Dynamic pay on platforms such as Uber should be banned, says TUC

The practice of using “dynamic pricing” to set pay on gig economy platforms including Uber should be banned because it leaves workers at the mercy of shadowy algorithms with no certainty over their earnings, trade union leaders have urged.

In a report exposing the human cost of the gig economy practice, the Trades Union Congress said pay was becoming decoupled from time, skill or effort. Instead, work had become a speculative practice with the rewards determined by an algorithmic process with little transparency.

Under dynamic pricing, computer-driven algorithms set variable prices on a gig economy platform for customers and rates of commission for workers to match real-time supply and demand in a market.

However, union leaders say the practice replaces fixed rates or transparent tariffs with opaque, constantly shifting pricing mechanisms, where the data used to determine the rewards and decision-making process are largely obscured.

Having initially taken a fixed 20% cut of the UK fares charged, which subsequently rose to 25%, Uber introduced dynamic pricing in 2023, an algorithm that variably sets pay for drivers and fares for passengers.

Publishing the testimonies of almost a dozen workers, the TUC found workers describing themselves as “gambling”, “leaving it to fate,” or “waiting for the jackpot,” because pay felt like the outcome of chance rather than work.

Compiled alongside the non-profit campaign group Worker Info Exchange (WIE) and academics from Nottingham Trent’s Work Futures Observatory, the report called on the UK government to take action to “end” the practice of dynamic pay.

It also called on ministers to push ahead with reforms to further strengthen employment rights in the UK and to give workers and trade unions the right to access data collected by employers for artificial intelligence decision-making.

Among the case studies in the TUC report, several Uber drivers said that dynamic pricing was negatively affecting their incomes, family life and health. They also said that passenger safety could be compromised because they felt the intense competition was forcing them to drive even when they were tired.

Several said they felt their earnings were equivalent to being paid below the minimum wage.

Vladimir, a London based-driver who has worked for Uber since 2016, said: “It’s too unfair. I want to smash my screen. It feels miserable.”

He said he believed his income had fallen as a result of dynamic pricing. “Uber went from 100% transparency … to 0% transparency. Everything is ‘flexible’. The fare is flexible. The commission is flexible. What the driver gets is flexible. No one knows.”

It comes after a University of Oxford study last year showed that many Uber drivers were earning “substantially less” an hour since the ride hailing app introduced dynamic pricing in 2023.

Published in partnership with WIE, the Oxford researchers also found the introduction of algorithmically determined fees for passengers and pay for drivers coincided with the company taking a higher share of fares.

Paul Nowak, the TUC general secretary, said an urgent crackdown on dynamic pricing was required.

“Two drivers doing practically the same job at the same time could be paid wildly different sums determined by an algorithm. And when taking a job, they have seconds to decide whether it will be worth their time with patchy information,” he said.

“That’s plainly unfair. This is a rigged system which overwhelmingly tilts the balance of power to platform company bosses over workers.”

He added: “Let’s call this out for what it is: exploitation by the algorithm.”

Uber has faced legal demands to stop using AI-driven pay systems in a case orchestrated by WIE, challenging its use of dynamic pay on behalf of drivers in the UK, the Netherlands and elsewhere in Europe.

Cansu Safak, the research lead at WIE, said: “The absence of basic worker rights has allowed dynamic pay to thrive. With no transparency over the conditions they work under, drivers have been forced to turn to data protection law as the only remaining route to assert their rights.

“And in the absence of meaningful regulatory response, they are once again turning to the courts to seek justice through the collective legal action we have launched.”

An Uber spokesperson said drivers told them they choose the company because it offers flexibility, good earnings and benefits.

“Uber has always priced trips based on a range of factors, including time, distance and demand, and drivers always see the destination, and how much they will earn from the trip, before they decide whether to accept.

“All drivers receive a weekly summary of their earnings, showing how much passengers paid and exactly what Uber and the driver received. The vast majority of total fares continue to go where they belong: into drivers’ pockets, and the amount Uber keeps from fares has remained relatively flat.”

The UK government have been approached for comment.