31 ms·

Uber said to use “sophisticated” software to defraud drivers, passengers

343 points by dralley 10y ago

legulere 10y ago
In the thread about Uber retreating from Denmark, people asked why taximeters are sensible regulation. This is the reason. We need a trustable third party that ensures fair transactions. Uber cannot be this because they have their own interests. Regularly checked taximeters can ensure this at least partly.
- eric_h 10y ago
  Yellow cabs in New York have meters that are supposed to be checked regularly. Never the less, I have taken yellow cabs with unquestionably different rates per actual miles and time driven (e.g. same distance/time, different fares, because one taxi's meter was faster).
  - TeMPOraL 10y ago
    I assume there's a procedure that you could use to report a particular taxi car/driver, which would put them in a world of hurt for cheating. That's another reason why it's good to have a trustworthy third party there.
    - eric_h 10y ago
      There is, at least in theory: call 311. However what's to stop the driver from slowing the meter down before he gets inspected? There's no GPS in the meter, as far as I'm aware, so I don't believe there's a way to truly audit the fares the driver has already taken.
      - TeMPOraL 10y ago
        Shouldn't the meters be tamper-resistant though?
        eric_h 10y ago
        They should, and perhaps that's improved in recent years, but it was definitely a common problem as few as 3-4 years ago (from my experience, I've largely switched away from yellow cabs to Uber/Lyft - mostly because the price and experience are vastly more consistent)
        TeMPOraL 10y ago
        I see. Regardless of what one thinks of Uber, there's no denying that taxis worldwide - not just in the US - totally had it coming.
        deleted 10y ago
        [deleted]
    - mnutt 10y ago
      I have a coworker who reported fraudulent cab driver activity to the TLC. It was an arduous process involving multiple interviews and a hearing, and in the end the driver was fined about $200. Nothing inherently unfair about that process, but it's hardly a world of hurt.
rdiddly 10y ago
One good way to make sure the fare matches the distance would be to install some sort of device that measures mileage. The driver could start the device when the ride starts and turn it off when it's over. It could even calculate and display the fare for both parties! Of course that kind of transparency wouldn't be possible unless all the vehicles had the device. So you'd probably need a licensing system for them. Which in turn could be overseen by a commission made up of industry reps and local government officials to ensure fairness and local control. Wild ideas man, wild ideas.
- Dylan16807 10y ago
  Ha ha ha. Half the problem is that drivers are being paid based on exactly such a device. And your second paragraph is just a series of non-sequiturs. You're stretching too hard to make the cute analogy. Measuring doesn't imply that all vehicles need it. Nor does that in turn imply the need for a licensing system.
  - rdiddly 10y ago
    I was making leaps because everyone sees it coming and it's boring. No need to make it longer. I don't think analogy is the word you're looking for.
    - Dylan16807 10y ago
      I couldn't think of a better one in less than a minute. Do you have word suggestion? It's pretty close to an analogy, as a hypothetical mirror from one part of reality onto another.
      - rdiddly 10y ago
        Hmm no, now that you mention it. The technique probably has a name, but if it does, I don't know it. That's going to bother me now. Basically just describing existing commonplace conditions (the taxi industry) as if it were some crazy new idea, for ironic effect.
mtgentry 10y ago
If they can prove it, this is super shady on Uber's part. Reminds me of Michael Bolton's money making scheme in Office Space.
- CydeWeys 10y ago
  It also doesn't speak well to Uber's reputation that I have no problems whatsoever believing that this might be happening. Compared to all the other unethical stuff that they've done (such as Greyball), I can totally believe that they'd do this as well. If it's possible for both the rider and driver to see the forecasted route at the time of hailing, it should be pretty simple to throw together evidence to show that different pathfinding is in use.
- patrickg_zill 10y ago
  I celebrate his entire catalog.
- nommm-nommm 10y ago
  https://en.wikipedia.org/wiki/Salami_slicing https://en.wikipedia.org/wiki/Salami_slicing
- JCzynski 10y ago
  Reading what they actually did (or accused of doing, technically), it's not shady at all.
lithos 10y ago
Uber has killed so much goodwill and their reputation so well that no one will be surprised at almost any accusation directed at Uber. I know my first thought was "not surprising", and I imagine others will think the same.
- Judgmentality 10y ago
  One time when I took an Uber, the driver told me how Uber was defrauding him. He had his friend order an Uber, and he made sure to pick him up, and they compared the prices. The prices, unsurprisingly, were much higher for the passenger than for the driver. The difficulty of course is proving this to be true. And then the question is how much does Uber lose from a settlement? Probably less than they earned from price manipulation. But at this point it seems people might actually think negatively of Uber as a whole, but how long that will stick is hard to say.
  - Consultant32452 10y ago
    I don't really understand why Uber would be required to show the same price to both sides unless contractually obligated. When I hire a contractor to renovate my house he doesn't typically show me the invoices to all his subs. He negotiates one price with them and a different price with me.
    - shirleman 10y ago
      If the rate drivers get paid is based off the price paid by riders, yeah, it is illegal what they are doing. If they only say it's a % of it, then you are correct
    - sharemywin 10y ago
      Don't they mention in recruiting material they pay a %.
      - Consultant32452 10y ago
        My understanding, based on other comments here, is that Uber recently changed its pricing model so that riders get a fixed price, but drivers still get a range based on distance and time. Obviously the rider's fixed price needs to have some cushion in it. It's a change, and recruiting material may need to be changed if it wasn't already, but it's hardly a scandal. Also, the % could remain the same if Uber is still paying that % in aggregate.
enknamel 10y ago
This just sounds like Uber quickly charges you for the worst case since if they charge you for the best case and things go wrong, Uber loses. No one can know what route will even be possible given how chaotic traffic and closures can be. Then the driver gets paid by whatever route is actually taken. I don't really see this as an issue at all.
- gleenn 10y ago
  If it is merely traffic changes, why is the customer not getting a cheaper ride if the route is shorter? If the customer is paying more, why isn't that money going to the driver?
  - enknamel 10y ago
    One of the beautiful aspects of Uber over say, taking a taxi, is that you only pay the one price no matter what. You don't have to worry over the route. You don't have to do anything other than get in a car and know you will get where you want to for the price you agreed to. Also, if there is a fare left over, why should it go to the driver? Uber isn't existing to just get rides for drivers and forward all proceeds to them. They are a giant company that needs to be making money off of every ride. A lot more money than they are making now if they are ever going to be cashflow positive.
    - jellicle 10y ago
      Uh, is that true, at all?
      - Dylan16807 10y ago
        So that comment asserts: 1. When using Uber you lock in the price upfront. 2. People like to be certain about prices. 3. Uber is capitalist and likes to keep money. 4. Uber has profitability issues. All of those look true to me. What part do you think isn't true?
        10y ago
bdrool 10y ago
Oh, come on. I doubt it's all that sophisticated.
ihsw2 10y ago
The fare discrepancy can extend beyond longer/shorter route calculation -- there is also the issue of surge price disparity between driver and passenger. For example, the user would see 3x surge pricing while the driver would see 2x surge pricing, where the user is charged for 3x but the driver is paid for 2x. This is pure speculation and I have not witnessed this behavior but it's another way things can go wrong in Uber's favor. Uber might be able to defend itself saying that the data provided to the driver and passenger are different because of misconfigured caching and stale data being served to either party, but it's a moot point in case Ars Technica has concrete and verifible claims of methodical and programmatic fraud. Personally I have witnessed being billed for $0 in-app after taking a round trip (effectively zero distance traveled) but the email notification showed the proper billing value, and there may be more instances of this "confusion."
