Uber has reached a settlement with California over payments made to driver-partners in violation of state law, the California Department of Motor Vehicles (DMV) announced Friday.
The settlement includes the removal of approximately $1.2 billion in payment agreements, the DMV said in a news release.
Uber’s payment arrangements with some driver-parts suppliers are part of a broader strategy to limit the use of third-party payment systems, including payment platforms such as PayPal, the agency said.
The companies will also implement new policies to prevent their drivers from using any payment platforms, the DMV said.
The settlement is the result of a four-year investigation and settlement between Uber and California’s Department of Consumer Affairs, the DPS said.
“Today’s settlement resolves a complaint filed by the California Office of Civil Rights regarding alleged illegal payment arrangements between Uber Technologies Inc. and several driver-contacts,” the agency wrote in the release.
“This is the first of its kind involving the use or payment of third parties to pay drivers in California.
The DOJ is committed to working with our partners to combat illegal payments and is committed in protecting consumers from any threat to consumer safety.”
The DOJ said it had taken “appropriate action” to address Uber’s payments, and the settlement “reflects our continuing commitment to aggressively enforce existing state laws that prohibit illegal payment transactions.”