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Brief: Oops, we shortchanged drivers out of millions of dollars, says Uber

Uber CEO Travis Kalanick. Photo credit: TechCrunch

The news

  • Uber has admitted its app miscalculated the cut for drivers and shortchanged them for two-and-a-half years. It has noticed this in commissions taken from 50,000 drivers in New York, who will be paid US$45 million in back pay with interest.
  • The app calculated commissions for Uber on a pre-tax sum, whereas its terms of service stipulate calculating it after taxes are deducted.

Why it matters

  • This is the second time this year that Uber has had to admit to miscalculating earnings for drivers. It earlier acknowledged underpaying drivers in Philadelphia, during a lawsuit hearing. So the problem could be more widespread than revealed so far.
  • This also shakes users’ trust in algorithmic calculations of fares in ride-hailing apps. Uber recently launched a new version of its app which calculates fares based on a customer’s “willingness to pay” instead of just time and distance.
  • This is the latest in a litany of mess-ups for Uber, threatening its dominance in ride-sharing. A US federal judge recently referred to criminal prosecutors a lawsuit against Uber by Google’s Waymo for trade secret theft in self-driving technology.

Source: The Wall Street Journal

This post Brief: Oops, we shortchanged drivers out of millions of dollars, says Uber appeared first on Tech in Asia.

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