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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 compar

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.
- Freestyler_3 10y ago
  Oh no, they are making money off you! /s So often I hear people who really think that companies are milking them, in reality the company is asking a fair price based on wage and company expenses. (of course some companies do really overcharge)
  - Freestyler_3 10y ago
    ps, not directed at you. but more an extent to what you said.
- maxerickson 10y ago
  There's not a lot of details in the story. If the driver's payment is supposed to be based on the fare and Uber is misrepresenting the amount of the fare collected from the passenger, that's a problem.
  - Consultant32452 10y ago
    According to the Uber website, drivers get paid based on time and distance. https://www.uber.com/info/how-much-do-drivers-with-uber-make/ https://www.uber.com/info/how-much-do-drivers-with-uber-make... >Los Angeles - $0.15 per minute and $0.90 per mile >San Francisco - $0.22 per minute and $1.15 per mile >Chicago - $0.20 per minute and $0.90 per mile >Boston - $0.20 per minute and $1.24 per mile
    - maxerickson 10y ago
      The minus the Uber Fee sprinkled all over that page makes it marketing.
      - Consultant32452 10y ago
        Of course it's marketing. The website is obviously not a legally binding contract. The point is that it's not in any way described as being an fixed percentage of what the passenger pays. That's just not the payment mechanism at all. Of course, the devil is in the details, but it would really surprise me if Uber's contract had a completely different compensation model than the website.
        lovich 10y ago
        The company that routinely breaks laws as their business model? It would surprise you if they broke another law?
        Consultant32452 10y ago
        No, it wouldn't surprise me that they broke the law. I'm still going to request some actual evidence though.
- ewjordan 10y ago
  According to the complaint, this was part of the contract: 52. The Uber Defendants and Plaintiff and the other Class Members had a contractual agreement regarding the collection, receipt, and payment to drivers of the fares paid by Users for the driver’s transportation services. 53. The Uber Defendants agreed that they would collect and pay to the Plaintiff the fare by the User, minus a contractual service fee and booking fee. 54. As a result of the misrepresentations and omissions alleged herein, including the Uber Defendants' failure to remit payment to the Plaintiff and other Class members of the full amount of the fare (after deducting the contractual service fee percentage and booking fee), there has been a violation or breach of the agreement between Plaintiff and the Uber Defendants. Accordingly, Plaintiff and the other Class members have been underpaid for their services and did not receive the benefit of their bargain. If the contract with drivers did, in fact, say that Uber would pay out the fare that the user paid minus a standard service and booking fee, then it seems like this is pretty solid, though IANAL. I have no idea if that's what the actual agreement is, though.
  - Consultant32452 10y ago
    I don't know what any contracts say, or may have said in the past, but the Uber website makes it clear that drivers are paid a pretty fixed rate based on time and distance. I'm sure there's some extra details around the high demand times and all that, but there's no mention of getting paid a fixed %. https://www.uber.com/info/how-much-do-drivers-with-uber-make/ https://www.uber.com/info/how-much-do-drivers-with-uber-make...
