https://disconnect.blog/the-high-cost-of-ubers-small-profit/
As Uber has been fighting those battles, it’s also been rolling out a new way to further empower itself. Surge pricing is nothing new — it increased prices during periods of high demand — but in the past few years Uber rolled out dynamic pricing to take it to a whole new level. Dynamic pricing makes rider fares and driver pay much harder to predict by causing prices to shift according to more factors that are hidden from everyone but Uber itself, and it divorces the amount drivers are paid from the amount customers pay for the ride. Further, as part of its upfront pricing policy, Uber also removes any context on the fare — or pay, for a driver — that it offers: whether it’s high or low, what a base fare would be, and why it’s made that calculation.Drivers compellingly argue that upfront pricing is designed to reduce their pay, as has been painstakingly detailed in a column by Columbia Business School professor Len Sherman for Forbes. Long-time Uber driver Sergio Avedian told him it was “the latest in a long line of earnings reductions” because it ensures “a collapse of my personal Utilization Rate if I refuse to accept lowball offers, or a collapse in my hourly earnings if I do.” Drivers feel the company is testing to see how low of a payment they’ll accept for a trip and it will penalize them if they refuse too many rides.