By on May 24, 2017

Uber ride, Image: Jason Tester Guerrilla Futures/Flickr

Uber has messed up — again. The ride-hailing company admitted to shortchanging New York City drivers to the tune of tens of millions of dollars due to miscalculated payments. It’s the second time Uber has been caught mishandling payroll, with the latest fiasco resembling Richard Pryor’s banking scheme from Superman III.

In its agreement with drivers, Uber is supposed to calculate its own percentage after taxes and other fees. However, it ended up calculating its New York commissions on total cost, including those expenditures. This has resulted in NY-based drivers receiving slightly lower fares ever since the November 2014 agreement. It doesn’t amount to much per fare but, when compounded by several thousand drivers and a handful of years, it adds up to millions. Regardless of how unintentional the error may or may not have been, the affected drivers are incredibly displeased. 

In a media release, the Independent Drivers Guild expressed its anger over Uber’s inability to compensate its contractors as agreed — taking aim not just at the industry giant, but its competitors, too.

“Uber’s theft of drivers’ hard-earned wages is the latest in a long history of underhanded tactics in this industry. Year after year, companies like Uber, Lyft, Juno and Gett become more valuable and year after year they find new ways to take advantage of hard-working drivers. This is exactly why we have been calling for industry-wide pay protections to stop the exploitation of New York’s drivers once and for all,” said IDG founder Jim Conigliaro Jr.

“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.”

I’ve noticed Uber drivers in NYC souring on the company over the last few years, too. Employees who once praised the company for giving them options have soured on the subject as of late, and this is a big reason why.

The guild has called upon regulators to launch an immediate investigation into the fare and payment practices of all ride-hailing applications. It also reached out to the city’s Taxi and Limousine Commission to create industry-wide rules to protect driver pay.

In January, Uber paid $20 million settlement with the Federal Trade Commission after admitting it exaggerated how much drivers could earn through the platform. Philadelphia drivers also received fare-based refunds earlier this year.

Uber has claimed it noticed the payroll error when it began creating more elaborate receipts for drivers. It plans to refund the missing wages. That sum should yield average drivers $900 each, though The Wall Street Journal estimated it would translate into a total expenditure of at least $45 million from Uber.

Drivers working for the company were issued an email today with the amount they are owed. Uber claims the funds should deposited into their accounts within a week’s time. Other drivers who have abandoned the company but may still be owed compensation are asked to reach out to the business to ensure they also receive payment.

“We are committed to paying every driver every penny they are owed — plus interest — as quickly as possible,” Rachel Holt, the company’s regional general manager for North America, said in a statement.

[Image: Jason Tester/Flickr (CC BY-ND 2.0)]

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8 Comments on “Uber to Repay Millions After Stiffing NYC Drivers for Years...”


  • avatar
    JimZ

    “with the latest fiasco resembling Richard Pryor’s banking scheme from Superman III.”

    Underrated movie, actually.

  • avatar
    Rick T.

    “In its agreement with drivers, Uber is supposed to calculate its own percentage after taxes and other fees. However, it ended up calculating its New York commissions on total cost, including those expenditures.”

    I went back to the article and the original wording in the article is much clearer:

    “Under the terms of its November 2014 nationwide driver agreement, Uber was meant to take its commission, generally 25%, from U.S. drivers based on fares after any taxes and fees were deducted. Uber said that, instead, in New York City it calculated a higher cut using the full fare before accounting for sales tax and a local injury-compensation fund fee.”

  • avatar
    jpolicke

    Note to Uber drivers: unless you want to become as regulated as a medallion cab, DO NOT get the TLC involved. Given that you are the antithesis of everything they stand for, don’t expect much in the way of assistance either.

  • avatar
    SCE to AUX

    It’s hard to believe this error was merely the result of selecting the wrong cell in a spreadsheet when calculating commissions.

  • avatar

    -Alright so when the sub routine compounds the interest it uses all these extra decimal places that just get rounded off. So we simplified the whole thing, we rounded them all down, drop the remainder into an account we opened.

    —So you’re stealing?

    -Ah no, you don’t understand. It’s very complicated. It’s uh it’s aggregate, so I’m talking about fractions of a penny here. And over time they add up to a lot.

    —It’s not yours?

    -Well it becomes ours

    —How is that not stealing?

    -I don’t think I’m explaining this very well

  • avatar
    RHD

    This is like getting charged sales tax on shipping charges on Ebay, and sales tax on the deposit on a case of soda. (Both have happened to me, and both are not legal.)
    Somehow the error just conveniently happens to be in the favor of the seller, not the consumer. Funny how it works that way.

  • avatar
    Erikstrawn

    I’m not a fan of Uber’s business practices, but…

    “Uber has claimed it noticed the payroll error when it began creating more elaborate receipts for drivers.”

    So did Uber find the error, admit it, and willingly agree to pay the drivers back? Or did the drivers finally get better receipts and demand repayment? If Uber did it voluntarily, then kudos to them for owning up to it. If the drivers had to ask, then shame on Uber. I can’t find evidence either way in the article.

    “Other drivers who have abandoned the company but may still be owed compensation are asked to reach out to the business to ensure they also receive payment.”

    No, it should be on Uber to ensure they receive payment, but former drivers should “Trust, but verify.”

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