How Uber uses psychological tricks to push its drivers' buttons

Travis Kalanick, CEO of  ride-sharing service Uber, during a press conference in Beijing on Jan 11, 2016.
Travis Kalanick, CEO of ride-sharing service Uber, during a press conference in Beijing on Jan 11, 2016.PHOTO: AFP
Former Uber driver Josh Streeter showing a screenshot from the Uber app that encourages driving longer, in Tampa, Florida, on March 23, 2017.
Former Uber driver Josh Streeter showing a screenshot from the Uber app that encourages driving longer, in Tampa, Florida, on March 23, 2017. PHOTO: NYTIMES

(NYTIMES) - Ride-hailing giant Uber rarely discusses internal matters in public. But in March, facing crises on multiple fronts, top officials convened a call for reporters in which the company announced that it would fix its troubled relationship with drivers.

"We've underinvested in the driver experience," a senior official said. "We are now re-examining everything we do in order to rebuild that love."

And yet even as Uber talks up its determination to treat drivers more humanely, it is engaged in a behind-the-scenes experiment in behavioural science to manipulate them in the service of its corporate growth - an effort whose dimensions became evident in interviews with several dozen current and former Uber officials, drivers and social scientists, as well as a review of behavioural research.

Uber's innovations reflect the changing ways companies are managing workers amid the rise of the freelance-based "gig economy." Its drivers are officially independent business owners rather than traditional employees with set schedules. This allows Uber to minimise labour costs, but means it cannot compel drivers to show up at a specific place and time. And this lack of control can wreak havoc on a service whose goal is to seamlessly transport passengers whenever and wherever they want.

Uber helps solve this fundamental problem by using psychological inducements and other techniques unearthed by social science to influence when, where and how long drivers work. It is a quest for a perfectly efficient system: a balance between rider demand and driver supply at the lowest cost to passengers and the company.

Employing hundreds of social scientists and data scientists, Uber has experimented with video game techniques, graphics and non-cash rewards of little value that can prod drivers into working longer and harder - and sometimes at hours and locations that are less lucrative for them.

To keep drivers on the road, the company has exploited some people's tendency to set earnings goals - alerting them that they are ever so close to hitting a precious target when they try to log off.

"We show drivers areas of high demand or incentivise them to drive more," said Mr Michael Amodeo, an Uber spokesman. "But any driver can stop work literally at the tap of a button - the decision whether or not to drive is 100 per cent theirs."

Uber's recent emphasis on drivers is no accident. As problems have mounted at the company, from an allegation of sexual harassment in its offices to revelations that it created a tool to deliberately evade regulatory scrutiny, Uber has made softening its posture toward drivers a litmus test of its ability to become a better corporate citizen.

But an examination by The New York Times found that Uber is continuing apace in its struggle to wield the upper hand with drivers. And as platform-mediated work like driving for Uber increasingly becomes the way people make a living, the company's example illustrates that pulling psychological levers may eventually become the reigning approach to managing the American worker.

Though employers have long borrowed insights from social science to get more out of their workers, they are constrained in doing so.

A large body of law and custom in the United States holds that because employers have far more power over their employees than businesses do over their customers, they must provide them with far greater protections - not least, a minimum wage and overtime pay.

Uber exists in a kind of legal and ethical purgatory, however. Because its drivers are independent contractors, they lack most of the protections associated with employment.

"We're talking about this kind of manipulation that literally affects people's income," said Dr Ryan Calo, a law professor at the University of Washington who studies the way companies use data and algorithms to exploit psychological weaknesses.

Uber officials, he said, are "using what they know about drivers, their control over the interface and the terms of transaction to channel the behaviour of the driver in the direction they want it to go."

Alongside Uber's daunting targets for expanding its pool of drivers to meet mounting demand, a high turnover threatened to cap the company's growth and throw it into crisis.

Underlying the tension was the fact that Uber's interests and those of drivers are at odds on some level. Drivers, who typically keep what's left of their gross fare after Uber takes a roughly 25 per cent commission, prefer some scarcity in their ranks to keep them busier and push up earnings. For its part, Uber is desperate to avoid shortages, seeking to serve every customer quickly.

