One estimate suggests the Silicon Valley unicorn could have to refund over $45 million
Updated: May 23, 2017
Another week, another problem for Uber.
The Silicon Valley ridesharing firm said Tuesday that it had shortchanged drivers in New York City for the past 30 months by mistakenly taking a larger commission than it was entitled to. Instead of charging its standard 25% commission after taxes and fees, the ridehailing app took a bigger pre-tax cut, according to the Wall Street Journal. Uber told the Journal that it would be refunding the difference with interest, which by one estimate means it’ll be paying back over $45 million.
Uber is already beleaguered by allegations of systemic sexual harassment in its workplace, claims that it tracked users even after they deleted its app, and a chief executive who has basically been called a jerk by a board member. Earlier this month, a new report from the Rideshare Guy, a blog and consultancy run by an aerospace engineer turned Uber driver, claims that there are significant discrepancies between the fares paid by Uber riders and what their drivers actually receive
This self-inflicted brouhaha follows a decision made by the tech giant last summer to show customers a final price before they even slide into the backseat of a black car. The change was made to address criticism that its pricing system wasn’t transparent enough for clients, though drivers are still paid according to the distance and time taken for a journey.
Since then, drivers have complained that passengers often pay more for their rides than they actually bill, with Uber pocketing the difference. For the first time however, there’s some evidence of how much Uber may actually be taking to the bank. Though only the tech company knows what each party is paying and charging respectively, the Rideshare Guy analyzed sales tax charges and required fees paid to the Black Car Fund– an injury compensation pool for liveried drivers– to find out what passengers actually paid. They then compared it to what drivers charged.
Of the 82 UberX rides in New York it studied, the Rideshare Guy found that Uber made a $162.56 profit, on top of the commission it already charges drivers. One notable instance was when a customer shilled out $142.70 to get from Staten Island to the Bronx, though the driver only charged $117.20. Uber has said it makes money from some trips and loses them on others and indeed, it lost about $108 on 49 UberPool journeys. Still, across all 165 rides the blog looked at—they include pricier Uber XL and SUV options—the tech firm banked an undeclared surplus of $85.54.
An Uber spokesperson told Moneyish that the report’s conclusions were “overarching” and “based on the experience of one driver over a small sample of trips.” Still, the company says that plans are in the works to make driver earnings more transparent. “We know we need to do a better job of making earnings clearer and simpler so what a driver makes doesn’t feel like a mystery,” the rep said.
This comes as Uber’s relations with drivers have recently been strained. In a viral video first unearthed by Bloomberg in February, CEO Travis Kalanick was captured berating a driver who complained about falling fares. In January, it paid $20 million to settle an FTC claim that it “misled prospective drivers with exaggerated earning claims and claims about financing.” The $20 million was used to compensate affected drivers, though Uber didn’t admit guilt.
This story was updated on May 23, 2017 with news of Uber shortchanging drivers in New York City.
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