.5 million. Both settlements await court approval. Once approved, the class members who receive restitution as part of these settlements will include California victims of the practices at issue in the enforcement action. The District Attorneys are continuing to monitor the settlement proceedings.
The District Attorneys’ success came with investigative support from many agencies throughout the State, including the Department of Food and Agriculture Division of Measurement Standards and law enforcement personnel at the Los Angeles Police Department, SFO, and LAX.
The action brought fingerprinting to the forefront of a global conversation about problems with the background check systems used by Uber and similar companies. That conversation is continuing around the world as well as right here in California, where the Public Utilities Commission recently announced that it would seek comment within two months on the use of fingerprint-based background checks for drivers.
As a result of the settlement, Uber has agreed to be bound by a permanent injunction prohibiting the company from making misleading statements regarding the safety of its transportation services or the background checks of its drivers. The injunction also requires that Uber cooperate in good faith with the Division of Measurement Standards in certifying its app for commercial use now and in the future. Uber also agrees not to operate at California airports without permission from the airport authority.
The settlement requires Uber to pay a civil penalty of $25 million. Uber will tender $10 million within 60 days of today. Payment of the remaining $15 million will be waived at the end of two years if Uber has complied with all the terms of the permanent injunction.
Assistant District Attorneys Ernst Helperin, Nancy Tung, Phoebe Maffei, Sean Kiley, Daniel Amador, Managing Attorney Evan Ackiron and Assistant Chief June Cravett prosecuted the case. Invaluable assistance was provided by Investigative Assistants Marlene Stevens, Chloe Mosqueda, Reg Clay and Supervising Investigative Assistant Blanca Conway.