savanaly 10y ago
Are we worried that shady behavior that hurts consumers and riders might become the new equilibrium? I don't see how it could be. Whatever the machinations of Uber to artificially alter prices, no matter how sneaky, at the end of the day they'll lose drivers and riders to competitors if their margins drift too far from the economic cost of being the middle man. A driver don't need to know in what way he or she is being lied to or maniuplated to know that they make less per hour driving for Uber than for [Uber's next best competitor]. Thus, I don't see how there could be an equilibrium where Uber is overcharging and still has a significant portion of the market.
- janardanyri 10y ago
  The whole point of "network effect" strategy is to render this analysis untrue.
- _yosefk 10y ago
  Leaving it consumers to worry about fraud is not how you create a functioning market economy. The real equilibrium in places where fraud isn't punished is you rely on the market as little as you can and everyone is poorer as a result. Fraud is illegal for good reasons.
pizzetta 10y ago
I have to think this is not their mode of operation, but if it is, what the hell, Uber? If they actually do something like this as matter of course, goodbye. That's just unacceptable and very dirty.
awqrre 10y ago
They probably will blame this on previous executives...
basseq 10y ago
As an Uber user, I'm unaware of this "upfront" pricing model. I thought the price charged was based on the actual time/distance (which, incidentally, they email me on the receipt). I know I can estimate the trip cost, but I thought that was just an estimate. Am I wrong? What is this "upfront" pricing? And is the reverse true? E.g., can I commit to some committed price then have the driver take some crazy route?
- basseq 10y ago
  I'm wrong. Huh. https://qz.com/874224/this-year-you-wont-wake-up-to-a-shocking-uber-fare-on-new-years-day/ https://qz.com/874224/this-year-you-wont-wake-up-to-a-shocki... But seeing this, it's neither sophisticated nor malicious. They changed their customer pricing model from time-and-miles to fixed-price. That doesn't defraud anyone. And of course Uber is going to balance their increased risk (i.e., that their estimate is too low) against better profitability and customer experience. Like, duh. Similarly, Uber didn't change their pricing model for drivers. It's still time-and-miles. You can certainly argue that drivers should get "more", but are drivers willing to shoulder the increased risk as well? I could see this story going the other way: Uber Slams Drivers With Increased Risk, Lower Pay with an example of some driver getting paid $10 for some crazy-long trip during a snowstorm.
  - hug 10y ago
    I was also very confused about this -- I am a heavy Uber user and was under the impression that I was paying a flagfall plus minutes & kilometers rate. There's a hint about my confusion in what I just said above: I'm from Australia, where drivers are considered contractors by the Australian Tax Office and must know the gross amount charged for the purposes of calculating their GST (a 10% VAT) burden. I suspect that Uber aren't able to bring upfront pricing in here without a considerable fight.
lancewiggs 10y ago
Uber has deliberately fostered a culture that thinks it's acceptable to rip off people and institutions. We should never support companies with behaviour like this.
employee8000 10y ago
No this doesn't happen. Some people may think that Uber charges the rider a different rate than the driver receives but it isn't the case. A driver I had was sure this happened and asked me that on a fairly expensive trip (I think it was around $80). I told him this didn't happen and I gave him my personal phone number and the amount of fare I was charged. I told him to check his daily numbers and if he didn't see this charge then to call me immediately. He never did.
- 013a 10y ago
  It wouldn't be very sophisticated if that's all it took to discover fraud.
- michael_storm 10y ago
  Well I guess that's settled, then.
- KingMob 10y ago
  And if he had called you, you would have done... what, for him, exactly? Paid for a lawyer on his behalf? Given him a living wage while he was blackballed by Uber after suing them? Even if he uncovered an error, he probably would have concluded that calling you would have done nothing. Absence of evidence is not evidence of absence.
  - employee8000 10y ago
    I work for Uber. I would have tried to figure out wtf was going on because that's not how we do business, as far as I know.
itchyjunk 10y ago
"27. In the overwhelming majority of transportations, the upfront price is the amount that a User is ultimately charged for the transportation services by the driver. 28. When a driver accepts a User’s request for transportation, the User’s final destination is populated into the driver’s application and the driver is provided with navigation instructions directing him or her to the best route to the User’s destination" --------- It seems like User sees a price X for a ride and accepts it. The driver might see a price X-y if conditions have changed. Doesn't that imply User agrees to price X and driver to price X-y ? Uber might be able to adjust the price at the end but can they be sued if both party agrees to it before hand? -------------- "36. Had Plaintiff and the Class known the truth about the Uber Defendants’ deception, they would never have engaged in the transportation or would have demanded that their compensation be based on the higher fare." ------------ I am curious as to how they reached to a conclusion that Uber was intentionally doing this. Did a bunch of drivers co-ordinate experiments with riders to see if there was price differences? Did they just log out and log back into different accounts to see the price differences? I am neutral to Uber so I feel its natural to question if Uber is seen as an easy target to go after since they are already in a legal swamp. IANAL so would love to read what people familiar with law have to say.
- arghbleargh 10y ago
  This seems like a tricky case because if the users and drivers are being completely rational, it's not clear that Uber's deception should have affected their behavior. Sure, the drivers expected to make X% of fares, but realistically they probably estimated what that would come out to be not from looking at customer fare data (in which case the deception would have materially harmed them) but rather by tracking what they or other drivers were actually getting paid. Still, if the allegations are true, a culture where it is fine to engage in such active deception is not a good sign.
- noodle 10y ago
  I feel like the question is, if an Uber driver takes longer to arrive due to unforeseen/unforeseeable circumstances, does Uber pay them more than price X? Or is their comp always capped at X? If they pay more than X, then what Uber's doing is fair-ish. IMO. If the driver can never earn more than X, then that is a problem.
elastic_church 10y ago
All it takes is a tiny tiny line in the terms of use that states that the fare differences can be different between client side apps. The user isn't paying the driver, they are paying uber. The driver is paid by uber under a separate agreement. So it honestly doesn't matter.
mrow84 10y ago
Here's an article about this issue from a couple of months ago, for anyone looking for additional information: http://therideshareguy.com/how-to-beat-ubers-upfront-pricing/ http://therideshareguy.com/how-to-beat-ubers-upfront-pricing...
sharemywin 10y ago
If they business model is based on breaking local laws, why would anyone expect them to deal ethically with them?
- Zak 10y ago
  Uber's side of that story is that the local laws created unjust monopolies with uncompetitive pricing and poor service. For the most part, at least in the US, they weren't wrong. Airbnb is also based on skirting regulations and has not been the subject of the kinds of complaints of misconduct from users, service providers and employees that Uber has. This suggests to be that the problem is specific to Uber rather than being inherent to companies that use new business models that don't fit into existing regulatory frameworks.
  - JCzynski 10y ago
    AirBnB has been subject to even more complaints from neighbors and competitors than Uber, though.
    - Zak 10y ago
