Uber’s business model—which I feared from the get-go would morph into a platform engineered to exploit drivers and riders—has always been personal to me. As I’ve noted several times on this blog, I drove a Toronto taxi when I was in college, and it was a very lucrative gig. In those days, it was an all-cash business, and I was rolling in dough.
My hack license gave me peace of mind. I was always worried that I wouldn’t make it in Corporate Canada; even if I landed a good job, I figured I’d screw up my career. I befriended many longtime cab drivers, and it gave me considerable comfort to see that they lived a decent life—owning homes, sending their kids to college, and even taking vacations.
I perceived life in Canada as fair and humane. The country in those days offered world-class universal health care. My doctor worked at St. Michael’s Hospital in what was then a seedy part of town, and his waiting room was occupied by people from all walks of life. I never saw a medical bill until I moved to the U.S.
Young Americans today don’t even have the peace of mind of knowing they could survive by driving a taxi. Uber and Lyft have largely displaced that industry and become the primary options for local transportation, save for public transit in some cities. They’re using their market dominance to financially exploit unsuspecting riders as well as their drivers, whom they shamefully claim they don’t even employ.
Consumer Reports has published the damning findings of an investigation strongly suggesting that Uber’s pricing system is structurally rigged. The platform is designed to determine the exact desperation of customers needing a ride and then squeeze them for every penny before they cry uncle. The algorithm then dispatches the order, assigning it to the driver most desperate to service it for the least amount of money.
CR’s analysis revealed the startling mechanics of this system. Researchers found that riders requesting essentially the same trip at roughly the same time were often quoted dramatically different prices. Across the rides tested, the median gap between the lowest and highest fare was a staggering 50 percent. On one test route in Austin, fares ranged wildly from $25 to $65 for the exact same distance.
Uber insists it does not engage in so-called surveillance pricing and claims fare differences merely reflect changing marketplace conditions. Perhaps. I note that Uber spokesperson Zahid Arab’s LinkedIn bio says he brings “proven narrative excellence to high-stakes policy communications,” and boasts of his ability to “transform complex regulatory challenges into compelling stories that move public opinion and drive legislative action.”
Pardon me if I’m a little skeptical about anything Uber says in response to its growing controversies.
Uber’s former head of economic research appears to support some of Consumer Reports’ broader concerns. Keith Chen, a UCLA behavioral economist widely credited with designing Uber’s surge-pricing system, told NBC News that the company’s pricing evolved from a taxi-like model based largely on time and mileage to a far more sophisticated system involving “more complicated optimization” and tests designed to gauge what customers are willing to pay.
That’s a remarkable admission. Uber may deny it engages in surveillance pricing, but its former chief economist acknowledges the company has spent years refining systems designed to determine what riders will tolerate paying.
Surveillance pricing has attracted attention in Washington. In March, the Republican-controlled House Committee on Oversight and Government Reform announced an investigation into whether Uber, Lyft, and other companies were using surveillance pricing. Committee Chairman James Comer warned that pricing algorithms could “weaponize personal data and pad [companies’] profit margins at the expense of providing transparency to consumers.”
What’s clear from CR’s investigation is that Uber possesses enormous amounts of customer data and has developed increasingly sophisticated algorithms optimized to maximize revenue. Whether those algorithms are explicitly personalized or not, the result is the same: many passengers are paying far more than they realize for the same ride.
Uber’s passengers are not the only ones getting squeezed. Columbia Business School professor Len Sherman analyzed years of driver records and concluded that Uber’s share of rider fares has climbed to roughly 50 percent in many markets under the conventional definition of take rates. CR reached a remarkably similar finding from the opposite side of the transaction: in one of its test cases, a driver received just 53 percent of the fare while Uber retained roughly 47 percent, excluding government fees.
In Uber’s early years, the company marketed itself as taking just 20 percent of the fare, leaving drivers with 80 percent. In some markets, drivers received even more.
Uber’s recruiting pitch was simple: “Drive with Uber. Keep 80% of every fare.”
The statistics can feel abstract, but CR featured an impacted Uber driver. Stephanie King, 61, spent more than two decades managing a medical office before turning to Uber and Lyft in 2018 to supplement her income. In her first year, she earned roughly $60,000, aided by generous bonuses.
