Time Magazine nicely sums up Uber’s controversial impact during the last decade. A June 15, 2017, article states, “Over the past eight years, the hardcharging ride-hailing company has grown into a global powerhouse worth nearly $70 billion, disrupting the taxi industry in 76 countries and creating an app relied on by millions both for rides and for income. The wildly successful company has also been plagued by scandal from the start.”
Since the very beginning of its inception, Uber drivers have challenged their workplace classification, fighting to be called employees instead of independent contractors. Drivers claim that they are not receiving minimum wage. There have been stories of assaults and injuries, raising the question of who is responsible for the misdeeds of drivers?
Uber software engineer Susan Fowler claimed that she experienced sexual harassment and gender discrimination while working at Uber. The Time article states that an internal investigation allegedly uncovered more than 200 claims of “infractions like sexual harassment, discrimination, and retaliation.”
Uber claims to be making changes. An investigation into the culture led to Uber’s recent decision to fire 20 employees. At the time of this writing, Uber CEO Travis Kalanick had resigned from his position. Many of the issues facing Uber will not find any resolution in the immediate future. Court cases related to employee classification and other controversial practices are pending in many states and may take years to conclude. In New York City, however, at least one problem appears to be reaching an end; one that may benefit the thousands of Uber drivers that work here.
In May 2017, ride-sharing company Uber stated that it would pay tens of millions of dollars to drivers in New York City. Uber acknowledged that for well over two years, it paid thousands of drivers incorrectly and according to the Wall Street Journal “deprived workers of their proper earnings.”
Under Uber’s terms of service agreement, the company is supposed to take its commission, usually about 25%, after any taxes and fees get deducted from the drivers’ fares. In other words, the agreement requires Uber to take their commission from the post-tax amount of any passenger fare collected by the driver.
For example, if a passenger invoice for a ride was $30, and $3 of that represented taxes, Uber’s commission should be based on $27. Uber was taking a commission based on $30.
By taking their commission pre-tax, they violated their contract and underpaid as many as 50,000 Uber drivers.
Providing restitution to the underpaid drivers may cost Uber as much as $45 million. If estimates are correct, each driver may be eligible to receive approximately $900.00 in unpaid wages.
The pay structure of drivers for Uber, Lyft, and other ridesharing companies, make it difficult to determine whether drivers are receiving their correct pay. For example, some people are concerned that these employers are making the drivers pay taxes and other fees that go to the government when it is the business that should absorb those costs.
“Uber has dispatched more than 125 million rides in New York City since the beginning of 2015, according to data from the Taxi and Limousine Commission” and if it violated the terms of its agreement with its drivers by taking unlawful deductions, the cost to the company could be in the hundreds of millions.
Only time and persistence will tell if Uber will ever straighten out its practices. Drivers should understand their rights under their agreements and the appropriate laws to ensure they receive fair wages.
Are you an NYC Uber driver or a driver for another company? If so, make sure you are receiving all of the money to which you are entitled. Contact employment attorneys at Leeds Brown Law, P.C., representing workers in New York City and the surrounding areas. Call 1-800-585-4658 for a free consultation.