A recent study by the University of Oxford has found that Uber’s implementation of dynamic pricing has resulted in increased fares for passengers and decreased earnings for drivers. The study, which analyzed data from 258 Uber drivers in the UK over a period of 8 years, revealed that the company’s share of revenue has also increased since the introduction of the algorithm in 2023.
The study reported a significant change in the company’s operations after the implementation of dynamic pricing, stating that while passengers now pay more per trip, drivers’ earnings have declined. However, Uber has refuted some of the claims made in the study, stating that all drivers are informed of their potential earnings before accepting a trip.
The study, conducted by researchers from the university’s Computer Science department, also found that Uber’s commission has increased from 25% to 29% since the introduction of dynamic pricing. In the same time period, drivers’ hourly income has decreased from over £22 to just over £19, with drivers spending more unpaid time waiting for rides.
In February, Uber began operating in Oxford despite warnings from private hire and black cab drivers about its potential struggles in the city. The study’s lead author, prof Reuben Binns, commented on the widening gap between what customers pay and what drivers receive, explaining that the more a customer pays for a trip, the less the driver earns per minute due to Uber’s commission structure.
The study was commissioned by the Workers Information Exchange, led by former Uber driver James Farrar, who successfully campaigned for Uber drivers to be treated as workers rather than self-employed. In response to the study, an Uber spokesperson stated that they do not recognize the figures presented and highlighted that drivers in the UK earned over £1bn in the first quarter of this year. The company also emphasized that all drivers receive a weekly summary of their earnings, including a breakdown of what Uber and the driver received from each trip.
Despite the controversy surrounding the study, Uber maintains that thousands of drivers continue to choose to work for the company as passenger demand and trips continue to grow. For more news and updates, you can follow BBC Oxfordshire on Facebook, X (Twitter), or Instagram.