Uber was slapped with a class-action lawsuit on Wednesday on behalf of more than 96,000 New York City drivers who claim they were underpaid over the course of more than three years, court papers show.
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The suit was filed in federal court in Manhattan by three drivers individually and on behalf of the thousands of former and current Uber drivers who were allegedly underpaid because of taxes that were deducted from their pay from at least the beginning of November 2013 to May 22, 2017, records show. The drivers were represented by attorneys for the New York Taxi Workers Alliance.
Uber did not respond to FOX Business’ request for comment.
“From the time Uber interested the New York City market in 2011, until May 22, 2017, Uber illegally deducted from drivers’ earnings monies which Uber represented were sales taxes and the surcharge for the Black Car Fund (“BCF”) surcharge, which provides Workers’ Compensation for Black Car drivers,” court papers state.
The tax rate was 8.875 percent during the specified time period.
But even Uber’s contract did not allow for the taxes to be deducted from drivers' pay, according to documents.
“Uber’s contracts promised drivers a set percentage of each fare paid by the passenger with only Uber’s commission, or ‘Service Fee’ deducted from each fare.”
The “service fee” accounted for 20 to 28 percent of each fare.
Uber seemingly admitted to the error in a May 2017 email to New York City drivers, which stated: “We’re moving to a simpler rate structure where service fees & taxes will no longer be included in base, time & distance rates … Previously, you needed to deduct Uber’s service fees, sales tax and Black Car Fund from your rates to determine your earnings.”
Just days later, the company paid drivers a total of tens of millions of dollars in funds that were owed to them, according to a New York Times report from the time.
“Such payments by Uber," court papers state, "amounted to only a fraction of the total deductions Uber made in violation of its contracts."