New York Drivers are entitled to receive their money back, plus interest, due to a miscalculation of commissions on Uber’s end
Uber service said that it they have been taking their cuts from a figure that included state taxes, rather than a pretax fare. To clear things up, if the client paid $20, and $2 represented taxes, Uber’s commission was takes as a percentage of $20, and not of $18 as it should have been.
“We are committed to paying every driver every penny they are owed — plus interest — as quickly as possible,” Rachel Holt, the company’s regional general manager for the United States and Canada, said
However, the way Uber handles passenger’s payments raised further questions, which might be even more substantial: leave aside the pocket-change difference in commission, but are those $2 in taxes properly coming out of the driver’s pockets?
The contract between Uber and its drivers seems to allow the company to deduct only its 25% commission from their fares, and not the taxes. On the other hand, the lawsuit filed last year in New York mentioned that the company was making its drivers swallow the tax burden.
Further documentation approves this practice, which leads to drivers losing hundreds of millions of dollars.
The executive director, Bhairavi Desai, said that “from the beginning, Uber built its business model on the assumption that ‘we hate taxes,’” and that it had long “passed this tax on to drivers.”
As a response to Uber’s approval of the error, the advocacy group mentioned that “Uber hasn’t just wrongly calculated its commission; it has been unlawfully taking the cost of sales tax and an injured-worker surcharge right out of driver pay.”
Rhode Island and Massachusetts also impose taxes or fees on ride-hailing services; however, it is not clear how Uber collects them.
The New York state tax regulations say that the charges are supposed to be paid by the passengers. This means that they are the ones to be assesses on top of the fares. However, the receipts suggest that Uber deducts the amount from the divers’ portion. This happening was completely denied by the company.
