Uber has been issued a legal demand to halt its use of artificial intelligence-driven pay systems, which are alleged to have significantly reduced driver incomes. The letter before action, sent by the non-profit Worker Info Exchange (WIE) on Wednesday, claims the ride-hailing app has breached European data protection law by varying driver pay rates through its algorithm.
James Farrar, director of WIE, stated: “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.” He added that the collective action aims to secure transparent, fair and safe working conditions for platform workers.
The proposed case is expected to be filed in Amsterdam, where Uber is based in Europe. It follows research published by WIE in partnership with Oxford University, which found that many Uber drivers were earning “substantially less” per hour since the introduction of a “dynamic pricing” algorithm in 2023. The algorithm variably sets pay for drivers and fares for passengers, replacing the earlier “surge pricing” model.
The Oxford University research stated: “Our findings suggest that post-dynamic pricing, many aspects of Uber drivers’ jobs have gotten worse. Average pay per hour on the app is stagnant, and is lower in real terms in the year following the introduction of dynamic pricing.” WIE argues that Uber trained its algorithms using drivers’ historic personal data, violating GDPR regulations.
An Uber spokesperson defended the company, saying: “Drivers choose Uber because we offer flexibility over where and when they work, and transparency over every trip they take.” They dismissed the WIE study as inaccurate and reliant on incomplete data, noting that the researchers themselves admitted their analysis could not isolate the causal effect of dynamic pricing on pay.
WIE alleges that the “legal harm” commenced in 2020 with “upfront pricing”, where passengers are quoted a set fare. If Uber fails to comply with demands to cease these practices and compensate drivers, WIE intends to bring collective proceedings before the Amsterdam district court under Dutch collective redress law.
