News: Company also agrees to not market its services as the “safest ride on the road”.
Taxi app compaany Uber has agreed to pay as much as $25m in a bid to settle a lawsuit filed by the cities of Los Angeles and San Francisco over insufficient driver’s background checks.
The cities sued the company in December 2014 alleging that Uber had misled customers with advertisement on its "the gold standard" safety check.
The company said it will stop using the "safest ride on the road" lead in its marketing campaigns.
Uber now has to pay $10m and a further $15m in the next 24 months if it fails to comply with the agreement, according to the Superior Court of California.
George Gascón, San Francisco District Attorney, said: "The result we achieved today goes well beyond its impact on Uber.
"[This outcome] sends a clear message to all businesses, and to start-ups in particular, that in the quest to quickly obtain market share laws designed to protect consumers cannot be ignored."
Uber has faced critics over its checks on people that register to driver passengers under the company’s banner.
According to the Los Angeles Times, under California law, at least four drivers would have not been allowed to drive a taxi due to their criminal record.
An Uber driver, for example, has been in jail for 26 years for a second-degree murder, yet he has driven over 1,000 customers with his taxi.
In a statement, Uber said: "We are glad to put this case behind us and excited to redouble our efforts serving riders and drivers across the state of California.
"No means of transportation can ever be 100% safe. Accidents and incidents do happen. That is why we need to ensure that the language used to describe safety at Uber is clear and precise. So we’ve agreed not to use terms like ‘safest ride on the road’ or describe our background checks as ‘the gold standard’."
The company has been facing backlashes with authorities around the world. In January, the Paris high court ordered the company to pay £900k to the National Taxi Union due to the way its drivers pick-up passengers, according to the AFP.
This followed a year of riots and protests in London, Lisbon, Paris, Hangzhou, and other parts of the world in 2015.