Business

Labor Dispute Costs Uber Millions Of Dollars

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Eric Lieberman Managing Editor
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Uber is paying its New York City drivers roughly $900 each for miscalculating their appropriate compensation, the ride sharing company reported Tuesday.

Due to contractual obligations with the drivers, Uber’s share of the individual profits are supposed to be calculated after taxes and other dues are deducted, according to The Wall Street Journal. The company admits it inadvertently failed to account for taxes and supplementary fees when taking out money for its commission, meaning it unfairly took a higher cut.

Uber says it realized the error while generating a comprehensive receipt for its drivers. It is now in the process of refunding the money. With an estimated 50,000 drivers, the recompense could equate to more than $45 million, reports The WSJ.

“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,” said Rachel Holt, regional general manager of Uber in the U.S. and Canada, according to The WSJ. “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.”

Recovering driver trust, though, may be a hard-pressed task.

While just one of many contractors, an Uber driver got in a heated argument with the company’s CEO Travis Kalanick after criticizing his business techniques, specifically undercutting competition by offering cheaper rides. The video was eventually publicized and Kalanick apologized for purportedly treating the driver “disrespectfully,” adding that he needs to “change as a leader and grow up.”

The ride-hailing business in general has been peppered with a number of scandals and mishaps in recent months and years. (RELATED: Uber Showcases Its Diversity Report By Calling Certain Kinds Of Employees ‘Jewbers’)

Uber has been accused of operating three separate invasive spy programs since its inception. One was used to circumvent restrictive regulations. But the two others, respectively, were reportedly created and employed to spy on drivers of its ride-sharing little brother Lyft, as well as ordinary and celebrity patrons.

There are also several allegations of sexual harassment, systemic sexism, rampant lewd behavior, and cutthroat work culture, some of which have led to a number of varying lawsuits.

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