VC Who Blamed the Government for $140 in Tolls During Uber Ride Should Blame Uber Instead

On Monday afternoon, prominent venture capitalist Martin Varsavsky took an Uber from Manhattan to Philadelphia. He then tweeted about it because, as he put it, “different governments charged me $140 in various tolls and taxes.”

The tweet with its clear anti-big-government implications went semi-viral, mostly thanks to folks pointing out he could have avoided paying any tolls and taxes with an Amtrak ticket that runs fast, convenient service between the two cities. Varsavsky defended himself, saying he usually does take the train but had Zoom interviews to do and wanted the privacy of an Uber.

Whether or not Varsavsky could or should have taken the train is a question of its own. What’s more interesting here is the issue of how, exactly, Uber managed to charge Varsavsky $140 in “tolls and taxes.” No person plugging this trip into Google Maps would ever end up paying anything close to that much in tolls.

Uber may not have technically overcharged Varsavsky based on its own guidelines, which state that toll charges can change from the estimated to actual amount and “may be kept by your driver, paid by your driver to Uber or related entities, or passed through (in whole or in part) to a governmental agency or other third parties.” It is absolutely clear, though, that Varsavsky ended up paying almost twice as much as any reasonable round trip between the two cities would cost in tolls for someone not in an Uber. 

In other words, Varsavsky’s beef is not with “governments,” but with Uber.

In a statement, Uber said its system charges riders a $20 surcharge for "potential" tolls a driver "may" incur on the way back. “Fair pricing—for both riders and drivers—is critical to Uber’s success,” Uber spokesperson Freddi Goldstein said. “To ensure drivers are fairly compensated, toll pricing on select Westbound bridge and tunnel crossings includes a $20 surcharge to account for potential tolls the driver may incur on the Eastbound return. The surcharge goes entirely to the driver. We are looking into this trip and, if deemed appropriate, we will reimburse the rider accordingly.” Asked to clarify why it includes a $20 surcharge when the maximum toll is $16, Goldstein said, “The surcharge is meant to reimburse the driver for any tolls and compensate the driver for the trip back when they are ineligible for any trips.”

Varsavsky did not respond to Motherboard’s requests for comment.

First things first: Varsavsky did not pay $140 in "tolls and taxes." The actual total of the charges in the screenshot is $147.32, but that includes a $35 “Out Of Town Surcharge” by Uber that has nothing to do with government tolls and taxes. 

There's also $11.76 for the New York Black Car Fund, a 3 percent surcharge that pays for various driver benefits including workers’ compensation that they don’t get as independent contractors. (We can also deduce from this that the fare was $392. Yikes!) Everyone pays this 3 percent on every Uber, Lyft, or taxi trip. Which leaves us with almost exactly $100 in tolls charged to Varsavsky.

Uber’s FAQ on tolls states that riders will pay not only for the tolls their driver will pay during the trip but also “tolls associated with your driver’s return to the area in which they usually conduct trips.” This seems fair and would explain why Varsavsky was billed for the Holland Tunnel, Goethals Bridge, and Bayonne Bridge Westbound tolls (ie: to Manhattan) when they do not charge a toll going eastbound, as Varsavsky would have been going to Philadelphia. The driver may, in theory, have had to pay those tolls coming back, although as we’ll get to later, this is a completely nonsensical route that no one planning their own trip would ever actually take to enter Manhattan. 

Even so, the numbers don't add up. Varsavsky was charged $20 for each of those crossings, for a total of $60. This is a bit curious as the absolute maximum a car can be charged for those crossings is $16, according to the Port Authority of New York and New Jersey’s website. More likely, the Uber driver would have an E-ZPass—virtually everyone who drives in the tri-state area has an E-ZPass—and pay either $11.75 or $13.75 depending on the time of day, which would reduce the final bill further. If the driver crossed all three bridges on return, it would have cost a maximum of $48 in tolls, not $60. At the E-ZPass rate, it would have been $40 or less.

Tollguru.com says the fastest trip from Manhattan to Philadelphia with an E-ZPass costs around $25, give or take a few bucks. The return trip is about the same. This can vary based on time of day, but a round trip should clock in at $50 in tolls maximum. Add the Black Car Fund’s $11.76 and Varsavsky should have been looking at maybe $60 tops in government-imposed taxes and tolls, about half what Uber actually charged him. 

The bigger issue here is someone not in an Uber would never in a million years go over both toll bridges and through the Holland Tunnel on the return journey, because all three are tolled. The far more sensible route would have been to take I-95 straight north directly to the Holland Tunnel rather than cutting through Staten Island and hitting both bridges. 

The map below shows how Google Maps routes someone from Philadelphia to Manhattan, zoomed in on the Manhattan approach. In black is the route Varsavsky’s Uber took on the way to Philadelphia. As you can see, it unnecessarily hits two tolled bridges that are otherwise easily and conveniently bypassed. Google Maps doesn’t even present it as an option for the return trip.

What could have happened is that during Varsavsky’s journey is that Google Maps or Waze thought it would save some time to cut through Staten Island and chose the faster route because there are no tolls going eastbound. Varsavsky got hit with all three tolls, assuming the driver took the same exact route back to Manhattan. But Google Maps almost never recommends that route precisely because of the unnecessary tolling. Instead, it typically recommends taking I-78 via the Newark Bay Bridge and Holland Tunnel, in which case the driver is tolled for just one crossing. 

Not only that, but this peculiar routing also smacked him with a bunch of completely unnecessary New Jersey Turnpike entrance-and-exit tolls that only added to the bill. In this scenario, Varsavsky ended up paying $40 extra in tolls. Did Uber merely estimate these tolls and pass them on? Given the opacity of Uber's algorithmic decision-making, it's tough to say for certain.

It is more than a bit silly to take a $400 Uber along one of the country’s most convenient rail routes and complain about excessive tolling. It is even sillier to do so without examining the bill to figure out what actually happened. In this case, Varsavsky’s knee-jerk reaction to blame “government” only highlighted how big corporations can make people's lives more difficult while avoiding blame.