Lord knows Uber's been taking a beating -- of its own making. The problems have played into the hands of rival Lyft, which is watching its business grow. But you know who else is paying a price? You are.
A brand-new study finds that Uber drivers in the U.S. and U.K. work together to game the company's algorithms. Many coordinate their use of Uber's app to create a perceived driver shortage, setting off higher surge pricing so rides are more expensive for consumers.
Other techniques leave the passengers untouched but cause Uber to pay more per ride than it otherwise would.
Uber hasn't yet responded to a request for comment.
[Update: Uber responded with the following statement: "This behavior is neither widespread or permissible on the Uber platform, and we have technical safeguards in place to help prevent it from happening."]
Mareike Möhlmann and Ola Henfridsson of Warwick Business School in the U.K. and Lior Zalmanson of New York University interviewed drivers in New York City and London and analyzed 1,012 blogs on UberPeople.net, a site for Uber drivers. The researchers found that drivers organize mass "switch-offs," or periods in which they log off the app.
Uber software that oversees driver performance through the app that drivers have to use registers the condition as a sudden lack of available rides. The company then applies surge pricing as it does to manage a mismatch between supply and demand. As a result, you, the passenger, pay more and both Uber and the driver make more. Once surge pricing is in place, the drivers log back in and quickly make extra money.
The researchers found that drivers coordinate when to log off, because it takes a certain number to trigger the perceived lack of drivers.
It's complete manipulation, possibly stemming from the relatively low amounts of money many Uber drivers make. Or maybe it's a reaction to how Uber reportedly psychologically manipulates drivers to its advantage.
Drivers use other techniques that hit Uber rather than riders. For example, they will accept an UberPool ridesharing fare and then immediately log off or ignore other requests so they can go directly to a destination. They effectively get a larger amount from Uber for the trip. (According to the RideShareGuy.com site, multiple trips under UberPool often aren't worth the extra work.)
This isn't the first evidence that drivers game Uber when they can. One driver in San Diego reportedly realized that surge pricing often meant drunk passengers and the chance someone might vomit in the back of his car. If that happens, Uber pays for professional cleaning, but the driver in question has gloves and cleaning supplies in the car so he can do the cleanup and keep the extra.
You, the passenger, have no direct control in any of this, particularly when it comes to surge pricing. But there is one thing you can do, which is take a basic smart consumer action and comparison shop. Find out if Lyft and other rideshare providers operate in your location. Download the apps and check who offers the best deal. (If a service turns out to be unreliable or an otherwise poor choice, you can always delete its app going forward.) There's a reasonable chance someone else can get you where you need to go for less.