The friction over meeting demand was compounded by complaints about arrangements like aggressive car leases that required many drivers to work upward of 50 or 60 hours each week to eke out a profit. Uber officials began to worry that a driver backlash was putting them at a strategic disadvantage in their competition with Lyft, which had cultivated a reputation for being more driver-friendly.

Uber was increasingly concerned that many new drivers were leaving the platform before completing the 25 rides that would earn them a signing bonus. To stem that tide, Uber officials in some cities began experimenting with simple encouragement: You're almost halfway there, congratulations!

While the experiment seemed warm and innocuous, it had in fact been exquisitely calibrated. The company's data scientists had previously discovered that once drivers reached the 25-ride threshold, their rate of attrition fell sharply.

And psychologists and video game designers have long known that encouragement toward a concrete goal can motivate people to complete a task.

"It's getting you to internalise the company's goals," said Ms Chelsea Howe, a prominent video game designer who has spoken out against coercive psychological techniques deployed in games. "Internalised motivation is the most powerful kind."

Mr Amodeo, the Uber spokesman, defended the practice. "We try to make the early experience as good as possible, but also as realistic as possible," he said. "We want people to decide for themselves if driving is right for them."

Of course, managers have been borrowing from the logic of games for generations, as when they set up contests and competition among workers. More overt forms of gamification have proliferated during the past decade.

But Uber can go much further. Because it mediates its drivers' entire work experience through an app, there are few limits to the elements it can gamify. Uber collects staggering amounts of data that allow it to discard game features that do not work and refine those that do. And because its workers are contractors, the gamification strategies are not hemmed in by employment law.

Dr Kevin Werbach, a business professor who has written extensively on the subject, said that while gamification could be a force for good in the gig economy - for example, by creating bonds among workers who do not share a physical space - there was a danger of abuse. "If what you're doing is basically saying, 'We've found a cheap way to get you to do work without paying you for it, we'll pay you in badges that don't cost anything,' that's a manipulative way to go about it," he said.

When asked whether Uber's product managers and data scientists were akin to developers at a social gaming company like Zynga, Mr Jonathan Hall, Uber's head of economic and policy research, accepted the analogy but rejected the implication.

"I think there's something to that, but ultimately Zynga should worry mostly about how fun its games are rather than trying to get you to play a little bit more by some trick," he said.He argued that exploiting people's psychological tics was unlikely to have more than a marginal effect on how long they played Zynga's games or drove for Uber. It is "icing on the cake," he said.

More important, some of the psychological levers that Uber pulls to increase the supply of drivers have quite powerful effects.

Consider an algorithm called forward dispatch - Lyft has a similar one - that dispatches a new ride to a driver before the current one ends.

Forward dispatch shortens waiting times for passengers, who may no longer have to wait for a driver 10 minutes away when a second driver is dropping off a passenger two minutes away.

Perhaps no less important, forward dispatch causes drivers to stay on the road substantially longer during busy periods - a key goal for both companies.

Uber and Lyft explain this in essentially the same way.

"Drivers keep telling us the worst thing is when they're idle for a long time," said Mr Kevin Fan, director of product at Lyft. "If it's slow, they're going to go sign off. We want to make sure they're constantly busy."

While this is unquestionably true, there is another way to think of the logic of forward dispatch: It overrides self-control.

There are aspects of the platforms that genuinely do increase drivers' control over their work lives, as Uber frequently points out. Unlike most workers, an Uber driver can put in a few hours each day between dropping children off at school and picking them up in the afternoon.

Uber is even in the process of developing a feature that allows drivers to tell the app in advance that they need to arrive at a given location at a given time.

"If you need to pick up your kids at soccer practice at 6pm," said Mr Nundu Janakiram, the Uber official in charge of products that improve drivers' experiences, "it will start to give you trips to take you in the general direction to get to a specific place in time."