Uber Agrees to Pay $10 Million to Settle Lawsuit Over Background Checks

Uber agreed to pay at least $10 million to settle claims by California prosecutors that it deluded riders about the nature of its driver historical verification

The settlement was signed Thursday in San Francisco, where Uber is located.

According to LA Times Uber needs to pay $10 million within of 60 days, with the installment liable to be part equally between the two urban communities. Should it neglect to comply, the sum will naturally increment to $25 million.

Uber did not admit wrongdoing, as is standard for such settlements, and said it already has made many changes prosecutors sought.

San Francisco and Los Angeles prosecutors sued Uber in 2014, saying Uber's background checks were less strict to what taxi drivers go through since they did not implement fingerprint checks for past convictions. Instead, Uber's procedure relies on a name search of other criminal databases and motor vehicle department files going back seven years.

Now Uber ceased claiming its background checks were "industry leading" when it settled a separate case brought by riders. Under that $28.5 million settlement reached in February, Uber also modified its "safe ride fee" as a "booking fee."

Amid the case procedures a year ago, Gascón and lead prosecutor Jackie Lacey asserted Uber's methods, which incorporate the examination of area, government, and multi-state criminal foundation records, brought about the organization missing criminal records for 25 Uber candidates in San Francisco and Los Angeles. They said this was halfway down to Uber overlooking a database of around 30,000 enrolled sex offenders, furthermore in light of the fact that the checks just cover the previous seven years.

"The result we achieved today goes well beyond its impact on Uber," San Francisco District Attorney George Gascón said in a written statement. "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."

The LA Times noted Thursday’s settlement as “relatively small” and “something of a coup” for the company, which today is valued at $62.5 billion.

"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 written statement.

Uber Technologies Inc. is an American multinational online transportation network company headquartered in San Francisco, California. It develops, markets and operates the Uber mobile app, which allows consumers with smartphones to submit a trip request which is then routed to Uber drivers who use their own cars.