Multinational mobile taxi hailing app Uber has agreed to pay $ 148 million in a case where the company was sued for violating private data laws. The settlement is part of litigation brought by all 50 states and the District of Columbia and marks the highest pay out in a privacy breach case. Uber had already reached a non-financial settlement with the US Federal Trade Commission but the new agreement is more punitive.
This follows a data breach incident in November 2016 where hackers stole personal information including license plate numbers, emails and phone numbers of over 600,000 Uber drivers and millions of users. The company chose to hush up the breach by paying $ 100,000 to the cyber criminals to destroy the data and only disclosed details of the event after a year, angering drivers and regulators who took legal action. The settlement also compels Uber Technologies Inc. to engage an independent partner that will check and report on adherence to data-privacy standards.
Illinois Attorney General Lisa Madigan made the announcement, castigating the company’s decision to delay informing victims as unacceptable. New York Attorney General Barbara Underwood also issued a statement, warning the case was a message on the zero tolerance policy adopted against companies that are in the habit of skirting the law.
The episode comes as Uber seeks to shed its reputation as an aggressive market share hunter that is willing to move around laws and regulations to achieve its goals. New CEO Dara Khosrowshahi seeks to stabilize the company for an upcoming IPO offer in 2019 after replacing co-founder Travis Kalanick who was known for an uncompromising approach when it came to growth. Uber has had to already issue monetary compensations to drivers this year in another case with the Federal Trade Commission concerning average income and will hope this latest development closes an uncomfortable period. The company’s chief legal officer, Tony West, issued a conciliatory statement after the settlement, emphasizing Uber’s commitment to transparency, integrity and accountability.
The settlement money will not directly benefit the victims but go to various departments of the states involved.