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Uber Admits it Made an Accounting Error and Will Refund Nearly $50 Million to Drivers The company says it incorrectly calculated how much its commission should have been on rides in New York City over the past two and a half years, according to The Wall Street Journal.

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Tom Brant News reporter

May 24, 2017 3 min read

This story originally appeared on PCMag

Uber's rocky relationship with its drivers has resulted in the company offering olive branches and

occasional compensation, and that pattern continues with a colossal error the ride-hailing

company admitted to on Tuesday: drivers in New York City were shortchanged by nearly $50

million in payments, The Wall Street Journal reported.

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Uber had apparently been calculating New York City drivers' earnings based on an incorrect

formula. Instead of subtracting taxes and fees before collecting its 25 percent commission as per its

nationwide agreement with drivers, Uber was collecting its take based on a ride's total fare,

the Journal reported.

It's unclear exactly how much Uber pocketed thanks to the incorrectly-applied commission, which

lasted for more than two years. The company says it will refund the entire amount plus interest,

which amounts to an average of $900 per driver. Using an independent estimate of 50,000 New York

City-area drivers, the Journal calculated that the blunder will cost the company $45 million.

Uber is a tech company that prides itself on �ne-tuning its smartphone app based on the data that

it collects from both riders and drivers, so it's hard to fathom how an apparently simple arithmetic

error could have persisted for more than two years. The company said it uncovered the mistake as it

was overhauling its driver receipt system.

"We made a mistake and we are committed to making it right by paying every driver every penny

they are owed, plus interest, as quickly as possible," Rachel Holt, regional general manager of Uber

in the U.S. and Canada, said in a statement to the Journal. "We are working hard to regain driver

trust, and that means being transparent, sticking to our word and making the Uber experience

better from end to end."

Regaining trust won't be easy given Uber's checkered past when it comes to dealing with drivers,

especially those in New York. In January, the company agreed to pay a $20 million settlement to the

Federal Trade Commission to resolve charges that it misled prospective drivers about how much

they could earn by signing up. Uber claimed on its website that the median annual income for

drivers in New York City was more than $90,000, when in reality less than 10 percent of all drivers

in the city made that much, according to the FTC's complaint.