The data breach occurred when two individual hackers accessed information stored on a third-party cloud-based service used by Uber, Khosrowshahi wrote.
The heist took the names, email addresses and mobile phone numbers of 57 million riders around the world.
"Uber CEO Dara Khosrowshahi's statement that there is no excuse for what happened and Uber will be putting integrity and trust at the core of every business decision is a welcome message", he said. He was not at the helm when it happened.
Uber agreed to pay the fee as long as the hackers stayed quiet and deleted the info.
Tech Crunch also added that Uber could face problems in their home state of California for the attempted data breach cover up.
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No Social Security numbers, credit card numbers, bank account numbers, birth dates or trip location data was taken, Uber said.
Earlier in 2016, the company reached a settlement with the NY attorney general requiring it to take steps to be more vigilant about protecting the information that its app stores about its riders. The company is providing these drivers with free credit monitoring and identity theft protection.
"Deliberately concealing breaches from regulators and citizens could attract higher fines for companies", said deputy commissioner James Dipple-Johnstone.
But new information has come to light giving us a further glimpse at Uber's strategy in dealing with the data breach.
New York Attorney General Eric Schneiderman on Tuesday launched an investigation into the incident. "While I can't erase the past, I can commit on behalf of every Uber employee that we will learn from our mistakes", said Khosrowshahi.
Such poor practices contributed to the Uber breach, with Khosrowshahi saying that the company had "implemented security measures to restrict access to and strengthen controls on our cloud-based storage accounts". Uber may have violated Californian breach disclosure laws as well.
He said Uber has hired Matt Olsen, a former general counsel at the National Security Agency and director of the National Counterterrorism Center, "to help me think through how best to guide and structure our security teams and processes going forward".
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