Today, despite years of experience on the platforms and sharply higher living costs, she says her annual earnings have fallen to roughly $35,000 and she relies on credit cards to make ends meet.
“They keep shifting all of the ways you can make money, so that you can’t get a good picture of what’s actually going on,” King told Consumer Reports. “As soon as you figure out how much you need to work to live in a given week, they say, ‘Hey, we have another idea.’ They keep pulling the rug out from under us.”
This increasingly sophisticated extraction model flourished under the leadership of Dara Khosrowshahi. Since being named CEO in 2017, Khosrowshahi has pocketed roughly $184 million in total compensation, mostly tied directly to Uber’s stock performance.
Khosrowshahi has certainly been earning his keep for Wall Street. When he assumed command, Uber was a chaotic corporate novelty hemorrhaging cash and reporting a staggering net loss of over $4 billion. By the end of 2025, that narrative completely flipped, with Uber generating bottom-line profits of more than $10 billion.
He achieved this feat by skinning the financial hides of Uber’s drivers and customers.
Uber has generated so much cash that loyal readers of this blog can instantly guess what the company did with the money.
Yup. Uber over the past two years has spent roughly $6.5 billion buying back its own stock, artificially juicing its equity value on paper.
Uber matters not because it is unique, but because it has become one of the purest expressions of a broader economic model spreading throughout corporate America.
It’s a wonder how any thinking American who isn’t part of the 1% isn’t outraged. Uber gouges its customers while simultaneously squeezing its drivers; its stock gets pumped, and Khosrowshahi and his corporate insiders laugh all the way to the bank.
The Wall Street Journal’s editorial page would tell you that Uber represents free-market capitalism at its finest. The Friedman doctrine, coined by economist Milton Friedman and known as shareholder theory, holds that the sole social responsibility of business is to increase its profits and enrich its shareholders.
It’s a compelling argument for the elite when companies are printing money. But when the going gets rough, the shareholders always seem to get going.
When GM went bust in 2009—having spent decades prioritizing short-term shareholder payouts and dividends rather than squirreling away the cash reserves needed to weather an economic downturn—I don’t recall reading about a single GM shareholder offering to return their accumulated largesse to save their beloved company.
The social responsibility to save GM didn’t fall on Wall Street. It fell squarely on the shoulders of American and Canadian taxpayers. In any case, free market capitalism isn’t resonating very well with America’s youth.
According to the 52nd edition of the Harvard Youth Poll released in April 2026, a minuscule 13 percent of young Americans believe the country is headed in the right direction. Squeezed to the bone by inflation and an impossible housing market, just 29 percent expect to ever be better off economically than their parents.
Trust in the federal government to do the right thing has collapsed to a record low of 15 percent. Half of young Americans now believe people like them have no say in what government does. This is no longer standard generational cynicism. It is a profound, systemic malaise.
The deep economic alienation of American youth is already expressing itself in bizarre and destructive ways.
Students at elite universities chant “Death to America” while attending institutions that cost more than many Americans earn in a year. Others embrace socialism, communism, or various forms of political extremism. On the opposite end of the spectrum, young men increasingly gravitate toward online influencers who preach resentment, nihilism, and contempt for established institutions.
The ideologies differ. The underlying emotion is remarkably similar. A growing number of young Americans no longer believe the system works for them. When people lose faith that hard work will produce economic security, they begin searching for alternative explanations and alternative movements. Some become radicals. Others become cynics. Very few become defenders of the status quo.
Alas, I naively thought Consumer Reports’ findings might rattle investors, particularly as it might fuel more political attention. CR’s investigation, which was picked up today by some mainstream media outlets, presented convincing evidence suggesting Uber may be squeezing riders as aggressively as it squeezes drivers.
Instead, Wall Street shrugged.
Uber’s stock closed at $73.25, up 0.55 percent. Simultaneously, a prominent financial website published a report arguing the shares are possibly undervalued by nearly 13 percent.
Apparently, the prospect of extracting more money from riders while paying drivers less is not a warning sign.
It’s an investment thesis.