False or deceptive advertising, as we all know is the use of misleading statements in brand advertising and falsification of the commodity that may affect stakeholders and consumers negatively.
Brand advertising has the potential to manipulate individuals into buying the products, which they might consider avoiding otherwise. This is the reason why government bodies and lawmakers across the world introduce regulation to keep misleading, deceptive, and false advertising in check. Consumers have the right to know about the service they are using or product they are buying.
Uber CEO Travis Kalanick is currently tackling hundreds of class-action lawsuits filed against his company around the world. After today, he can, at least, strike one off the day-to-day increasing list. In 2014, the cities of San Francisco and Los Angeles sued the ride-sharing giant over the procedures of background checking. Finally, Uber has managed to settle the case out of the court for up to $25M i.e. $15M legally and in hand $10M in the time span of 60 days.
The settlement, which has been approved by a judge of San Francisco, has alterations to a few Uber policies and monetary policies. Also, the ride-sharing service is confined to functioning at airports. If by any chance Uber fails to stick to these alterations for at least two years, the company will have to pay another $15M.
The changes made in the advertising segments mostly relate to background checks. It also depends on how the advertisements are represented to consumers. The District Attorneys of San Francisco and Los Angeles considered the issue with the ride-sharing giant for claiming its background checking procedure as the ‘gold standard’ and describing itself to consumers as the ‘safest ride on the road’.
Uber has assured not to use ‘language’ it has been using so far, and it swears to confine its services to the airports in California where it’s permitted to offer rides. The ride-sharing giant used to function at airports without any explicit approval to do so. It also charged $4 as toll fee for the airport. Moving further, the company assures it will continue to ensure that fare calculation in the app based on data provided by GPS remains fair. It will do so by the help of the Division of Measurement Standards.
Well, if you’ve already started criticizing Uber, then you must know that it isn’t the only ride-sharing service to land into such mess. Lyft, the arch-rival of Uber, was sued by the same District Attorneys over similar circumstances. One such case of Lyft was settled for $500,000.
Uber is a giant ride-sharing network and despite its consistent romance with class-action lawsuits, its popularity among users remains far from fading. People are still crazy for Uber.
Deceptive advertising is illegal in most countries. However, marketers still manage to find methods to deceive customers in ways, which are legal, or illegal technically, but unenforceable. For brand advertisers, this ‘loop hole’ may work for most of the time, but not every time.
Uber is a company with a valuation of $60 billion, which is not an easy job. So we’re sure that $10M or $25M won’t make any difference to Uber CEO Travis Kalanick. But, we’re hoping that Uber finally learns a lesson after settling this deal and works towards polishing its legally tarnished brand image.
