Trick or Treat: Uber’s Psychological Experiment

Trick or Treat: Uber's Psychological Experiment.

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In April, the New York Times published a fascinating piece on how Uber continues to use psychological techniques to influence where, when, and how long their drivers work.[1]

Litigation on the employee/independent contractor distinction is far from foreign to us. Skirting this line can lead to grave consequences in the courts.

Gig-Based Dilemma

Recent popularity of gig-based business comes to no surprise: companies allow anyone in need of income and flexible hours to transform idle time into extra cash. In turn, consumers can outsource daily living tasks from dog walking and grocery shopping to food delivery and transportation services.

Most of these workers are classified as independent contractors, meaning they are not entitled to minimum wage, overtime, health insurance, collective bargaining and other legal protections.[2] However, proponents of the gig economy argue that flexibility and availability of customers outweigh these concerns.

Electronic Incentives

Uber sets the stage for other gig-based companies by engaging in a behind-the-scenes behavior science experiment to push their drivers to enhance the company’s bottom line. The ridesharing app uses tactics similar to those used in video games, including alerting drivers when they are close to meeting earning goals; rewarding drivers with in-app, non-monetary badges; presenting an alert about their next potential fare before dropping off their current passenger (which cannot be turned off, only paused); and increasing engagement through male local managers pretending to be women when texting drivers to head to certain areas.[3]

Uber is in the process of developing a feature that allows riders to tell the app in advance that they need to arrive a location at a particular time. For example, if you need to pick up your kids from soccer practice at 6 p.m., the app will give you trips that take you in that general direction.[4]

Predictably, the uncertain regulation surrounding gig work has led to multiple class-action lawsuits. Litigation is not limited to the employment context. This issue arises in other areas where worker classification matters, such as personal injury and other tort claims.

Check out O’Connor’s Texas Employment Codes Plus and O’Connor’s Federal Employment Codes Plus to stay up to date on these hot-button issues.

[1] Noam Scheiber, How Uber Uses Psychological Tricks to Push Its Drivers’ Buttons, New York Times, Apr. 2, 2017.

[2] Todd Scherwin et al., The Uncertain Future of the Gig Economy, Today’s General Counsel, Oct./Nov. 2016.

[3] Tech Crunch provides a useful summary: Catherine Shu, Uber Responds to the New York Times Article About How It Psychologically Manipulates Drivers, Tech Crunch, Apr. 5, 2017.

[4] Scheiber, How Uber Uses Psychological Tricks to Push Its Drivers’ Buttons.