Uber has said it underpaid its New York City drivers by improperly calculating the company’s share of passenger fares, and will pay out an average of $900 per driver in restitution, costing tens of millions of dollars. The back pay could run at least $45 million, based on the approximately 50,000 drivers the Independent Drivers’ Guild says work in New York City.
The ride-hailing company has previously misled drivers about how much they could make and miscalculated fares. In this case, Uber was taking its cut of fares based on the pretax sum, instead of after taxes and fees as stated in its terms of service. The issue was also raised in a lawsuit against San Francisco-based Uber filed by the New York Taxi Workers’ Alliance. In March, Uber acknowledged that it had underestimated drivers’ pay in Philadelphia by millions of dollars.
“We are committed to paying every driver every penny they are owed - plus interest - as quickly as possible,” Rachel Holt, Uber’s head of U.S. operations, said in a statement. “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.”
The Wall Street Journal reported earlier on Uber refunding money to drivers.
“Uber’s theft of drivers’ hard-earned wages is the latest in a long history of underhanded tactics in this industry,” said Jim Conigliaro Jr., founder of the Independent Drivers’ Guild. The guild called on regulators to investigate ride-hailing companies’ payment practices.
Uber recently updated its terms of service for drivers. The Taxi Workers Alliance said the payments Uber is offering didn’t go far enough. “While we welcome progress in Uber acknowledging its unlawful deductions, make no mistake: the full amount that they owe to drivers is much more than what it is now claiming,” Bhairavi Desai, the Taxi Workers Alliance’s executive director, said in a statement. “Uber hasn’t just wrongly calculated its commission, it has been unlawfully taking the cost of sales tax and an injured worker surcharge right out of driver pay as opposed to charging it on top of the fare as the law requires.”