Ride-Hailing Revolution: Higher Uber Fares and Declining Driver Incomes Spark Controversy

In a revealing study from the University of Oxford, researchers have uncovered a concerning trend in the Uber business model: while passenger fares are rising due to a new dynamic pricing algorithm, driver incomes are simultaneously declining. The study analyzed over 1.5 million trips taken by 258 Uber drivers in the UK between 2016 and 2024.

Key findings from the research disclosed a significant increase in Uber’s slice of the revenue, with its commission climbing from 25% to 29% since the algorithm’s introduction in 2023. As a result, drivers have seen their hourly earnings drop from more than £22 to just over £19, exacerbated by increasing wait times without pay. Professor Reuben Binns, the lead author of the study, noted that the widening gap between what customers pay and what drivers earn has grown more pronounced under the new pricing model. Essentially, higher fares for passengers correlate with lower earnings per minute for drivers, particularly on more valuable trips.

Uber, however, disputes the findings, labeling many assertions in the study as “totally false.” An Uber spokesperson asserted that drivers are informed of their potential earnings prior to accepting trips. They pointed to over £1 billion in earnings for UK drivers between January and March of this year as evidence of the platform’s economic viability for drivers. The company emphasizes that although their cut of the fare might adjust week by week, the percentage kept by Uber has been stable over the years.

The implications of this study resonate beyond just numbers; they pose significant questions about the sustainability of gig work and the relationship between platforms like Uber and their drivers. Amid these tensions, the debate over how ride-hailing companies balance profitability and driver welfare continues, particularly as demand remains high.