Uber is a fast-growing company within the sharing economy industry, which connects individuals with those requiring services in either transportation or food delivery. The essay writer company uses an app to connect drivers or delivery drivers to riders and individuals who order food delivery services. While Uber’s privacy policies are transparent, clearly spelling out what information may be gathered from users who utilize the services offered, there is confusion regarding what, and when, information is gathered by the company and how that information is being used by the company.
Without a better understanding of Uber’s collection and use of private user information, informed decisions by users and the public regarding Uber’s practices cannot be made. At this time, Uber collects information from the following categories, among others:
- · Profile Information & User Content
- · Background Checks
- · Demographic Information
- · Insurance Information
- · Location Information
- · Transaction and Financial Information
- · Device Information
- · Communications Within the App or Website
- · Third Parties and Vendors
Use of Information
Uber retains the ability to use all information alone, or in combination with other data, to inform its analytics processes, improve or alter its services, or to sell or give information to third parties within the sharing economy or ride sharing industry. The data collected by the company remains anonymous and is aggregated following data collection to protect the privacy of individuals. While the company has made breakthroughs in geo-mapping that has allowed for significant improvements to be made in real time technology, there are concerns that the company may use this information in ways that will have a negative impact on the user in the future. Users can opt-out of information sharing in some instances, though to use the company’s services there will need to be some information shared and collected by the company.
INTRODUCTION: UBER’S DATA COLLECTION PRACTICES & DATA USE
This report addresses the two following research questions regarding Uber’s business practices:
- What information does Uber collect from its users?
- How does Uber use the information?
BACKGROUND: UBER & THE SHARING ECONOMY
Business today is built on the collection of consumer data, and the sharing economy is no exception. It is difficult, however, for users to determine what personal information is being collected by companies and how that data is being used. One of the main benefits that consumers experience within sharing economy apps and services is the perception that the consumers are receiving “…a more personal and unique service, with both high affective and high participative value” (Ranzini, Etter, Lutz & Vermeulen 2018 p. 2). In order to use these services, however, either to provide services to others or receive services, users must exchange personal information through a site or app that connects users to one another.
This drastically affects how consumers perceive information privacy, not only between the companies running the sharing economy platforms, but in the information given to other users. This information can include, “Addresses, credit card information, as well as geo-location, travel habits, photos of personal items, individual preferences related to the use of various goods, and personal spaces are exchanged or made public and therewith require some implicit or explicit privacy considerations” (Ranzani et al. 2018 p. 2). One of the largest companies within the sharing economy is Uber, a ride-sharing app that connects users to drivers in cities worldwide. The company is of particular concern regarding privacy and data collection, since it is unclear what exact information the company collects from its users and how it that information is then used by the company. As data continues to be the greatest asset of modern business, it is important to understand the lines that are drawn between consumer privacy and data collection by large corporations. The following paper examines Uber’s data collection practices and how that information is then used for the company’s benefit.
Definitions of Key Terms
- Sharing Economy: The use of apps or websites where private individuals can connect with one another for services, generally for a fee.
- Uber: A multinational ride-sharing company that works through the app or the company’s website to connect drivers to riders, or food delivery drivers to customers.
- Users (Uber): Users are drivers, delivery drivers (which Uber refers to as ‘delivery partners’), individuals receiving the services, whether they are passengers or customers who ordered food delivery.
USER INFORMATION COLLECTED BY UBER
- The User’s Profile
Data is gathered by the company whenever a user creates or updates their user account. The information that may be collected includes the user’s name, phone number, email address, login information, banking or other payment information and information from the payment verification, along with the user’s government identification information. The government information that may be collected includes the user’s Social Security number, passport number, or their driver’s license number, along with the user’s date of birth, government identification photos, and their signature. For drivers working for the company, Uber also collects the user’s insurance and vehicle information (Uber 2018).
- User Content
The user content collected by Uber includes information that is submitted to customer support services, data from the ratings given within the app, or information given to Uber when the company is contacted for other purposes (Uber 2018).
- Demographic Data
- Information Obtained Through Background Checks
When users sign up to be a driver for the company, or when they sign up to be a delivery partner, Uber performs background checks. The company reports that it may collect the information obtained from the background checks, such as driver history or if the user has a criminal record, so long as that information is legally permitted in the state, country or region. Uber also reports that third party vendors may also collect this information on the company’s behalf (Uber 2018).
Demographics of Uber’s Users 2017 (United States)
Source: McGrath 2017.
The benefits of the data mentioned above can be useful for Uber in clearing drivers to work with the company and ensure that they have a good driving record and that they have committed no felonies, which is important in light of the services that Uber offers. Demographics, user profiles and user content are also important from a marketing perspective, to allow the company to create stronger advertising campaigns to draw in its target market. However, Uber’s data collection does not stop there, which is where the data collection begins to raise alarms among consumers for potential breaches of privacy.
Additional Information Collected by Uber
- Location Information
Location information is collected in different ways for different users, though the company does note that based on the user settings within the app and user permissions granted, Uber may collect the user’s precise location information (or the user’s approximate location) as it is determined through the device’s GPS, WiFi or IP Address (Uber 2018).
- Location Information of Driver/Delivery Partners
Drivers and delivery partners’ location information is collected whenever the app is opened within the user’s device. This includes when the app is being used in the foreground, or when the app is still open and running in the background (not open on the user’s device screen).
