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Uber to Pay Back Tens of Thousands of Drivers in New York City

Uber owes drivers in New York City "tens of millions" of dollars, Quartz reports. The company's terms-of-service agreement states that it takes its commission—about 25 percent for UberX trips—from drivers' net fare, after sales tax and workers' compensation have been withheld. But due to a system error, that money was actually coming out of gross fare, costing workers extra:

By calculating its commission on the gross fare, Uber ended up taking about 2.6% more from drivers than it would have on the net fare. The company plans to repay those earnings, plus 9% annual interest, to "tens of thousands" of New York drivers, it told Quartz, with an average payment of around $900 each.

The announcement comes as Uber moves to a "route-based" method of setting fares in some cities, which charges different rates depending on what the company thinks a rider would be willing to pay. The way earnings are calculated, though, hasn't changed—drivers are paid based on the miles and minutes they travel. This leads to discrepancies between what customers pay and the money drivers see after a trip.