Apr 3, 2017 - Economy

How Uber uses mind tricks to manage its drivers

Rebecca Zisser / Axios

A lengthy New York Times report about Uber's techniques for managing when and where drivers work reveals an intense collision between Uber's business model, its employment practices, and its use of behavior science to influence drivers.

  • Why it matters: Uber's classification of its drivers as independent contractors instead of employees is at the core of its need for these practices. To avoid being forced to classify workers as employees, a company has to limit how much control is exerts over its contractors' work—it can't do things like train them, give them set work schedules, etc. So it's devised methods — similar to those used by video game developers — to direct drivers, including "surge" pricing, encouraging text messages, reminding them of earnings goals, and more.
  • Competing goals: Not all techniques satisfy everyone's goals, as the Times points out. "Surge" pricing, for example, aims to get more drivers to get on the road to meet the increased demand for rides, but the price hikes frustrate passengers. And while Uber wants to have as many drivers on the road at all times to ensure passengers can get picked up quickly, this leaves many drivers idle if there's not enough demand.
  • Beyond Uber: While Uber is the subject of the Times' report, it's far from the only "gig economy" company to use such techniques to manage independent contractors.
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