Study: Uber Drivers Band Together To Game System, Force Surge Pricing
LONDON — When Uber was getting started, its now ousted CEO Travis Kalanick was known for pushing at the edges of ethics and the law to give his company an advantage.
Now it seems that attitude has been adopted by Uber drivers themselves.
A large study by Warwick Business School and New York University has shown that the company’s drivers are organizing and finding ways to game the system that establishes how much passengers pay.
“Uber’s strategy is not at all transparent, drivers do not know how decisions are made or even how jobs are allocated and this creates negative feelings towards the company,” says NYU’s Dr. Lior Zalmanson, one of the co-authors, in a press release. “So they fight back and have found ways to use the system to their advantage.”
Operating in some 600 cities and having grown to a value of $68 billion dollars in under a decade, Uber has become so large that researchers say the drivers feel detached from the interests of the business.
And so the drivers have found ways to game the system.
The researchers said they found out about the manipulations by interviewing drivers in New York and London, as well as analyzing over 1,000 blogs on the UberPeople.net platform.
In one instance, they recorded this exchange on UberPeople.net:
Driver A: “Guys stay logged off until surge.”
Driver B: “Uber will find out if people are manipulating the system.”
Driver A: “They already know cos it happens every week. Deactivation en masse coming soon. Watch this space.”
For those unfamiliar with the ride-hailing app, surge pricing occurs when Uber rides are in high demand. The Uber website explains that in those cases Uber starts raising prices “to encourage more partners to get on the road so there are enough drivers available to respond to the requests.”
In addition to manipulating surge pricing to get high fares, the researchers found drivers were also figuring out ways to game the UberPOOL option, in which multiple riders on the same route share a car. According to researchers, for these rides, the drivers get a 30% commission rather than the usual 10%. By logging off after picking up the first passenger, they said they were able to keep the higher commission, but not pick up any further passengers along the way.
The study also found that most drivers were also operating for other ride services such as Lyft, Juno, and Gett, “using whoever provides a ride first.”
Countering the claims about such manipulation, Uber argued in a recent article in The Telegraph that “this behavior is neither widespread or permissible on the Uber app, and we have a number of technical safeguards in place to prevent it from happening.”
The study comes on the heals of former CEO Travis Kalanick’s resignation in late June. According to a New York Times article on Kalanick’s departure, Kalanick had been accused of sexually harassing employees and Uber has been dealing with an intellectual property lawsuit from a Google subsidiary, and federal investigations into their use of software to avoid law enforcement. The same article noted this difficult history has “grown inextricably tied to Mr. Kalanick.”
Whether Kalanick’s departure will create a cultural change at Uber that results in better driver relations remains to be seen.