Blog Post

Uber hit with lawsuit over use of credit scores in driver hiring

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Poor Uber can’t win. After consumers blamed it for a spate of alleged rapes and hammer assaults by its drivers, the ride-sharing company tightened up its background checks — and now a driver’s lawsuit that seeks class-action status says the way Uber runs those checks is against the law.

In a lawsuit filed on Monday in San Francisco, former Uber driver Abdul Mohamed claims that the company violated the Fair Credit Reporting Act by using his consumer credit report to terminate him unfairly.

According to Mohamed, he spent $25,000 to acquire a car and began work as an Uber X driver in October. Shortly after, Uber cut off his access to the company’s phone app for drivers, and sent him an email stating the decision to fire him arose in part because of information obtained on his credit report.

The upshot, in the words of the lawsuit, is that Uber’s use of the credit report to fire him “deprived him of his livelihood and left him without an alternative means of providing for his family, including his seven children.”

The lawsuit also alleges that Uber made the decision to terminate because “the consumer reporter indicated he had a minor criminal record that, in fact, stems from his seven children receiving much-needed Medicaid benefits.”

As the suit points out, Uber’s use of credit reports to inform hiring decisions is not uncommon (though the New York Times and others have been very critical of the practice).

The issue with Uber is instead that the company is allegedly skipping steps that are intended to give workers a fair shot about knowing, and responding to, allegations raised in the credit reports. Specifically, the lawsuit claims that Uber failed to instruct a company called Hirease, which runs background checks on behalf of employers, to send Mohamed “adverse action” notices.

The lawsuit, which also claims that Uber violated credit reporting laws in California and Massachusetts, asks the court to order Uber to pay thousands of dollars to former drivers and would-be drivers across the country.

Uber, whose disruptive business model has also made it a target for numerous lawsuits by the taxi industry, did not immediately reply to an email request for comment about the case. Here’s a copy of the complaint:

Uber Fair Credit Class Action

[protected-iframe id=”8d8015508f95e021ddd34294c1fa953c-14960843-34118173″ info=”https://www.scribd.com/embeds/248222438/content?start_page=1&view_mode=scroll&show_recommendations=true” width=”100%” height=”600″ frameborder=”0″ scrolling=”no”]

6 Responses to “Uber hit with lawsuit over use of credit scores in driver hiring”

  1. How can Uber demand credit scores as part of its decision to allow a person to drive for the company? Uber has repeatedly said that it’s not an employer but a conduit to help drivers and passengers connect. Why would it be any of Uber’s business then what the financials are of an indepedent contractor?

  2. How is creditworthiness a legitimate factor for a driver? Why is it even considered? How is legal history a factor in determining creditworthiness? Why is it part of the report? While there may be statistical correlations between credit scores and criminal history, there aren’t causal relationships. If you are late on the rent, you may rob a bank, but that doesn’t mean that all delinquent renters are bank robbers.

    This is a form of laziness on the part of Uber. The credit reporting agencies keep trying to promote that more and more tenuous conclusions can be drawn from our data, when in fact the data are just data and being late on a payment isn’t proof of global moral turpitude. But, maybe Uber has to rely on outside sources for that type of information, since they don’t seem to have any internal moral compass.

  3. Erika Smith

    Haha, I just have to laugh, when you read the article and how it pertains to Mohamed it’s like a pity party. People need to become accountable for their own actions, I agree with the other comment on managing your finances, why not lease a vehicle until the business is lucrative right, not to mention seven children, “oops I did it again” rings loudly in my head. Just as with the economy and loss of real estate for people all I have to say is “were you not there when you signed?” anyway, ya, hilarious, what an idiot, people that are sue happy is why there is so much red tape in the simplest of transactions these days.. Be responsible!

  4. How is An employer to blame if you cannot handle your finances well. There maybe mitigating explanations for low FICOmscores but a company has a right to consider hiring only persons that engender trust.

    Society and companies cannot be the fall guys for personal fault lines and it is high time,we as a society, amended the process of holding everyone responsible but ourselves.

    • Smail Buzzby

      Can you read? If you are denied employment because of a credit issue you should be given an opportunity to dispute or explain it. Uber did not do that. Do you think it is impossible that someone could use your name and mess up your credit or that there are never mistakes by credit reporting agencies?