Uber’s $1-per-ride ‘Safe Rides Fee’ Had Nothing To Do With Safety
The company took in an estimated $500 million from this seemingly random surcharge
Uber imposed a $1-per-ride surcharge it called a “Safe Rides Fee” in 2014, but it turns out only recently that the whole fees structure was only a play for profit. The fees collected amounted to around $500 million and was never earmarked specifically for safety and was “devised primarily to add $1 of pure margin to each trip,” according to an excerpt from New York Times reporter Mike Isaac’s new book Super Pumped: The Battle for Uber. Uber also later updated that the fees went up to as high as $2.50 per ride in some places.
During this time, Uber was facing rising costs from insurance companies and background checks for their Drivers, so the company imposed a safety fees to help boost margins. Their actual safety program saw little changes during this time and consisted of little more than a short video course for drivers. It wasn’t until years later after the CEO was replaced that Uber began adding safety features to its app, such as an emergency button to call 911.
Uber said that this fees was being used for all types of expenses related to the safety of users. This included operational costs, marketing, technology upgrades, driver screening and incident response. But according to Isaac’s book, that was all hokum. “We boosted our margins saying our rides were safer,” one former employee told him. “It was obscene.”
When this story came out, riders quickly filed two class action lawsuits in 2016 against Uber and were eventually settled for $28.5 million — which is only ~5% of the estimated amount Uber was able to collect.
As part of the settlement, Uber also agreed to avoid using certain language like “safest ride on the road” and “gold standard in safety.” It also was required to change the name of the surcharge from “safe ride fee” to “booking fee.”
These fees are all coupled under booking fees and are still added to all your Uber rides today. They are of variable charge and depends on factors such as the passenger, destination, supply.
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