Some Uber Drivers Are Teaming Up To Force ‘Surge’ Pricing

CBS Local — When Uber began to gain popularity, then-CEO Travis Kalanick developed a reputation for pushing ethical and legal boundaries in order to ensure his company had the upper hand.

Now it appears that the company’s labor force, the Uber drivers themselves, have adopted a similar ideology.

Uber drivers are now organizing en masse and finding ways to game the app’s system in order to raise fares that passengers pay, according to a large new study from Warwick Business School and New York University.

“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,” said co-author Lior Zalmanson, an NYU professor, in a press release. “So they fight back and have found ways to use the system to their advantage.”

Uber has expanded to about 600 cities in less than a decade, and is currently valued at $68 billion. The drivers overall feel little to no attachment to Uber’s corporate business interests, and thus have sought ways to financially benefit themselves, the researchers said.

The researchers uncovered this trend by interviewing Uber drivers in New York and London, along with monitoring blog posts on UberPeople.net, which included the following conversation:

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.”

Uber surge pricing occurs when rides are in high demand, but the supply of drivers is low, and effectively driving the price of rides upward. The app raises prices “to encourage more partners to get on the road so there are enough drivers available to respond to the requests,” according to Uber’s website.

The NYU and Warwick researchers also discovered that drivers were gaming the app’s UberPOOL option, which allows riders on the same route to share a car.

Uber drivers receive a 30 percent commission for these rides, rather than the normal 10 percent, by logging off after picking up the first passenger and not picking up other passengers en route to the first customer’s destination.

On the contrary, the ridesharing company previously said that “this behavior is neither widespread nor permissible on the Uber app, and we have a number of technical safeguards in place to prevent it from happening.” according to a recent article in The Telegraph.

Kalanick recently resigned as Uber’s CEO in June amid allegations of sexual harassment and illegal use of Google’s intellectual property in order to evade law enforcement.

And while Uber is continuing to search for it’s next chief executive, it remains uncertain whether any change in corporate culture will translate to better company relations with its labor force — the drivers.

[H/T: Study Finds]

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