Uber has been fined up to $25 million for misleading clients about how well it vets its drivers.
A San Francisco court imposed the fine on the taxi firm after prosecutors said Uber falsely claimed that its background criminal checks on new drivers were the most comprehensive available.
San Francisco and Los Angeles prosecutors launched the legal action in 2014. It was finalised yesterday.
Under the settlement Uber must pay $10 million within 60 days. If it does not comply with the terms of the settlement over the next two years, it will have to pay a further $15 million.
Prosecutors said Uber’s background checks were less rigorous than the company maintained because its drivers are not subject to fingerprint checks for past convictions.
Instead, Uber relies on a name search of other criminal databases and department files going back seven years.
Uber has been forced to defend the safety of its service recently following a string of allegations that its drivers have assaulted passengers.
In February, an Uber driver in Michigan was charged with six murders after going on a killing spree during his shift.
Jason Dalton, 45, has been charged with shooting eight people, killing six of them, over a five-hour period on February 20 in between driving customers Uber in Kalamazoo, 150 miles west of Detroit.
Yesterday Uber did not admit wrongdoing, as is standard for such settlements, and said it has already made many of the changes sought by prosecutors.
“We’re glad to put this case behind us and excited to redouble our efforts serving riders and drivers across the state of California,” Uber said in a written statement.