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Uber settles with SF, LA over background checks

The ride-hailing company's advertising can no longer say Uber offers the "safest ride on the road."

Uber is barred from describing its background checks as "the gold standard."

Uber agreed Thursday to pay as much as $25 million to settle a lawsuit filed by the county of Los Angeles and the county of San Francisco that accused the ride-hailing company of misleading consumers about safety.

Uber also agreed to a host of changes to its marketing and operations to address concerns raised by the suit. Uber said in a blog post Thursday that it had already instituted some of those changes.

"The result we achieved today goes well beyond its impact on Uber," San Francisco District Attorney George Gascón said in a statement. "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."

Uber agreed to pay a civil penalty of $10 million that will be split equally between San Francisco and Los Angeles. If the company fails to meet the terms of the settlement over the next two years, it will have to pay an additional $15 million.

As part of the settlement, Uber agreed to stop using terms like "safest ride on the road" in its advertising or describe its background checks as "the gold standard."

The company also must get approval to operate at airports, and continue to work with California officials to make sure its app meets standards for passenger fare calculation.

Uber said it was glad to have settled the issue and would "redouble" efforts to serve riders and drivers in California.

The settlement comes as Uber's background-check process faces renewed scrutiny after a driver was accused of killing six people during a shooting spree in February. Uber runs potential drivers through several forms of background checks but has been criticized for excluding fingerprint checks as part of its process.

Correction, 9:30 p.m. PT: The lawsuit was filed by the counties of San Francisco and Los Angeles.