back to article Overcharge customers, underpay the serfs. Who else but Uber (allegedly)

Uber has been hit with a class-action lawsuit alleging the dial-a-ride app maker deliberately cuts driver payouts while at the same time overcharging riders. The complaint [PDF], filed this week in the California Central District US Court, claims the Uber phone app deliberately chooses longer routes to calculate fares, then …

  1. Vector

    Hmmm...

    This sounds like more rules, and we know how Uber feels about those.

    1. John Smith 19 Gold badge
      Unhappy

      Oh Silicon Valley Companies don't mind rules

      Just as long as they don't actually have to follow them.

      Like Uber

      Or Google (copyright)

      Or Apple. (everything)

      No rules are fine for everyone else but we <company name here> are special.

  2. DougS Silver badge

    Wouldn't surprise me a bit

    Uber is by far the shadiest and least ethical of the latest crop of Silicon Valley companies that hit it big.

    1. ecofeco Silver badge

      Re: Wouldn't surprise me a bit

      And THAT is really saying something.

    2. a_yank_lurker Silver badge

      Re: Wouldn't surprise me a bit

      That is a very low blow but very accurate. Makes me glad I haven't used Uber. I still use cabs on occasion.

    3. ad47uk

      Re: Wouldn't surprise me a bit

      One of the reason I would never use then even if they did come to this city.

      Use my local taxi companies.

  3. VinceH Silver badge

    "The complaint [PDF], filed this week in the California Central District US Court, claims the Uber phone app deliberately chooses longer routes to calculate fares, then presents the driver with a shorter route for calculating their payment.

    As a result, the suit argues, Uber maximizes its own payout by both overcharging the passenger and then underpaying the driver for each trip."

    Er... no. Based on that description, it's overcharging passengers, but not underpaying drivers* - unless the argument from the plaintiff is that drivers should get a fair cut of the overcharge, and therefore be as dodgy as the company itself.

    * I'm assuming that the drivers use the route given to them.

    1. diodesign (Written by Reg staff) Silver badge

      Re: Vince

      I don't really understand where you're coming from. It seems pretty straightforward. From the lawsuit:

      "The Uber Defendants often transmit or provide the driver with a fee based on a reduced fare amount. The Uber Defendants retain the difference in the fare charged to the User and the fare reported to the driver, in addition to the service fee and booking fee disclosed to drivers."

      So, yeah, the lawsuit claims Uber is overcharging passengers and underpaying drivers.

      C.

      1. VinceH Silver badge

        Re: Vince

        I understand that, Chris - but what I'm getting at is that the fundamental issue is that Uber are overcharging the passengers. If the drivers are to be paid based on what Uber charge the passengers, the drivers will be part of the same problem: The passengers will be overcharged, and both Uber and the drivers will be getting a cut of the overcharge.

        If this is to be put right, it isn't that the drivers should be paid more, it is that the passengers should be charged the correct amount.

        1. Anonymous Coward
          Anonymous Coward

          Re: Vince

          It's pretty clear

          " the Uber Defendants collect the

          upfront rate from the User based on the longer route and time calculations but do not

          transmit the full fare collected to the drivers (minus the per transport service fee to

          which the Uber Defendants are entitled). Instead, the Uber Defendants often transmit

          or provide the driver with a fee based on a reduced fare amount. The Uber

          Defendants retain the difference in the fare charged to the User and the fare reported

          to the driver, in addition to the service fee and booking fee disclosed to drivers."

        2. Roland6 Silver badge

          Re: Vince

          "but what I'm getting at is that the fundamental issue is that Uber are overcharging the passengers. If the drivers are to be paid based on what Uber charge the passengers, the drivers will be part of the same problem"

          If Uber were playing by their own T&C's with the drivers then you would be correct, the drivers would be part of the problem!

          The agreed deal between Uber and the drivers is that the drivers get a percentage of the "determined fare". What is being disputed is the "determined fare", as it appears the "determined fare" as given to the service user (ie. passenger) is for a longer route than the "determined fare" given to the driver. The important point is that Uber are using the fare shown to the driver to calculate the driver's share of the business, when according to its agreement with the driver, it should be using the "determined fare" it gave to the passenger...

          What this means (if the drivers win) is that if Uber implements dynamic pricing to passengers, drivers should get a cut of the dynamic price.

          However, you are right, fundamentally Uber are overcharging the passenger. However, I suggest that if the route Uber used to price the journey for the customer is not excessive, ie. it would be a reasonable route and Uber gave the driver a selection of routes, that included the one used to price the trip, then the customer is paying for the expertise of the driver and the issue of overcharging is not so clear cut.

