Uber is under mounting pressure after a transparency watchdog accused the company of using artificial intelligence to set driver pay in ways that may violate European data protection laws. The Worker Info Exchange (WIE), a non-profit organization focused on digital labor rights, has sent a formal legal notice to Uber BV in Amsterdam and Uber Technologies Inc. in the United States, laying the groundwork for a proposed collective action.
According to WIE, Uber’s dynamic pay tools—algorithms that adjust compensation based on supply, demand, and behavioral patterns—operate with little transparency and have led to financial losses for thousands of drivers across the UK and Europe. For many drivers, WIE argues, the shift to AI-driven pay models has coincided with unpredictable earnings and reduced bargaining power.
Expanding the Inquiry Across Europe
The legal threat extends beyond the UK. WIE says it is investigating Uber’s pay systems across Europe and may expand its claims to additional countries in the coming months. The organization’s challenge could test the limits of platform accountability under EU laws governing automated decision-making, data transfers, and worker rights.
WIE’s legal letter alleges that Uber’s systems may breach core protections under the EU’s General Data Protection Regulation (GDPR). The group claims that between August 2021 and November 2023, Uber unlawfully transferred driver data from Europe to the United States, potentially exposing personal information to unauthorized access and government surveillance. These transfers, WIE argues, occurred without drivers’ meaningful consent.
Claims of Algorithmic Harm and Worker Exploitation
At the center of the dispute is whether Uber’s algorithms undermine workers’ financial security. James Farrar, chair of WIE International’s management board, said the company’s reliance on AI and machine learning has created “deeply intrusive and exploitative pay-setting systems.”
Research conducted by the University of Oxford in partnership with WIE found that 82 percent of Uber’s UK drivers reported earning less per hour after the introduction of dynamic pay. Many lost 8–16 percent of their annual earnings during that period. Farrar argues that these findings show how algorithmic systems can reshape labor conditions without offering workers clarity or recourse.
WIE claims the company uses drivers’ personal data—including behavioral metrics and travel histories—to train pay-setting algorithms, allegedly without obtaining proper consent. Such profiling, the group says, risks entrenching asymmetries between platform companies and workers.
A Potential Test Case for Algorithmic Accountability
If Uber does not meet its demands to halt the practices and compensate affected drivers, WIE intends to file collective proceedings before the Amsterdam District Court under the Netherlands’ collective redress law. The case could become one of Europe’s most prominent tests of whether AI-powered workplace systems must be subject to stricter scrutiny under privacy and labor regulations.
For now, the conflict underscores a broader tension in the global gig economy: companies increasingly depend on automated systems to manage workforces at scale, while drivers and delivery workers argue that these same systems obscure decision-making and weaken their rights.
As calls for transparency grow louder, Uber’s upcoming legal battle may determine not only the future of its dynamic pay systems, but also how far algorithmic management can go before it collides with the boundaries of European law.
