Uber Underpaid Drivers in New York City for Two Years

On Tuesday, Uber Technologies announced that it had underpaid its drivers in New York City for over two years. The error has cost the ride-hailing start-up millions of dollars.

Generally, Uber takes its commission from drivers after it deducts for taxes as well as certain fees, but instead, it took a larger percentage from its drivers in New York City using the price of a full fare prior to taking into account fees and sales taxes.

Usually, Uber takes a commission of 25% from drivers in the U.S. under a 2014 nationwide agreement for drivers released in November of that year.

The company may possibly pay back its drivers over $45 million, averaging close to $900 for each driver.

Rachel Holt, the regional general manager at Uber for the U.S. and Canada said through an email that Uber was committed to pay every penny it owed to every driver plus interest as quickly as it can.

All drivers in New York City under the agreement from 2014 would be eligible to receive a refund regardless if they were active today or not, as long as they have completed at least one Uber ride.

On Tuesday, the Independent Drivers Guild and the 50,000 drivers it represents in New York City called upon federal regulators to start an investigation into Uber’s payments practices and with those of other ride-hailing companies.

The guild, through a prepared statement, also said an investigation was needed into the use by Uber of its feature of upfront pricing that guarantees customers a fare prior to booking a ride.

Drivers have been complaining that the feature had short-changed them as Uber receives the difference, said the guild which in 2016 was set up with the help of Uber.

This past January, Uber entered into an agreement to pay out over $20 million to settle claims with the United States government that it had exaggerated the possible earnings in looking to recruit new drivers as well as that it had downplayed costs for leasing or buying a vehicle.

Uber of late has been rocked by a number of different setbacks that include accusations by a former female employee of sexual harassment and a video that shows CEO Travis Kalanick berating one of the Uber drivers in a harsh manner.

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