Uber drivers earn less per hour after app change, research finds

Many Uber drivers are earning "substantially less" an hour since the ride-hailing app introduced a "dynamic pricing" algorithm in 2023 that coincided with the company taking a significantly higher share of fares, research has revealed.

- Simon Goodley

The findings are in a study released yesterday by academics at the University of Oxford. They analysed data provided by 258 UK Uber drivers responsible for 1.5m trips.

Having initially taken a fixed 20% cut of the UK fares charged, which subsequently rose to 25%, Uber introduced dynamic pricing in 2023, an algorithm that variably sets pay for drivers and fares for passengers. It was a later iteration of Uber's "surge pricing" that increased fares during periods of peak demand.

Uber now takes a cut of 29% of a fare, rising to more than 50% in some cases, the researchers found.

Unions criticised the move when it was made in 2023, claiming there was no transparency and that the technology "could push down working conditions by targeting drivers based on their willingness and ability to accept lower fares".

The Oxford researchers said: "Post-dynamic pricing, Uber's passengers now pay higher prices, but the drivers are not better off."