Sometimes there's also additional money that goes into Uber's coffers, according to a popular blog about the ridesharing industry. And sometimes, according to Uber, what it charges the rider doesn't cover all costs including the actual cost of paying the driver.
What's going on here? Uber says there are occasionally discrepancies having to do with the company's offer of "upfront fares" in some cities starting in June. The feature states the total fare a rider will pay based on start and end point of their trip, rather than telling drivers the fare after the trip is completed. It's something Uber says it's been doing with UberPOOL for some time.
"Upfront fares are calculated using the expected time and distance of the trip and local traffic, as well as how many riders and nearby drivers are using Uber at that moment. And when fares go up due to increased demand, instead of surge lightning bolts and pop-up screens, riders are given the actual fare before they request their ride," states an Uber blog post about the practice.
What Rideshare Guy head of operations and blogger Christian Perea noticed was that this practice could result in riders paying more than they expect, and not seeing what they pay transfer into the fee paid the driver.
"Over the past few weeks, we have been receiving emails that Uber's 'Upfront' fares have been overcharging passengers without paying drivers the difference. In some instances, passengers are getting charged double the actual time and distance for a normal ride, yet drivers are receiving only about half of the amount the passenger pays while Uber is pocketing the difference," he writes in a post about the occurrence.
An example his post provides: A roughly 10 mile ride in Los Angeles where he calculates Uber pocketed an additional four dollars beyond what the company normally takes from passenger payment.
"Evan requested a ride from an Uber driver who took him 9.91 miles in 23 minutes. Since Evan happened to know the driver, they compared fares at the end of the trip to find that the two amounts were way off. Evan paid $18.08 for this ride (actually $9.09 after his discount code) but his driver only received $9.31 after Uber's 25% commission," writes Perea.
Perea, who has worked as a driver for Uber and Lyft, tells Inc. it seems differences can be amplified to cause larger discrepancies for longer trips.
Uber explains that drivers are paid by ride based on mileage they drive and time it takes them, plus the base fare. What this means, according to a company spokesperson, is that if the driver takes a route that doesn't match the route assumed in the calculation of the upfront fare, what they are paid could differ from the balance of the ride charge left over after Uber's fees to the driver and other expenses like tolls.
This can mean the driver makes less than one might anticipate based on the ride charge, according to Uber. Or, the company says, it could mean Uber has to compensate in its pay to the driver for having calculated a fare that isn't sufficient to cover what the driver is owed.