Uber Accidentally Underpaid Millions Of Dollars To NYC Drivers


Uber drivers based in New York City who were working for the company within the last two and a half years ago, are likely to be in line for a reimbursement of underpaid earnings, according to a report out of the Wall Street Journal. The reason for this, is that Uber has accidentally underpaid NYC drivers, and possibly for as long as the last two and half years. More accurately, it seems it is not that Uber has underpaid those drivers, but instead, Uber has been taking a larger cut than it should have been during that time.

According to the report, the difference between what drivers should have been paid and were paid (or what Uber should have taken and did take) comes down to the weight of tax. The details coming through is that Uber typically takes one quarter of the amount paid by a Uber rider, after tax and any other relevant fees have been deducted from the total fare. However, in NYC, the 25-percent deduction was reportedly occurring before the tax and fees had been accounted for. While the report states this amounted to roughly $900 per driver, cumulatively, this is thought to equate to tens of million of dollars. Likewise, the $900 is not exactly what each driver has been underpaid, and instead represents an average of the underpayment plus any relevant interest owed. So presumably driver payments will differ somewhat from that average depending on how much they earned, as not all drivers will have been working and earning the same over the period in question. Which seems to be a point raised in comments attributed to Uber's Regional General Manager for the U.S. and Canada, Rachel Holt. With Holt stating that the company intends to pay "every driver every penny they are owed, plus interest, as quickly as possible." Further adding that Uber "made a mistake and we are committed to making it right."

Of course, this is not the first time that an issue between Uber and its drivers has surfaced. In April of this year, court documents emerged detailing a court action lawsuit that was being brought against the ride-sharing company in California. The documents pertained to alleged payment manipulation practices, where Uber was accused of using software differences between the price shown to a rider and the price shown to the driver. In other words, Uber was being accused of charging the rider a for a longer displayed ride/route, while the driver was being paid based on a shorter displayed ride/route. In addition, another report from April of this year looked to highlight various issues that Uber is reportedly having in retaining drivers over the long-term. With the reports suggesting that as few as 4-percent of drivers, were Uber drivers a year before.

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Freelance Contributor

John has been writing about and reviewing tech products since 2014 after making the transition from writing about and reviewing airlines. With a background in Psychology, John has a particular interest in the science and future of the industry. John also covers much of the news surrounding audio and visual tech, including cord-cutting, the state of Pay-TV, and Android TV. Contact him at [email protected]

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