WASHINGTON – Uber Technologies Inc. said it will pay each of its New York City drivers $900 after the company admitting shortchanging them on their earnings for two-and-a-half years.
Uber was supposed to take a commission ranging from 20 to 25 percent of a driver’s earnings after deducting sales tax and a local fee to fund benefits for injured drivers. That was the agreement the ride-hailing company put in place in November 2014.
Instead, the company has been calculating its commission on the gross fares.
The average payout per driver will be about $900 and drivers’ pay will be calculated correctly going forward, an Uber spokesperson said Tuesday. All New York City Uber drivers who signed the 2014 agreement would be eligible for a refund, even if they are no longer driving for the company.
With tens of thousands of drivers eligible for a refund, the San Francisco-based company will repay an estimated $45 million.
Uber said it recently discovered the mistake, as it was preparing a new pricing scheme.
This is the second time this year that Uber has admitted to underpaying U.S. drivers. In March, the company paid refunds to UberBlack luxury sedan drivers in Philadelphia after charging them an extra 5 percent in commission for about 18 months.
“We are committed to paying every driver every penny they are owed – plus interest – as quickly as possible,” Rachel Holt, Uber’s regional general manager for the U.S. and Canada, 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.”
Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said her organization considers it unlawful for Uber to take the sales tax and fee from the driver’s fare in the first place.
“This payout is an attempt by Uber to pull a fast one to avoid court oversight and shortchange drivers in the process,” she said. “Nice try. We’ll see you in court to win back all of the money drivers are owed, includ[ing] up to double damages.”
In January, Uber agreed to pay $20 million to settle the Federal Trade Commission’s allegations that the company had exaggerated prospective earnings when recruiting drivers.
This article was republished with permission from Talk Media News.
Top photo by Tim Forkes
Regina Holmes has more than two decades of experience as a journalist –editing and reporting for news dailies including the Miami Herald, Newsday and the Baltimore Examiner. She also launched an award-winning investigative news website that tackled police and political corruption in Baltimore. She has worked as a consultant for the World Bank and Baltimore County Public Schools. Regina became a journalist because even as a child she was fascinated by the power of the press: how it could force a president out of office, elect a president, expose corruption, and shine a light on discrimination. She is passionate about giving a voice to people who are disenfranchised, ignored or powerless, including people of color, senior citizens, the impoverished, people with disabilities, veterans, and children. Issues in which she is particularly interested include race relations, criminal justice, and police brutality. She has a bachelor’s degree in English from Vassar College and a master’s degree in journalism from Columbia University. She is a member of the National Association of Black Journalists. In her spare time, Regina enjoys traveling,antiquing, window-shopping for carsand watching HGTV.