Uber, the online ride-hailing platform, has again been hit by a class-action lawsuit, foreign media reported. The New York City Taxi Workers Union, which filed the lawsuit on behalf of the plaintiffs, accused it of failing to repay taxes deducted from its income. The coalition is understood to be looking to recover the announcement from more than 96,000 drivers who worked for Uber between 2013 and 2017, when Uber deducted sales tax and so-called “Black Car Fund” surcharges from drivers.
“Uber’s business model depends on the exploitation and theft of funds by low-paid workers who support their families,” Bhairavi Desai, the alliance’s executive director, said in a statement.
The so-called “black car fund” was established under the state’s 1999 law. It is designed to help injured drivers pay for medical and lost work, and charges online car platforms such as Uber/Lyft, as well as traditional taxi platforms, based on fares.
The rate has been 2.5% since 2013. However, the latest revelations by Crain’s New York Business found that the Black Car Fund may have violated state regulations.
In fact, this isn’t the first time Uber has been accused of failing to pay back taxes on drivers’ earnings. Back in 2017, the company admitted that mistakes were made to calculate commissions based on income that included state taxes, not bedtime amounts.
Uber said it would reimburse the lost revenue, but did not disclose the exact amount. This time, however, the Taxi Drivers’ Alliance points out that in addition to charging a service fee, Uber has mistakenly passed on these taxes to them.
The case was specifically launched by a New York-based taxi driver, but Jalopnik noted in an August report that the company received far more from drivers than it had publicly disclosed.
The plaintiffs also questioned Uber’s “pre-pricing” system, which allows companies to charge customers higher than the operating price they notify drivers.
The lawsuit, filed in Manhattan federal court on November 6, has its first impact, and early investors may decide to sell the company’s stock in droves until the end of the year.