A new Consumer Reports investigation finds rideshare companies Uber and Lyft use algorithms that charge customers significantly different prices for the same ride in Pennsylvania and nationwide.
Volunteers requested numerous rides from the same location to the same destination at the same time. Consumer Reports found fares differed by an average of 42%.
State Sen. Nick Pisciottano, D-Allegheny County, said Uber and Lyft are not essential goods, but he warned that as the pricing model spreads to other parts of the economy, it could become harder for consumers to know what they will be charged or make informed decisions.
“They are a for-profit company, so they are trying to get consumers to pay as much as possible, in order to buy their service and make the best profit they can without losing those rides entirely,” Pisciottano said.
Pisciottano said legislation he introduced earlier this year would prohibit the use of dynamic pricing on essential goods, such as groceries, to safeguard constituents from exploitative practices. The measure is in committee.
Uber and Lyft are pushing back on claims of artificial pricing, saying the results reflect normal real-time marketplace conditions.
Derek Kravitz, deputy editor for special projects for Consumer Reports, said volunteers provided detailed estimates of how often they use the apps, along with demographic information such as race, gender and billing ZIP code.
Researchers then ran a statistical method to see whether people were being shown different prices based on who they were. Kravitz said they found little evidence of price differences tied to demographics.
Consumer Reports shared the findings with Uber and Lyft, and both companies said they do not personalize the base fares of rides.
“They use your personal data to personalize discounts and promos, meaning that your account information, your ride history, even your behavior in how you use the app, that can all determine the types of promos and discounts you get or not,” Kravitz said.
The report also found the share of fares going to Uber and Lyft drivers ranged between 43% and 49%, and that number has been trending downward in recent years.
Kravitz said what drivers make is not keeping up with inflation or with increases in passenger fares. The report’s authors said that puts pressure on both passengers and drivers while increasing company profits.
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