The practice of using dynamic pricing to set pay on gig economy platforms, including Uber, should be banned, according to trade union leaders. They argue that it leaves workers at the mercy of opaque algorithms with no certainty over their earnings.
TUC Report Highlights Human Cost
In a report exposing the human cost of dynamic pricing, the Trades Union Congress (TUC) stated that pay is becoming decoupled from time, skill, or effort. Instead, work has become a speculative practice where rewards are determined by an algorithmic process with little transparency.
Dynamic pricing involves computer-driven algorithms setting variable prices for customers and commission rates for workers to match real-time supply and demand. However, union leaders say this replaces fixed rates or transparent tariffs with opaque, constantly shifting pricing mechanisms, where the data used to determine rewards and decision-making are largely obscured.
Uber's Implementation
Uber, which initially took a fixed 20% cut of UK fares (rising to 25%), introduced dynamic pricing in 2023. This algorithm variably sets pay for drivers and fares for passengers.
Publishing testimonies from almost a dozen workers, the TUC found workers describing themselves as “gambling,” “leaving it to fate,” or “waiting for the jackpot,” because pay felt like the outcome of chance rather than work.
Call for Government Action
The report, compiled alongside the non-profit campaign group Worker Info Exchange (WIE) and academics from Nottingham Trent’s Work Futures Observatory, calls on the UK government to take action to “end” dynamic pay. It also urges ministers to push ahead with reforms to strengthen employment rights and give workers and trade unions the right to access data collected by employers for AI decision-making.
Worker Testimonies
Several Uber drivers in the report said dynamic pricing negatively affects their incomes, family life, and health. They also noted that passenger safety could be compromised because intense competition forces them to drive even when tired. Some said their earnings were equivalent to being paid below the minimum wage.
Vladimir, a London-based driver who has worked for Uber since 2016, said: “It’s too unfair. I want to smash my screen. It feels miserable.” He believes his income has fallen due to dynamic pricing: “Uber went from 100% transparency … to 0% transparency. Everything is ‘flexible’. The fare is flexible. The commission is flexible. What the driver gets is flexible. No one knows.”
Oxford Study Findings
The report follows a University of Oxford study last year showing that many Uber drivers earn “substantially less” per hour since the introduction of dynamic pricing. Published with WIE, the Oxford researchers also found that the algorithmically determined fees coincided with Uber taking a higher share of fares.
Paul Nowak, the TUC general secretary, called for an urgent crackdown on dynamic pricing: “Two drivers doing practically the same job at the same time could be paid wildly different sums determined by an algorithm. And when taking a job, they have seconds to decide whether it will be worth their time with patchy information. That’s plainly unfair. This is a rigged system which overwhelmingly tilts the balance of power to platform company bosses over workers.” He added: “Let’s call this out for what it is: exploitation by the algorithm.”
Legal Challenges
Uber has faced legal demands to stop using AI-driven pay systems in a case orchestrated by WIE, challenging its use of dynamic pay on behalf of drivers in the UK, the Netherlands, and elsewhere in Europe.
Cansu Safak, research lead at WIE, said: “The absence of basic worker rights has allowed dynamic pay to thrive. With no transparency over the conditions they work under, drivers have been forced to turn to data protection law as the only remaining route to assert their rights. And in the absence of meaningful regulatory response, they are once again turning to the courts to seek justice through the collective legal action we have launched.”
Uber's Response
An Uber spokesperson said drivers choose the company for flexibility, good earnings, and benefits. “Uber has always priced trips based on a range of factors, including time, distance and demand, and drivers always see the destination, and how much they will earn from the trip, before they decide whether to accept. All drivers receive a weekly summary of their earnings, showing how much passengers paid and exactly what Uber and the driver received. The vast majority of total fares continue to go where they belong: into drivers’ pockets, and the amount Uber keeps from fares has remained relatively flat.”
The UK government has been approached for comment.
