Uber and Lyft are using AI-driven pricing tactics to routinely charge different customers significantly different prices for rides ordered at about the same times, an investigation by Consumer Reports, a testing and advocacy organization, shows.
How it works
- Significant price discrepancies: Consumer Reports’ investigation found dramatically different prices for the same Uber and Lyft rides at similar times. It defined the same ride as a trip from the same starting point to the same ending point priced at almost the same time – generally within a few minutes of one another and, in many cases, within the same minute. The median difference between the lowest and highest price groupings across tested routes was about 50 percent.
- Widespread difference in discounts: Both apps also regularly entice customers to book rides by offering supposed discounts off what appeared to be inflated original prices, a practice that not only is deceptive and manipulative but also may violate several states’ consumer-protection laws. Consumer Reports found that nearly 11 percent of all discounts advertised on both platforms fell into this category. It believes these discounts are fake.
- Erosion of trust: The algorithmic pricing system makes it nearly impossible for consumers to comparison shop or understand the justification for price variations, creating a lack of transparency and trust in the ride-hailing market.
“People expect prices to change when demand spikes,” Phil Radford, president and CEO of Consumer Reports, said in a statement. “What they don’t expect is for two customers taking the same ride at the same time to be charged very different amounts, or to be shown discounts that may not be discounts at all.”
Radford said the solution is straightforward: companies should be required to clearly explain how prices are set and ensure that advertised discounts are genuine, so people can comparison shop and know they’re being treated fairly.
The comparison shopping challenge
Uber and Lyft are pioneers in “dynamic” and “surge” pricing, where prices fluctuate based on real-time supply and demand. However, Consumer Reports says the companies aren’t using traditional dynamic pricing:
- More than dynamic pricing: The pricing tactics observed in Consumer Reports’ Uber and Lyft tests differ from dynamic or surge pricing because volunteers booked rides within a few minutes of one another and, in many cases, within the same minute.
- Algorithmic black box: Both companies use complex algorithms and AI to rapidly set prices. This creates a black box effect, preventing consumers from understanding how price is determined and hindering price comparisons. Uber and Lyft say that they don’t use personal data to set base prices but acknowledge its use for discounts and promotions.
Key findings from the investigation
- Universal price variation: All 30 routes tested across the United States showed at least two different price groupings; many had more.
- One route in Kansas City, Miss., generated 29 different prices for 55 potential customers for the same ride at the same time.
- Another route with 10 airport trips in Portland, Ore., yielded eight different prices for the same trip at similar times.
- Fake discounts: About 50 percent of upfront prices supposedly reflected a discount, but 11 percent of these were found to be fake based on what appeared to be inflated original prices.
- Driver compensation concerns: Consumer Reports’ analysis showed that Uber and Lyft retain between 43 percent and 49.5 percent of each fare, a percentage that has grown as drivers’ shares have reportedly decreased.
Consumer Reports’ testing methods
The Consumer Reports investigation looked at advertised offers and promotions for Uber and Lyft before rides were ordered and paid for in March and April 2026. Tests were designed to minimize variables such as time-based dynamic pricing by having volunteers price the same routes at about the same times. The investigation included:
- Virtual testing: Volunteers checked prices for select routes across 17 states, recording and comparing price quotes for the same trips.
- In-person testing: The riders matched with a pre-selected pool of drivers. Consumer Reports then compared receipts from riders and drivers to determine fare distribution and company take-rates.
Pricing tactics draw criticism from consumers and lawmakers
Algorithmic and AI-driven pricing tactics are attracting growing attention and criticism from consumers, lawmakers, and regulators, Radford said.
A Consumer Reports investigation on Instacart found that the company used AI-enabled software to group customers and charge them different prices for the same products at some of the nation’s largest grocery stores.
This year, Connecticut and Maryland became the first states in the U.S. to ban certain forms of personalized pricing, and other states are considering similar measures.
