On Wednesday morning, a compact group of people huddled on their phones at the foot of the giant glass skyscraper that houses Uber’s London headquarters. They conducted an experiment to try to solve one of the biggest mysteries in the platform economy today: how Uber’s algorithm calculates driver pay.
Under flags and banners calling on Uber to “stop dynamic pricing”, one driver ordered a ride to Heathrow Airport and was quoted £46. Seconds later, the job information was sent to another protester’s phone, who informed the app he was ready to ride. His salary? 26 lbs.
For years, Uber has taken a 25% commission from drivers living in London. However, in January 2023, the company informed drivers that the app was updating its pricing model, which it said was necessary to keep prices attractive to drivers and ensure the shortest pickup times for passengers. But people behind the wheel say these changes have lowered their wages and made the way they are charged impossible to understand, raising concerns that active pricing is offering drivers across Europe and the US personalized wages, which Uber denies.
“A few years ago, the tariff was transparent, you could see how much the passenger paid,” says Farah Musa, an Uber driver since 2015, who has been taking part in the protest and 24-hour strike. Now the information is hidden and he doesn’t understand how the fee is calculated. “Dynamic pricing is not good for drivers. We are being deceived.”
Uber’s “increased pricing” feature only worked during busy periods, making rides more pricey in an attempt to encourage drivers to log in to the app. But now the app uses variable or “dynamic” pricing all the time, says James Farrar, a former Uber driver who won a landmark case against the company in the U.K. Supreme Court and is now director of the nonprofit Worker Info Exchange. “We have gone from a completely transparent wage and pricing system to one that is now completely opaque,” he says. “People literally don’t understand how pay was determined, how work was assigned and how they could be included in the decision-making process.”
Only Uber knows how wages are calculated, says Lucky Matthew at a protest in London, and claims he is now paid £400 ($509) a week less than before the pandemic. “We work the same hours as before, the cost of living is rising, but wages are falling.”
Many drivers at the protest asked passengers how much they were paying for their rides, and their responses sparked a wave of anger towards the company because they claim Uber receives much more than a 25 percent cut. “It’s a scam,” said Cristina Ioanitescu, who drives an Uber XL and was carrying a sign that read, “Smart Pricing = Smart Scam.” “It’s a lot of stress for us.” Uber says that while commissions vary, they can sometimes be as low as 0 percent, and drivers can see the price before accepting a ride.