Uber’s recent legal problems over their background check policies for drivers shows how employee screening procedures can be problematic and expensive for companies.
In 2014, two of California’s District Attorneys for the cities of San Francisco and Los Angeles filed a lawsuit against Uber’s ride-sharing service for making misleading statements to consumers regarding the company’s background checks for drivers. Uber told users that they conduct thorough background checks on all of their drivers.
However, unlike taxi companies, Uber does not do background screening on their drivers based on government fingerprint checks. Government fingerprint screening is considered to be a more reliable way to check a potential driver’s background than using just a name and social security number.
Rather than using government fingerprint checks to screen drivers, Uber’s background check procedures search county court records for every location that the driver has lived for the last seven years. Uber claims that fingerprint checks aren’t any better than county court records at verifying the safety of drivers.
The lawsuit was filed after San Francisco District Attorney George Gascón’s office found 25 Uber drivers who had serious criminal background histories on their records.
Last Thursday, Uber announced that they had reached an agreement with the District Attorneys who filed the suit. As part of Uber’s agreement with Los Angeles and San Francisco, the company agrees to never market their ride-sharing service as the “safest ride on the road” or refer to their driver background check procedures as “the gold standard.”
Uber has also agreed to pay the DAs $10 million within 60 days in order to settle the suit. In addition, if Uber is caught breaking the terms of the settlement during the next two years, the company will have to pay an additional $15 million in fines.
Uber also agreed to only offer their services at California airports where it’s allowed to pick up and drop off riders. Uber had been operating at airports where they didn’t have official permission to do so. In addition, Uber is no longer allowed to charge riders a $4.00 airport toll in California unless the entire toll is paid to the airport.
Other terms of the settlement require Uber to continue to work with the California Department of Agriculture’s Division of Measurement Standards to make sure that their fares, which are calculated by the Uber app based on GPS location information, stay accurate for people who use the Uber service.
The settlement terms for Uber’s case were approved by a San Francisco Superior Court judge last Thursday. Uber claims that they are already in compliance with most of the terms and provisions in the settlement.
Several years ago, the same two District Attorneys offices filed suit against rival ride-sharing service Lyft for making misleading claims about their background check procedures. Lyft settled their background check dispute with the DAs for $500,000.
Uber recently settled two other class action lawsuits that totalled $28.5 million in penalties back in February 2016 and November 2015 regarding the company’s safety claims and background check issues.
Unfortunately, Uber’s legal problems in the State of California are not over. The company is facing another class action lawsuit in June 2016 that is challenging the classification of Uber drivers as contractors rather than employees.