Uber hasn’t had a particularly good string of luck so far in 2017. Between its CEO’s very public gaffes to widespread allegations of favoritism and sexism in its ranks, the company could use a break sooner rather than later. This week, the company admitted that it has been ripping off its drivers in New York City to the tune of millions of dollars due to what it claims is an inadvertent calculation error that went undetected for over two and a half years. That’s probably not going to help the company image.
Initially reported by the Wall Street Journal, Uber explained how the massive miscalculation happened. When the company calculates the share to take from driver fares, it does so using the post-tax amount, so both the driver and Uber are getting the correct share of the actual revenue from the fare. But in NYC, the company was taking its share from the pre-tax fare amount, leaving the driver with a smaller cut after taxes and fees were sliced off the top.
That lost driver revenue, while small for each fare, added up over the course of over two and a half years. Now, the company owes drivers a whopping $45 million, at least, which it will have to pay back. The company released a statement saying that it plans to pay its New York City drivers — each of which could see $900 or more — “every penny they are owed, plus interest.” That’s a good start but it’s clearly not enough to appease all drivers, as the Independent Drivers Guild has now asked regulators to launch an investigation into Uber’s payment system, as well as that of its ride-hailing competitors.