Government urged to ban ‘dynamic pay’ used by companies like Uber
Key Points
- The Trades Union Congress (TUC) has urged the government to ban dynamic pay systems used by companies like Uber.
- Research shows that dynamic pay exploits workers and increases inequality while reducing their bargaining power.
- A 2025 study found that after Uber introduced dynamic pay, workers' take-home pay fell across the board while the company's surplus skyrocketed.
- The government has already made progress in reforming employment legislation, but the TUC has urged it to expand its scope to end this practice across the country.
UK workers have called on the government to put an end to ‘dynamic pay’ systems they believe erode their rights and wages.
The Trades Union Congress (TUC), a collection of 47 unions representing more than 5.3 million UK employees, has published a report describing how dynamic pay is being used by modern tech and gig economy platforms to boost their profits at the cost of workers’ stability and bargaining power.
Platform work, which refers to gig work done through platforms like Uber and Deliveroo rather than traditional employment, has become increasingly common in the United Kingdom, but the TUC states the pay systems used by these companies are taking a toll on drivers, delivery riders, and others.
These companies do not offer workers a standard rate for work done through their platform. Instead, they use algorithms to determine variable and often personalised compensation for specific workers.
This not only has the potential to increase inequality, with some workers potentially being paid less for the same work than others, but also drastically impacts a worker’s security.
Dynamic pay can make their average take-home unpredictable and can lead to them being unsure what they will be paid at the point of accepting a specific job.
The TUC notes that these companies have often presented dynamic pay as being beneficial, as it allows real-time matching of supply and demand and can reward workers with better pay for being available during peak hours or in busy locations.
However, the TUC believes this system is too opaque to workers and decouples their earnings from their skill or effort. It pointed to case studies where drivers reported spending an average of ten hours a week logged on and waiting for work but not making any money.
The incentives of these big tech platforms is to shift towards profitability as their expansion slows, and the TUC said this creates a situation where workers are subject to a wage-setting regime they have no insight into, which is uniquely resistant to collective bargaining, and which is incentivised to exert downwards pressure through algorithmic engineering.
How Uber’s dynamic pay affected drivers
In a 2025 study by the University of Oxford which analysed 1.5 million trips on Uber, the findings show that dynamic pay led to reduced take-home pay for workers and increased inequality.
According to the data, the share of a fare retained by drivers fell significantly after the introduction of dynamic pricing, down to 50-60% for many drivers. However, the surplus profits earned by Uber increased by 38% after the pricing system was introduced.
Dynamic pricing was also shown to lead to more volatility and reduce predictability, making it more difficult for drivers to be sure of how much they will earn, and increasing the dead, unpaid time they spend waiting for trips without generating any income.
The study also found that inequality increased substantially, even among those doing similar work. Once dynamic pricing was introduced, a shrinking number of “winners” appeared that earned more than the vast majority of other drivers on the platform.
It was suggested that drivers doing the same work received different pay due to personalised algorithmic decisions.
A ban on dynamic pay in the UK
The TUC has called on the government to expand its planned labour reforms to end the use of dynamic pay by platforms such as Uber in the United Kingdom.
It argued that if the government aims to provide workers with fair pay and security, these goals are incompatible with the current pay regime used by these platforms. They undermine the principle of ‘same pay for same job’, the organisation said.
“It is not the logical next stage in development of the platform economy. Under the guise of ‘innovation’ it is little more than a throwback to a bygone era where employers did their utmost to disguise how wage-setting worked.”
It also said the government should move more quickly towards its planned classification of a single status of worker that no longer differentiates between workers and employees. This should include tackling bogus self-employment, the organisation said.
Lastly, the TUC said trade unions should have collective data rights over worker data to prevent the use of opaque algorithms in determining pay. It said employers should have transparency obligations to address the imbalance of power in workplace data processing.
The Labour government’s Plan to Make Work Pay is an ongoing effort to reform employment legislation and includes recent amendments to the Employment Rights Act, which ended zero-hour contracts and provided stronger protections against unfair dismissal.
