Yeah it isn't a problem for the rider, the driver is the one getting defrauded.

Suppose I'm a farmer and I've authorized you as a reseller of my beef, and you're making 5% commission on whatever you sell, and I give you some price flexibility.

If you sell my beef for $10 a pound, then report to me you sold it for $8 a pound, and pocket that $2 in addition to your 5% commission, you've stolen from me.

(having been an uber/lyft driver) I would say this is exactly wrong. The person being "cheated" is the rider - because if the rider is not knowledgeable enough to know that the ride could be less if they went with the "not-estimated" rate, then they could have not paid upfront instead letting the ride roll.

The driver gets paid for miles and minutes. Moreover, if say something unexpected happens, say traffic, Uber will eat the difference.

I mean if uber loses the lawsuit, they are simply going to change the T&C with the driver so that all rides are preset, and the driver will be paid the estimated rates, and drivers will get screwed when there's lots of traffic.

With the estimated rate, the product sold to the customer is the trip, not the time/mileage. As the driver is a contractor and not an employee of uber, they are an intermediary in the transaction. They are reselling the trip for me for a significant cut. If they sell it for more and don't give me my fair cut, that's theft.

In any case, technically everyone is getting screwed and they likely end up sharing whatever the markup is. (Driver loses wages, user pays more).

it's not theft. The driver contract says you get paid back for the time and mileage that you incur, NOT "whatever the customer gets paid". Besides, if the trip goes over the amount that the customer pays (beacause, say, for traffic, or an unmarked road closure) then uber pays out the full amount to the driver for the actual time/mileage incurred.

let's say that Uber posted really unreasonably fast times for the given route instead. Would you then argue that uber could systematically pay the drivers a lower rate, because that's the fare they pitched to the passenger?

Well, it depends entirely on the contract between the farmer and the reseller. If the contract states you get the retail price minus 5% and I lie to you about the retail price, certainly this is fraud. But if the contract states you get $X/pound, and that's exactly what I pay you, the retail price never enters into it.

If later on the farmer complains that they were paid according to the contract terms, but their meat is retailing for a higher markup than they expected because of its enticing packaging, I don't see how the farmer is entitled to any relief on that.

The impression I get from the comments here isn't that people are upset that customers could have gotten a slightly better deal. The bigger issue seems to be that Uber is keeping a greater percentage of the money then they would otherwise have been entitled to.

It's the drivers who are being defrauded.

Uber tells passenger the ride will cost $5.00 Uber tells driver the ride will cost $4.00 (from which Uber takes a cut) Uber pockets the entire $1 difference.

I think you're misinformed. Uber tells the rider the ride will cost $5. Uber doesn't tell the drivers how much the ride will cost until the trip is finished. Then the fare is calculated based on miles and minutes. If the fare ended up > $5 then Uber will pay for the difference. If the fare ended up < $5 then Uber will take the difference. Seems reasonable to me.

How often would you think Uber undershoots the estimate?

Probably not that often - but it doesn't sound like its risk less for them

well they're losing billion of dollars every quarter so I'd say pretty often.

I meant: how often do they lose the spread?

On the other hand, if the ride ends up paying the driver $6 because the driver has to change routes because of construction/traffic/etc, I believe Uber eats the $1 difference

I didn't gather that from the article; if you are right then it will be apparent in the court case.

Because the driver is not paid based on that rate. That is fraud.