Prosecutors in San Francisco and Los Angeles Sue Uber, Settle With Lyft

Lawsuits surrounded 'misleading' claims to consumers about how they vet drivers

Prosecutors in Los Angeles and San Francisco announced a settlement with ridesharing company Lyft on Tuesday for making 'false and misleading statements' to consumers about background checks for vetting drivers, but filed a similar lawsuit against Uber.

The civil suit against Uber alleges that the company not only made 'untrue and misleading' statements about the checks, according to a statement from the office of Los Angeles County District Attorney Jackie Lacey, but has also been illegally operating at airports across the state and charging San Francisco riders a 'fraudulent' $4 airport fee despite drivers not paying one to the airport. The suit seeks civil penalties as well as reimbursements for affected customers.

At a press conference, according to Bloomberg, the prosecutors said Uber had touted strict vetting requirements to justify a $1 'safety fee' passed onto riders, 'when in fact taxi drivers by law undergo more comprehensive background checks that include fingerprinting.' Though the company no longer uses the phrase, Uber has called their safety checks 'industry-leading.'

Previous reports have surfaced about aspiring Uber drivers applying for background checks through a third party by submitting information online, with no requirement to appear in person before gaining approval to work through the system. One driver told Valleywag that, 'One person could fill out all the info and hand off the approved account to another person' and that he was aware of multiple drivers 'sharing an account.' Gascon called background checks without assurances like fingerprinting 'completely worthless.'

Lacey and San Francisco District Attorney George Gascón had threatened to levy civil penalties against the companies in September, for failing to meet consumer protection standards.

Lyft has agreed to pay a $500,000 civil penalty, as well as submit its app to additional government scrutiny and obtain express permission for operating at airports in the state. The settlement, according to the statement from Lacey's office, also includes a permanent injunction that prohibits the company from making 'misleading statements about its background checks.'

This comes at a time when cities like New Dehli and Portland are moving to block services like Uber from operating, due to concerns about oversight and safety.