Rideshare drivers want clear fare info, “right-sized” fleet

Rideshare Drivers’ Association of Ontario raises alarm about impact of Uber’s A.I.-based pay as City of Toronto report confirms widespread below-minimum wage earnings for drivers

In the wake of a new City of Toronto staff report confirming widespread below minimum wage earnings by ride-hailing drivers, the Rideshare Drivers Association of Ontario (RDAO) released a new report reviewing evidence that Uber’s new AI-based pricing scheme may be driving earnings even lower.  The report is available here: https://rb.gy/tqwxao

“Uber has essentially taken a bad system and made it much worse,” explained Earla Phillips, Vice President of RDAO.  “A secretive and proprietary system determines fares and pay separately for each ride; the algorithm can change how fares and pay are determined on a dime and without notice.”  

RDAO has called on the City to take immediate action to end predatory practices such as AI-based pay and the intentional over-supply of ride-hail drivers. “Drivers have been forced into crushing poverty in the midst of an affordability crisis – we can’t wait for another study.  We can’t get enough work, and when we do get work, we can’t rely on minimum rates. The time for action is well past due,” said Phillips.  

The report reviews over 200 trip offers received by Toronto-area ride-hail drivers following Uber’s introduction of AI-based pricing on October 8, 2024, and compared them to rates drivers would have been offered under the prior system, which calculated base fares based on time and distance.

Key findings:

·        Widespread evidence of drivers being offered less for rides under AI-based pay than under the previous time-and-distance fare system;

·        Longer trips, on which drivers rely, saw a greater decrease in earnings – as much as 25% 

The evidence reviewed by RDAO is consistent with a much larger study of ride-hail driver earnings in the US, where AI-based pay was introduced in 2022.  Uber driver monthly earnings fell by 17.1% from 2022 to 2023, even though working hours fell by only 2.9%. Fares, however, increased faster than the rate of inflation.

“The City of Toronto Act gives the City the clear authority to set fare policies and determine who, and how many, drivers to license – powerful tools to address predatory practices in the ride-hailing industry,” said JJ Fueser, a researcher with RideFair, a sustainable transportation not-for-profit.  “Even if Uber continues to decrease driver pay relative to customer fares, the City can ensure that dominant platforms can’t put companies committed to ethical practices out of business.”

RECOMMENDATIONS:
The RDAO is calling for:

• An end to AI-based pricing and a return to transparent, “rate card” fare/pay structure
• City-led regulation of ride-hailing fleet size, preventing intentional over-supply of the market by dominant platforms