Uber admits underpaying New York drivers approximately $45 million

Now the ride-sharing company has to pay back drivers thousands of dollars because of an accounting glitch.

Uber drivers protest wage cuts in New York City on Feb. 1, 2016. CREDIT: AP Photo/Seth Wenig
Uber drivers protest wage cuts in New York City on Feb. 1, 2016. CREDIT: AP Photo/Seth Wenig

Uber’s gotta pay — with interest.

The infamous ride-sharing app admitted Tuesday that it had been underpaying its New York drivers since November 2014 due to an accounting error that took out more than the company’s 25 percent commission, the Wall Street Journal first reported.

Uber typically takes its commission after taxes and fees are deducted from a driver’s fare, but the accounting glitch that took it out beforehand resulted in a larger pay deduction for drivers. Uber’s terms of service did not specify that it took commissions out of gross fare earnings.

To make things right, Uber is repaying an average of $900 per driver with interest, which is estimated to cost a total of at least $45 million. One driver is receiving a $7,000 payout, Recode reported.

“We made a mistake and we are committed to making it right by paying every driver every penny they are owed, plus interest, as quickly as possible,” Uber’s regional manager in the U.S. and Canada, Rachel Holt, 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 has had a rough year with multiple public relations disasters spanning a consumer and driver backlash for the company’s tepid response to the Trump administration’s immigration ban and a sprawling sexual harassment scandal. But the company’s issues with drivers over pay have also persisted.

In January, Uber settled a lawsuit that claimed the company misled drivers regarding earning potential and conditions of the company’s auto financing program. Drivers protested against poor pay throughout 2016, demanding higher pay.

Through it all, Uber has fought drivers on granting employee status and benefits, fair pay, and unionization. But despite the influx of lawsuits, it appears that drivers are going to keep fighting the company on issues.

Following news of Uber’s repayment of New York drivers, the Independent Drivers Guild, which represents more than 50,000 app drivers, called for a widespread investigation into the company’s payment practices.

“Drivers have been complaining about this and other shady accounting tactics to no avail,” said IDG’s executive director Ryan Price in a statement. “Drivers are relieved to be paid the money they are owed plus interest and we hope other companies follow suit.”

“We also call for regulators to launch an immediate investigation into ride hail applications fare and payment practices in our city.”