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​Uber confesses to underpaying NYC drivers, promises refund

Because of an accounting error, the ride-hailing company says it'll pay back tens of millions of dollars to drivers.

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Uber says it'll pay back its New York City drivers an average of $900 per person.

Uber

Uber is backpedaling over an accounting error that led to tens of thousands of New York City drivers not getting their full pay for two and a half years.

Now the ride-hailing company is saying it'll pay all of those drivers back at an average of $900 per driver -- that means it'll be shelling out tens of millions of dollars.

"We are committed to paying every driver every penny they are owed -- plus interest -- as quickly as possible," Rachel Holt, Uber's regional general manager for the US and Canada, 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 is one of the biggest ride-hailing services in the world, with operations in more than 450 cities in over 70 countries. More than 1 million people drive for Uber, but the relationship between the company and its drivers isn't always smooth. Uber drivers have staged protests, filed lawsuits and voiced concerns that their pay is too low.

This latest wrinkle between the company and its drivers isn't going over too well. The Independent Drivers Guild, which advocates for 50,000 drivers in New York City, says shortchanging drivers is a common occurrence for Uber and other ride-hailing apps.

"Uber's theft of drivers' hard-earned wages is the latest in a long history of underhanded tactics in this industry," said Independent Drivers Guild founder Jim Conigliaro Jr. "This is exactly why we have been calling for industry-wide pay protections to stop the exploitation of New York's drivers once and for all."

Uber reportedly discovered the accounting error when it created a new receipt template for New York City drivers, according to The Wall Street Journal, which first reported this story.

The accounting error occurred because Uber was taking its usual 25 percent commission from drivers' gross fares, instead of deducting it after taxes and fees. This went against a driver agreement Uber instituted in 2014, in which the company said it'd take its cut after the taxes and fees were subtracted. Going forward, Uber will now deduct its commission after those other fees are accounted for.

Uber says it sent out notices to everyone who has driven for Uber since its driver agreement went into affect in 2014. Those drivers who've worked for Uber in the past 90 days will get the full amount they're owed deposited into their account within the next week. Those drivers who haven't driven in the last 90 days will be asked to confirm their bank accounts and then will get the deposit.

The Independent Drivers Guild says that other ride-hailing services, like Lyft and Gett, also charge commission on gross fares. Lyft confirmed it does take its cut from gross fares because that's what it says in its driver agreement.

"In New York, we deduct commissions and administrative fees from gross fares, as per our driver agreement," a Lyft spokesman said. "We also pay sales tax on gross fares as required by law."

Gett didn't immediately respond to requests for comment.

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