      If anything, that reinforces my point: a business model based on this type of disruption does not seem to imply bad behavior in other aspects of its operation.
  - sharemywin 10y ago
    I'm sure gun runners tell themselves they're just helping innocent people protect themselves. If your basing your company on the idea that it's is above the law then I guess you have to ask where's the line. What laws do you follow and which ones do you ignore. to me it seems like a slippery slope.
    - Zak 10y ago
      There are actually terms in law for drawing such a distinction: malum prohibitum and malum in se. Malum prohibitum means "bad because forbidden". It includes most regulatory law, requirements to have licences to do things, drug prohibition, etc.... Some of these prohibitions are probably necessary to have a society people actually want to live in, but many are more debatable and some actively make society worse. Prohibited conduct varies greatly between jurisdictions. Malum in se means "bad in itself". It concerns directly causing harm to others. While some edge cases vary, almost every legal jurisdiction has general prohibitions on murder, rape, theft, fraud and such. I'm not aware of any significant controversies in which Airbnb has been accused of the latter, nor Lyft. I think most people can tell the difference between skirting regulations that many people honestly believe don't serve the public interest and tolerating sexual harassment or deceiving contractors.
tyre 10y ago
I don't see the scandal. 1) Uber's upfront estimate is based on a naive calculation of getting from A -> B. From a software perspective, that makes sense. The consumer hasn't even committed to riding, so let's just toss out a ballpark figure. 2) If the consumer looks at the figure and says, "Yes, that's reasonable for transportation from A -> B", which they indicate by clicking "Request Ride", then they are agreeing to pay that price for the service. 3) The rider can verbally request a different route once in the Uber. 4) The driver is paid based on minutes and miles, via some formula that they've agreed to. The rider is charged based on an up-front calculation, which they can decide if it is worth it or not. It sounds like the lawsuit is alleging that the rider is being defrauded by being taken on a different route than the one displayed at time of purchase. I think this is silly because, to my knowledge, everyone taking an Uber is paying for the transportation and not any particular route. I.e. being taken on a specific route isn't what the rider is agreeing to pay for. Also, as noted in (3), the rider is always free to change the route. Additionally silly because the rider seems to be alleging that they were defrauded by being taken by a more efficient route. There just doesn't seem to be any "harm" in what's happening here. I can understand the case if the user agreed to go from San Francisco down to San Jose, based on a route straight down the 101 highway, then, once they got in, was driven to San Jose through Los Angeles.
- deleted 10y ago
  [deleted]
- mfringel 10y ago
  The problem is that there's an implicit agreement that the amount the passenger is willing to pay is the gross amount the driver receives, of which fees are taken off the top. The arbitrage between the shorter path and the longer path represents an undocumented fee given to Uber for no additional service rendered.
  - richardwhiuk 10y ago
    I don't see this as an implicit agreement. I see myself as purchasing a service from Uber, who fulfill that by subcontracting to a driver.
tmh79 10y ago
I think people misunderstand upfront fares. Its like buying an airplane ticket: the airline charges passengers the appropriate price to fill the plane, and it pays pilots a salary. Pilots who fly more profitable routes don't get paid bonuses because their passengers pay more. Same thing with UPS drivers, who get paid a fixed amount to drive packages around. The concept of "up front fares" seems to be widely practiced in logistics companies, and is probably a part of the transition as ride sharing companies become less like taxis and more like UPS/airlines.
- maxerickson 10y ago
  Pilots who fly better routes do get paid more. Because seniority. http://www.askthepilot.com/questionanswers/seniority/ http://www.askthepilot.com/questionanswers/seniority/ (better may not always equate to most profitable though, it might be other things like schedule)
- darod 10y ago
  Pilots aren't contractors. Uber drivers are.
- discodave 10y ago
  Your analogy does not work because UPS drivers and Pilots are either salaried or hourly employees. Their contract is very clear and also covered by employment law. Uber treats drivers as contractors and then makes certain representations about the payment structure. The allegations here are the equivalent of airlines telling pilots that they get paid a percentage of all the fares, then lying about the total fares.
elif 10y ago
So, to both parties, they are under-promising on an unknowable future event. that is better than over-promising? i don't see the issue here.
davidf18 10y ago
There should be an app where different services (Uber/Lyft/Gett/Via/Arro (which is Yellow Cabs) bid on a ride and the lowest bid gets the ride. That would help to fix this problem. In NYC I had noticed that Uber was charging as much as Yellow Cab for some of the trips and I was surprised about their algorithm. Now I understand why.
- martinald 10y ago
  Google Maps does this in London (at least on Android). Unfortunately, there's no Lyft in the UK and Uber really dominates the market, so it's pretty useless. There's also services like RideGuru.
- enahs-sf 10y ago
  Everyone loves a good arbitrage opportunity.
mabbo 10y ago
Both driver and passenger think they know the full truth of the matter for the financial transaction they're agreeing to, but they don't. There's implicit dishonesty in that, and when you combine dishonesty with money we call it 'fraud' usually. But let's set aside the question of whether it was legal. Was it moral? Software like this doesn't fall from the sky- management approved it, software teams wrote it, maintain it and system tests probably exist to validate it works... how do those developers feel okay about this? How do they not feel like they're cheating people out of money? When your Mom hears about it, and asks if you were part of it will you spend 20 minutes giving a long-winded answer about how it was actually not a bad thing? That's a bad sign, man. I'm reminded of the scene from 'Clerks' discussing Contractors[0] [0]https://www.youtube.com/watch?v=iQdDRrcAOjA https://www.youtube.com/watch?v=iQdDRrcAOjA
- TeMPOraL 10y ago
  If we're talking morality, then let's remember that Uber has been very lacking in that area for many years now; they also don't mind, and they're pretty open about them not minding. So from that point of view, nothing new really happened here. It's same old Uber, doing same old shitty and exploitative things to people.
cwyers 10y ago
Ars Technica Uses Sensationalist Headlines And Shallow Understanding Of Subject Matter To Defraud People Into Reading Their Articles
ashish10 10y ago
Hmm.. So in my area where Lyft is always expensive 20-30% more than Uber. I don't know how much these Lyft guys are stealing ?
dullgiulio 10y ago
Updated description for a start-up: "We are like Uber, except for the lawsuits."
JCzynski 10y ago
This seems entirely appropriate and not fraud. For a flat rate, you're charged based on a somewhat longer, non-ideal route, rather than the optimal route which you'll take if everything goes well.
socrates1998 10y ago
The issue is with the agreement with Uber driver's, if Uber is changing the terms of the relationship without letting them know and agree to it, then that's a major violation of the contract and Uber could see a massive labor lawsuit.
Macsenour 10y ago
I'm no lawyer but I understood "fraud" to be misrepresentation. Who is being defrauded? The passenger pays one price, the company pays the driver and takes a bit of that fee. The company is defrauding the driver by not telling him the full fee the passenger is paying? If they word it such as: "A % of the fee and other fees", I don't see fraud. Not a lawyer.. feel free to correct me.
AsyncAwait 10y ago
I have no sympathy for Uber, but it does start to feel like someone is out to get them, the guys just can't seem to catch a break.
jeffdavis 10y ago
If there is a sudden traffic jam and it takes twice as long, then presumably uber must pay the extra money to the driver. So are the drivers asking for some kind of "flat rate or variable, whichever is greater" contract?
- DrScump 10y ago
  It's not "extra" money, it's contracted compensation. The driver stuck in traffic doesn't have the discretion to say, "screw this crowd, I'm bailing on this trip to pursue surge pricing in the next neighborhood over."
