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Lawsuit Claims Uber Quietly Makes Millions a Month in Overcharged Fares
Last year, Uber introduced upfront fares as an added means of transparency. The fare system allows customers to see their calculated fare in advance before they book their rides.
Uber says it calculates upfront fares by the trip’s expected time and distance, traffic and local demand at that moment.
In a June 2016 post, Uber described its upfront fares as ensuring “no complicated math and no surprises” for riders.
But a federal class-action lawsuit filed May 24 against the ride-hailing company claims otherwise. More than 100 plaintiffs say the company has been charging UberX riders higher rates than the “actual fare” (the amount the driver receives for the trip). The suit says Uber is pocketing millions as a result.
Plaintiffs Accuse Uber of Fare Fraud
Jacqueline Gayed, a Brooklyn, New York resident described in the lawsuit as a regular UberX user, is the lead plaintiff in the class-action lawsuit.
According to Fast Company, Gayed is married to an Uber driver. She says she compared rider fares to driver compensation over time, and is accusing Uber of fudging the numbers.
Gayed’s lawsuit claims that Uber has charged UberX riders an average of $1.98 more than the driver’s fare. The suit alleges that UberX users pay for longer, less efficient routes than what the driver’s app uses. This results in a discrepancy between the actual fare and what the rider pays.
The lawsuit includes screenshots that purportedly show Mr. Gayed’s fares compared to his rider’s total fares. All six examples appear to show a discrepancy between rider and driver fares.
In easier terms, Gayed is claiming that Uber presents different fares to the riders and drivers, and it pockets the difference.
The lawsuit says Uber is violating a New York law prohibiting unjust enrichment and estimates it could pocketing an extra $7.43 million per month in New York City as a result.
In April, a Los Angeles Uber driver filed a similar lawsuit about the upfront pricing system.
The lawsuit seeks damages for UberX rides dating back to April 2016 and seeks a trial by jury.
Earlier this week, the ride-hailing company admitted to an error that resulted in it underpaying its New York drivers a whopping $45 million.
The company has vowed to do right by paying the drivers ”every penny owed” plus interest.
So far, there has been no official response from Uber about the new class-action suit. The Penny Hoarder will update this story as it develops.
Kelly Smith is a junior writer and engagement specialist at The Penny Hoarder. Catch her on Twitter at @keywordkelly.