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Uber Said To Use 'Sophisticated' Software To Defraud Drivers, Passengers (arstechnica.com)

Posted by BeauHD on from the methodical-scheme dept.

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.

5 of 168 comments (clear)

  1. Regulation by Anonymous Coward · · Score: 5, Insightful

    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."

    1. Re:Regulation by msauve · · Score: 5, Informative

      "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
    2. Re:Regulation by Anonymous Coward · · Score: 5, Insightful

      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.

  2. I am running out of excuses by jediborg · · Score: 5, Interesting

    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

  3. Re:Someone MUST go to jail... by Swave+An+deBwoner · · Score: 5, Insightful

    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.