Uber, Lyft and other gig-economy companies fired or rejected at least dozens of workers based on flawed background checks provided by tech company Checkr Inc., according to court records and interviews.
Since its founding in 2014, about 70 federal lawsuits have been filed against San Francisco-based Checkr, which provides background checks to some of the largest gig-economy companies in Silicon Valley, including Uber, Lyft and Postmates.
Big If True reviewed 18 pending lawsuits against Checkr that were filed this year in federal courts across the country. The suits claim Checkr gave five gig-economy companies background checks that contained inaccurate information, included records that should have been omitted or had other issues. The employers then fired workers and rejected applicants based on the botched background checks, according to the lawsuits.
Most of the suits were filed by applicants or former workers for Uber Technologies, including its food delivery platform, Uber Eats. Lyft, DoorDash, Thumbtack and Postmates also made hiring decisions based on problematic reports from Checkr, court records show. None of the gig-economy companies responded to requests for comment.
A spokesperson for Checkr initially responded to a request for comment but did not arrange an interview with anyone from the company.
These lawsuits follow years of scrutiny on Uber’s background check process, which has previously green-lighted applicants with criminal histories that critics say should have prevented their hiring. In a headline-grabbing example from three months ago, Checkr failed to report that an applicant had been accused of grisly war crimes in Somalia.
The suits also were filed on the heels of a class action lawsuit against Checkr that the company settled last year for about $4.5 million, plus attorney’s fees. That lawsuit alleged Checkr had provided three different background reports to three different companies for a single applicant, whose report also included minor traffic violations older than seven years that were illegal to report.
How the wrong records crop up in background checks
Checkr’s background reports are based on an applicant’s social security number and name, which are run through multiple databases, including a national sex offender registry and county court records. Checkr, Uber and other gig economy companies don’t verify if the screening results are correct, multiple lawsuits suggest.
Critics of Checkr’s search by name say that this approach pales in comparison to fingerprint-based background checks, which most taxi companies require for drivers. These screenings compare an applicant’s prints against those in FBI and other law enforcement databases, reducing the likelihood of a mix-up.
In 2014, district attorneys in San Francisco and Los Angeles sued Uber over its background check system, alleging the company had hired drivers who had been convicted of murder, assault with a firearm and kidnapping. At the time, San Francisco District Attorney George Gascón said that background checks conducted without fingerprints were “completely worthless.” Uber settled the suit in 2016 for $10 million.
In the lawsuits reviewed by Big If True, Checkr conducted several background checks that inaccurately reported applicants and workers had expired or surrendered licenses. A South Carolina man started driving for Uber in 2014, and in January, court records claim a Checkr background check inaccurately reported that his license had expired. Uber fired him.
But most of the lawsuits allege Checkr reported inaccurate criminal histories that suggested applicants had been convicted of or charged with crimes they did not commit. Sometimes, the background checks were based on records for another person with the same name or a very similar name. Other times, the records belonged to someone whose name didn’t match the applicant’s.
Some of the criminal histories Checkr falsely reported include violent felonies, court records show.
Checkr reported a New York City resident with no criminal history had been charged with assault and battery. Checkr falsely reported other prospective workers were charged with felonies that included burglary and impersonating a police officer, the lawsuits allege.
A suit filed last week claims a Checkr background report found 19 criminal charges against a San Antonio woman who had applied to work for Uber, Uber Eats, DoorDash and Lyft. When all of the companies rejected her application, she told Checkr about the errors, but the company insisted the report was correct and refused to fix its errors, court records claim.
Sergei Lemberg, a Wilton, Connecticut consumer rights attorney representing the woman in that case, said he has filed dozens of lawsuits against Checkr for background check issues. He recommends people run background checks on themselves “before it becomes a job-losing situation.”
“(Background checks) frequently have errors, and the errors could be extremely costly,” Lemberg said.
Linda Sherry, director of national priorities for Consumer Action, said finding the source of the incorrect information is important, since errors often reflect flaws in public records.
“Public records are notorious for getting things wrong and also for being absolutely, incredibly difficult to find where the information originated and correct,” Sherry said.
In some cases, Lemberg said, background checks include deferred adjudications or arrests for crimes the applicant wasn’t ultimately convicted of.
“So, there are a lot of issues here and very little oversight,” Lemberg said.
In several of the cases reviewed by Big If True, Checkr reported charges that were filed but had been dismissed or expunged. A New Jersey man had worked for Uber Eats for several years and had applied for Postmates in March when a Checkr report included a misdemeanor assault conviction that had been expunged. Uber Eats and Postmates both opted not to employ him.
Lyft rejected an Iowa applicant when Checkr inaccurately reported a previous misdemeanor possession charge as a felony. Her report also included a reckless driving charge that had been dismissed.
