Uber’s Costly Accounting Mistake

2017 has been a difficult year for Uber. The ride-hailing service has hit headlines for all the wrong reasons this year, ranging from harassment claims in its workplace to a lawsuit from tech giant Google. The latest announcement from Uber’s HQ office in San Francisco, stated that an accounting error was made back in 2014, resulting in the company taking more than its share of the fares customers paid for rides in New York City.

The accounting error stems from an update to Uber’s terms of service. Uber typically takes a service fee of around 25% per ride, from the total net fare of any trip – the price the passenger paid minus the sales tax and other fees. However, since 2014 Uber has been taking its share from the total gross fare of the ride in New York City, which includes sales tax and workers compensation charges. This seemingly minor error resulted in Uber taking an additional 2.6% from drivers in NYC.

Rachel Holt, Uber’s Regional General Manager, US & Canada stated that “We are working hard to regain driver trust, and that means being transparent, sticking to our word, and making the Uber experience better from end to end.

We are committed to paying every driver every penny they are owed – plus interest – as quickly as possible,” she continued.

Uber says it discovered the error when updating its terms of service for the recent launch of its new route-based pricing strategy. Uber said they have started the process of notifying all of the drivers who have driven in New York City over the last 2.5 years. According to Uber, most drivers will receive about $900 to make up for the company’s mistake.

Sometimes even the most process-oriented organizations can make small errors that can easily be prevented. If you’re interested in helping your team to avoid errors like these, schedule a demo of ART today!