Academic studies find Uber's algorithms raised fares and cut driver pay
Two major academic studies from Columbia Business School and the University of Oxford reportedly found that Uber's algorithmic pricing systems increased fares for passengers and reduced driver earnings while significantly raising the company's profit share. The research analysed millions of trips and identified a pattern of systematic price discrimination that benefited Uber at the expense of both drivers and riders.
What happened
Columbia Business School researchers analysed over 2 million trip requests and tens of thousands of trips to conclude that Uber used "algorithmic price discrimination" that raised "rider fares and cut driver pay on billions of trips, systematically, selectively, and opaquely".
A University of Oxford study analysed 1.5 million UK trips over 258 drivers between 2016 and 2024, finding a significant shift when Uber introduced a dynamic pricing algorithm in 2023. The Columbia study focused on 24,532 trips by a single US Uber driver after the introduction of upfront pricing in 2022.
Reported impact
Oxford researchers found passengers now pay more per trip while drivers' earnings have declined. Adjusted for inflation, drivers' hourly income fell from over £22 to just over £19 before operating costs, and drivers spent more unpaid time waiting for rides.
Uber's commission rose from around 25% to 29%, and in some cases over 50%. The Columbia study concluded Uber increased its take rate from about 32% at the start of upfront pricing to upwards of 42% by the end of 2024. Uber reported generating $6.9bn of cash in 2024, up from losing $303m in 2022.
Index analysis
Oxford researchers found that the higher the value of the trip, the more of a cut Uber takes, so the more customers pay, the less drivers earn per minute. The Columbia author noted that Uber's approach allowed the company to identify "who is willing to pay more [as a passenger] or accept less [as a driver]."
Governance controls
Oxford researchers raised questions about transparency and fairness in the gig economy. The Columbia study described Uber's pricing mechanism as "opaque" computer code.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.