Uber Admits Stiffing NYC Drivers By Millions Of Dollars
NEW YORK (CBSNewYork) -- Uber may have been taking its New York City drivers for a ride.
Uber on Tuesday admitted to underpaying its city drivers tens of millions of dollars for the past 2 1/2 years.
"We are committed to paying every driver every penny they are owed — plus interest — as quickly as possible," Uber executive Rachel Holt 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."
The company is supposed to calculate commissions from net revenues, but Uber now admits it's been using gross revenues which include taxes and fees, CBS2 reported. That artificially inflated the company's keep.
The ride-hailing company said each affected driver would get a refund of about $900, which includes interest.
The company has more than 50,000 drivers in the city.
The New York Taxi Workers Alliance said the company owes its drivers more than its claiming.
"Uber is using the difference in the commission it wrongly took from drivers, rather than reimburse the drivers the full tax and surcharge amounts they are owned back — a difference of nearly 10 percent," said Bhairavi Desai, the group's executive director.
"This payout is an attempt by Uber to pull a fast one to avoid court oversight and shortchange drivers in the process," said Desai, whose organization has filed several lawsuits against the San Francisco-based company.
"Despite all the fanfare today, Uber is not committing to paying back drivers the full amount," Desai told WCBS 880's Peter Haskell.
It's been a tumultuous year for Uber, which has been hit with lawsuits, allegations of sexual harassment, a federal investigation into claims that it has used a fake version of its app to thwart authorities and accusations of trade theft.
In February, a video emerged of CEO Travis Kalanick arguing with an Uber driver. It includes yelling and profanity and ends with a combative Kalanick dismissing the agitated driver's claims that sharp reductions in fares forced him into bankruptcy.
Kalanick later conceded he needed leadership help.
(© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)