    - kbenson 10y ago
      Perhaps the contract changed at some point, and Uber decided it didn't need to honor the prior contracts (or was negligent in taking them into account)? Edit: Not to imply the accusations are valid. I'm not trying to make a case that Uber must be guilty, as much as my wording could be read that way depending on how you approach it.
      - Consultant32452 10y ago
- Steko 10y ago
  If they're using a fraudulent route as the basis for the price, that's like your contractor billing you for more manhours than it actually took.
  - Consultant32452 10y ago
    Uber drivers get paid based on time and mileage. What the passenger pays is irrelevant. So the only thing that would matter is if the driver's tachometer and clock don't match up with Uber's.
  - sathackr 10y ago
    When I'm asked to provide a quote for service, I estimate the amount of time it will take me, and send the customer a quote based on this. But I don't tell the customer that they are paying me by the hour -- I say this is what I am charging you for me to do X. If I estimate 40 hours but it takes 37, the customer still pays for 40. If it takes 43 hours, the customer still pays 40. I believe this is how a good portion of contract work works.
    - hypersoar 10y ago
      That doesn't seem to be quite the whole story, though. Suppose I'm a contractor you've hired to remodel your house. I tell you that I can get a plumber to do it for $5,000, of which I'll get some cut, and you agree. Then I go to a plumber and tell them you're willing to pay $4,500 for the job, and they agree. I pocket the extra $500. Have I been honest in this scenario?
      - inverse_pi 10y ago
        No I think you've got it wrong. Drivers are paid by miles and minutes after the trip is done. It's like "I'm a contractor you've hired to remodel your house. I tell you that I can get a plumber to do it for $5,000, of which I'll get some cut, and you agree. Then I go to a plumber and ask them to do the work, of which I'll pay them $50/hour. If the actual work take them more than 100 hours (>$5000). Then I'll pay the difference. If the actual work take less than 100 hours then I pocket the difference." Have I been honest in this scenario?
basseq 10y ago
Uber's driver agreement isn't and has never been, "You get X% of the fare we charge." It's "You get $X for this fare." (Based on some combination of time and distance actuals, which are also transparent, along with any multipliers.) If I can charge a rider $10 for a ride and get a driver to accept $5, no one's "defrauded". They may not like the spread, but that's easy to solve: riders, don't pay $10, and drivers, don't accept $5 in the first place.
- spcelzrd 10y ago
  Uber drivers don't get to accept or reject rides based on destination or cost. All they know is the pickup location of the passenger. You really have to go through a lot of contortions to defend Uber on this one. Remember when Best Buy created an entire shadow web site just to keep people from looking up prices in the store? Maybe not illegal, but not a great business practice.
  - eru 10y ago
    Uber drivers are free to leave. (And yes, I agree that this might not be a good business practice. I like my business practices honest and simple.)
    - s73ver 10y ago
      No. That is a terrible, terrible defense.
      - eru 10y ago
        Why? spcelzrd talked about how uber drivers don't get too choose on each specific ride, and that's true. But that's besides the point: they are playing something like an iterated prisoners' dilemma with uber; but they are free to take their business elsewhere, if uber 'defects' too much.
  - deleted 10y ago
    [deleted]
  - 10y ago

