Since last summer, Uber has sought to improve transparency by implementing "upfront pricing." Under the premise, a rider is informed of a ride's price range before entering a vehicle, based on traffic estimates, time and mileage. Ostensibly, it's a winning scheme that encourages more trust in the ride-share company, which has been besieged with a series of crises this year. In reality, as a new class-action lawsuit filed in a Manhattan federal court alleges, there's a discrepancy between what riders are being charged and how it's calculating driver pay, and it all comes back to the upfront pricing model.
Under the system, Uber X customers are charged based on routes that are less-efficient than the ones it's using to calculate what drivers are paid. As the suit alleges, the outcome of this paradigm is higher fares and the company is pocketing any leftover surplus on the fare directly from its customers, allowing it to amass an extra $7.43 million per month.
Fast Company obtained the suit, which states: