Uber owes NY drivers millions after accounting error

Ride-hailing pioneer Uber has admitted it owes its New York drivers tens of millions of dollars following an accounting error in the way in which it calculated their commission, by using a figure which included state taxes rather than a pre-tax fare

Rachel Holt, Uber’s regional general manager for the US and Canada, said in a statement: ‘We are committed to paying every driver every penny they are owed — plus interest — as quickly as possible.’

Drivers are in line for an average of around $900 each, and those who have performed a trip in the last 90 days will automatically get a direct deposit. Otherwise they will have to fill out a form online to receive the payment. Uber is reckoned to have some 50,000 drivers active in New York.

The problem dates back to at least 2014, and arises because Uber’s contract states that drivers should get 25% commission on the whole fare. However, over the past three years the company has been calculating commission based on the fare minus withholding taxes.

The New York Taxi Workers Alliance claims it originally alerted Uber to the problems last year, when it pointed out the discrepancy when it filed a class-action suit against Uber over alleged violations of employment laws.

Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said in a statement: ‘This payout is an attempt by Uber to pull a fast one to avoid court oversight and shortchange drivers in the process. Nice try.

‘We’ll see Uber in court to win back all of the money drivers are owed, including up to double damages. Meanwhile, we’ll celebrate the victory of stopping this unlawful practice moving forward.’

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

View profile and articles

Be the first to vote

Rate this article

Related Articles