Uber Settles Lawsuit with S.F. and L.A. District Attorneys

The district attorneys of San Francisco and Los Angeles have settled an unlawful business practice lawsuit against Uber over claims the company made misleading statements about its background checks for drivers.

The suit, filed in late 2014, alleged that Uber made untrue claims when it said it offered "the safest ride on the road" and that its drivers undergo rigorous background checks that are "industry-leading."

According to a press release from San Francisco District Attorney George Gascón and Los Angeles District Attorney Jackie Lacey, Uber and its subsidiary, Raiser, agreed to pay as much as a $25 million civil penalty.

"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," Gascón said in a statement.

Uber's background checks have been criticized as not being as thorough as fingerprint background checks, which taxicab drivers in most large American cities are required to pass.

Both Uber and Lyft -- which settled a similar suit  with the L.A. and S.F. district attorneys -- have claimed that no background check is perfect, and that theirs are just as good as the taxi industry's. Uber has also claimed fingerprint background checks are discriminatory.

"No means of transportation can ever be 100 percent safe. Accidents and incidents do happen. That's why we need to ensure that the language used to describe safety at Uber is clear and precise. So we've agreed to not use terms like 'safest ride on the road' or describe our background checks as 'the gold standard,' " an Uber spokeswoman said in a statement.

In August, when prosecutors filed an amended complaint against Uber, they reported uncovering at least 25 cases in Los Angeles where Uber's background checks failed to stop registered sex offenders, burglars and a convicted murderer from becoming drivers.

The prosecutors argue that Uber's background checks do not have access to state and federal databases, and say fingerprint background checks are "the gold standard." Uber recently agreed to settle two federal class-action lawsuits in California over similar allegations.

The two district attorneys say their suit against Uber "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."

As part of the settlement, the company also agreed not to operate at California airports unless it has permission to do so.

Uber agreed to pay $10 million within 60 days, with the amount being evenly split between San Francisco and Los Angeles. Officials said the remaining $15 million would be waived in two years, if the company has complied with the terms of the settlement. An Uber spokeswoman said the company has complied with "most" of the terms.

The California Public Utilities Commission is currently considering whether to require fingerprint background checks for all ride-service drivers in California.