Uber says report about drivers losing work is wrong after NYT details psychological methods used by firm

Uber defended itself on Wednesday against a New York Times article that claimed faster pick-up times for riders leads to a larger number of drivers without jobs.

The ride-hailing service took issue with a graphic in the Times article published Monday which detailed how Uber uses psychological techniques to keep drivers on the road. But a blog post by Uber did not address any of the claims over its method but instead took issue with an interactive graphic in the Times piece. The image showed that as more drivers came on the road, the number of minutes a passenger had to wait for a ride decreased, but the number of drivers idling rose sharply.

Travis Kalanick.
David Orrell | CNBC
Travis Kalanick.

"This is simply not true—and had the Times asked us whether it was, we would have explained the reality of what happens when Uber grows in a city: riders enjoy lower pick-up times and drivers benefit from less downtime between trips," Betsy Masiello, director of policy research at Uber, wrote in a blog post.

"It's a virtuous cycle that is widely acknowledged in business and academia, and which is backed up by data."

Uber published a number of charts which showed that as the number of drivers goes up, the waiting time for riders falls and so does the idle time for drivers. However, none of the charts had numerical values along the axes so there is no indication of the time period, time or number of drivers they are referring to.

Masiello explains that as the number of passengers and drivers grow, an individual driver is likely to be closer to a rider, leading to shorter pick-up times and more paying passengers. Uber's policy research director also asserted that new features like uberPOOL have meant longer trips, while incentives to drive during the busiest times help drivers to earn more.

"So although the Times article suggests that Uber's interest is misaligned with drivers', the opposite is true: it's in our interest to ensure that drivers have a paying passenger as often as possible because they're more likely to keep using our app to earn money. (And Uber doesn't earn money until drivers do)," Masiello said.

Uber's blog post said that the Times' graphic has two "flaws". Firstly, it treats demand as fixed, which "cuts against a fundamental tenet of transportation economics: if you make a service more compelling and convenient, you attract more demand." Secondly, it assumes that the number of drivers on the road is fixed and set by Uber. But "neither is true", Masiello wrote.

"If we were able to impose a situation where 80 percent of drivers' time was idle, drivers would leave the platform in droves to work with competitors—or leave ridesharing altogether," the blog post said.

The New York Times was not available for comment when contacted by CNBC.

Uber's blog post did not tackle many of the other assertions made in the Times article. Monday's story explained some of the techniques Uber uses to keep its drivers on the road for longer including:

  • Alerting drivers via the app that they were close to reaching a goal in terms of the amount of money they were making
  • A feature that tells the driver about a potential next passenger before they have finished a current trip
  • Local managers pretending to be females to text drivers telling them where the biggest area of demand would be

"We show drivers areas of high demand or incentivize them to drive more," said Michael Amodeo, an Uber spokesman told the Times. "But any driver can stop work literally at the tap of a button — the decision whether or not to drive is 100 percent theirs."

Uber also acknowledged in the article that it had experimented with female personas.

Pressure continues to pile on Uber following a number of public relations disasters of late including a video of Chief Executive Travis Kalanick berating a driver who complained about low fares and its continued legal battle with Alphabet spin-off Waymo.