In House - The FindLaw Corporate Counsel Blog

Does Uber App Cheat Drivers?

There's an app for that, but not for that lawsuit.

At least, that's what Uber might say. A class action, however, says the Uber app is cheating drivers out of money.

It's a little more complicated than that, but it comes down to numbers. When your company uses a money-making program, make sure the accountants have worked out the details.

Company Formula

In Dulberg v. Uber, the plaintiffs allege they are underpaid using the company's formula. Their complaint says they were supposed to get 80 percent of the fare, but it's between 70 and 80 percent.

In one case, for example, Martin Dulberg picked up a passenger who was charged $15.38. Dulberg should have made 80 percent, or $10.86, the complaint says.

But Uber changed the way it calculates, resulting in a lower net pay. "[I]nstead of receiving the promised 80 percent, Dulberg received approximately 73 percent, the plaintiff alleges.

The lawsuit was filed a year ago, but has now been certified as a class action on behalf of more than 9,000 drivers. Unlike other Uber cases that focus on independent contractor v. employee issues, the Dulberg matter turns on the driver's fares.

Fare Calculation

The legal dispute boils down to different ways Uber calculates fares. It allegedly charges riders one amount, but calculates a different way for drivers.

The company app gives "upfront pricing," which lets customers know how much they will have to pay for a requested trip. Drivers are paid, however, based on how far and how much time they actually drive.

"The Fare that Uber calculates on actual values is generally smaller than the upfront Fare that passengers pay," the plaintiffs say. "Uber pays class members based on this lower amount and pockets the difference."

With all the litigation Uber has going on, it may take a while to sort this one out. This month, it survived one class action by taxi drivers and settled another major lawsuit.

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