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Gloucestershire Business News

Uber drivers playing the system to push up prices

Uber drivers are working together to play the system and earn more cash, according to a new study.

Although not currently operating in Gloucestershire, business people and tourists alike will know Uber from 20 cities around the UK, including London, Bristol and Birmingham.

Uber is a kind of car-for-hire service that relies on smartphone tech as its dispatch and fee manager. Uber drivers do not possess special licenses; they use their personal vehicles to offer discounted fare rides. Ride-hailing and payment are all handled through a smartphone app, and you needn't handle cash or even offer tips to your Uber driver.

The service operates in 570 cities worldwide and has been plagued by controversy around its management practises. Now it seems that drivers are hitting back.

Researchers found drivers were finding ways to trick the algorithms Uber uses to control them to cancel fares they didn't want to avoid UberPOOL - where drivers have to take multiple passengers who are heading in the same direction.

Drivers also organise mass 'switch-offs', so the lack of drivers in a certain area causes a surge in pricing, where Uber can charge passengers more because of the high demand of customers but little supply of drivers, giving drivers a bigger slice too.

The new study by Warwick Business School and New York University, has unearthed details on how Uber drivers are fighting back against the "algorithmic management" used by Uber.

Dr Moehlmann of Warwick Business School said: "Uber uses software algorithms for oversight, governance and to control drivers, who are tracked and their performance constantly evaluated.

"In response, drivers have developed practices to regain control, even gaming the system.

"It shows that 'algorithmic management' that Uber uses may not only be ethically questionable, but may also hurt the company itself."

The researchers interviewed drivers in New York and London and analysed 1,012 blogs on the Uberpeople.com platform and found a mass deactivation organised.

Professor Henfridsson of Warwick Business School said: "Drivers also 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."

And despite it being part of the agreement, drivers ignored UberPOOL requests.

Driver A said: "After about two to three days of ignoring them, you will not receive any more. I have not received an UberPOOL request in months. I guess Uber thinks they are punishing me by not sending me any more."

"There are real tensions between drivers' need for autonomy and a platform programmed to be always in control," said Professor Henfridsson.

Under constant surveillance through their phones and customer reviews, drivers' behaviour 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.

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.

"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," said Dr Lior Zalmanson of New York University.

"This creates tension and resentment, especially when drivers can only email to resolve problems. 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.

"So they fight back and have found ways to use the system to their advantage."

Uber itself was sceptical of the study's findings and a spokesperson said: "This behaviour is neither widespread nor permissible on the Uber app and we have a number of technical safeguards in place to prevent it from happening."

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