For over a year, Uber has been overcharging passengers and underpaying drivers.
Bloomberg News reports the company uses an "upfront pricing" scheme to estimate how much people are willing to pay for rides. The company detailed for the first a pricing system that’s been in testing for months in certain cities. On Friday, Uber acknowledged to drivers the discrepancy between their compensation and what riders pay.
Upfront pricing can cut a driver's pay if they take more efficient routes than ones predicted by Uber's mapping system.
Christian Perea, who drives for Uber, says the company has implemented many price cuts over the years where, quote, "my pay is trimmed to the point where it's terrible."
The difference between rider fares and driver pay could be the future of Uber’s business. The company said it pockets what’s leftover and could parlay this mathematical framework into moving closer to profitability.