Uber Confronted with Legal Demands Over AI Pay Systems
Uber has been served with legal demands to immediately cease using its artificial intelligence-driven pay systems, following allegations that the technology has substantially reduced driver incomes. The non-profit foundation Worker Info Exchange (WIE) dispatched a formal letter before action to the ride-hailing giant on Wednesday, marking the beginning of a significant legal confrontation.
Allegations of Data Protection Breaches
The proposed legal case, expected to be filed in Amsterdam where Uber bases its European operations, alleges the company has breached European data protection law. The foundation claims Uber's controversial algorithm unlawfully varies driver pay rates. James Farrar, director of WIE, stated that Uber has leveraged artificial intelligence and machine learning to implement deeply intrusive and exploitative pay-setting systems that have damaged the livelihoods of thousands of drivers.
This collective action aims to secure a fairer deal for drivers and ensure Uber is held financially accountable for the harm caused by this unlawful use of AI. The case fundamentally concerns securing transparent, fair and safe working conditions for all platform workers.
Oxford University Research Fuels Dispute
The legal moves follow research published by WIE in partnership with Oxford University during the summer, which examined Uber driver pay. The academic paper concluded that many Uber drivers began earning substantially less per hour after the company introduced its dynamic pricing algorithm in 2023.
This system, a later iteration of Uber's surge pricing, variably sets pay for drivers and fares for passengers. The Oxford research found that in the year following dynamic pricing's introduction, average pay per hour on the app remained stagnant and was lower in real terms, with the company taking a significantly higher share of fares.
WIE argues that Uber trained its algorithms using drivers' own historic personal data, observing their working practices. Under the General Data Protection Regulation (GDPR), drivers are entitled to demand that Uber stop using this technology, revert to a previous method of transparent pay-setting with human oversight, and provide compensation for their losses.
Uber's Defence and Escalating Conflict
An Uber spokesperson challenged the study's accuracy, stating it relies on incomplete and selective data. The company emphasised that the researchers themselves admitted their analysis does not enable them to isolate the causal effect of dynamic pricing on pay, making any conclusions about driver earnings misleading.
Uber maintains that drivers choose its platform for the flexibility and transparency it offers, including seeing fare, destination, and earnings before accepting a trip. The spokesperson added that passenger demand and trips continue to grow.
WIE further alleges the legal harm commenced earlier, in 2020, with the introduction of upfront pricing where passengers are quoted a set fare. The foundation has declared that if Uber fails to comply with its demands to cease these practices and compensate affected drivers, it will proceed with collective proceedings before the Amsterdam district court under the Netherlands' collective redress law.
