Uber’s new payment model raising concerns

It’s been two months since Uber introduced upfront fares, a new payment model that allows drivers to see the destination and how much they’ll earn before they accept a trip on the rideshare app. But advocates and drivers who spoke to The Leader Spirit say they are now making less and it’s unclear how Uber determines what they’re paid or how much they charge customers.

“These companies have access to an enormous amount of data about every single driver and passenger, the road conditions, everything,” said J.J. Fueser of RideFair, a sustainable transportation not-for-profit

Fueser says that data is used to determine customer fare, driver payment and Uber’s cut but what those percentages are remains unclear according to Uber driver Earla Phillips, who is vice-president of the Rideshare Drivers Association of Ontario.

“Our new contracts have zero dollars in them,” she tells The Leader Spirit. “They can just pull a number out of the clouds and charge a customer anything they want.”

The Leader Spirit conducted its own unscientific experiment, inputting the same pickup, same destination, and the same time. Everyone who took part in the experiment received a different price from the app, ranging from $21.31 up to $26.04.

Uber did not explain why different customers got a different price, only that the new pricing structure takes into account various factors related to a driver’s trip, including time, distance, and market conditions. Uber says it does not use information on an individual driver’s personal characteristics such as their gender, race, or ethnicity or past behaviour on the platform, like their rating.

“It used to be a rate card. We knew exactly how much we were getting for a base, per kilometre, per minute, for cancellations,” said Phillips. “Now, there’s no numbers in there.”

The new model came into effect October 8 across Ontario but Uber has been using the upfront pricing system in the United States since 2022. In 2023 the company recorded its first operating profit though it’s not clear if the new model played a role.

“This type of payment model should not be permitted under labour laws,” said Fueser.

In response to questions about the fairness of the new payment model, the Ontario Ministry of Labour said in a statement that under the incoming Digital Platform Workers Rights Act, “When offering a work assignment to workers, a company must provide the estimated amount the worker will be paid for the work and a description of how that amount was calculated, any factors used in determining to offer the work assignment to the worker; and any consequences based on the worker’s performance rating for the work assignment or the worker’s failure to perform the work assignment.”

A report released this past week from the City of Toronto found the median hourly wage after expenses for drivers was less than minimum wage but the study was conducted before the new payment model was put in place.

Uber tells The Leader Spirit that since the implementation of the new model, payments have remained consistent across the province. A spokesperson adds drivers can check their weekly statement for a detailed breakdown of their earnings.