Uber imposed a $1-per-ride surcharge it called a “Safe Rides Fee” in 2014, but it was a just a play for profit. The money collected by the company from the fee — estimated at around $500 million — 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.
At the time, Uber was facing rising costs from insurance and background checks, so the company came up with the idea of imposing a safety fee to help boost its margins. Meanwhile, its actual safety program consisted of little more than a short video course for drivers. It wasn’t until years later that Uber began adding safety features to its app, such as an emergency button to call 911.
Safe ride fees varied from market to market, but they generally amounted to a buck and some change. In San Francisco, riders were charged $1.35 per trip. Philadelphians paid $1.25, while riders in Los Angeles paid $1.65. Uber said the fee was meant to pay for operational costs associated with safety, such as marketing, driver screening, incident response, and technology upgrades. The company claimed it needed to charge riders a separate fee to prevent it from being affected by surge pricing.
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.” (A spokesperson for Uber did not immediately respond to a request for comment.)
Riders quickly caught on. In 2016, two class action lawsuits were filed against Uber alleging the ride-hail company improperly marketed its safety record to passengers. The suits were eventually settled for $28.5 million — a fraction of the amount that The New York Times estimates Uber was able to rake in.
As part of the settlement, Uber agreed to avoid using certain language when marketing itself, such as “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.” That fee remains on every passenger’s bill today.
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