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Uber Sued for Allegedly Overcharging Riders
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Summary: A lawsuit filed in New York claims that Uber’s “upfront” feature overcharges riders. 

Imagine taking an Uber and chatting up the driver, quickly discovering that he has two kids at home and is driving to supplement his family’s income. You’re having a good time, and then wham. You’re at your destination before you know it. Then imagine reaching the end of the ride and discovering that your bill is $55 but he’s being told the fare was $40. What would you think of Uber then?


A new class action lawsuit filed in Brooklyn federal court claims that the mega-rich ride-sharing company is actually guilty of overcharging its riders, and according to Fast Company, the lawsuit said that Uber’s actions qualify as unjust enrichment under New York law.

This lawsuit rides on the back of a settlement from this week in which Uber paid tens of millions of dollars back to drivers whom they admitted to underpaying, like in the hypothetical scenario listed above.

In the lawsuit filed this week, Uber customers said that the company is charging UberX riders based on inefficient routes that are different than the routes the drivers’ pay is based upon. This results in riders paying higher fares. According to the lawsuit, Uber collects an extra $7.43 million per month because of this pricing discrepancy.

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The complaint said that they are focusing on Uber’s “upfront” pricing model, which gives drivers a guaranteed rate based on distance and time and gives riders a fixed price before they book their ride.

“Contrary to Uber’s representations concerning the ‘cost of the ride’ and the “actual fare” charged to Uber X riders via the Upfront Pricing model, Uber has charged Uber X riders a fare that is $1.98 higher on average than the ‘actual fare’, i.e., the fare incurred by the Uber X drivers for the ride,” the lawsuit said.

In a report published in Bloomberg, an Uber spokesperson said that the company uses artificial intelligence to determine prices, but the lawsuit said that Uber has programmed its app to use long routes in order to raise up fares.

“Upon information and belief, Uber has intentionally designed the software that calculates the Upfront Price to use a longer, less efficient route than the route which Uber uses to populate the driver’s Uber App, which charges the rider a higher fare and pays the driver a lower fare, when the two should be the same fare as set forth in the Technology Services Agreement,” the lawsuit said.

This week’s class action was filed by lead plaintiff Jacqueline Gayed, and so far one hundred passengers have joined. According to Fast Company, Gayed is married to an Uber driver and that is how she was able to compare rider and driver payments.

According to NBC News, this lawsuit is similar to one filed in California in April.

A representative from Uber told NBC News that they could not comment on pending litigation.

What do you think of Uber? Let us know in the comments below.




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