Uber, currently embroiled in a legal battle over self-driving car technology against Alphabet unit Waymo, has found itself a new controversy in New York City.
The ride-hailing company admitted that it had underpaid drivers in New York City by millions, with the blame being cast on an accounting error.
Uber Shortchanges New York City Drivers
In a report by the Wall Street Journal, Uber said that it had underpaid New York City drivers for over two years due to an accounting error that likely translates to tens of millions of dollars.
The error started in November 2014, when Uber changed the way that it calculated commissions. Uber mistakenly took its 25 percent commission from the gross fares of the drivers, instead of doing so after fees and taxes. This was in violation of the driver agreement rolled out by Uber in 2014, where it said that it will be taking its commission from requested rides after the deduction of fees and taxes, which includes the 2.5 percent black car fund fee of New York City and the 8.875 percent sales tax.
Uber spotted the mistake after it rolled out a new route-based pricing system and said that it will launch an investigation on whether the same problem is being experienced in other cities.
Uber To Give Back What It Owes
Uber said that it will be taking action to rectify the situation right away, promising New York City drivers that they will get their dues.
"We are committed to paying every driver every penny they are owed — plus interest — as quickly as possible," said Uber's regional manager for the United States and Canada, Rachel Holt.
New York City drivers will receive an average of $900 each under Uber's pledge to give back what it owes. Uber has sent notices to drivers who have been with Uber since the driver agreement took effect in 2014.
Uber says that it will deposit the full amount owed to drivers who have worked for Uber in the past 90 days by next week. For drivers who have not worked for Uber in the past 90 days, they will be first asked to confirm their bank accounts before they receive the money owed to them.
New Uber Controversy
Despite Uber's claim that the error was unintentional and that it will be giving back the money owed to New York City drivers, the Independent Drivers Guild did not receive the news lightly.
"Uber's theft of drivers' hard-earned wages is the latest in a long history of underhanded tactics in this industry," said Jim Conigliaro Jr., who founded the group that represents 50,000 drivers in New York City.
The shortchanging of payments to its drivers in New York City adds to the growing list of controversies that have recently plagued Uber. In addition to the legal battle against Waymo for stolen self-driving car technology, Uber also received a lawsuit from drivers of rival service Lyft for alleged illegal tracking through the Hell program.
A report last month also brought to light an incident from 2015, when Apple CEO Tim Cook threatened to remove the Uber app from the Apple App Store after the ride-hailing company was discovered to be secretly identifying and tagging iPhones even after its app was deleted.
