On Wednesday morning, a small group of people sat hunched over their phones at the foot of the gigantic glass skyscraper that stands there Uber's head office in London. They conducted an experiment in an attempt to solve one of the biggest mysteries in the platform economy right now: how Uber's algorithm calculates driver pay.
Under flags and banners calling on Uber to “Stop Dynamic Pricing”, a driver ordered a ride, acting as a customer to Heathrow Airport, and received a quote for £46. Seconds later, the job pinged on a colleague's phone demonstrator, who had told the app he was ready to drive. His fee? £26.
For years, Uber charged a 25 percent commission from London-based drivers. But the company told drivers in January 2023 that the app was updating its pricing model, a change the company said was necessary to make rates attractive to drivers and provide the lowest pickup time for passengers. Yet those behind the wheel say these changes have reduced their wages and made the way they are calculated impossible to understand. This has led to fears that dynamic pricing is offering drivers across Europe and the US personalized wages, a charge Uber denies.
“A few years ago the fare was transparent, you could see how much the passenger had to pay,” says Farah Musa, an Uber driver since 2015, who is participating in the protest and the 24-hour strike. Now that information is hidden and he doesn't understand how the rate is calculated. “Dynamic pricing is not good for drivers. We are being deceived.”
Uber's 'surge pricing' feature only kicked in during busy periods, making rides more expensive to incentivize drivers to log into the app. Now, however, the app uses constantly variable or “dynamic” pricing, says James Farrar, the former Uber driver who won a groundbreaking case against the company in the UK High Court and is now director of the non-profit Worker Info Exchange. “We have gone from a completely transparent wage and price system to one that is now completely opaque,” he says. “People literally don't understand how pay is determined, how work is assigned and how they may be profiled in that decision-making.”
Only Uber knows how wages are calculated, says Lucky Matthew at protest in London, who says he now receives £400 less per week than before the pandemic. “We are working the same hours as before, the cost of living is going up, but wages are going down.”
Many of the drivers at this protest have asked their passengers how much they pay for the ride and their answers have unleashed a wave of anger towards the company, as they claim that Uber is taking much more than a 25 percent cut. “It's a scam,” said Cristina Ioanitescu, who drives an Uber XL and carries a sign that reads “smart pricing = smart cheating.” “It causes us a lot of stress.” Uber says that while commission fees vary, they can sometimes be as low as 0 percent and drivers can see the rate before accepting a ride.