A second major academic study has accused Uber of using opaque computer code to dramatically increase its profits at the expense of drivers and passengers. Research by Columbia Business School in New York concluded that the company implemented “algorithmic price discrimination” that raised fares and cut driver pay on billions of trips.
The Ivy League study, based on tens of thousands of trips and over 2 million trip requests, follows a similar paper from the University of Oxford last week that analysed 1.5 million UK trips. The Oxford study found that many UK drivers were making “substantially less” per hour since Uber introduced a “dynamic pricing” algorithm in 2023, which coincided with the company taking a higher share of fares.
Len Sherman, author of the US report, said: “Uber says ‘we know more about driver and rider behaviour, so we can figure out who is willing to pay more or accept less.’ I’m in awe of what they have been able to accomplish.” His report added that since implementing upfront pricing, Uber increased rider prices, cut driver pay, and improved its cashflow. In 2024, Uber reported generating $6.9bn in cash, up from a loss of $303m in 2022.
The Columbia paper, focusing on 24,532 trips by a single US driver, concluded that Uber’s take rate rose from about 32% at the start of upfront pricing to upwards of 42% by the end of 2024. The Oxford research found that since dynamic pricing launched, Uber’s median take rate per UK driver increased from 25% to 29%, and on some trips exceeded 50%.
An Uber spokesperson said: “Uber’s pricing is designed to be transparent and fair. Upfront pricing gives riders clarity and allows drivers to make informed decisions. Our dynamic pricing algorithms help balance supply and demand. Upfront prices are not personalised – our algorithms do not use information about individual characteristics. Suggestions that our systems manipulate pricing unfairly are false.”