  - jeffdavis 10y ago
    It seems the drivers are asking for both sides... If up-front is an underestimate, they want the contracted milage/time rate. If it's an overestimate, they want the up-front pricing. There is no problem with that. Many contracts are drawn up that way. I think it may even offer a great incentive to drivers to make trips faster. But it doesn't strike my outrage nerve that it's not happening now.
comments_db 10y ago
At this rate, soon Uber will be a verb. Unfortunately, associated with all the wrong things. a la "...just don't uber it..."
Digit-Al 10y ago
To me it seems the disconnect here is between the fixed fee on one side (the passenger) and the flexible fee on the other side (the driver). Uber is, sort of, acting as an insurer and underwriting the cost of the journey. The passenger pays a fixed fee for a projection of how much the route will cost and the driver gets paid by how much it actually costs in driving time and distance. If there is some sort of unexpected delay and the journey takes longer then, presumably, the driver will be paid more than the passenger paid so Uber will lose out. As with all insurers Uber charges a higher initial charge to act as a buffer and minimise the chances of losing money on the journey. I can't really see any way of getting round this as long as the passenger pays a fixed price and the driver is paid a flexible fee.
Rainymood 10y ago
We walk a thin line between deception and incentives.
chickenbane 10y ago
A bit off topic, but I was just in New Orleans for a fun trip. I normally use Lyft, but apparently Lyft pickups were not allowed at the airport so I used Uber (my last Uber ride was months ago). After waiting at least 15 minutes in the pickup spot, my driver cancelled. Annoyed, I requested another Uber ride (which went fine). However, I was shocked to learn that Uber had still charged me a cancellation fee for the first ride and continued to argue it was appropriate when I protested. I finally resolved it when I continued to press the issue, but I found the whole scenario incredibly customer-hostile. Along with the litany of gross Uber stories, I will continue to prefer Lyft!
- notyourwork 10y ago
  I ran into the cancellation loop a few months ago in Oakland. Had 3 drivers confirm, after 10-15 minutes cancel. Ironically, one driver called to tell me she was cancelling for another ride and then literally drove by us.
pnathan 10y ago
If, at the same time, driver and customer are being shown different prices, as the article alleges, then that is a problem. If the price is an estimate, and the estimate is revised based upon actual time and distance, then that is within reason. That said, this problem would be much more tractable if the drivers were employees of Uber. Perhaps that's what should be done? :)
- wwalser 10y ago
  I've used Uber in NY, CA, and FL in the past 6 months. Every time I've done so I was shown exactly the price that I would pay up front. It's a static price. I pay that amount to go from X to Y, regardless of minutes, miles or extraordinary circumstances. I have no idea what the driver's compensation is based on but it isn't transparently obvious to me that it would be fraudulent for Uber to offer me a static fare that, over the course of the ride, turns out to be different to the value of that ride to the driver. Imagine: When I am offered a fare based on expected traffic that doesn't materialize, the miles+minutes value to the driver is well under what I paid. Other times, when I hit unexpected traffic, I pay Uber less than they pay the driver because of the extra minutes. I'm not saying "this wasn't fraud". I'm saying, "I can imagine a pricing and reward scheme by which it's not." If at some point Uber said to drivers "We take an x% cut of the fare.", then yes, it seems clear that drivers would be defrauded by the scheme. Maybe we'll get to find out :). edit: Other comments have links indicating that my "x% of fare" idea may, in fact, be in Uber's contract with drivers.
Wissmania 10y ago
I am not sure about the legality here, but I will say that I see this arrangement as good for both the driver and the passenger. As a passenger I can know exactly what I'm paying ahead of time, and don't have to worry about my driver intentionally increasing the time/distance of a trip to charge me more. As a driver, you are compensated on a time/distance basis, which means you don't have to worry as much about special requests/traffic/other issues messing with what you earn. Uber is the one accepting the risk here, which the chance that the payout to the driver exceeds the flat rate the passenger paid because of an extra long trip.
- incongruity 10y ago
  Even if it is read charitably, as you have done, that really damages Uber' claim that it's a effectively just a middleman connecting independent contractors with customers. By doing this, Uber is much more than a mere ride arranging service and, instead, they're actively reducing risk and manipulating both sides – something a mere middleman wouldn't do.
- Wissmania 10y ago
  Another thing: If Uber really wanted to charge their customers more, they could just raise their rates relative to distance (which would be identical to the user since they only see the final fare and not the components of it). I think they probably just pick a long route to be conservative in the time estimate they give to the user.
throwaway-blue 10y ago
FWIW Lyft's upfront pricing words the exact same way. This is a non-story and just good product management. This feature solves the problem of presenting a surge multiplier to the customer. With a surge multiplier the customer has to guess how much it's going to cost. With this they just see the price and figure out if it is worth it or not. Reducing purchase friction and uncertainty increases demand and is good for drivers. Plus, both Uber and Lyft are assuming risk with upfront pricing. They are guaranteeing a price. Sometimes it will be higher and sometimes it will be lower. The driver is accepting a different payment arrangement based on distance and time. Both companies are classic middlemen and taking advantage of consumer surplus.
anigbrowl 10y ago
If the allegations in this suit are true, fuck Uber forever. They should go out of business, their assets should be stripped from the investors and redistributed to the users, and Kalanick and a bunch of other people should go to jail for fraud. There is no way to overlook the persistent structural problems displayed by this company. Some things could be matters of opinion (like the values of their corporate culture and so on), but there are multiple instances by now of Uber actively choosing to circumvent laws or deceive people on a systematic rather than an occasional or ad-hoc basis. I've rarely seen such a clear chase for revocation of a business license.
vinay_ys 10y ago
UberGo is most prevalent option in India. In UberGo you are shown a fixed final price at the time of starting the trip. This is supposedly calculated based on the best route you will take from point A to B. Def. of best is - cheapest cost - by trading between short/long routes vs traffic congestion on those routes that cost time. But once the rider gets into the car and driver starts google maps, it can show a different route due to changing traffic conditions. Or driver can refuse to follow google maps and use his own judgement on which route is better (for him). In either case, Uber should be transparent and show to both rider and driver the difference between what was initially calculated vs what it actually cost based on the actual trip. But uber does not do this. Instead of they also add another arbitrary/opaque surge multiplier. If at all they have to do any fraud, they are better off doing that "fraud" by showing different multiplier for rider vs driver. Consumer protection law agencies should insist Uber should at least be transparent and predictable in how they determine surge multiplier and their distance/time metering is accurate.
partycoder 10y ago
I heard that Uber is more likely to give you surge pricing if you are running out of battery. Might be a rumor.
mark212 10y ago
This is all very interesting, but Uber has pretty robust arbitration and class action waiver clauses in their contracts, both with the users and the drivers. Sadly, this will go to arbitration on an individual basis pretty quickly. I haven't seen Uber lose a motion to compel (except once in S.D.N.Y., but it was quickly reversed on appeal).
lloydatkinson 10y ago
jesus christ hacker news has a fucking erection for anything anti-uber, get over yourselves, they provide a taxi service that actually helps people

