Uber rolled out its new upfront pricing scheme a few months ago, and it has proven popular with riders. Drivers have been expressing skepticism about the numbers on their end, and now there’s a lawsuit alleging Uber has used the new cost structure to rip off its drivers. The proposed class action lawsuit claims that Uber regularly shows higher fares to riders than it does to drivers. Uber then apparently pockets the difference in addition to taking its usual cut from the driver.
Before upfront pricing was rolled out last year, Uber riders always had to worry their ride would end up being much more expensive based on the time of day and traffic conditions. The so-called “surge” pricing would increase the base fee by a multiple, which riders would have to agree to. However, the final cost wasn’t disclosed until the ride was over because it was based on the time and distance driven. Now, the system estimates the duration of a ride and shows you how much it’ll cost before you order a car.
The lawsuit alleges that Uber intentionally designed the system to shortchange drivers and make more money from rides. Specifically, the driver and rider apps are using different routes and coming up with different figures. When you request a ride, the upfront pricing is based on a calculation of routes that don’t account for time of day or traffic conditions. No matter what happens, that’s the amount you pay as a rider. On the other side of the fence, the driver’s app does route around traffic. It doesn’t pay the driver based on the upfront price, though. They are only paid for the lower “efficient” route.
Uber drivers have been making noise about this for months, posting examples of fare mismatches online in hopes of gaining some attention. The Rideshare Guy, a blog catering to drivers for Uber and similar services, actually went out and tested this a while back. It found some serious discrepancies, too. In one test, the passenger paid $18.08, but the driver saw $12.42 (before Uber’s cut). In another test, the passenger paid $19.20 and the driver got $12.65. Based on this, it looks like Uber is making a few extra bucks for every ride.
This lawsuit comes on the heels of other legal trouble for Uber. It was banned in all of Italy over the weekend. Then there was the disastrous hearing last week in the Waymo/Google trade secret case. The judge in that case has threatened to slap Uber with an injunction that would halt much of the work on its self-driving car project.
The lawsuit was just filed, so it’s unclear if it will be granted class action status. If it succeeds, the suit demands back pay for drivers, as well as legal fees. The plaintiffs also want Uber to stop showing different prices to drivers and riders.