London: A new study from the University of Oxford has found that many Uber drivers in the UK are earning significantly less per hour since the ride-hailing platform introduced a ‘dynamic pricing’ algorithm in 2023.
The algorithm change has coincided with Uber taking a substantially higher share of fares, even as passenger prices have increased.
The research was conducted using data from 258 UK-based Uber drivers, accounting for 1.5 million completed trips. It was published in collaboration with the Worker Info Exchange (WIE), a non-profit organisation advocating for gig workers.
Historically, Uber took a fixed 20 percent commission from UK fares, later increasing it to 25 percent. With the 2023 launch of dynamic pricing, a more advanced version of its earlier surge pricing model, the company now uses a variable pricing algorithm to determine both driver compensation and passenger fares. Researchers noted that this has allowed Uber to increase its average take rate to 29 percent, with the figure surpassing 50 percent in certain cases.
According to the Oxford study, Uber’s increased take rate is especially pronounced on higher-fare trips, allowing the company to extract up to 38 percent more income from drivers’ labour on average. The report concluded that, “Post-dynamic pricing, Uber’s passengers now pay higher prices, but the drivers are not better off… Average pay per hour on the app is stagnant, and is lower in real terms in the year following the introduction of dynamic pricing.”
Critics, including labour unions, had raised alarms about the lack of transparency surrounding the new algorithm when it was introduced in 2023. They warned that Uber’s technology could lower working conditions by targeting drivers based on their willingness to accept reduced pay. The study’s findings appear to validate those concerns.
In response, an Uber spokesperson disputed the study’s findings, and stated that, “We do not recognise the figures in this report. Every driver is guaranteed to earn at least the national living wage.”
The company claimed that Uber drivers in the UK collectively earned over £1 billion between January and March 2025, an increase from the same period the previous year. Uber also highlighted that its platform offers drivers complete flexibility, full visibility over each trip, and weekly summaries breaking down earnings for transparency.
Despite Uber’s defence, the Oxford report presents a contrasting picture. Using Uber’s pay metrics, the average hourly earnings for drivers were found to be £29.46.
However, when factoring in waiting time, the period Uber drivers spend available for pickups but not engaged in trips, the average fell to £15.98 per hour. Neither figure accounts for vehicle maintenance, insurance, or fuel costs, which further impact net income.
The revelations add to the list of controversies surrounding Uber in recent years:
- In 2021, the UK Supreme Court ruled that Uber drivers are entitled to minimum wage and paid holidays, reshaping the gig economy landscape.
- In 2022, the ‘Uber Files’ investigation exposed unethical practices, including secret lobbying of global governments and efforts to mislead police and regulators.
Following the Uber Files scandal, Jill Hazelbaker, Uber’s Senior VP of Public Affairs, acknowledged past misconduct and remarked that, “We have not and will not make excuses for past behaviour that is clearly not in line with our present values. Instead, we ask the public to judge us by what we’ve done over the last five years and what we will do in the years to come.”
The Oxford study concludes that Uber’s shift to dynamic pricing has led to worsening conditions for drivers, as the company benefits from a higher share of fares while hourly earnings remain stagnant or decline in real terms. The report reinforces growing concerns over the use of opaque algorithms in gig platforms and their impact on worker livelihoods.
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