343 points by dralley 10y ago

In the thread about Uber retreating from Denmark, people asked why taximeters are sensible regulation. This is the reason. We need a trustable third party that ensures fair transactions. Uber cannot be this because they have their own interests. Regularly checked taximeters can ensure this at least partly.

eric_h 10y ago
Yellow cabs in New York have meters that are supposed to be checked regularly. Never the less, I have taken yellow cabs with unquestionably different rates per actual miles and time driven (e.g. same distance/time, different fares, because one taxi's meter was faster).
- TeMPOraL 10y ago
  I assume there's a procedure that you could use to report a particular taxi car/driver, which would put them in a world of hurt for cheating. That's another reason why it's good to have a trustworthy third party there.
  - eric_h 10y ago
    There is, at least in theory: call 311. However what's to stop the driver from slowing the meter down before he gets inspected? There's no GPS in the meter, as far as I'm aware, so I don't believe there's a way to truly audit the fares the driver has already taken.
    - TeMPOraL 10y ago
      Shouldn't the meters be tamper-resistant though?
      - eric_h 10y ago
        They should, and perhaps that's improved in recent years, but it was definitely a common problem as few as 3-4 years ago (from my experience, I've largely switched away from yellow cabs to Uber/Lyft - mostly because the price and experience are vastly more consistent)
        TeMPOraL 10y ago
        I see. Regardless of what one thinks of Uber, there's no denying that taxis worldwide - not just in the US - totally had it coming.
        deleted 10y ago
        [deleted]
  - mnutt 10y ago
    I have a coworker who reported fraudulent cab driver activity to the TLC. It was an arduous process involving multiple interviews and a hearing, and in the end the driver was fined about $200. Nothing inherently unfair about that process, but it's hardly a world of hurt.

rdiddly 10y ago

One good way to make sure the fare matches the distance would be to install some sort of device that measures mileage. The driver could start the device when the ride starts and turn it off when it's over. It could even calculate and display the fare for both parties! Of course that kind of transparency wouldn't be possible unless all the vehicles had the device. So you'd probably need a licensing system for them. Which in turn could be overseen by a commission made up of industry reps and local government officials to ensure fairness and local control. Wild ideas man, wild ideas.

Dylan16807 10y ago
Ha ha ha. Half the problem is that drivers are being paid based on exactly such a device. And your second paragraph is just a series of non-sequiturs. You're stretching too hard to make the cute analogy. Measuring doesn't imply that all vehicles need it. Nor does that in turn imply the need for a licensing system.
- rdiddly 10y ago
  I was making leaps because everyone sees it coming and it's boring. No need to make it longer. I don't think analogy is the word you're looking for.
  - Dylan16807 10y ago
    I couldn't think of a better one in less than a minute. Do you have word suggestion? It's pretty close to an analogy, as a hypothetical mirror from one part of reality onto another.
    - rdiddly 10y ago
      Hmm no, now that you mention it. The technique probably has a name, but if it does, I don't know it. That's going to bother me now. Basically just describing existing commonplace conditions (the taxi industry) as if it were some crazy new idea, for ironic effect.

mtgentry 10y ago

If they can prove it, this is super shady on Uber's part. Reminds me of Michael Bolton's money making scheme in Office Space.

CydeWeys 10y ago
It also doesn't speak well to Uber's reputation that I have no problems whatsoever believing that this might be happening. Compared to all the other unethical stuff that they've done (such as Greyball), I can totally believe that they'd do this as well. If it's possible for both the rider and driver to see the forecasted route at the time of hailing, it should be pretty simple to throw together evidence to show that different pathfinding is in use.
patrickg_zill 10y ago
I celebrate his entire catalog.
nommm-nommm 10y ago
https://en.wikipedia.org/wiki/Salami_slicing https://en.wikipedia.org/wiki/Salami_slicing
JCzynski 10y ago
Reading what they actually did (or accused of doing, technically), it's not shady at all.

lithos 10y ago

Uber has killed so much goodwill and their reputation so well that no one will be surprised at almost any accusation directed at Uber. I know my first thought was "not surprising", and I imagine others will think the same.

Judgmentality 10y ago
One time when I took an Uber, the driver told me how Uber was defrauding him. He had his friend order an Uber, and he made sure to pick him up, and they compared the prices. The prices, unsurprisingly, were much higher for the passenger than for the driver. The difficulty of course is proving this to be true. And then the question is how much does Uber lose from a settlement? Probably less than they earned from price manipulation. But at this point it seems people might actually think negatively of Uber as a whole, but how long that will stick is hard to say.
- Consultant32452 10y ago
  I don't really understand why Uber would be required to show the same price to both sides unless contractually obligated. When I hire a contractor to renovate my house he doesn't typically show me the invoices to all his subs. He negotiates one price with them and a different price with me.
  - shirleman 10y ago
    If the rate drivers get paid is based off the price paid by riders, yeah, it is illegal what they are doing. If they only say it's a % of it, then you are correct
  - sharemywin 10y ago
    Don't they mention in recruiting material they pay a %.
    - Consultant32452 10y ago
      My understanding, based on other comments here, is that Uber recently changed its pricing model so that riders get a fixed price, but drivers still get a range based on distance and time. Obviously the rider's fixed price needs to have some cushion in it. It's a change, and recruiting material may need to be changed if it wasn't already, but it's hardly a scandal. Also, the % could remain the same if Uber is still paying that % in aggregate.

enknamel 10y ago

This just sounds like Uber quickly charges you for the worst case since if they charge you for the best case and things go wrong, Uber loses. No one can know what route will even be possible given how chaotic traffic and closures can be. Then the driver gets paid by whatever route is actually taken. I don't really see this as an issue at all.

gleenn 10y ago
If it is merely traffic changes, why is the customer not getting a cheaper ride if the route is shorter? If the customer is paying more, why isn't that money going to the driver?
- enknamel 10y ago
  One of the beautiful aspects of Uber over say, taking a taxi, is that you only pay the one price no matter what. You don't have to worry over the route. You don't have to do anything other than get in a car and know you will get where you want to for the price you agreed to. Also, if there is a fare left over, why should it go to the driver? Uber isn't existing to just get rides for drivers and forward all proceeds to them. They are a giant company that needs to be making money off of every ride. A lot more money than they are making now if they are ever going to be cashflow positive.
  - jellicle 10y ago
    Uh, is that true, at all?
    - Dylan16807 10y ago
      So that comment asserts: 1. When using Uber you lock in the price upfront. 2. People like to be certain about prices. 3. Uber is capitalist and likes to keep money. 4. Uber has profitability issues. All of those look true to me. What part do you think isn't true?
      - 10y ago

bdrool 10y ago

Oh, come on. I doubt it's all that sophisticated.

ihsw2 10y ago

The fare discrepancy can extend beyond longer/shorter route calculation -- there is also the issue of surge price disparity between driver and passenger. For example, the user would see 3x surge pricing while the driver would see 2x surge pricing, where the user is charged for 3x but the driver is paid for 2x. This is pure speculation and I have not witnessed this behavior but it's another way things can go wrong in Uber's favor. Uber might be able to defend itself saying that the data provided to the driver and passenger are different because of misconfigured caching and stale data being served to either party, but it's a moot point in case Ars Technica has concrete and verifible claims of methodical and programmatic fraud. Personally I have witnessed being billed for $0 in-app after taking a round trip (effectively zero distance traveled) but the email notification showed the proper billing value, and there may be more instances of this "confusion."

