Uber’s mobile apps current a satisfying simplicity of prices: You realize the fare upfront, and the one math left is how a lot to tip. However the elements governing your driver’s revenue on anyone experience, and over their ongoing enterprise, are removed from easy.
A recent report by Columbia Enterprise Faculty professor Len Sherman, which he unveiled with the gig-work-optimization app GigU on the Internet Summit Rio convention, tries to dispel that monetary fog by crunching information shared confidentially by a couple of skilled drivers. Sherman’s conclusion: By deploying algorithmic pricing and shifting prices, Uber has revved up its U.S. “take charge” to above 50%.
Sherman and GigU researchers recruited three veteran Uber drivers who requested the platform’s information about their journeys: one in Texas with about 20,000 rides since 2015 and two in Florida with a decade of expertise every, one with some 18,000 journeys and the opposite with roughly 11,000.
Charts in Sherman’s report generated from these particulars present rider per-mile fares and driver per-mile earnings staying coupled till Uber’s 2019 initial public offering, with drivers holding 80% to 85% of the fare.
However from the pandemic onward, and particularly after Uber’s 2022 launch of “upfront fare” pricing and its flip to profitability in 2023, the 2 figures scissor aside till driver shares drop beneath 50%.
As Sherman notes, that simply exceeds Apple’s longstanding, long-resented 30% cut of many App Retailer transactions.
He isn’t the one researcher to search out platform shares that prime. A research published last week by Shopper Experiences cited evaluation by Princeton’s Employees Algorithm Observatory on ride-hail information from Oregon that calculated take charges of 44% for Uber and 52% for Lyft.
That isn’t an inevitable consequence, as Sherman’s report illustrates with an instance of presidency intervention: a settlement with Uber and Lyft negotiated in 2024 by Massachusetts Legal professional Common Andrea Pleasure Campbell that set minimal pay charges. GigU estimated that it raised per-mile pay for Boston drivers to $2.31. The quantity in Dallas? $0.89 a mile.
Uber and Lyft every level to an exterior value they cowl however can’t management: industrial insurance coverage for drivers.
Uber’s press workplace despatched an announcement studying partly that “Professor Sherman depends on a couple of particular person tales to make sweeping claims about Uber’s enterprise nationally” and pointing to a January post through which the corporate cited a take charge after insurance coverage and different third-party prices of 21% worldwide in Q3 of 2025. That put up additionally put “median driver earnings per utilized hour” within the US above $30 an hour with ideas included.
Making use of the maths outlined in that put up to Uber’s Q1 2026 earnings, with $26.4 billion in gross bookings for mobility, $6.8 billion in mobility income, “Different” bills, largely insurance coverage, of $3.51 billion, and working revenue of $2.03 billion, reveals about the identical take charge.
However Uber’s filings don’t specify a driver take charge or get away U.S. figures. That’s the reason Sherman and GigU (an honoree within the social-good category of Quick Firm‘s Most Revolutionary Firms program) needed to depend on the small print Uber offers to particular person drivers.
“Uber by no means offers counterfactual information to refute report findings,” Sherman gripes. His learn of the agency’s filings: “fastidiously constructed to offer simply sufficient to fulfill SEC reporting necessities, however by no means sufficient to truly study something actual about their operations or economics.”
Lyft, for its half, stated its payment per experience averages “roughly 14% of what passengers pay,” with a 30% cap announced in April that returns any month-to-month extra again to drivers. Lyft’s response didn’t cite a driver take charge.
Sherman’s report emphasizes how a lot insurance coverage prices can fluctuate, even for a similar driver on the identical route. Levi Spires, for instance, noticed “estimated industrial auto insurance coverage and operational bills” on his receipts for 100 Uber Reserve journeys over two years from Ithaca, New York, to Syracuse Hancock Worldwide Airport, about 60 miles away, vary from $13.75 to $50.
Uber’s self-insurance has additionally enabled it to hoard billions of {dollars} in money, the activist group Shopper Watchdog reported in late May, from $6.7 billion in insurance coverage reserves reported in Uber’s 2023 annual report back to $12.5 billion in its 2025 annual report.
“Essentially the most headline-grabbing factoid from my analysis is undoubtedly the 50% Uber take charge determine,” Sherman says. “However to me, probably the most startling discovering was the evaluation of Uber’s industrial insurance coverage charges, because it ties collectively a grand scheme for Uber to squeeze driver pay, pad insurance coverage reserves and generate extra unrestricted money move, in a devilishly efficient grasp plan.”
Uber’s response stated insurance eats up 17% of a fare in Texas and 15% in Florida. Each Uber and Lyft have lobbied for modifications to state insurance coverage laws. Uber didn’t tackle questions on how a lot these prices can fluctuate or the critique that self-insuring lets the corporate stash money.
Sherman’s report advises riders and drivers to make use of price-comparison apps and “resolution help instruments” with out naming any. GigU CEO and co-founder Luiz Gustavo Neves places in a plug for the free Obi app for riders and, unsurprisingly, endorses drivers utilizing GigU’s Android app, which prices $49.95 a yr for real-time estimates of experience requests’ profitability.
Neves additionally cites Empower as a extra equitable type of ride-hail service, because it charges drivers a subscription to supply transportation after which lets them maintain 100% of fares. However Empower doesn’t present industrial insurance coverage and has spent years defying regulators in Washington, D.C.
Sherman sees Uber as standing alone in shaping its financial fortunes.
“Uber is the one US firm that has the flexibility to set shopper costs, provider pay charges and the reported figures for its largest non-labor value merchandise [insurance],” he says. “Uber does so with zero transparency on how costs, pay charges or its bills are decided regardless of rising proof of elevating costs, squeezing driver pay and inflating their reported insurance coverage prices.”
However has that spurred the three drivers Sherman studied to give up Uber? No. So far as he and GigU can inform, all three stay on the street.
