Over the years, Uber prices have increased a lot for their riders but the drivers have been consistently underpaid. Uber drivers argue that the gap between the driver’s compensation and the riders pay has been getting wider and wider.
An Uber driver in North Carolina filed a lawsuit against Uber in February 2017, claiming that he and other drivers working for Uber are consistently underpaid.
During the court proceedings in the federal court in San Francisco, the lawyer representing the Uber driver Martin Dulberg claimed that Dulberg received approximately 73% of the fare when he drove a passenger on 2nd February 2017.
According to the contract, Uber drivers are entitled to 80% of the rider’s fare but this changed recently after Uber introduced its new route based pricing. Now, the drivers receive compensation between 70 to 80% but not full 80%.
Uber’s head of product, Daniel Graf said that the company applies machine learning techniques to understand whether certain groups of customers are willing to pay a higher price for their ride. This new fare system is called route-based pricing. Under this system, Uber prices are calculated based on the rider’s location and time of the day. Uber argued that the extra cash they receive is being spent for the betterment of the company and to pay bonuses to Uber drivers.