- Accord with California officials imposes $10 million penalty
- Company defended vetting of driver accused of shooting spree
Uber Technologies Inc. agreed to settle claims by California prosecutors that its background checks on drivers weren’t as thorough as advertised and failed to screen out ex-convicts.
The company is required to pay a civil penalty of $10 million within two months, the district attorneys of San Francisco and Los Angeles said Thursday in a joint statement. A payment of an additional $15 million will be waived if Uber complies with the settlement, they said.
Uber is facing scrutiny in the U.S. and internationally over whether the company can do more to examine the backgrounds of its drivers. The world’s biggest ride-share provider has strenuously resisted requiring fingerprinted background checks, like those required for most U.S. taxi drivers, opting instead for services that check people’s names against court records.
The settlement with prosecutors comes while the company is on the front lines of a nationwide battle over whether the business model used in the so-called sharing economy unfairly exploits workers. Uber faces a trial in June over claims by California drivers seeking to be treated as employees rather than independent contractors. A similar lawsuit against Uber’s smaller rival, Lyft Inc., remains pending in San Francisco federal court after a judge refused Thursday to approve a settlement that he said would shortchange drivers.
In February, Uber defended its vetting of drivers after police in Kalamazoo, Michigan, arrested Jason Brian Dalton, who was later charged with fatally shooting six people between picking up passengers for the company. Uber Chief Security Officer Joe Sullivan said at the time that a background check process wouldn’t have prevented the deaths because Dalton had no criminal history.
In January, an Uber driver in London was sentenced to 18 months in jail after he was convicted of sexually assaulting a woman who was getting into his car.
The California Public Utilities Commission is weighing appropriate background protocols for ride-share companies. The commission has considered a proposal that would require fingerprinted background checks for services that transport unaccompanied minors, but hasn’t outlined a similar requirement for companies like Uber and Lyft. Uber has tested a panic button for customers using its app in India. It has also experimented in Houston with a safety feature that uses location data from a phone’s GPS.
The settlement announced Thursday prohibits Uber from making misleading statements about the safety of its rides or the background checks of its drivers, prosecutors said. It must stop describing its background checks as “the gold standard,” and quit using the slogan the “safest ride on the road,” according to the statement. Uber made similar concessions while agreeing in February to pay $28.5 million to settle claims in a class-action suit on behalf of passengers.
“We’re glad to put this case behind us and excited to redouble our efforts serving riders and drivers across the state of California,” Uber said in a statement.
The prosecutors said in their lawsuit that Uber’s background checks have missed thieves, burglars, a kidnapper and a convicted murderer.
Before Uber was sued, Lyft settled similar allegations by the same prosecutors by agreeing to pay $500,000 and refrain from misrepresenting its driver vetting process.
The case is California v. Uber Technologies Inc., CGC-14-543120, California Superior Court, San Francisco County.