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Eticas’s algorithmic audit finds compliance problems with ride-hailing platforms

Case Studies

A recently launched algorithmic audit finds compliance problems with ride-hailing platforms

price fixing

Barcelona, March 29th, 2023.- Eticas, Taxi Project 2.0 and Observatorio TAS (Work, Algorithm and Society in Spanish), three organizations focused on promoting ethical and fair practices in the digital economy, have published the results of their algorithmic auditing of ride-hailing platforms. The report explores Uber, Cabify and Bolt’s compliance with competition, labor and consumer protection laws in Spain.

The report reveals that the pricing algorithms of the three platforms appear to collude on some of the most important routes in Andalusia and Madrid, suggesting indirect price fixing through their algorithms, and in breach of the Law for the Defense of Competence. This means that the systems of these ride-hailing companies could influence the price of trips in ways that harm competition and consumers.

In addition, the use of this type of algorithms when mediating in labor relations lacks transparency in terms of payment and driver profiling, and can lead to discrimination against workers in case of absence for legally protected reasons. In addition, the report concludes that Uber’s pricing algorithm may discriminate based on the socioeconomic characteristics of neighborhoods, making mobility services less accessible in lower-income areas, which may constitute a violation of the General Law for the Protection of Consumers and Users.

The results of this audit raise doubts about the compliance of the ride-hailing platforms with the applicable legislation in the areas of competition, labor and consumer law. The lack of transparency in the algorithms used by mobility service providers is a persistent problem in these sector despite recent legal advances in favor of algorithmic transparency. As European law regarding platform workers is being developed to protect workers rights and regulate algorithmic management in the workplace, a first at the EU level, it is important to take into account how ride-hailing services also affect competition and consumers’ rights.

“This is the first report in the world to demonstrate with a significant amount of data that the dynamic pricing algorithms of ride-hailing platforms are fixing rates. With algorithms, companies no longer have to sit around the table to negotiate, so the competition authorities should be focusing their efforts on these new automated mechanisms,” says economist Sergi Cutillas. “Let’s hope that the competition authorities, given the flagrant evidence presented in our investigation, realize that their current position on this issue is favoring monopolies” agrees Tito Álvarez from Taxi Project 2.0.

Among its recommendations, the report highlights the need for greater transparency in the algorithms used by transport platforms, as well as stricter enforcement of existing laws to ensure that they are held accountable for any violation.

“These platforms play an important role in our economy, and it is important they operate in a fair and transparent manner that benefits both consumers and workers,” explains Gemma Galdón, founder and CEO of Eticas. “The results of this audit demonstrate the need for greater scrutiny of the algorithms used, and for stricter enforcement of the laws that already exist in this regard.”

Other recommendations include the need for greater collaboration between regulators, academics, and civil society organizations to promote ethical and fair practices in the digital economy.

The publication of this audit comes at a time of growing concern about the impact of algorithmic decision-making on our society. As algorithms make more and more decisions, it is important that we make sure they are transparent, accountable, and fair. This report provides a valuable contribution to the ongoing debate on how to regulate the use of algorithms in our economy and society.

ABOUT TAXI PROJECT 2.0:

Taxi Project 2.0 is a European think tank created by taxi drivers from the Spanish state that is dedicated to the study of social, legal and technical changes in the passenger transport sector, with the aim of defending the taxi. Taxi Project 2.0 has influenced important legislative processes, such as the current debate on the Sustainable Mobility Law, and judicial processes such as the promotion of unconstitutionality appeals to the Ayuso Law on VTC. Taxi Project has also carried out analysis in the field of competition policy and digital rights, such as those presented in this report.

Web: taxiproject.eu | Facebook: Taxi Project 2.0

For further information:

Alberto ‘Tito’ Álvarez: info@taxiproject.eu | +34678492419

ABOUT ETICAS:

Eticas is the world’s first algorithmic auditing company. Eticas works for major international public and private sector actors such as the UN, the European Commission, the OECD and the Inter-American Development Bank. Founded by Dr. Gemma Galdon in 2012, since its inception it has been committed to protecting people and their rights in technological processes. Web: eticas.tech | Twitter: @eticas.tech | LinkedIn: Eticas

For further information:

Patricia Vázquez: patricia@eticas.tech | +34 638 269 084

ABOUT OBSERVATORIO TAS:

The Work, Algorithm and Society (TAS) Observatory is a non-profit association that aims to defend the interests and claim the rights of workers in the platform economy. We investigate and collect data, give visibility to algorithmic irregularities and contractual illegalities, publish periodic reports, promote legal actions and defend ethical and inclusive work models. Web: https://observa-tas.org | Twitter: @ObservatorioTAS

For further information:

Juanjo Lavergne: observatoriotas@gmail.com | +34 659 267 106