savanaly 10y ago

Are we worried that shady behavior that hurts consumers and riders might become the new equilibrium? I don't see how it could be. Whatever the machinations of Uber to artificially alter prices, no matter how sneaky, at the end of the day they'll lose drivers and riders to competitors if their margins drift too far from the economic cost of being the middle man. A driver don't need to know in what way he or she is being lied to or maniuplated to know that they make less per hour driving for Uber than for [Uber's next best competitor]. Thus, I don't see how there could be an equilibrium where Uber is overcharging and still has a significant portion of the market.

janardanyri 10y ago
The whole point of "network effect" strategy is to render this analysis untrue.
_yosefk 10y ago
Leaving it consumers to worry about fraud is not how you create a functioning market economy. The real equilibrium in places where fraud isn't punished is you rely on the market as little as you can and everyone is poorer as a result. Fraud is illegal for good reasons.

pizzetta 10y ago

I have to think this is not their mode of operation, but if it is, what the hell, Uber? If they actually do something like this as matter of course, goodbye. That's just unacceptable and very dirty.

awqrre 10y ago

They probably will blame this on previous executives...

basseq 10y ago

As an Uber user, I'm unaware of this "upfront" pricing model. I thought the price charged was based on the actual time/distance (which, incidentally, they email me on the receipt). I know I can estimate the trip cost, but I thought that was just an estimate. Am I wrong? What is this "upfront" pricing? And is the reverse true? E.g., can I commit to some committed price then have the driver take some crazy route?

basseq 10y ago
I'm wrong. Huh. https://qz.com/874224/this-year-you-wont-wake-up-to-a-shocking-uber-fare-on-new-years-day/ https://qz.com/874224/this-year-you-wont-wake-up-to-a-shocki... But seeing this, it's neither sophisticated nor malicious. They changed their customer pricing model from time-and-miles to fixed-price. That doesn't defraud anyone. And of course Uber is going to balance their increased risk (i.e., that their estimate is too low) against better profitability and customer experience. Like, duh. Similarly, Uber didn't change their pricing model for drivers. It's still time-and-miles. You can certainly argue that drivers should get "more", but are drivers willing to shoulder the increased risk as well? I could see this story going the other way: Uber Slams Drivers With Increased Risk, Lower Pay with an example of some driver getting paid $10 for some crazy-long trip during a snowstorm.
- hug 10y ago
  I was also very confused about this -- I am a heavy Uber user and was under the impression that I was paying a flagfall plus minutes & kilometers rate. There's a hint about my confusion in what I just said above: I'm from Australia, where drivers are considered contractors by the Australian Tax Office and must know the gross amount charged for the purposes of calculating their GST (a 10% VAT) burden. I suspect that Uber aren't able to bring upfront pricing in here without a considerable fight.

lancewiggs 10y ago

Uber has deliberately fostered a culture that thinks it's acceptable to rip off people and institutions. We should never support companies with behaviour like this.

employee8000 10y ago

No this doesn't happen. Some people may think that Uber charges the rider a different rate than the driver receives but it isn't the case. A driver I had was sure this happened and asked me that on a fairly expensive trip (I think it was around $80). I told him this didn't happen and I gave him my personal phone number and the amount of fare I was charged. I told him to check his daily numbers and if he didn't see this charge then to call me immediately. He never did.

013a 10y ago
It wouldn't be very sophisticated if that's all it took to discover fraud.
michael_storm 10y ago
Well I guess that's settled, then.
KingMob 10y ago
And if he had called you, you would have done... what, for him, exactly? Paid for a lawyer on his behalf? Given him a living wage while he was blackballed by Uber after suing them? Even if he uncovered an error, he probably would have concluded that calling you would have done nothing. Absence of evidence is not evidence of absence.
- employee8000 10y ago
  I work for Uber. I would have tried to figure out wtf was going on because that's not how we do business, as far as I know.

itchyjunk 10y ago

"27. In the overwhelming majority of transportations, the upfront price is the amount that a User is ultimately charged for the transportation services by the driver. 28. When a driver accepts a User’s request for transportation, the User’s final destination is populated into the driver’s application and the driver is provided with navigation instructions directing him or her to the best route to the User’s destination" --------- It seems like User sees a price X for a ride and accepts it. The driver might see a price X-y if conditions have changed. Doesn't that imply User agrees to price X and driver to price X-y ? Uber might be able to adjust the price at the end but can they be sued if both party agrees to it before hand? -------------- "36. Had Plaintiff and the Class known the truth about the Uber Defendants’ deception, they would never have engaged in the transportation or would have demanded that their compensation be based on the higher fare." ------------ I am curious as to how they reached to a conclusion that Uber was intentionally doing this. Did a bunch of drivers co-ordinate experiments with riders to see if there was price differences? Did they just log out and log back into different accounts to see the price differences? I am neutral to Uber so I feel its natural to question if Uber is seen as an easy target to go after since they are already in a legal swamp. IANAL so would love to read what people familiar with law have to say.

arghbleargh 10y ago
This seems like a tricky case because if the users and drivers are being completely rational, it's not clear that Uber's deception should have affected their behavior. Sure, the drivers expected to make X% of fares, but realistically they probably estimated what that would come out to be not from looking at customer fare data (in which case the deception would have materially harmed them) but rather by tracking what they or other drivers were actually getting paid. Still, if the allegations are true, a culture where it is fine to engage in such active deception is not a good sign.
noodle 10y ago
I feel like the question is, if an Uber driver takes longer to arrive due to unforeseen/unforeseeable circumstances, does Uber pay them more than price X? Or is their comp always capped at X? If they pay more than X, then what Uber's doing is fair-ish. IMO. If the driver can never earn more than X, then that is a problem.

elastic_church 10y ago

All it takes is a tiny tiny line in the terms of use that states that the fare differences can be different between client side apps. The user isn't paying the driver, they are paying uber. The driver is paid by uber under a separate agreement. So it honestly doesn't matter.

mrow84 10y ago

Here's an article about this issue from a couple of months ago, for anyone looking for additional information: http://therideshareguy.com/how-to-beat-ubers-upfront-pricing/ http://therideshareguy.com/how-to-beat-ubers-upfront-pricing...

sharemywin 10y ago

If they business model is based on breaking local laws, why would anyone expect them to deal ethically with them?

