- Uber‘s “Safe Rides Fee” that it appended to trips beginning in 2014 was a pure margin play, according to a new book.
- The ride-hailing giant eventually agreed to pay a small settlement over misleading marketing claims, but it was only a small fraction of the estimated $US500 million the fee brought in.
- “Super Pumped: The Battle for Uber,” set to be published in September, chronicles the first decade of the company’s growth and the ouster of its founder Travis Kalanick.
- Visit Business Insider’s homepage for more stories.
In 2014, amid growing concerns about assaults in its cars,Uber announced a $US1 “Safe Rides Fee” to bolster the company’s background checks, safety education, and more.
There was just one problem: that fee didn’t actually go anywhere except straight to the company’s coffers, according to a forthcoming book from New York Times reporter Mike Isaac.
“According to employees who worked on the project, the Safe Rides Fee was devised primarily to add $US1 of pure margin to each trip,” he writes in “Super Pumped: The Battle for Uber,” which is set to publish on September 3. “Over time, court documents show, it brought in nearly half a billion dollars for the company, and after the money was collected, it was never earmarked specifically for improving safety.”
To be fair, Uber’s now-deleted blog post – which Business Insider covered at the time – never said there were any new efforts, potentially hedging the new charge.
“This fee supports the increased costs associated with our continued efforts to ensure the safest platform for Uber riders and drivers,” it said (emphasis ours). “Those include an industry-leading background check process, regular motor vehicle checks, driver safety education, current and future development of safety features in the app, and insurance.”
But it wasn’t enough to escape an eventual $US28.5 million settlement, about 6% of the estimated $US500 million of revenue the fee brought in, while also agreeing to change some marketing language like “safest ride on the road.”
“Unfortunately, however, no means of transportation can ever be 100 per cent safe,” Uber said at the time of the settlement, according to The Verge. “Accidents and incidents will happen. That’s why it’s important to ensure that the language we use to describe safety at Uber is clear, precise and accurate.”
More from ‘Super Pumped’:
- Uber’s lax ID requirements in Brazil led to people playing ‘Uber roulette’ and sticking up drivers – leading to 16 murders
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