Uber drivers claim personal data used to manipulate fares

SAN FRANCISCO (CN) — A class of app-based Uber drivers say the ride-hailing company unlawfully collects their personal data and uses it to algorithmically set fares based on predictions of how little drivers will accept.

The lead plaintiff, Edwin Carranza, a Los Angeles-based Uber driver, claims he was required to provide Uber with personal data — including his precise location, trip history, acceptance and rejection patterns, cancellation history, driving locations, driving times, app-use behavior, identity-verification data and biometric or facial-verification data — to access the platform.

However, Carranza says he was not told, nor did he give informed consent, for Uber to use artificial intelligence-based systems and algorithms to build a profile using that data to generate personalized trip offers that predict the lowest fare he was likely to accept.

“Through Uber’s misuse of driver data, drivers’ reasonable expectations of privacy in their data — expectations Uber itself affirmed and cultivated through its privacy representations and omissions — were infringed,” Carranza writes in the complaint, filed in San Francisco Superior Court Wednesday.

“Uber has leveraged AI and deep machine learning to implement deeply intrusive and exploitative compensation-setting systems that have damaged the livelihoods of thousands of drivers, causing unparalleled harm for the hard-working individuals who comprise nearly the whole labor force of the entire ridesharing industry,” he claims.

Carranza says he was offered reduced fares after he declined other low-value ride offers, lower fares in the direction of his home when he usually returned home for the day and false surge-price notifications encouraging him to drive away from his desired location.

He claims that had he known that Uber was using his data to profile him and generate individualized pricing, he would have considered that when deciding whether to use the app.

“Uber’s nondisclosure deprived Mr. Carranza of the ability to make informed decisions about his data, his time, his fuel, his vehicle use and his participation on the platform,” Carranza writes.

In July 2022, Uber CEO Dara Khosrowshahi announced a new system of “Upfront Fares,” allowing drivers to see how much they would earn from each ride before accepting it, compared with the prior system of guaranteed per-mile and per-minute rates.

According to Uber, upfront fares are calculated using factors including the base fare, estimated trip length and duration, pickup distance and surge pricing.

Carranza claims Uber’s upfront fare system exploits continuously collected driver data and amounts to a “surveillance wage” that is personalized not based on driver performance, but on that data.

Carranza further claims that Uber manipulates driver behavior through surge notifications, which alert drivers to areas with elevated fares that are he says are frequently false, as well as by reducing ride offers to drivers who decline low-value trips or are close to receiving promised bonuses.

He compares daily use of the ride-hailing app to gambling, with Uber’s algorithms mirroring the “unpredictable, dopamine-triggering reward structure” used in slot machines.

“The algorithms distribute higher-value fares and lucrative bonuses unpredictably, and this sporadic reward system preys on hope: a driver might experience a highly profitable shift, convincing them to work longer hours the following day, only for the algorithm to reduce displayed trip amounts or slow ride allocation — leaving the driver chasing a payout that never arrives,” he says.

Carranza claims Uber’s practices violate state unfair competition and false advertising laws, along with invasion of privacy, intrusion upon seclusion, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing and unjust enrichment.

He is asking the court for public injunctive relief targeting Uber’s advertising, recruitment, onboarding, privacy notices and app representations about the company’s data collection practices.

He also seeks an order requiring Uber to disclose what data and algorithmic factors are used to determine driver-facing trip amounts, prohibiting the company from using sensitive data to manipulate driver-facing pricing and disgorgement of Uber’s profits from the challenged practices.

In a statement to Courthouse News, attorney Lina Kaisey of Kaisey Law P.C. said the plaintiffs were glad to see “data misuse getting the attention it deserves.”

“As our lawsuit alleges, Uber has long turned corporate surveillance into a profit engine by using drivers’ own data to benefit the company at the expense of drivers and communities who make the platform work,” she said.

Representatives for Uber did not immediately respond to a request for comment.

Follow @mhattridge_