          1. VinceH Silver badge

            Re: Vince

            When I commented last night I was basing my view on what I read in El Reg's article - so I picked up on the word overcharging (unsurprisingly - it's not only used in the article, but the first word of the headline!). However, reading it again, I can see it's not in any of the quoted bits.

            Skim reading the PDF, it mentions the longer route used to calculate the users' prices, but doesn't claim the users are being overcharged per se*. So it can be argued that regardless of how its calculated, the amount users are charged is the amount users have agreed to - therefore, they are not being overcharged and it is just that drivers are being underpaid.

            However, while the complaint does specify the underpayment, it does also make a nod to the "overcharging" with things like "This fraudulent scheme negatively impacted not only drivers like Plaintiff Sophano Van, and thousands of individual Class members nationwide, but even end users..." which does very strongly suggest that customers were overcharged, without making that the actual complaint.

    2. gnasher729 Silver badge

      The drivers should get a fixed percentage of what the customer pays, whatever the customer pays. We don't really know what the correct charge would be, but t he number quoted to the customer and the one quoted to the driver should be the same, and it is claimed that it isn't.

      Let's say Uber's cut is 25%, they quote $10 to the driver, but they charge the customer $15. If the correct amount is $10 then the driver should get $7.50 and Uber $2.50. If the correct amount is $15, then the driver should get $11.25 and Uber should get $3.75. If they are scamming as suggested, the driver gets $7.50 and Uber gets $7.50, which is either twice or three times as much as they should get.

    3. katrinab Silver badge

      You are forgetting the fact that due to the legal fiction created by Über states that the driver works directly for the passenger, and Über collects the money as agent on their behalf, and deducts a commission charge.

      So, following that legal fiction, all of the money collected by Über from the passenger is the driver's income, and Über are under-reporting it.

  4. User McUser
    Joke

    What's next for Uber?

    I've obtained a leaked Uber document outlining upcoming new rules for their drivers. Here are some of the highlights!

    -Drivers to be paid in script, which can only be used at the Uber Company Store.

    -"Dead Peasant" insurance policies issued on drivers who are then routed by the Uber app along the most dangerous routes (based on traffic fatality statistics.)

    - Must legally change their name to "Jeeves."

    -Must now pay Uber for permission to drive their own car when "off duty." (Note: Company script is not an acceptable form of payment.)

    -Lyft drivers must now be fought to the death (previously only "to incapacitation.")

    -Must sign away rights to their "DNA and all works derived there from."

  5. Kanhef

    As far as user experience, this wasn't a bad idea. It's fairly common in some industries (e.g., restaurants) to provide worst-case estimates of wait times, so that when customers are provided service sooner than estimated, they are pleasantly surprised. So it's not unreasonable to give the passenger one estimated arrival time, while giving the driver a route that will get there slightly earlier, barring unexpected traffic delays.

    What will get them in trouble is if they have been calculating charges and payments separately, as the lawsuit alleges. Without highly-improbable macroscale quantum effects, both routes cannot be taken at the same time, so either passengers are being charged for more time and distance than they actually spent in the car, or drivers are being paid for less time than they actually spent driving. Whichever one it is, that's a pretty strong case for fraud.

    1. Anonymous Coward
      Anonymous Coward

      "As far as user experience, this wasn't a bad idea. It's fairly common in some industries (e.g., restaurants) to provide worst-case estimates of wait times, "

      You haven't understood the article. This isn't about wait times but routes.

      Exaggerated, the customer wants to go from Regent Street to Heathrow. Uber identifies a route involving a complete circuit of the M25 and quotes accordingly. It then works out the distance as the crow flies and works out the driver payment based on that.

  6. Will Godfrey Silver badge
    Mushroom

    Needs one of these ->

    It seems Uber started at the bottom and worked it's way down from there.

  7. Anonymous Coward
    Anonymous Coward

    Really?

    Are there any douche moves left that Uber hasn't tried? This company needs to be RICO'd out of existence - and please throw a few senior execs in jail while you're at it.

    1. Mark 65

      Re: Really?

      I'm sure they've got douche-bag they haven't even tapped into yet.

  8. ecofeco Silver badge

    Another clear violation contractor labor laws

    This is yet another clear violation of contractor labor laws as well.

    The law clearly states that a contractor must be able to determine how best to fulfill the work required and if the client, in this case, Uber, micro manages the actual work, they are in effect, now employers.

    The law clearly states you can't have it both ways and was created to prevent just this scenario.

    1. Roland6 Silver badge

      Re: Another clear violation contractor labor laws

      The law clearly states that a contractor must be able to determine how best to fulfill the work required and if the client, in this case, Uber, micro manages the actual work, they are in effect, now employers.

