Uber driver pay is falling as the company’s take rate rises, new research finds

Uber’s mobile apps present a pleasing simplicity of costs: You know the fare upfront, and the only math left is how much to tip. But the factors governing your driver’s profit on any one ride, and over their ongoing business, are far from simple. A recent report by Columbia Business School professor Len Sherman, which he unveiled with the gig-work-optimization app Gig U at the Web Summit Rio conference, tries to dispel that financial fog by crunching data shared confidentially by a few experienced drivers. Sherman’s conclusion: By deploying algorithmic pricing and shifting costs, Uber has revved up its U.S. “take rate” to above 50%. Sherman and GigU researchers recruited three veteran Uber drivers who requested the platform’s data about their trips: one in Texas with about 20,000 rides since 2015 and two in Florida with a decade of experience each, one with some 18,000 trips and the other with roughly 11,000. Charts in Sherman’s report generated from those details show rider per-mile fares and driver per-mile earnings staying coupled until Uber’s 2019 initial public offering, with drivers keeping 80% to 85% of the fare. But from the pandemic onward, and especially after Uber’s 2022 launch of “upfront fare” pricing and its turn to profitability in 2023, the two figures scissor apart until driver shares drop below 50%. As Sherman notes, that easily exceeds Apple’s longstanding, long-resented 30% cut of many App Store transactions. He is not the only researcher to find platform shares that high. A study published last week by Consumer Reports cited analysis by Princeton’s Workers Algorithm Observatory on ride-hail data from Oregon that calculated take rates of 44% for Uber and 52% for Lyft. That is not an inevitable outcome, as Sherman’s report illustrates with an example of government intervention: a settlement with Uber and Lyft negotiated in 2024 by Massachusetts Attorney General Andrea Joy Campbell that set minimum pay rates. GigU estimated that it raised per-mile p