Uber’s parent company faces $8.9M fine in Colo. over questionable, or incomplete, background checks

DENVER – Uber’s parent company is facing an $8.9 million fine after the Colorado Public Utilities Commission found 57 Uber drivers in the state were driving when they weren’t supposed to be, and the state is questioning whether background checks on those drivers were performed at all.

The parent company, Rasier, LLC, was issued notice of the civil penalty Monday — $2,500 a day for each day one of the 57 disqualified drivers worked, resulting in the penalty of close to $9 million. Uber uses an accredited background check company to screen potential drivers.

The investigation by the PUC started earlier this year when a driver was accused of assaulting a passenger in Vail.

“The driver dragged a passenger out of their car, kicked them in the face, and broke their nose,” PUC Director Doug Dean told Denver7. “He was subsequently convicted of the crime.”

Dean said Uber wouldn’t cooperate with Vail Police, so the department contacted the P.U.C.

“We asked Uber to provide us with all the records of drivers that had been accused of, arrested for, or convicted of a disqualifying offense,” Dean said. “We actually had quite a bit of push back from Uber.  They said we didn’t have the authority to ask them for that information.  We told them, ‘Yes we do. Just look at the law.'”

The PUC cross-checked driver records with state databases, and found 12 drivers with felony convictions; 17 with major moving violations; three with active interlock devices, and 63 whose driver’s licenses had “issues,” according to the PUC.

One of the people driving for Uber in Colorado was a habitual felony offender and had at one point in the past escaped from prison, the PUC said.

Colorado law requires companies like Uber and its parent company to check all prospective drivers’ criminal histories before they are hired. People with felony convictions, alcohol- and drug-related driving convictions, sexual crime convictions and major moving vehicle violations are barred from working for such companies.

“PUC staff was able to find felony convictions that the company’s background checks failed to find, demonstrating that the company’s background checks are inadequate,” said PUC Director Doug Dean. “In other cases, we could not confirm criminal background checks were even conducted by Uber.”

Dean said the failure to catch the crimes on background checks, or to perform them at all, “put the safety of passengers in extreme jeopardy.”

In 2014, the New York Times reported that Colorado lawmakers eased background checks for drivers when they legalized ride-sharing companies like Uber.

Referring to the 2014 bill, Rep. Max Tyler told the New York Times at the time that “the bill did not have an F.B.I. background check, no fingerprint check, none of the things taxi drivers must go through.”

In November 2015, Denver7 reported that Dean had concerns about people using pseudonyms to register to drive for Uber, and others raised questions about the background-check system. Dean wrote Monday that “Uber’s background checks also failed to identify a number of aliases used by their drivers.”

A PUC spokesperson told Denver7 Monday “there have been no changes in the law regarding background checks” since the ride-sharing law went into place in 2014.

Uber and its company can pay half of the penalty within 10 days and resolve the case, or can fight the fine by requesting a hearing before a judge.

Riders surprised

Uber riders didn’t learn about the allegations until told by Denver7.

“I’m glad you told me,” said Chris Watson, of Fort Worth, Texas, “but I’m not positive that that will impact my deciding to purchase an Uber in the future, just because of the convenience of the whole thing.”

Watson said the Uber driver he used to get to Union Station arrived 45 seconds after he ordered the ride.

“In my experience, taxis take a lot longer to get to you,” he said.

“When I travel, I use Uber,” said Chy Owens. “Normally I decide based on price, but now I guess I would be more willing to pay extra for safety and stuff, especially since I’m a female.”

Company Reaction

A person with knowledge of the investigation said Uber did not learn of the fine until Colorado released a press release.

The P.U.C. said it notified a company representative in the Metro area.

An Uber spokesperson said in a statement to Denver7 that the company discovered an error in its process that led to the drivers being allowed to work for the company:

“We recently discovered a process error that was inconsistent with Colorado’s ridesharing regulations and proactively notified the Colorado Public Utilities Commission (CPUC). This error affected a small number of drivers and we immediately took corrective action. Per Uber safety policies and Colorado state regulations, drivers with access to the Uber app must undergo a nationally accredited third party background screening. We will continue to work closely with the CPUC to enable access to safe, reliable transportation options for all Coloradans.”