Zak 10y ago
Uber's side of that story is that the local laws created unjust monopolies with uncompetitive pricing and poor service. For the most part, at least in the US, they weren't wrong. Airbnb is also based on skirting regulations and has not been the subject of the kinds of complaints of misconduct from users, service providers and employees that Uber has. This suggests to be that the problem is specific to Uber rather than being inherent to companies that use new business models that don't fit into existing regulatory frameworks.
- JCzynski 10y ago
  AirBnB has been subject to even more complaints from neighbors and competitors than Uber, though.
  - Zak 10y ago
    If anything, that reinforces my point: a business model based on this type of disruption does not seem to imply bad behavior in other aspects of its operation.
- sharemywin 10y ago
  I'm sure gun runners tell themselves they're just helping innocent people protect themselves. If your basing your company on the idea that it's is above the law then I guess you have to ask where's the line. What laws do you follow and which ones do you ignore. to me it seems like a slippery slope.
  - Zak 10y ago
    There are actually terms in law for drawing such a distinction: malum prohibitum and malum in se. Malum prohibitum means "bad because forbidden". It includes most regulatory law, requirements to have licences to do things, drug prohibition, etc.... Some of these prohibitions are probably necessary to have a society people actually want to live in, but many are more debatable and some actively make society worse. Prohibited conduct varies greatly between jurisdictions. Malum in se means "bad in itself". It concerns directly causing harm to others. While some edge cases vary, almost every legal jurisdiction has general prohibitions on murder, rape, theft, fraud and such. I'm not aware of any significant controversies in which Airbnb has been accused of the latter, nor Lyft. I think most people can tell the difference between skirting regulations that many people honestly believe don't serve the public interest and tolerating sexual harassment or deceiving contractors.

tyre 10y ago

I don't see the scandal. 1) Uber's upfront estimate is based on a naive calculation of getting from A -> B. From a software perspective, that makes sense. The consumer hasn't even committed to riding, so let's just toss out a ballpark figure. 2) If the consumer looks at the figure and says, "Yes, that's reasonable for transportation from A -> B", which they indicate by clicking "Request Ride", then they are agreeing to pay that price for the service. 3) The rider can verbally request a different route once in the Uber. 4) The driver is paid based on minutes and miles, via some formula that they've agreed to. The rider is charged based on an up-front calculation, which they can decide if it is worth it or not. It sounds like the lawsuit is alleging that the rider is being defrauded by being taken on a different route than the one displayed at time of purchase. I think this is silly because, to my knowledge, everyone taking an Uber is paying for the transportation and not any particular route. I.e. being taken on a specific route isn't what the rider is agreeing to pay for. Also, as noted in (3), the rider is always free to change the route. Additionally silly because the rider seems to be alleging that they were defrauded by being taken by a more efficient route. There just doesn't seem to be any "harm" in what's happening here. I can understand the case if the user agreed to go from San Francisco down to San Jose, based on a route straight down the 101 highway, then, once they got in, was driven to San Jose through Los Angeles.

deleted 10y ago
[deleted]
mfringel 10y ago
The problem is that there's an implicit agreement that the amount the passenger is willing to pay is the gross amount the driver receives, of which fees are taken off the top. The arbitrage between the shorter path and the longer path represents an undocumented fee given to Uber for no additional service rendered.
- richardwhiuk 10y ago
  I don't see this as an implicit agreement. I see myself as purchasing a service from Uber, who fulfill that by subcontracting to a driver.

tmh79 10y ago

I think people misunderstand upfront fares. Its like buying an airplane ticket: the airline charges passengers the appropriate price to fill the plane, and it pays pilots a salary. Pilots who fly more profitable routes don't get paid bonuses because their passengers pay more. Same thing with UPS drivers, who get paid a fixed amount to drive packages around. The concept of "up front fares" seems to be widely practiced in logistics companies, and is probably a part of the transition as ride sharing companies become less like taxis and more like UPS/airlines.

maxerickson 10y ago
Pilots who fly better routes do get paid more. Because seniority. http://www.askthepilot.com/questionanswers/seniority/ http://www.askthepilot.com/questionanswers/seniority/ (better may not always equate to most profitable though, it might be other things like schedule)
darod 10y ago
Pilots aren't contractors. Uber drivers are.
discodave 10y ago
Your analogy does not work because UPS drivers and Pilots are either salaried or hourly employees. Their contract is very clear and also covered by employment law. Uber treats drivers as contractors and then makes certain representations about the payment structure. The allegations here are the equivalent of airlines telling pilots that they get paid a percentage of all the fares, then lying about the total fares.

elif 10y ago

So, to both parties, they are under-promising on an unknowable future event. that is better than over-promising? i don't see the issue here.

davidf18 10y ago

There should be an app where different services (Uber/Lyft/Gett/Via/Arro (which is Yellow Cabs) bid on a ride and the lowest bid gets the ride. That would help to fix this problem. In NYC I had noticed that Uber was charging as much as Yellow Cab for some of the trips and I was surprised about their algorithm. Now I understand why.

martinald 10y ago
Google Maps does this in London (at least on Android). Unfortunately, there's no Lyft in the UK and Uber really dominates the market, so it's pretty useless. There's also services like RideGuru.
enahs-sf 10y ago
Everyone loves a good arbitrage opportunity.

mabbo 10y ago

Both driver and passenger think they know the full truth of the matter for the financial transaction they're agreeing to, but they don't. There's implicit dishonesty in that, and when you combine dishonesty with money we call it 'fraud' usually. But let's set aside the question of whether it was legal. Was it moral? Software like this doesn't fall from the sky- management approved it, software teams wrote it, maintain it and system tests probably exist to validate it works... how do those developers feel okay about this? How do they not feel like they're cheating people out of money? When your Mom hears about it, and asks if you were part of it will you spend 20 minutes giving a long-winded answer about how it was actually not a bad thing? That's a bad sign, man. I'm reminded of the scene from 'Clerks' discussing Contractors[0] [0]https://www.youtube.com/watch?v=iQdDRrcAOjA https://www.youtube.com/watch?v=iQdDRrcAOjA

TeMPOraL 10y ago
If we're talking morality, then let's remember that Uber has been very lacking in that area for many years now; they also don't mind, and they're pretty open about them not minding. So from that point of view, nothing new really happened here. It's same old Uber, doing same old shitty and exploitative things to people.

cwyers 10y ago

Ars Technica Uses Sensationalist Headlines And Shallow Understanding Of Subject Matter To Defraud People Into Reading Their Articles

ashish10 10y ago

Hmm.. So in my area where Lyft is always expensive 20-30% more than Uber. I don't know how much these Lyft guys are stealing ?

dullgiulio 10y ago

Updated description for a start-up: "We are like Uber, except for the lawsuits."

JCzynski 10y ago

This seems entirely appropriate and not fraud. For a flat rate, you're charged based on a somewhat longer, non-ideal route, rather than the optimal route which you'll take if everything goes well.

socrates1998 10y ago

The issue is with the agreement with Uber driver's, if Uber is changing the terms of the relationship without letting them know and agree to it, then that's a major violation of the contract and Uber could see a massive labor lawsuit.

Macsenour 10y ago

I'm no lawyer but I understood "fraud" to be misrepresentation. Who is being defrauded? The passenger pays one price, the company pays the driver and takes a bit of that fee. The company is defrauding the driver by not telling him the full fee the passenger is paying? If they word it such as: "A % of the fee and other fees", I don't see fraud. Not a lawyer.. feel free to correct me.

AsyncAwait 10y ago

I have no sympathy for Uber, but it does start to feel like someone is out to get them, the guys just can't seem to catch a break.

jeffdavis 10y ago

If there is a sudden traffic jam and it takes twice as long, then presumably uber must pay the extra money to the driver. So are the drivers asking for some kind of "flat rate or variable, whichever is greater" contract?

