UBER DRIVERS SEE EARNINGS CUT AMIDST ALGORITHM CHANGES RESEARCH REVEALS

Uber drivers across the UK are earning “substantially less” per hour following the introduction of a “dynamic pricing” algorithm in 2023, which has also coincided with Uber taking a significantly larger share of fares, new research from the University of Oxford has found.

The study, released on 19 June by Oxford academics, analysed data from 258 UK Uber drivers covering 1.5 million trips. It reveals a dramatic shift in Uber’s “take rate,” from an initial fixed 20% (later rising to 25%) to an average of 29%, and in some instances, exceeding 50% of a fare.

The dynamic pricing model, an evolution of Uber’s previous “surge pricing,” was implemented in 2023, variably setting both driver pay and passenger fares. However, the research indicates that while “Uber’s passengers now pay higher prices, but the drivers are not better off.”

The findings suggest that “many aspects of Uber drivers’ jobs have become worse,” with average hourly pay stagnant and declining in real terms since the algorithm’s introduction. The report, published in partnership with Worker Info Exchange (WIE), concluded that “Many drivers are earning substantially less per hour.”

Unions have long criticised Uber’s lack of transparency regarding its algorithmic pricing. The GMB Union, welcoming the new report, expressed concerns that the system primarily benefits Uber, not its drivers. They are seeking greater clarity on fare calculations, including the role of “behavioural insights,” and are calling for negotiations on the proportion of surge pricing drivers receive and a review of “Engaged Time” calculations.

One driver interviewed in the study highlighted the opaque nature of the new system, stating, in the study it was only when passengers volunteered the fares they paid in conversations with drivers that “you discover they [Uber] are robbing us and the customer”.

Despite the research findings, Uber disputes the figures. A spokesperson said: “Uber drivers in the UK took home over £1bn in earnings between January and March of this year, which is up on the year before. Drivers choose to drive with Uber because we offer total flexibility on when they work and provide full transparency over the trips they accept.”

Uber maintains that “Every driver is guaranteed to earn at least the national living wage” and that “All drivers receive a weekly summary of their earnings, which includes a clear breakdown of what Uber and the driver received from trips.”