Last month, the ridesharing company Uber admitted it had collected millions and millions of dollars over a three-year period from drivers in New York City and shortchanged payments to those drivers. It is estimated that here were tens of thousands of drivers who the company failed to reimburse.
Uber says each of those drivers will receive an average of $900. This amount includes interest. The company has not given an exact amount of how much exactly they withheld and how much they will be paying out.
The failure to pay drivers began in November 2014 when Uber failed to follow a commission calculations adjustment. Instead, the company was taking a total of 25 percent of each fare.
In addition to their cut, they were also taking an additional 2.5 percent for the city’s black car fund fee and another 8.875 percent sales tax. Uber should not have been taking the black car fee or the sales tax its commissions.
An example of what these extra deductions looks like this: A driver has a fare for $100. The deduction for the black car fee and the sales tax totals approximately $11, leaving a net fare amount at $89.
Uber should have deducted their 25 percent commission from the $89, but instead deducted their commission from the $100 gross fare amount.
This problem is just one more potential legal issue the ridesharing giants has had, particularly with labor groups who disagree with the way the company compensates their drivers, all of who are independent contractors.
Last year, the New York Taxi Workers Alliance filed a class-action lawsuit against the company accusing Uber of violating labor laws. The group has now amended the lawsuit over this latest issue, alleging that Uber is only reimbursing drivers because of the current lawsuit.
Uber claims that they just recently realized they had shortchanged drivers for so long as they were adjusting route charges, although they did admit that the discrepancy had been raised in the past by other parties.
Upon hearing of the latest Uber controversy, Attorney Neal Goldstein commented, “It is one thing to make erroneously calculate an amount due your contractors, but to have that error continue over three years, under these circumstance, does appear questionable.”