Uber's driver agreement isn't and has never been, "You get X% of the fare we charge." It's "You get $X for this fare." (Based on some combination of time and distance actuals, which are also transparent, along with any multipliers.)
If I can charge a rider $10 for a ride and get a driver to accept $5, no one's "defrauded". They may not like the spread, but that's easy to solve: riders, don't pay $10, and drivers, don't accept $5 in the first place.
Uber drivers don't get to accept or reject rides based on destination or cost. All they know is the pickup location of the passenger.
You really have to go through a lot of contortions to defend Uber on this one. Remember when Best Buy created an entire shadow web site just to keep people from looking up prices in the store? Maybe not illegal, but not a great business practice.
> Remember when Best Buy created an entire shadow web site just to keep people from looking up prices in the store?
No, because they never did that. The explanations that came out ten years ago made sense, about different regions having different pricing structures and the national price not always matching in-store. One spends different amounts to retail items in different areas of the world. That was a Consumerist/Gizmodo/Connecticut hullabaloo over nothing, which continues to this day at pretty much every retailer I can think of. I can totally understand an in-store kiosk showing in-store prices, and there are more non-nefarious explanations for the entire scenario than nefarious. I say that disliking Best Buy.
Take gasoline, for example. Notice it's cheaper when you cross an arbitrary governmental border? California into Nevada is my favorite. Notice Chipotle, hell, Taco Bell is cheaper (sometimes >20%) in some places than others? It's all the same issue.
I was unclear. When I say $X I don't mean a flat amount per fare. (You are correct in that regard.) I mean an agreed upon payment formula of $y * miles + $z * miles = $X. That formula is not secret. And does not contain $fare as a variable.
Why? spcelzrd talked about how uber drivers don't get too choose on each specific ride, and that's true. But that's besides the point: they are playing something like an iterated prisoners' dilemma with uber; but they are free to take their business elsewhere, if uber 'defects' too much.
v. In exchange for use of the Uber Software, drivers will be charged a service fee on a per transportation basis calculated as a percentage of the determined fare.
This is found under the allegations section of the lawsuit.
Good point! We'd have to dig into the user agreement itself to see what nuances exist there. Based on this complaint alone, I suspect Uber will argue "determined fare" may not mean "fare charged to rider" and that drivers are paid on the actual ("determined") miles and time.
Additionally, I find the allegation that Uber created upfront pricing for "the purposes of creating this discrepancy" to be very difficult to prove. Is this intended to highlight the difference between a breach of contract and "malicious fraud"?
By the way, here's an article from last summer on the same topic, quoting Uber as saying:
“With upfront fares, riders agree to a fare that’s calculated in advance while drivers get paid based on a per-mile, per-minute rate as is normal with uberX,” the spokesman told Fortune. “Because no predictive model is 100% perfect, what riders pay and drivers earn on a trip may differ slightly from time to time.”[1]
However, it is confusing, and Uber's own site makes no mention of upfront pricing and says:
"Drivers using the partner app are charged an Uber Fee as a percentage of each trip fare."
Those two statements are at odds with each other, and both are from official Uber sources.
This isn't a "spread." This is Uber charging the passenger one fare and paying the driver as if the passenger paid a smaller fare, without telling the driver or the rider that it is doing that. It's more like a broker quoting two different spreads to either end of a transaction and skimming off the top.
If the variables are the same to calculate both prices, then it's Uber's cut which is variable.
Doesn't sound like a fraud to me, but let's take for example payment: wasn't Stripe main success driver the simple (and predictable) pricing rule[1]. How long before Lyft or some other company steals drivers from Uber this way?
More than that: they're different vatiables. One is actual, measured time and distance: this is how drivers are paid. The other is estimated time and distance wrapped up in a risk modeling / worst-case analysis: this is how riders are charged.
Estimation vs. measurement. The two converge in an ideal world where risk drops to zero and estimation methodologies are perfect.
If I can charge a rider $10 for a ride and get a driver to accept $5, no one's "defrauded". They may not like the spread, but that's easy to solve: riders, don't pay $10, and drivers, don't accept $5 in the first place.