Uber drove in the wrong way in New York City

Uber is backpedaling over an accounting error that led to tens of thousands of New York City drivers not getting their full pay for two and a half years.

Uber reportedly discovered the accounting error when it created a new receipt template for New York City drivers, according to The Wall Street Journal, which first reported this story.
The payments are the result of an error Uber said it recently discovered in how it calculated driver earnings. Until this week, Uber applied its “service fee”—typically 25% for UberX rides in New York City—to the gross fare, or the total amount paid by the passenger. But in a terms-of-service agreement dated to November 2014, Uber told drivers it calculated that commission based on the net fare, or the amount paid by the passenger minus sales tax and other applicable fees. Uber told WSJ that it will refund affected New York City drivers an average of $900 each, which includes interest on the loss profit over the past years. 

Uber says it sent out notices to everyone who has driven for Uber since its driver agreement went into affect in 2014. Those drivers who've worked for Uber in the past 90 days will get the full amount they're owed deposited into their account within the next week. Those drivers who haven't driven in the last 90 days will be asked to confirm their bank accounts and then will get the deposit.

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

Uber is one of the biggest ride-hailing services in the world, with operations in more than 450 cities in over 70 countries. More than 1 million people drive for Uber, but the relationship between the company and its drivers isn't always smooth. Uber drivers have staged protests, filed lawsuits and voiced concerns that their pay is too low.

The Independent Drivers Guild says that other ride-hailing services, like Lyft and Gett, also charge commission on gross fares. Lyft confirmed it does take its cut from gross fares because that's what it says in its driver agreement.

"In New York, we deduct commissions and administrative fees from gross fares, as per our driver agreement," a Lyft spokesman said. "We also pay sales tax on gross fares as required by law."