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.

Comments

Uber at it again?

[LynnwoodRooster]

Kudos Uber, maybe you've finally figured out a path to turning a profit...

Re:Uber at it again?

[Tablizer]

If you lie, steal, cheat, manipulate; and STILL cannot turn a profit, then you truly suck at business.

More proof that drivers are employees

[whoever57]

If this claim is true, the claim that Uber merely facilitates the agreement between the driver and passenger and takes a commission is clearly bogus.

Also, if Uber specifies the route and demands that the driver takes that specific route, that may be exerting too much control of the drivers for them to be contractors.

Regulation

[Anonymous Coward]

Why is Uber's woes a surprise to anyone? We learned these lessons as a society when taxis were new.

Uber shows up, avoids regulation, offers cheap fares, accuses the existing infrastructure off being too bloated, and makes a bunch of money. Then it's noticed they are doing the same thing that taxis used to do before formal regulation.

Things like: overworking drivers, fudging rates, opaque accounting practices, etc.

I have to snicker when those in their 20's seem to think Uber is revolutionary and doesn't need to be "old skool" regulated, then quickly complain when things don't work out by saying, "they shouldn't be allowed to do that."

Re:Regulation

[PraiseBob]

Uber's Investors are losing a bunch of money. Uber's executives are making a bunch of money. Uber's "contractors" are in massive amounts of debt to the company.

Re:Regulation

[msauve]

"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.

Re:Regulation

[Anonymous Coward]

The crazy thing is, they are still way cheaper than a taxi despite all the BS...

I too can provide cheap service by not complying with laws, overworking and underpaying employees, being under- or uninsured, and burning venture capital. Just remember to give me my bonus, and watch me undercut competition.

Re:Regulation

[Gojira Shipi-Taro]

As a rider, I don't give a fuck WHY it's cheaper for me. Cab companies here flat suck. I suffered permanent injury because of one stranding me, forcing me to walk several miles in bad conditions before Uber.

In general it's less than half what the cab companies charge here (south florida). Not counting tips.

Re:Regulation

[gsslay]

But you don't understand! They have an app! People can call them up and track them on their phone! On their phone!

Any similarity with the old style industry is extremely tenuous, and only similar in that they also put people in the back of a car, drive them some place, then charge them. This is an entirely new industry, Industry v2.0 if you will. All the old rules don't apply and can be ignored because all those old fart legislators don't understand these new things that the youngsters have invented.

Who carries the risk?

[sstrick]

It sounds like Uber charges an up front fixed price fee with a risk margin built in. If the driver takes less time then Uber keeps this margin, however if the driver takes longer is Uber out of pocket? If so this is pretty much like all fixed price work.

Uber could make or lose money on each job.

And here's the issue with excessive regulation.

[green1]

Taxis have all sorts of regulations, most of them are for the good of society, such things as:
- maximum prices
- accountable billing practices
- enhanced driver licensing requirements
- vehicle inspections
- hours of service regulations
- insurance requirements

But then governments went overboard and also added regulations that do not help society at all such as:
- minimum prices
- limits to the number of taxis

The end result is that while most people applaud the items in the first list, the abhor the regulations in the second list. That list is why society as a whole is screaming for "ride-sharing" services to come in to their cities. That's why everyone is willing to pretend that these aren't taxi services, it's to try to get around the ridiculousness of those excessive regulations that are hated by all but the taxi industry themselves.

Problem is, you end up "throwing out the baby with the bathwater". If governments had stuck to regulating the safety and price gouging aspects of taxis, without artificially constraining supply or forcing artificially high prices, there'd be no demand for "ride sharing" services.

Any smart government would start over, and regulate anyone carrying passengers for hire the same, without limiting who can do it, or setting a minimum price. You'd get as free a market as possible, while still ensuring everyone plays fair and safe. Uber would hate you, but they'd have a really tough time getting the public on their side if the local taxi industry was already competitive (which they'd have to be if there were no limit on the number of taxi licenses).

Re:And here's the issue with excessive regulation.

[Serge_Tomiko]

Price floors are always a good thing, and are the hallmark of civilized society.

The limit to the number of taxis is also, generally, a good thing.

taxi regulation began in the world because everyone with a car started to pick up fares during the Great Depression. It really was total chaos, especially in Manhattan where all this regulation began.

sophisticated software

[vtcodger]

"Uber Said To Use 'Sophisticated' Software To Defraud Drivers, Passengers"

Really now. You wouldn't expect a high tech company like Uber to use unsophisticated software to rip off its customers and employees ... ehrr .. independent contractors?

I am running out of excuses

[jediborg]

I am running out of excuses for Uber's behavior. As a Libertarian i love their disruptive technology. I cheered them on when they took on over-regulated cities that basically monopolized (in my view) taxi cab services. I cheered on them using the free market to drive down prices. I truly did (and still mosty do) think the uber/lyft business model increases freedom for all, allowing anyone to obtain extra income without having to interview, sign a bunch of paperwork, and punch a 9-5 clock everyday and do exactly as ordered by a manager.

That said, if you are going to tackle regulators and try to bring free-market reforms, a certain percentage of the population is going to perceive that as immoral. In order to stand up against the fierce winds of authoritarianism you better darn make sure your service is as safe and convenient as possible and make sure your business is run in such a way that it stands up against the fiercest of ethical scrutiny.

When you have cars that are killing people, contractors being accused of sexual assault, MANAGERS being accused of sexism/racism in the workplace, and a CEO with a cringe-worthy temper AND evidence that your pricing models are not as transparent and honest as you led people to believe, you are just further reinforcing socialist's/communist's opinions that all companies are greedy, immoral, and care about nothing more than the bottom line. Instead of being a force for good and promoting libertarian ideals, you are just contributing to the decline of freedom and encouraging an excessive bureaucratic government to continue regulating our rights away

Re:I am running out of excuses

[Zaelath]

Libertarians seek to maximize political freedom and autonomy, emphasizing freedom of choice, voluntary association, individual judgment, and self-ownership. So sayeth Google, so sayeth we all.

You can use your individual judgement and freedom of choice to voluntarily associate yourself with a pack of vicious scumbags, or not.

Mind you, the idea what people will generally act decently given that freedom of choice is just SO ADORABLE.

Libertarians are so cute, yes they are, yes they are!

Re:Who carries the risk?

[Tihstae]

Nope, If the route is longer than expected. Say construction detour, uber will recharge the passenger.

Re:Uber cares nothing about drivers

[frovingslosh]

No, they are actually defrauding both the customer and the driver. It's the Uber way. Verizon is jealous.

Re:Someone MUST go to jail...

[Swave An deBwoner]

Manager: Programmer#1, I need you to create a function named Charge_Customer() to calculate the most scenic and pleasant route for our beloved customers.
Programmer#1: OK boss.

Manager: Programmer#2, I need you to create a function named Pay_Driver() to calculate the shortest and fastest route possible for our beloved drivers.
Programmer#2: OK boss.

Manager: Programmer#3, I need you to write a program Win_Win that calls Charge_Customer() and Pay_Driver().
Programmer#3: OK boss.

Re:Who carries the risk?

[bluegutang]

That's arguably even worse. It means that drivers are being paid per mile/minute of driving they do, while passengers are paid per trip they get. In other words, for entirely different things. That indicates Uber is NOT facilitating contracts between riders and drivers, but rather, they are providing rides while paying the driver a salary. No different from your local city bus. Once all those drivers are classified as employees, it's immediately obvious that Uber is violating a million employer laws.