How to tell when Uber is overcharging you

Uber drivers sit in their cars as they wait for passengers in Sao Paulo, Brazil, February 13, 2017. To match Insight UBER TECH-BRAZIL/ Picture taken…
Uber drivers sit in their cars as they wait for passengers in Sao Paulo, Brazil, February 13, 2017. To match Insight UBER TECH-BRAZIL/ Picture taken…
Image: Reuters/Nacho Doce
We may earn a commission from links on this page.

Late one night in January I took an UberPool home from a bar in Brooklyn. The on-demand car-pooling service Uber launched in 2014 is still a novelty in a city historically dominated by yellow cabs and the other two passengers in my car peppered our driver, Kevin, with questions. They were curious whether he liked working for Uber, and how much he would make for our three-stop journey.

I was the last drop-off that night, and I asked Kevin if I could stick around to compare what he earned with what we had paid. He agreed, so we sat in his car and waited for the trip summary to appear. Once it did, we noticed something odd: Uber had charged me $11.46, but it told Kevin my fare was $10.26, of which he got $7.30. The difference—$1.20, or 10% of what I paid—was unaccounted for.

Uber drivers across the US have reported similar discrepancies. Last September, The Rideshare Guy, a popular blog for drivers, detailed four instances in which Uber paid a driver based on a lower fare than what it charged to the rider. This February, Martin Dulberg, an Uber driver in Raleigh, North Carolina, sued Uber in federal court in California over similar fare disparities. The class-action suit alleges that Uber is contractually obligated to pay drivers based on the fare charged to passengers, not a separate calculation of miles and minutes driven.

“Because Uber overestimates its initial fee, drivers are paid less than they are contractually entitled to,” the complaint states. Paul Maslo, a lawyer representing Dulberg, said Uber’s response is due April 24.

Uber last year debuted “upfront pricing,” a new system in which customers agree to their fare before booking a ride. The model was touted for being more transparent than Uber’s previous fare system, which only let riders view an estimate of their final price. But upfront pricing isn’t always so upfront.

Around the time Uber switched to upfront pricing, several drivers told Quartz they began noticing a delay between when they completed a trip and when the summary of the ride became available. Before that, drivers said these details, which include their earnings after Uber’s commission and other adjustments, used to appear instantly.

“It started around the time they instituted upfront pricing, which just made upfront pricing even more shady in my opinion,” said Harry Campbell, founder of The Rideshare Guy. “I don’t know why there would be a delay other than so that the driver and passenger can’t compare fares.”

Uber said the upfront fares that riders agree to are a “best guess” of what a trip will cost based on time, distance, traffic, and demand, among other factors. Drivers are paid based on the actual length of a trip. Uber said this sometimes results in drivers being paid out of a higher fare than what the passenger is charged upfront. The company declined to provide details on whether these discrepancies net out in Uber’s favor. Ride-hailing is a high-volume, low-margin business, so coming out even a little ahead on these fare variations could have a meaningful impact on Uber’s bottom line.

The delay drivers notice is “due to fact that drivers earn based on the actual time and distance travelled” and the trip needs to finish before Uber can calculate their earnings, Michael Amodeo, an Uber spokesman, said in an emailed statement. It’s unclear why drivers would have noticed an increased delay around the time that upfront pricing rolled out, since Uber has always calculated their earnings once a trip ends. Uber said it didn’t know whether this latency period has gotten longer, but that it’s working to make any delay shorter.

Uber’s magic is in its algorithm, and it’s understandable why the company wouldn’t want customers—or competitors—pulling the curtain too far back on that. But Uber itself has encouraged their interest. Uber produces heartwarming interviews with drivers (#WhyIDrive, a video series, is on YouTube) and economic studies that highlight the benefits of “gig” work. If people are curious what their drivers get paid and how they like working for Uber, the company is at least partly to blame.

A more cynical reading of why Uber doesn’t want riders comparing notes with drivers is that they might discover some inconvenient truths about how the service actually works. Upfront pricing certainly allows riders to make a decision about what the trip is worth to them, but it could put them in the position of paying more than what the service actually costs, as was the case with my January trip. While the company touted the launch of upfront pricing with the promise of “no math and no surprises,” the system serves to make how Uber works even more opaque. The real surprise may be that you’re unwittingly being overcharged.