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Uber settles for $10 million over allegedly misleading statements about background checks

An Uber application is shown as cars drive by in Washington, D.C. on March 25, 2015.
Andrew Caballero-Reynolds/AFP/Getty Images
An Uber application is shown as cars drive by in Washington, D.C. on March 25, 2015.

Uber agreed to a $10 million settlement over allegedly misleading the public about background checks of its drivers which could ultimately cost them $25 million, according to a press release from Los Angeles County District Attorney Jackie Lacey. Uber settled with Lacey and San Francisco DA George Gascón.

Uber agreed to pay a $10 million penalty to Los Angeles and San Francisco counties in the next 60 days, according to the statement, though it admitted no wrongdoing in the settlement. It also has to pay a $15 million penalty if it doesn't comply with the terms of the settlement over the next two years.

The statement notes that it follows a December 2014 settlement with Lyft and that both companies are subject to a permanent injunction that bars them from making untrue or misleading statements about their background checks.

Uber is also required to ensure its passenger fare calculation app meets state accuracy standards and to receive approval from California airports for drivers to drop off and pick up passengers, according to the statement. It says that the company can't charge an airport "toll" unless the company or the drivers pay that entire fee to the airport.

"We are pleased that Uber has agreed to comply with state consumer laws," Lacey said in the statement. "With this settlement, the ridesharing company has pledged to communicate honestly about its driver background checks and airport fees."

Gascón said in the statement that the message goes beyond its impact on Uber.

"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," Gascón said.