The district attorneys of San Francisco and Los Angeles counties have filed suit against Uber for claims that the company made “false and misleading statements” to consumers, while also engaging in business practices that violate California Law. At the same time, those authorities announced a settlement with Uber competitor Lyft on similar charges.
The complaints claim that Uber “engaged in a variety of unlawful business practices in violation of California Business and Professions Code.” Most notably, the company is charged with the following:
- Making “untrue or misleading representations regarding the quality of the background checks,”
- Charging customers a $1.00 “Safe Rides” fee it justified by saying the money went to pay for those checks,
- Using the app to calculate fares based on time and distance without obtaining approval of the technology from a California agency that can do so,
- Unlawfully conducting commercial operations at California airports without obtaining authorizations from them, and
- Fraudulently charging a $4.00 “Airport Fee Toll” to customers even when drivers weren’t paying the airport.
The district attorneys are seeking a permanent injunction against Uber to stop those practices — which, if granted, could shut it down in two of its more important markets, at least for a time. They are also seeking civil penalties for those business acts and practices, along with restitution for consumers who paid safe ride fees and for airport fee tolls that weren’t passed on to the airport.
Uber has faced intense regulatory scrutiny in a number of markets over the past few days, including Portland, India, The Netherlands, and Spain. Then again, it’s gotten used to that after four years of tussles with local governments.
Meanwhile, those same SF and LA district attorneys announced a settlement with Lyft for similar charges of misleading representations. Those charges are also related to background checks applied to drivers, customer fare measurement, and unlawful commercial operations at California airports.
Unlike Uber, Lyft has agreed to an injunction that would prohibit it from making misleading statements related to its background checks. It also will submit its app to the California Department of Agriculture’s Division of Measurement Standards for evaluation of its accuracy. And it will require Lyft to get authorization from airports in California before operating there, something it has already done at SFO.
The company has also agreed to pay civil penalties of $500,000 in two tranches: one $250,000 payment within 30 days and another that would be waived at the end of the year if Lyft has shown that it has complied with all the terms of the injunction.