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Class Action against Uber takes Aim at Alleged Upfront Pricing Scam

Thursday, June 29, 2017

Uber, the ride-sharing company, has revolutionized personal transportation around the world by allowing passengers to hook up with drivers through a smartphone app. The company has also been accused of a number of dodgy business practices, one of them being a manipulation of upfront pricing. The practice has become the subject of Class Action lawsuits, one in California, and another recently filed in New York.

When one summons an Uber ride on a smartphone, the fare is calculated up front using one’s location and intended destination. Thus, everyone knows what the cost of the trip is going to be ahead of time. However, the New York suit alleges that Uber has a system that overcharges the rider, by calculating a less efficient route than the one the driver ultimately uses. For example, the rider might be charged $14 for the ride while the driver would see $12 for the actual route taken. The driver’s portion is calculated on the lower figure while Uberpockets the two dollar difference. The New York suit alleges, based on a study by a website called the Rideshare Guy who suggests that half the Uber riders in New York City are being hit with the inflated fare, resulting in a windfall of $74 million a month in New York alone.

The plaintiff in the suit assumes that Uber is following the same practice in other cities, which would mean that the ridesharing company would be raking in an unearned windfall worth an enormous amount of money. A spokesperson for Uber told the New York Post that she is looking into the matter.

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