New research carried out by the University of Oxford suggests that Uber’s pricing system has made the ride-hailing experience more costly for passengers while leaving many drivers earning less than before. The company’s shift to a dynamic pricing model has not only raised fares but also appears to have reduced drivers’ hourly pay over time, all while increasing Uber’s share of each transaction.
The study involved more than 250 drivers across the UK who provided detailed records of over 1.5 million trips collected between 2016 and 2024. Researchers closely examined the period before and after Uber introduced its dynamic pricing system in early 2023. This change allowed Uber to adjust fares in more complex ways, taking into account location, timing, and factors that remain undisclosed to drivers and passengers.
Before this pricing system was introduced, fares were mainly determined by the distance and time of each trip, and Uber’s commission was relatively stable. Under the new system, however, the percentage of each fare that Uber keeps varies with every ride, often increasing with the price of the trip. This means that while passengers pay more for longer or more expensive rides, drivers are not seeing a proportional rise in their earnings. In fact, the research shows that as trip values increase, drivers typically receive a smaller share of the fare per minute.
Drivers now face a more uncertain and less predictable working environment. On average, their hourly earnings have dropped from about £22 to just over £19 before costs like fuel and maintenance are deducted, after adjusting for inflation. In addition, drivers are spending more unpaid time waiting for ride requests. The data indicates that drivers, in some months, are waiting longer for jobs than the time they actually spend driving passengers.
The investigation also revealed that Uber’s share of the fare has gradually climbed. While the company previously took about a quarter of each fare, its share has now grown to nearly 30 percent on average. Some individual trips showed Uber taking more than half of the total fare, which represents a significant increase in the company’s revenue at the expense of driver pay.
The study found that this shift has not affected all drivers equally. Some drivers who started working after the new pricing system came into place seemed to earn slightly more per hour, but most long-term drivers reported lower average pay. Researchers pointed out that this widening gap suggests growing inequality among drivers, with the majority earning less despite working under similar conditions.
Another critical issue raised by the research was the increasing difficulty drivers face in understanding how their pay is calculated. Unlike the older pricing system, the new model makes it harder for drivers to predict their earnings based on trip details like distance or time of day. Even when using detailed trip data and advanced models, the researchers found that pay patterns under dynamic pricing were much harder to predict compared to earlier years.
Uber’s pricing system also seems to encourage oversupply. The company benefits from having more drivers logged into the app, ready to accept rides, even if they end up spending long periods waiting without pay. This oversupply keeps drivers competing for limited jobs, which pushes some to accept poorly paid trips out of fear that rejecting them will result in fewer future offers. While the cost of this waiting time falls entirely on the drivers, Uber does not bear any financial impact from the increasing number of idle workers.
The study also highlighted that Uber’s recent practice of removing the customer’s fare from drivers’ earnings reports has made it even harder for drivers to know how much of the payment Uber is keeping. Although Uber has begun disclosing average weekly commission rates, the figures provided do not show the breakdown for each trip, leaving drivers without the clarity they once had.
Interestingly, while Uber’s overall average commission seems to have stayed around the 25 percent mark, the study found that the company takes a much larger share from high-value trips, and these shifts are often hidden within broad averages. This detail helps explain why Uber’s surplus per driver hour has gone up by nearly 40 percent in recent years, even though the average take rate has not changed significantly when viewed across all trips.
The research team worked closely with driver organizations to design the study and ensure that it reflected the real concerns of those working on the platform. Drivers reported that the changes made them feel excluded from decisions that deeply affect their livelihoods, and many expressed frustration over losing the ability to track what customers are actually paying.
The findings will be shared at the upcoming ACM Conference on Fairness, Accountability, and Transparency, where researchers aim to contribute to wider discussions about how algorithm-driven pay systems are affecting workers in the gig economy.
Image: Mariia Shalabaieva / Unsplash
Read next: CapCut’s New Terms Spark Privacy and Ownership Concerns for Creators and Media Professionals Alike
The study involved more than 250 drivers across the UK who provided detailed records of over 1.5 million trips collected between 2016 and 2024. Researchers closely examined the period before and after Uber introduced its dynamic pricing system in early 2023. This change allowed Uber to adjust fares in more complex ways, taking into account location, timing, and factors that remain undisclosed to drivers and passengers.
Before this pricing system was introduced, fares were mainly determined by the distance and time of each trip, and Uber’s commission was relatively stable. Under the new system, however, the percentage of each fare that Uber keeps varies with every ride, often increasing with the price of the trip. This means that while passengers pay more for longer or more expensive rides, drivers are not seeing a proportional rise in their earnings. In fact, the research shows that as trip values increase, drivers typically receive a smaller share of the fare per minute.
Drivers now face a more uncertain and less predictable working environment. On average, their hourly earnings have dropped from about £22 to just over £19 before costs like fuel and maintenance are deducted, after adjusting for inflation. In addition, drivers are spending more unpaid time waiting for ride requests. The data indicates that drivers, in some months, are waiting longer for jobs than the time they actually spend driving passengers.
The investigation also revealed that Uber’s share of the fare has gradually climbed. While the company previously took about a quarter of each fare, its share has now grown to nearly 30 percent on average. Some individual trips showed Uber taking more than half of the total fare, which represents a significant increase in the company’s revenue at the expense of driver pay.
The study found that this shift has not affected all drivers equally. Some drivers who started working after the new pricing system came into place seemed to earn slightly more per hour, but most long-term drivers reported lower average pay. Researchers pointed out that this widening gap suggests growing inequality among drivers, with the majority earning less despite working under similar conditions.
Another critical issue raised by the research was the increasing difficulty drivers face in understanding how their pay is calculated. Unlike the older pricing system, the new model makes it harder for drivers to predict their earnings based on trip details like distance or time of day. Even when using detailed trip data and advanced models, the researchers found that pay patterns under dynamic pricing were much harder to predict compared to earlier years.
Uber’s pricing system also seems to encourage oversupply. The company benefits from having more drivers logged into the app, ready to accept rides, even if they end up spending long periods waiting without pay. This oversupply keeps drivers competing for limited jobs, which pushes some to accept poorly paid trips out of fear that rejecting them will result in fewer future offers. While the cost of this waiting time falls entirely on the drivers, Uber does not bear any financial impact from the increasing number of idle workers.
The study also highlighted that Uber’s recent practice of removing the customer’s fare from drivers’ earnings reports has made it even harder for drivers to know how much of the payment Uber is keeping. Although Uber has begun disclosing average weekly commission rates, the figures provided do not show the breakdown for each trip, leaving drivers without the clarity they once had.
Interestingly, while Uber’s overall average commission seems to have stayed around the 25 percent mark, the study found that the company takes a much larger share from high-value trips, and these shifts are often hidden within broad averages. This detail helps explain why Uber’s surplus per driver hour has gone up by nearly 40 percent in recent years, even though the average take rate has not changed significantly when viewed across all trips.
The research team worked closely with driver organizations to design the study and ensure that it reflected the real concerns of those working on the platform. Drivers reported that the changes made them feel excluded from decisions that deeply affect their livelihoods, and many expressed frustration over losing the ability to track what customers are actually paying.
The findings will be shared at the upcoming ACM Conference on Fairness, Accountability, and Transparency, where researchers aim to contribute to wider discussions about how algorithm-driven pay systems are affecting workers in the gig economy.
Image: Mariia Shalabaieva / Unsplash
Read next: CapCut’s New Terms Spark Privacy and Ownership Concerns for Creators and Media Professionals Alike