      Suspect Uber has some wiggle room here, as the route given to the driver is the one the fee has been calculated on. Thus they would claim the driver can either accept or reject to offered ride at the offered rate, also they would claim it is the driver's discretion as to what route they actually take, leaving unstated that the Uber route is the cheapest, so variation would naturally be at the drivers own expense.

      1. kain preacher Silver badge

        Re: Another clear violation contractor labor laws

        "the driver can either accept or reject to offered ride at the offered rate, " no they can not if they turn down a job to many times they are fired. Uber drivers have been known to call people and ask them to cancel so they do not get dinged.

        1. Moosh

          Re: Another clear violation contractor labor laws

          This actually happened to me the other day. He called up, asked me where I was heading to, then apologised and said he had to remain in the local area and asked if I could cancel.

          The replacement driver I got happened to be on his way to central London anyway, so was more than happy with the destination. Discussing with him, he said that Uber drivers are not told if a passenger specifies a destination; he said they used to be, but for some reason it was changed. I personally believe it was because some people with ridiculous destinations ended up complaining that they weren't getting picked up.

          He then brought up the fact that if you cancel a job after accepting it, you get flagged and its very bad. He also mentioned how you basically get fired if your rating dips below a 4/3.

  9. Your alien overlord - fear me

    Can we all just agree

    that Uber are a bunch of cunts?

    1. Anonymous Coward
      Anonymous Coward

      Re: Can we all just agree

      No, because female reproductive organs are useful in propagating the species, give the owner pleasant sensations and are nice for other people to interact with.

      Uber aren't even a bunch of assholes, because they too have a useful function.

      They even named themselves after a word popular with fascists...go figure.

  10. Martin-73 Silver badge

    I fail to understand why ubber* still exist

    They're operating an illegal unlicensed taxi service. Why are they not in prison?

    *it's pronounced ubber, because there's no umlaut on the U

    1. DavCrav Silver badge

      Re: I fail to understand why ubber* still exist

      "it's pronounced ubber, because there's no umlaut on the U"

      If it's ueber, it's pronouned something like 'ew-ber'. If it's uber, it's pronounced something like 'oo-ber'.

  11. Michael Thibault
    Joke

    It's the definition of entrepreneurial

    Suck it up!

  12. jason 7

    Uber is just the first...

    ...in a wave of 'companies' that are out to manipulate younger people who haven't had to fight for better working and pay conditions to say "Hey I think its cool to work like this and I'm cool with being exploited!" so the powers that be can use them to get rid of all the regulations and laws their fathers and grandfathers strove for.

    Hail to the new serfdom!

    1. Mark 65

      Re: Uber is just the first...

      It's the gig economy, stupid! Climb on-board and take part in the serfdom.

  13. allthecoolshortnamesweretaken

    Uber's "business model" is ripping off people. Using classic mob tactics.

  14. John Smith 19 Gold badge
    Unhappy

    Bottom line. It's double bubble.

    Charge the customers for the longer route (when they know a shorter route exists)

    Pay the drivers for driving the shorter route (while thinking they will be paid their cut for longer fare).

    The actual overcharge is to the customer.

    I'm not sure what stringing the drivers along with raised expectations of a larger takehome is but I suspect it's one of the clauses of some workers rights legislation probably passed in the last century, which is when this sort of abuse of management power was quite popular.

    1. Roland6 Silver badge

      Re: Bottom line. It's double bubble.

      Re: "Pay the drivers for driving the shorter route (while thinking they will be paid their cut for longer fare). The actual overcharge is to the customer. I'm not sure what stringing the drivers along with raised expectations of a larger takehome is"

      The complaint PDF isn't totally clear on whether the driver actually gets to see the user/passenger price.

      However, according to the evidence presented in this article:

      http://therideshareguy.com/ubers-upfront-pricing-is-secretly-overcharging-passengers-without-paying-drivers/

      it would seem that the driver doesn't get to see the user fare. Additionally, in the comments it seems that Uber also extended the delay after a trip, before it's app would show the drivers fare for the trip - to prevent comparison between user and driver displays?

      The article also notes that Lyft was going to move to the same pricing system...

      1. Anonymous Coward
        Anonymous Coward

        Re: Bottom line. It's double bubble.

        You could also delay on the basis of the location of the two devices. Doesn't prevent the user telling the driver what the cost is on the way out though.

  15. Anonymous Coward
    Anonymous Coward

    Uber HQ - an Ethics-free zone

    So slimy they give slimy folks the creeps.

    1. Anonymous Coward
      Anonymous Coward

      Re: Uber HQ - an Ethics-free zone

      "So slimy they give slimy folks the creeps."

      "He was so low he could walk under a rattlesnake wearing a top hat without even tickling it" - forget the source.

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