DrScump 10y ago
It's not "extra" money, it's contracted compensation. The driver stuck in traffic doesn't have the discretion to say, "screw this crowd, I'm bailing on this trip to pursue surge pricing in the next neighborhood over."
- jeffdavis 10y ago
  It seems the drivers are asking for both sides... If up-front is an underestimate, they want the contracted milage/time rate. If it's an overestimate, they want the up-front pricing. There is no problem with that. Many contracts are drawn up that way. I think it may even offer a great incentive to drivers to make trips faster. But it doesn't strike my outrage nerve that it's not happening now.

comments_db 10y ago

At this rate, soon Uber will be a verb. Unfortunately, associated with all the wrong things. a la "...just don't uber it..."

Digit-Al 10y ago

To me it seems the disconnect here is between the fixed fee on one side (the passenger) and the flexible fee on the other side (the driver). Uber is, sort of, acting as an insurer and underwriting the cost of the journey. The passenger pays a fixed fee for a projection of how much the route will cost and the driver gets paid by how much it actually costs in driving time and distance. If there is some sort of unexpected delay and the journey takes longer then, presumably, the driver will be paid more than the passenger paid so Uber will lose out. As with all insurers Uber charges a higher initial charge to act as a buffer and minimise the chances of losing money on the journey. I can't really see any way of getting round this as long as the passenger pays a fixed price and the driver is paid a flexible fee.

Rainymood 10y ago

We walk a thin line between deception and incentives.

chickenbane 10y ago

A bit off topic, but I was just in New Orleans for a fun trip. I normally use Lyft, but apparently Lyft pickups were not allowed at the airport so I used Uber (my last Uber ride was months ago). After waiting at least 15 minutes in the pickup spot, my driver cancelled. Annoyed, I requested another Uber ride (which went fine). However, I was shocked to learn that Uber had still charged me a cancellation fee for the first ride and continued to argue it was appropriate when I protested. I finally resolved it when I continued to press the issue, but I found the whole scenario incredibly customer-hostile. Along with the litany of gross Uber stories, I will continue to prefer Lyft!

notyourwork 10y ago
I ran into the cancellation loop a few months ago in Oakland. Had 3 drivers confirm, after 10-15 minutes cancel. Ironically, one driver called to tell me she was cancelling for another ride and then literally drove by us.

pnathan 10y ago

If, at the same time, driver and customer are being shown different prices, as the article alleges, then that is a problem. If the price is an estimate, and the estimate is revised based upon actual time and distance, then that is within reason. That said, this problem would be much more tractable if the drivers were employees of Uber. Perhaps that's what should be done? :)

wwalser 10y ago
I've used Uber in NY, CA, and FL in the past 6 months. Every time I've done so I was shown exactly the price that I would pay up front. It's a static price. I pay that amount to go from X to Y, regardless of minutes, miles or extraordinary circumstances. I have no idea what the driver's compensation is based on but it isn't transparently obvious to me that it would be fraudulent for Uber to offer me a static fare that, over the course of the ride, turns out to be different to the value of that ride to the driver. Imagine: When I am offered a fare based on expected traffic that doesn't materialize, the miles+minutes value to the driver is well under what I paid. Other times, when I hit unexpected traffic, I pay Uber less than they pay the driver because of the extra minutes. I'm not saying "this wasn't fraud". I'm saying, "I can imagine a pricing and reward scheme by which it's not." If at some point Uber said to drivers "We take an x% cut of the fare.", then yes, it seems clear that drivers would be defrauded by the scheme. Maybe we'll get to find out :). edit: Other comments have links indicating that my "x% of fare" idea may, in fact, be in Uber's contract with drivers.

Wissmania 10y ago

I am not sure about the legality here, but I will say that I see this arrangement as good for both the driver and the passenger. As a passenger I can know exactly what I'm paying ahead of time, and don't have to worry about my driver intentionally increasing the time/distance of a trip to charge me more. As a driver, you are compensated on a time/distance basis, which means you don't have to worry as much about special requests/traffic/other issues messing with what you earn. Uber is the one accepting the risk here, which the chance that the payout to the driver exceeds the flat rate the passenger paid because of an extra long trip.

incongruity 10y ago
Even if it is read charitably, as you have done, that really damages Uber' claim that it's a effectively just a middleman connecting independent contractors with customers. By doing this, Uber is much more than a mere ride arranging service and, instead, they're actively reducing risk and manipulating both sides – something a mere middleman wouldn't do.
Wissmania 10y ago
Another thing: If Uber really wanted to charge their customers more, they could just raise their rates relative to distance (which would be identical to the user since they only see the final fare and not the components of it). I think they probably just pick a long route to be conservative in the time estimate they give to the user.

throwaway-blue 10y ago

FWIW Lyft's upfront pricing words the exact same way. This is a non-story and just good product management. This feature solves the problem of presenting a surge multiplier to the customer. With a surge multiplier the customer has to guess how much it's going to cost. With this they just see the price and figure out if it is worth it or not. Reducing purchase friction and uncertainty increases demand and is good for drivers. Plus, both Uber and Lyft are assuming risk with upfront pricing. They are guaranteeing a price. Sometimes it will be higher and sometimes it will be lower. The driver is accepting a different payment arrangement based on distance and time. Both companies are classic middlemen and taking advantage of consumer surplus.

anigbrowl 10y ago

If the allegations in this suit are true, fuck Uber forever. They should go out of business, their assets should be stripped from the investors and redistributed to the users, and Kalanick and a bunch of other people should go to jail for fraud. There is no way to overlook the persistent structural problems displayed by this company. Some things could be matters of opinion (like the values of their corporate culture and so on), but there are multiple instances by now of Uber actively choosing to circumvent laws or deceive people on a systematic rather than an occasional or ad-hoc basis. I've rarely seen such a clear chase for revocation of a business license.

vinay_ys 10y ago

UberGo is most prevalent option in India. In UberGo you are shown a fixed final price at the time of starting the trip. This is supposedly calculated based on the best route you will take from point A to B. Def. of best is - cheapest cost - by trading between short/long routes vs traffic congestion on those routes that cost time. But once the rider gets into the car and driver starts google maps, it can show a different route due to changing traffic conditions. Or driver can refuse to follow google maps and use his own judgement on which route is better (for him). In either case, Uber should be transparent and show to both rider and driver the difference between what was initially calculated vs what it actually cost based on the actual trip. But uber does not do this. Instead of they also add another arbitrary/opaque surge multiplier. If at all they have to do any fraud, they are better off doing that "fraud" by showing different multiplier for rider vs driver. Consumer protection law agencies should insist Uber should at least be transparent and predictable in how they determine surge multiplier and their distance/time metering is accurate.

partycoder 10y ago

I heard that Uber is more likely to give you surge pricing if you are running out of battery. Might be a rumor.

mark212 10y ago

This is all very interesting, but Uber has pretty robust arbitration and class action waiver clauses in their contracts, both with the users and the drivers. Sadly, this will go to arbitration on an individual basis pretty quickly. I haven't seen Uber lose a motion to compel (except once in S.D.N.Y., but it was quickly reversed on appeal).

lloydatkinson 10y ago

jesus christ hacker news has a fucking erection for anything anti-uber, get over yourselves, they provide a taxi service that actually helps people