UberEats could be underpaying delivery drivers on 21% of trips

What matters is the aggregate amount over multiple trips. If you underpay on some trips and overpay on others and it is a net wash, then it doesn't really matter for the couriers if the payment algorithm is on the low side on some trips so long as it is on the high side on other trips.

Under or overpaying on trips is more of an interest to those engineers trying to optimize marketplace efficiency. Meal delivery businesses have as much of an interest in not underpaying as doing so reduces supply availability and therefore reliability and they have also an interest in not overpaying as that reduces profitability. The ultimate goal is optimal pricing in a three sided market to maximize liquidity as the business model does best when you optimize for volume of transactions. Maximizing liquidity amortizes fixed costs over more transactions. This applies as much to the meal delivery companies as to the restaurants involved.

At the end of the day, distance driven is very imperfect as you have issues like poor GPS signal and in cities you have the dilemma of urban canyons and tunnels. Also, drivers don't always take the suggested route. At vehicle speeds, it's hard problem to solve due to time between GPS pings. Another issue besides GPS inaccuracy is clock inaccuracy, especially with round-trip times between server and client and client and server aren't always symmetrical, especially on cellular networks, and this messes up all sorts of clock synchronization strategies. The peanut gallery on HN is seriously underestimating the complexity of measuring distance using GPS. It's pretty darn good when conditions are ideal, but when they aren't, good luck.

Another question is the magnitude of the underpayment in the 21% of trips. Are we talking about 1-2%, 5-10%, some other deviation? If it was something like 1-2%, we should all be amazed. Gage repeatability and reproducibility matters.

not sure why every driver isn't already using another mileage tracker app, at least for occasional trips to keep Uber accountable. theres dozens of those in the app store...

1. I tend to doubt they did it intentionally.

2. I could see a company with various ethical lapses like Uber not prioritizing an unintentional bug for a speedy fix.

3. In the intentional scenario, it'd be a case of https://en.wikipedia.org/wiki/Salami_slicing (popularized by Superman 3 / Office Space). Easier to get away with than a public rate cut, with the downside of bad PR if you get caught.

Lowering the "front page" $/mile rate could make the service immediately less attractive to workers, who can select between multiple services based on the apps on their phone. Lowering mileage paid is much harder for workers to detect, since it requires carefully checking each trip and measuring what's actually paid.

This could also be an "unintentional-intentional" bug, meaning its presence was just an accident -- but that the company has chosen to prioritize its engineering resources addressing issues that improve its revenue, rather than decreasing it.

In a business that is trying to optimize a marketplace, accurate measurability of everything matters as the performance of every marketplace optimization is degraded by having poor gage repeatability and reproducibility in its measurements. It's like trying to play darts when you're nearsighted and have 20/400 vision. This is process engineering 101 stuff.

There's way more money to be made in having accurate measurements than having inaccurate measurements that optimization engineers can't rely on. The more accurate the measurements, the more confidence you have that your marketplace optimization algorithms are producing the desired marketplace dynamics.