Dynamic pay on platforms such as Uber should be banned, says TUC | Gig economy
The practice of using “dynamic pricing” to set wages on gig economy platforms including Uber should be banned because it leaves workers at the mercy of shady algorithms with no certainty about their earnings, union leaders have argued.
In a report revealing the human cost of gig economy implementation, the Trades Union Congress said pay was decoupled from time, skill or effort. Instead, the work had become a speculative exercise in which rewards were determined by an algorithmic process with little transparency.
Under dynamic pricing, computer-aided algorithms set variable prices for customers and commission rates for employees on a gig economy platform to match real-time supply and demand in a market.
But union leaders say the practice has replaced fixed rates or transparent tariffs with opaque, ever-changing pricing mechanisms where the data used to determine rewards and decision-making is largely hidden.
Uber, which initially took a flat 20% cut of UK fares and later rose to 25%, introduced dynamic pricing in 2023, an algorithm that variably determines pay for drivers and fares for passengers.
Publishing statements from almost a dozen workers, the TUC found that workers described themselves as “gambling”, “leaving it to fate” or “waiting for the jackpot” because they felt the pay was the result of luck rather than work.
The report, prepared by non-profit campaign group Worker Info Exchange (WIE) and academics from Nottingham Trent’s Work Futures Observatory, called on the UK government to take action to “end” dynamic pay.
He also called on ministers to push ahead with reforms to further strengthen employment rights in the UK and give workers and unions access to data collected by employers for AI decision-making.
Among the case studies in the TUC report, many Uber drivers said dynamic pricing had negatively impacted their income, family life and health. They also said that passenger safety could be compromised as they felt intense competition forced them to drive even when tired.
Many said they felt their earnings were equivalent to being paid less than minimum wage.
London-based driver Vladimir, who has worked for Uber since 2016, said: “It’s so unfair. I want to smash my screen. It feels miserable.”
He said he believed his revenue had fallen as a result of dynamic pricing. “Uber has gone from 100% transparency to 0% transparency. Everything is ‘flexible’. Pay is flexible. Commission is flexible. What the driver gets is flexible. Nobody knows.”
It comes after an Oxford University study last year showed many Uber drivers are earning “significantly less” per hour since the ride-hailing app introduced dynamic pricing in 2023.
Published in partnership with WIE, Oxford researchers found that algorithmically determined fares for passengers and pay for drivers coincided with the company taking a higher share of fares.
TUC general secretary Paul Nowak said an urgent push was needed on dynamic pricing.
“Two drivers doing nearly the same job at the same time can be paid wildly different amounts determined by an algorithm. And when taking a job, they have seconds to decide whether it’s worth their time with disorganized information,” he said.
“This is clearly unfair. This is a rigged system that has largely tipped the balance of power against corporate bosses against workers.”
He added: “Let’s explain what this is: exploitation by the algorithm.”
Uber has faced legal demands to stop using AI-powered payment systems in a case organized by WIE and has challenged its use of dynamic payments on behalf of drivers in the UK, the Netherlands and elsewhere in Europe.
Cansu Şafak, head of research at WIE, said: “The absence of basic labor rights has allowed the development of dynamic pay. Due to the lack of transparency about the conditions under which they work, drivers have had to resort to data protection law as the only remaining way to defend their rights.”
“And in the absence of a meaningful regulatory response, they are once again turning to the courts to seek justice through the class legal action we have initiated.”
An Uber spokesman said drivers say they choose the company because it offers them flexibility, good earnings and benefits.
“Uber always prices trips based on a variety of factors, including time, distance and demand, and drivers always see the destination and how much they stand to make on the ride before deciding whether to accept it.
“All drivers receive a weekly earnings summary showing exactly what passengers are paying and what Uber and the driver are receiving. The vast majority of total fares continue to go where they belong: in drivers’ pockets, and the amount Uber separates from fares has remained relatively stable.”
The UK government has been approached for comment.
