How Uber drivers game the app and force surge pricing

Business and Economics Correspondent
BY    | Updated: Aug 4, 2017 at 3:48 PM
The logo of Uber is seen on an iPad, during a news conference to announce Uber resumes ride-hailing service, in Taipei, Taiwan April 13, 2017. REUTERS/Tyrone Siu - RTX35CNO

A new economics paper says Uber’s drivers are in revolt. Photo by Tyrone Siu/Reuters

Uber is the company everyone loves to hate, but still seems to use. But word has it that in New York at least, customers are so fed up they’re switching to other ride-sharing apps, mainly Lyft. The Indian government is said to be considering going into competition with Uber in India. And now comes an economics paper that says Uber’s drivers are in revolt as well.

As University of Warwick researchers Mareike Möhlmann and Ola Henfridsson and Lior Zalmanson of New York University say in their best academese: “We identify a series of mechanisms that drivers use to regain their autonomy when faced with the power asymmetry imposed by algorithmic management, including guessing, resisting, switching and gaming the Uber system.”

Algorithmic management is, of course, the software Uber uses to control its drivers. As Mareike Möhlmann puts it: “Uber uses software algorithms for oversight, governance and to control drivers, who are tracked and their performance constantly evaluated.”

A joint statement from the authors elaborated: “Under constant surveillance through their phones and customer reviews, drivers’ behavior is ranked automatically and any anomalies reported for further review, with automatic bans for not obeying orders or low grades. Drivers receive different commission rates and bonus targets, being left in the dark as to how it is all calculated. Plus drivers believe they are not given rides when they near reaching a bonus.

READ MORE: Column: Sadly, in Silicon Valley, Uber’s Kalanick is no outlier

“The compensation for UberPOOL, which drivers have to agree to do or be banned, is even more complex. Drivers are forced to accept different passengers on the same ride, even though it is not economically beneficial to do so.”

Small wonder then that, according to Lior Zalmanson, “The drivers have the feeling of working for a system rather than a company, and have little, if any interaction with an actual Uber employee.”

So what are the drivers doing in response? Gaming the system by tricking the algorithm.

The researchers report that drivers organize mass “switch-offs.” The dearth of drivers in a given area then triggers the surge pricing mechanism.

Want evidence? On the Uberpeople.com website, according to the paper, “Driver A said: ‘Guys stay logged off until surge.’”

Driver B said: “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.”

Drivers are also revolting against UberPool, the customer option of sharing a ride with other passengers at a discounted price. Infuriatingly, it has been the default on my own Uber app more often than not, despite my never once having wanted to use it. But it turns out to be extremely unpopular with drivers too, who get a much lower commission on UberPool rides, according to the researchers.

In retaliation, says Professor Henfridsson, “Drivers either accept the first passenger on UberPOOL then log off, or just ignore requests, so they don’t have to make a detour to pick anybody else up. They then still pocket the 30 per cent commission for UberPOOL, rather than the usual 10 per cent.”

More anecdata from the website are entered into evidence:

“Driver A said: ‘After about 2-3 days of ignoring them you will not receive anymore. I have not received an uberpoop request in months. I guess uber thinks they are punishing me by not sending me any more… poor me. LOL.’”

READ MORE: What it’s really like to be an Uber driver

Interview enough Uber drivers, and you’ll already know another of the authors’ findings: that most drivers “also operated alternative ride-hailing platforms such as Lyft, Juno, and Gett, using whoever provides a ride first.”

The authors conclude by summarizing their findings, pretty much as formally as they began: “We found that [the drivers] actively tried to regain some of their lost control and sense of autonomy. We reported four observed driver behaviors. We found that drivers tried to guess and make sense of the system’s intentions. They utilized forums such as UberPeople to share these stories and gain social support. In many cases, these stories were echoed by other drivers, creating an urge to act. This resulted in a range of practices to resist the system, by switching to alternative systems and even gaming the system to their advantage.”

Considered in concert with all the terrible PR Uber has received of late, a skeptic might wonder: Is this the beginning of the end for Uber? To which an Uber supporter might respond: Well, the company’s stock is apparently worth about $68 billion dollars, more than every other automobile company in the world besides Toyota. How many employees did Toyota have at last count? About 350,000. Uber? About 12,000.

Editor’s note: The text has been updated to reflect that India has not banned Uber.

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