Uber recently announced it will pay $10 million to resolve accusations that the company oversold the safety of its rides. The deal stems from a lawsuit brought by the district attorneys of San Francisco and Los Angeles, accusing the ride-booking company of misleading passengers about its driver background checks.

As part of the deal, Uber must not market itself as the “safest ride on the road,” or call its background checks “the gold standard.” If Uber fails to comply with those and other requirements within two years, it will have to pay an additional $15 million penalty.

According to San Francisco District Attorney George Gascón, the result goes well beyond its impact on Uber, as 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.

Uber has come under fire in the past about the safety of its rides, in part because it doesn’t require drivers to undergo government fingerprint checks as part of their background screening process. Instead, the screenings include a scan of county courthouse records in every place the driver has lived for the past seven years. A handful of female passengers have claimed they were sexually assaulted by their Uber drivers, and a driver has been charged in a Michigan mass shooting that left six people dead in February.

Uber has defended its background checks, saying fingerprint scans aren’t necessarily safer saying no means of transportation can ever be 100 percent safe and that accidents and incidents do happen and thus the need to make the language used to describe safety at Uber is clear and precise.


Perhaps the interesting thing about this news is that competitor Lyft settled a similar background check lawsuit with the San Francisco and Los Angeles district attorneys in 2014, making it one more bottle neck for players already operating or looking to enter into the car-pooling space.

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