Uber screwed up — big time — and now it has to pay. On Tuesday, the company copped to owing New York City drivers tens of millions of dollars due to miscalculated payments, according to a Wall Street Journal report. It's the second time Uber has admitted to shortchanging drivers this year.
According to Uber's agreement with drivers, the ride-hailing company is supposed to calculate its cut — usually 25 per cent of a fare — after taxes and other fees. Instead, Uber based its New York commission on the total cost (including taxes and fees) for years, sticking New York drives with a lower fare since the company updated its driver agreement in 2014.
Uber realised the error when it started creating more detailed receipts for drivers and says it plans to refund the money with interest. Uber estimates that drivers will get roughly $US900 ($1,204) apiece, which WSJ says could end up costing Uber at least $US45 ($60) million.
"Uber's theft of drivers' hard-earned wages is the latest in a long history of underhanded tactics in this industry," said Jim Gonigliaro Jr., the founder of the Independent Drivers Guild, an organisation that represents NYC Uber and Lyft drivers. "Drivers keep our city moving and we are asking customers and drivers alike to sign on to our petition for basic pay protections in an industry that has run amok."
Philadelphia drivers also got refunds on fares earlier this year, due to an error Uber made when updating its terms of service. Those refunds were much smaller, Uber said. The company also paid $US20 ($27) million in a January settlement with the Federal Trade Commission, admitting that it exaggerated how much drivers could earn on the platform.
Drivers who have offered rides on Uber in the last 90 days will get an email today with the amount Uber owes them, and the money will be deposited into their accounts within seven days, Uber says. Drivers who haven't driven for the company in more than three months will have to confirm their current bank account info with Uber before receiving a payment.
So far, Uber hasn't found any other errors during its audit of driver payments.
"We are committed to paying every driver every penny they are owed — plus interest — as quickly as possible. We are working hard to regain driver trust, and that means being transparent, sticking to our word, and making the Uber experience better from end to end," Rachel Holt, Uber's regional general manager for the US and Canada, said in an emailed statement to Gizmodo.