Some state laws limit how far back criminal histories can go. In a background check for a Lyft driver and Uber applicant from Everett, Washington, Checkr included offenses more than seven years old, a violation of state law, court records allege. Lyft suspended him, and Uber rejected his application.
Checkr takes on the ‘archaic, slow’ background check industry
When software engineers Daniel Yanisse and Jonathan Perichon worked at Deliv, a same-day delivery service, the pair imagined using artificial intelligence tactics to run background checks at lightning speed. That concept evolved into Checkr.
Over the years, Checkr has become the primary source of background checks for the gig economy, and the company now says it runs 1.5 million background checks every month.
Yanisse, Checkr’s CEO, said during a February interview with Yahoo Finance: “The background check industry has been a very archaic, slow industry, … so what we’ve been doing is really automating the process of background checks, using AI to increase speed and accuracy of background checks and allow large gig-economy companies, like Uber and Lyft, to scale to millions of workers.”
Checkr’s website says it has the fastest turnaround in the industry, but Yanisse acknowledged the reports aren’t always correct during his Yahoo Finance interview.
“There’s a lot of accuracy challenges,” he said, “And so we have a fair process where the consumer has the ability to dispute and appeal the background check in case they have an error.”
He added that the company created a separate website, Better Future, for people to run their own background checks and flag errors to Checkr.
Disputing Checkr’s background screenings doesn’t always work. An Upper Marlboro, Maryland resident had driven for Uber for about two years when a Checkr background report inaccurately linked him to crimes committed in Ohio. After Uber suspended him, he disputed the report, and Checkr corrected it and sent it to Uber. He started driving for the rideshare service again, but in April, Checkr provided Uber with a background check that contained the same inaccurate charges from before. Uber suspended him again, court records show.
For years, Uber and Lyft have received criticism that their background checks clear drivers with criminal histories.
After Massachusetts made state-run background checks for Uber and Lyft drivers mandatory two years ago, the state reported that more than 8,200 drivers failed the new screenings. The state screenings rejected about 1,000 drivers with records of violent crimes and 51 registered sex offenders.
CNN reported in May that both Uber and Lyft allowed Yusuf Abdi Ali to drive for the services for more than a year despite allegations that Ali was a war criminal who directed mass executions during Somalia’s civil war in the 1980s.
After CNN’s report, Yanisse, Checkr’s CEO, called the situation an “edge case” and said that Ali had passed his company’s background check because he didn’t have a criminal history in the United States.
Last year, Uber announced it would run annual criminal background checks on its drivers, but decided against FBI fingerprint checks, claiming its current system “stacks up well against the alternatives.”
Errors common in credit and background reports
Across the industry, issues with background checks are far from rare. An analysis from corporate watchdog Good Jobs First found that employers and background check companies have paid more than $325 million to settle suits related to background checks during the last decade. Background check companies alone paid $152 million during that time to settle lawsuits.
Good Jobs First Research Director Philip Mattera said background checks aren’t necessary for all positions, but when someone with a criminal background could pose a risk to a customer, “obviously it’s necessary to do these kinds of checks. But you’d think companies would want to make sure they’re getting the most complete and accurate information and not just going through the motions.”
The federal law regulating background checks is the Fair Credit Reporting Act, which also addresses credit reports. The Federal Trade Commission, which did not respond to a request for comment, provides oversight of these reporting industries.
Paul Stephens, director of policy and advocacy for Privacy Rights Clearinghouse, said that it’s common for both background and credit checks to contain errors.
“I think the main difference is, in the case of a background check screening, the consequences for the consumer can be a lot worse, because they may be denied a job,” he said. “With a credit report, perhaps they just can’t get a credit card or can’t get a car loan, but it’s often not as devastating as an error in a background screening.”
Contact Big If True editor Mollie Bryant at 405-990-0988 or bryant@bigiftrue.org. Follow her on Facebook and Twitter.
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Love the part where they created a separate site f or employees to check their own background reports. Wow. So they get paid twice. I’ve been waiting on my Checkr since May 2020 unable to drive Lyft or Uber. I signed up for both, but never drove for Uber, so now background due on both.
I have driven for Uber and Lyft for 3 years and just got fired from both for a misdemeanor charge, 2014 ; interfering with police.
I can not get a response from either company. I am devastated as this was my only job and really liked it
I contacted Ubereats and to no avail am I able to communicate my interest in returning to work nor, the fact that I have no record on my background. I have also gone as far as explaining my individual story with regard to the brief moment(september 2019) that I did have something on my record, which is why this problem arose in the first place. In February of 2021, with a clean slate record, I reached out to Ubereats support and I was lead through steps to resubmit a background check and that amounted to nothing. I will seek legal counsel if this matter is not resolved, on the grounds of discriminatory practice towards employment.