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.
Freestyler_3 10y ago
Oh no, they are making money off you! /s So often I hear people who really think that companies are milking them, in reality the company is asking a fair price based on wage and company expenses. (of course some companies do really overcharge)
- Freestyler_3 10y ago
  ps, not directed at you. but more an extent to what you said.
maxerickson 10y ago
There's not a lot of details in the story. If the driver's payment is supposed to be based on the fare and Uber is misrepresenting the amount of the fare collected from the passenger, that's a problem.
- Consultant32452 10y ago
  According to the Uber website, drivers get paid based on time and distance. https://www.uber.com/info/how-much-do-drivers-with-uber-make/ https://www.uber.com/info/how-much-do-drivers-with-uber-make... >Los Angeles - $0.15 per minute and $0.90 per mile >San Francisco - $0.22 per minute and $1.15 per mile >Chicago - $0.20 per minute and $0.90 per mile >Boston - $0.20 per minute and $1.24 per mile
  - maxerickson 10y ago
    The minus the Uber Fee sprinkled all over that page makes it marketing.
    - Consultant32452 10y ago
      Of course it's marketing. The website is obviously not a legally binding contract. The point is that it's not in any way described as being an fixed percentage of what the passenger pays. That's just not the payment mechanism at all. Of course, the devil is in the details, but it would really surprise me if Uber's contract had a completely different compensation model than the website.
      - lovich 10y ago
        The company that routinely breaks laws as their business model? It would surprise you if they broke another law?
        Consultant32452 10y ago
        No, it wouldn't surprise me that they broke the law. I'm still going to request some actual evidence though.
ewjordan 10y ago
According to the complaint, this was part of the contract: 52. The Uber Defendants and Plaintiff and the other Class Members had a contractual agreement regarding the collection, receipt, and payment to drivers of the fares paid by Users for the driver’s transportation services. 53. The Uber Defendants agreed that they would collect and pay to the Plaintiff the fare by the User, minus a contractual service fee and booking fee. 54. As a result of the misrepresentations and omissions alleged herein, including the Uber Defendants' failure to remit payment to the Plaintiff and other Class members of the full amount of the fare (after deducting the contractual service fee percentage and booking fee), there has been a violation or breach of the agreement between Plaintiff and the Uber Defendants. Accordingly, Plaintiff and the other Class members have been underpaid for their services and did not receive the benefit of their bargain. If the contract with drivers did, in fact, say that Uber would pay out the fare that the user paid minus a standard service and booking fee, then it seems like this is pretty solid, though IANAL. I have no idea if that's what the actual agreement is, though.
- Consultant32452 10y ago
  I don't know what any contracts say, or may have said in the past, but the Uber website makes it clear that drivers are paid a pretty fixed rate based on time and distance. I'm sure there's some extra details around the high demand times and all that, but there's no mention of getting paid a fixed %. https://www.uber.com/info/how-much-do-drivers-with-uber-make/ https://www.uber.com/info/how-much-do-drivers-with-uber-make...
  - kbenson 10y ago
    Perhaps the contract changed at some point, and Uber decided it didn't need to honor the prior contracts (or was negligent in taking them into account)? Edit: Not to imply the accusations are valid. I'm not trying to make a case that Uber must be guilty, as much as my wording could be read that way depending on how you approach it.
    - Consultant32452 10y ago
Steko 10y ago
If they're using a fraudulent route as the basis for the price, that's like your contractor billing you for more manhours than it actually took.
- Consultant32452 10y ago
  Uber drivers get paid based on time and mileage. What the passenger pays is irrelevant. So the only thing that would matter is if the driver's tachometer and clock don't match up with Uber's.
- sathackr 10y ago
  When I'm asked to provide a quote for service, I estimate the amount of time it will take me, and send the customer a quote based on this. But I don't tell the customer that they are paying me by the hour -- I say this is what I am charging you for me to do X. If I estimate 40 hours but it takes 37, the customer still pays for 40. If it takes 43 hours, the customer still pays 40. I believe this is how a good portion of contract work works.
  - hypersoar 10y ago
    That doesn't seem to be quite the whole story, though. Suppose I'm a contractor you've hired to remodel your house. I tell you that I can get a plumber to do it for $5,000, of which I'll get some cut, and you agree. Then I go to a plumber and tell them you're willing to pay $4,500 for the job, and they agree. I pocket the extra $500. Have I been honest in this scenario?
    - inverse_pi 10y ago
      No I think you've got it wrong. Drivers are paid by miles and minutes after the trip is done. It's like "I'm a contractor you've hired to remodel your house. I tell you that I can get a plumber to do it for $5,000, of which I'll get some cut, and you agree. Then I go to a plumber and ask them to do the work, of which I'll pay them $50/hour. If the actual work take them more than 100 hours (>$5000). Then I'll pay the difference. If the actual work take less than 100 hours then I pocket the difference." Have I been honest in this scenario?

basseq 10y ago

Uber's driver agreement isn't and has never been, "You get X% of the fare we charge." It's "You get $X for this fare." (Based on some combination of time and distance actuals, which are also transparent, along with any multipliers.) If I can charge a rider $10 for a ride and get a driver to accept $5, no one's "defrauded". They may not like the spread, but that's easy to solve: riders, don't pay $10, and drivers, don't accept $5 in the first place.

spcelzrd 10y ago
Uber drivers don't get to accept or reject rides based on destination or cost. All they know is the pickup location of the passenger. You really have to go through a lot of contortions to defend Uber on this one. Remember when Best Buy created an entire shadow web site just to keep people from looking up prices in the store? Maybe not illegal, but not a great business practice.
- eru 10y ago
  Uber drivers are free to leave. (And yes, I agree that this might not be a good business practice. I like my business practices honest and simple.)
  - s73ver 10y ago
    No. That is a terrible, terrible defense.
    - eru 10y ago
      Why? spcelzrd talked about how uber drivers don't get too choose on each specific ride, and that's true. But that's besides the point: they are playing something like an iterated prisoners' dilemma with uber; but they are free to take their business elsewhere, if uber 'defects' too much.
- deleted 10y ago
  [deleted]
- 10y ago