Uber, a ride-hailing company, and Lyft, a car-sharing company, have been found to be violating the Fair Credit Reporting Act, which bars fraudulent business practices.
The companies were fined $1.4 million each, and each received a $5,000 fine.
The Justice Department said the drivers were hired through contractors, who did not have the proper licenses and credentials.
Both companies also admitted to hiring drivers without proper licenses or credentials.
Uber’s CEO, Travis Kalanick, was the subject of a federal criminal investigation into the company.
“We will continue to work with the Department of Justice to hold accountable those who commit this type of fraud,” Kalanack said in a statement.
Uber has said it would stop its self-driving vehicles by the end of 2021.
Uber said in an email to The Wall Street Journal that it will donate $5 million to the US Food and Drug Administration and $5.5 million in cash to charities in the next year.
Lyft said it is also donating $5M in cash and $1 million in charitable contributions.