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Drivers Are Rising Up Against Uber’s ‘Opaque’ Pay System

May 23, 2024 6:47 AM

Drivers Are Rising Up Against Uber’s ‘Opaque’ Pay System

In London, Uber drivers are protesting a new payment system that they say makes it impossible to understand the algorithms that decide how much they get paid.

Collage of photography of ADCU protest signs reading No to Dynamic Pricing and Uber Obey the Law

Photo-illustration: WIRED Staff; Getty Images

On Wednesday morning, a small group of people huddled over their phones at the foot of the giant glass skyscraper that houses Uber’s London headquarters. They were running an experiment in an attempt to solve one of the greatest mysteries in the platform economy right now: how Uber’s algorithm calculates driver pay.

Beneath flags and banners calling on Uber to “Stop Dynamic Pricing,” one driver ordered a ride, acting as a customer to Heathrow Airport, and received a quote for £46. Seconds later, the job pinged up on the phone of a fellow protester, who had told the app he was ready to drive. His fee? £26.

For years, Uber has taken a commission of 25 percent from London-based drivers. But the company told drivers in January 2023 the app was updating its pricing model, a change it said was necessary to make fares appeal to drivers and offer the lowest pickup time for passengers. Yet the people behind the wheel say those changes have lowered their wages and made how they’re calculated impossible to understand—sparking fears that dynamic pricing is offering drivers across Europe and the US personalized wages, a charge that Uber denies.

“A few years back, the fare was transparent, you used to see how much the passenger was charged,” says Farah Musa, an Uber driver since 2015, who is taking part in the protest and 24-hour strike. Now the information is hidden, and he doesn’t understand how the fare is calculated. “Dynamic pricing is not good for drivers. We are being cheated.”

Uber’s “surge pricing” feature used to kick in only during busy periods, making rides more expensive to incentivize drivers to log in to the app. Now, however, the app uses variable or “dynamic” pricing all the time, says James Farrar, the former Uber driver who won a landmark case against the company in the UK Supreme Court and is now director of nonprofit Worker Info Exchange. “We’ve gone from a completely transparent pay and pricing system to one that’s now completely opaque,” he says. “People literally do not understand how the pay has been set, how the work has been allocated, and how they may have been profiled in that decisionmaking.”

It’s only Uber that knows how the wages are calculated, says Lucky Matthew, at the London protest, who says he now receives £400 ($509) per week less than before the pandemic. “We’re working the same hours as before, the cost of living is going up, but wages are going down.”

Many of the drivers at the protest have been asking their passengers how much they are paying for the ride, and their answers have unleashed a wave of anger toward the company because they claim Uber is taking much more than a 25 percent cut. “It’s a scam,” says Cristina Ioanitescu, who drives an Uber XL and carried a sign reading “Smart Pricing = Smart Cheating.” “It’s a lot of stress for us.” Uber says that although commission fees vary, they can sometimes be as low as 0 percent and drivers can see the fare before accepting a trip.

To understand how the fares are calculated, Uber drivers have not only been scrutinizing the passenger fees—they have also been poring over the company’s financial results. In the company’s February earnings call, a comment by Uber CEO Dara Khosrowshahi prompted concern among union representatives in the US and Europe that the company was personalizing the wages they were offered based on the data collected about drivers in the app.

“What we can do better is actually targeting different trips to different drivers based on their preferences or based on behavioral patterns that they’re showing us,” Khosrowshahi told investors in that call. “That really is the focus going forward.” When WIRED asked Uber about Khosrowshahi’s comments, the company denied it was personalizing prices for drivers based on who will accept the lowest fare.

“Uber reviews real-time information such as traffic and the distance to the rider to provide the best price to appeal to the drivers in the area,” says Caspar Nixon, Uber’s spokesperson. “All pricing is based on aggregate data, not personalized rider or driver data.” Drivers also receive a weekly statement telling them how much their passengers have paid versus the commission Uber has kept from their fares, Nixon adds.

Yet to Zamir Dreni, London vice chair for the App Drivers and Couriers Union, Khosrowshahi’s comments were proof enough. “They are profiling drivers,” he says. It’s not only London where drivers are suspicious of personalized pricing. “This has been a mystery for years now,” says Amrit Sewgobind, the representative for gig workers at the Dutch trade union FNV. Uber driver chat groups are now filled with screenshots as people try to compare journeys of similar distances that resulted in different fares, he says. Last summer, Sewgobind tried to better understand these differences by arranging an experiment in Amsterdam West, where he compared the various fares being offered to a small group of Uber drivers, although he says the results were inconclusive.

Drivers in the Finnish city of Jyväskylä also protested last year against Finnish food delivery platform Wolt, which in 2023 shifted from a base payment to a new pricing model that is calculated according to a variety of factors ranging from consumer and merchant location to weather and the weight of an order. Wolt told WIRED that no courier behavior data is used in that calculation.

“They don’t have a workforce to optimize. They don’t have an asset base to optimize. The only thing they have to optimize is the algorithm,” says Farrar of companies operating in the platform economy. “Dynamic pricing has been introduced as a means to charge customers more on average and to pay drivers less.”

Back at the protest in London, the Uber drivers are determined to be heard by the company in the skyscraper above them. Mohammed Farooq says the erosion he has witnessed in his pay over the past four years was enough to bring him here, to his first protest. “Unless we protest, Uber is not going to give us any rights,” he says.

Morgan Meaker is a senior writer at WIRED, covering Europe and European business from London. She won the top prize at the BSME Awards in 2023 and was part of the team that worked on WIRED’s award-winning investigation series “Inside the Suspicion Machine.” Before she joined WIRED in 2021, her… Read more
Senior Writer

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