Uber Technologies on Tuesday admitted to underpaying its New York City drivers for the past two-and-a-half years by taking a larger share of the fares than it was entitled to.
The ride-hailing giant said it will make amends for an error and pay back drivers every penny they are owed along with interest, a move that will cost the company tens of millions of dollars.
It marked the second time in three months that Uber has acknowledged it deprived workers of their proper earnings, the Wall Street Journal reports.
Under the terms of its November 2014 driver agreement, Uber was meant to take its commission, generally 25 percent, from US drivers based on fares after any taxes and fees were deducted.
Uber said that, instead, in New York City it calculated a higher cut using the full fare before accounting for sales tax and a local injury-compensation fund fee.
Uber told the Journal that it will refund the money plus interest, which comes to an average of about US$900 per driver.
The move could cost the company a total of at least US$45 million, based on an estimate of 50,000 drivers from the New York-based Independent Drivers Guild.
All New York City drivers, whether still active or not, are eligible for a refund as long as they completed a trip since signing the 2014 agreement.
Uber said it discovered the error while it was creating a more-detailed receipt for its drivers.
“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,” a company executive 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.”
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