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Uber Said To Use 'Sophisticated' Software To Defraud Drivers, Passengers (arstechnica.com)
A class-action lawsuit against Uber alleges that Uber has "devised a 'clever and sophisticated' scheme in which it manipulates navigation data used to determine 'upfront' rider fare prices while secretly short-changing the driver," reports Ars Technica. "When a rider uses Uber's app to hail a ride, the fare the app immediately shows to the passenger is based on a slower and longer route compared to the one displayed to the driver. The software displays a quicker, shorter route for the driver. But the rider pays the higher fee, and the driver's commission is paid from the cheaper, faster route, according to the lawsuit." From the report: This latest lawsuit (PDF) claims that Uber implemented the so-called "upfront" pricing scheme in September and informed drivers that fares are calculated on a per-mile and per-minute charge for the estimated distance and time of a ride. "However, the software that calculates the upfront price that is displayed and charged to the Users calculates the expected distance and time utilizing a route that is often longer in both distance and time to the one displayed in the driver's application," according to the suit. In the end, the rider pays a higher fee because the software calculates a longer route and displays that to the passenger. Yet the driver is paid a lower rate based on a quicker route, according to the suit. Uber keeps "the difference charged to the User and the fare reported to the driver, in addition to the service fee and booking fee disclosed to drivers," according to the suit.
"they are still way cheaper than a taxi despite all the BS"
Hard figures needed. Because, although the rider may pay less, Uber heavily subsidizes rides, and those subsidies must be included as part of the true cost when comparing with taxis.
It's said that Uber subsidizes over half the cost of a ride, so the true cost would be at least double.
So, we should expect the price to the rider to be less than half the cost of a taxi if they're truly cheaper. But, that doesn't appear to be the case. In fact, only when you add a 20% tip for the taxi driver, and only in one city, does that hold true (numbers are old, feel free to dig up more recent ones). In some cases, Uber is more expensive, even without considering the subsidies.
"National Security is the chief cause of national insecurity." - Celine's First Law
Nope, If the route is longer than expected. Say construction detour, uber will recharge the passenger.