Here’s What Happened When We Put 7 Uber Drivers In the Same Room

“It is almost like trying to reach some type of ancient scripture,” one driver said of attempting to determine how much they'll be paid from each ride.

By Eric Gardner, More Perfect Union

A More Perfect Union investigation into Uber and Lyft found that the rideshare giants are offering drivers different payments for the same rides, building more evidence that the firms are practicing what experts refer to as algorithmic wage discrimination.

Critics have long argued that major tech firms are developing systems to offer workers individualized pay rates based on complex data analysis, potentially paying different amounts for the same work. But until now, conversations around algorithmic wage discrimination have been mostly theoretical, as concrete evidence of the practice has been scarce. Drivers are by definition in separate cars, making it nearly impossible to compare ride offers, and the dominant gig economy companies have repeatedly disputed or remained silent about the idea that they offer workers different pay for the same work.

So, More Perfect Union rented a space in West Hollywood, California, and collaborated with the influential gig economy platform RideShare Guy to test the idea. For approximately 45 minutes, the seven drivers opened the Uber app and placed their phones on the table. They monitored incoming rides and refreshed their applications to control variables the companies said could impact fares. 

During that stretch, Uber offered drivers the same ride 46 times; at least one driver was offered less money for the same ride 29 times. When two drivers were offered different rates for the same ride, there was a gap of $.07. However, when more than three drivers were offered different wages, the gap expanded to 15 cents. In aggregate, the average gap was $.12 when there was a wage difference.

“You know, to the naked eye, it may not be as much,” said Sergio Avedian, a Senior Contributor to the Ride Share Guy who helped MPU pull off the experiment.

But according to Avedian, the goal isn’t to shave a large amount of money off each trip. “A penny's difference on 2.7 billion trips that Uber does every quarter is the idea,” he said. 

Lyft’s gap was significantly higher.

During our testing period, which lasted about 15 minutes, 32 rides were received on the Lyft platform; drivers received different offers for the same ride 31 times. The average gap between the highest offer and the lowest was $1.54. Only one ride was offered to only two drivers, with the gap being $0.12.

Uber and Lyft claim they operate transportation networks that match potential riders with independent contractors who are drivers. This designation allows the companies to push all work expenses (gas, wear and tear on cars) onto drivers while exempting the companies from various taxes and employee protections like health insurance, overtime, and minimum wage laws. In exchange, according to the companies, drivers have the flexibility to work when and how they choose. 

Recently, California, Massachusetts, Minnesota, New York, and Washington have, either through state law or agreements with the rideshare companies, created a new class of workers who maintain an independent designation while enshrining pay and benefit floors. The execution of the laws has been mixed, as in some cases the platforms are going so far as to lock drivers out from the apps to reduce the number of workers eligible for benefits.

Previously, both Uber and Lyft provided drivers with a rate card, which calculated their payment based on a combination of time and distance. This was similar to how taxi fares were calculated since almost their inception, although one major difference was that taxi rate cards were set through a publicly regulated process.

Lyft and Uber replaced that calculation with what the companies call “upfront” payments. Drivers now see a flat rate and where they are dropping the rider off. They do not see what the customer will pay. The calculation of payments for both companies is not known. “It is almost like trying to reach some type of ancient scripture,” a driver who participated in the study told MPU.

It’s been theorized that algorithmic wage discrimination allows companies to essentially coerce independent contractors. Since they are independent contractors and not employees, Lyft or Uber can not dictate which routes drivers accept, but they can manipulate which routes they are offered, or the pay for them, which can vary widely from other workers. 

“They use these pay mechanisms to influence their behavior,” Veena Dubal, a law professor who coined the term algorithmic wage discrimination, told NPR.

As for the drivers who participated in the study, the tipping point seems to be getting closer and closer. 

“You're fighting against not just the algorithm, but you're fighting over desperation from drivers who are trying to make an extra buck,” one driver told us. 

“It's depressing, to be honest with you.”