- Location Information of Riders/Delivery Recipients
Depending on the region of the user, Uber may be gathering location information when the app is in the foreground or background of the device. The company notes that this only occurs if the user has provided the appropriate permissions for location data to be processed by the company. The company notes that it is possible for the app and services to be used without granting location information permissions, however, the company also notes that the functionality of the services may be impacted. Even if these users do not allow permissions, their personal location information is shared with the company through the drivers or delivery partners (Uber 2018).
- Transaction Information
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- Device Information
The company collects information about the devices used to access its services, which includes the device models, IP addresses, the operating systems used, and the “software, file names and versions, preferred languages, unique device identifiers, advertising identifiers, serial numbers, device motion information, and mobile network information” (Uber 2018).
- Communications Data
Any communication that takes place within the Uber app, the company’s website, or “other services” is subject to data collection. Uber collects data information “…regarding the calls or texts, including the data and time of the call/text, and the content of the communications” (Uber 2018).
- Data Collected from Additional Sources
The data collected from other sources includes information regarding user feedback, referral programs, other users that request services on a user’s behalf and information connected to dispute issues. The company also reports that it may collect information from “Uber business partners through which you create or access your Uber account, such as payment providers, social media services… music services, or apps or websites who use Uber’s APIs or whose API Uber uses (such as when you order a ride through Google Maps)” (Uber 2018). The company also explains that it may collect user data regarding their insurance and financial providers, marketing services, transportation companies partnered with Uber and Business or Family profile information (Uber 2018).
HOW UBER USES THE COLLECTED DATA
In 2015, Uber also acquired assets from Microsoft’s search engine, Bing, which included approximately 100 of Microsoft’s employees who worked on data-collections activities, which was believed to be a move that would allow Uber to improve its own data collection and mapping (Wilhelm 2015). Within the technology sector, collection engineers are a highly prized commodity and the acquisition of “100 specific-focus engineers in a single move” shows some of Uber’s ambitions within the sharing economy market (Wilhelm 2015). The engineers that were brought into the company worked for Bing to collect image data, which included the development of Bing’s street, aerial and 3D mapping footage, which provides deeper insight into the direction Uber has begun to move in the past few years (Wilhelm 2015).
Uber’s operations are expansive, and the company continues to branch into new regions and services, which in part are driven by the company’s strong analytics and marketing abilities. Without Uber’s data collection methods, the company would likely have evolved much more slowly from its roots in San Francisco. The company’s algorithms work quickly, matching riders to drivers in less than fifteen seconds, and as the app processes the users’ information, Uber continues to work in the background “…storing data for every trip taken—even when the driver has no passengers. All of this data is stored and leveraged to predict supply and demand, as well as setting fares” (Patel n.d.). The company also uses data to understand the flow of transportation within individual cities, which allows it to adjust its timeframe for pickup and drop off based on common traffic issues within the area.
Interestingly Patel (n.d.) reports that Uber also collects information on the driver’s acceleration and speed and uses their personal information to determine whether the driver is working for one of Uber’s competitors. Patel (n.d.) explains that while this may seem like a massive invasion of user privacy, Uber remains clear on how the data is gathered within its site. The company reports that all personal data is made anonymous and then aggregated so that the company can monitor its service and usage, which can improve the company’s analytics. The company also notes that the information collected may be shared with third parties within the industry (Patel n.d.).
Data collected by Uber is “…crunched, analyzed, and used to predict everything from the customer’s wait time, to recommending where drivers should place themselves via heatmap in order to take advantage of the best fares and most passengers. All of these items are implemented in real-time” (Patel n.d.). Billions of points of data are gathered throughout each day by the company, which is then disseminated by Uber and turned into actionable points for service improvement. As Patel (n.d.) explains, “For example, Uber manages billions of GPS locations. Every minute, their platform juggles millions of events”. Those details then have to be converted to provide data visualization, which deals with “…everything from mapping and framework developments to data that the public (such as drivers) sees. And a lot of these data extrapolations and visualizations have never been done before, which has created the need for tools to be developed in-house” (Patel n.d.). Information being analyzed by Uber often needs to be delivered in real time to judge supply and demand within an area, or Uber’s marketing team may need to have aggregated data on hand to successfully plan the next marketing campaign (Patel n.d.).
Supply and Demand
Due to the differences in each city, a one-size-fits-all approach does not work for Uber. Supply and demand shift drastically for each city, which requires Uber to utilize its data for each city individually, in order to have enough drivers available at the right times to meet consumer demand (Patel n.d.).
Uber Use by City
Source: Uber Engineering 2015
The chart above shows the differences between Uber use based on time of day. Bright blue on the graphs indicates higher Uber use, while darker segments in the charts indicate lower use. As shown in the charts, each city has remarkably different times when users request rides, which means that Uber needs to judge its supply of drivers at any given time—and in specific areas of a city—to meet that demand.
Judging supply and demand may be one of the largest benefits for such extensive user data collection for the company, which may not be one that many users agree with. Uber implements surge pricing within its services, which can only be determined if the company has enough information to successful judge the supply of drivers or delivery partners or the demand for specific hours, locations, or events. One example that Patel (n.d.) gave was an example from 2011, where on New Year’s Eve, passengers interested in a one mile ride that was normally priced at $37 surged to $135 for the night.
This pricing strategy is one used by other transportation or hospitality services, such as airlines or hotels, but the difference in Uber’s pricing strategy is the use of real-time data that allows for minute by minute price fluctuations. Uber’s surge pricing structure has also received a patent to protect its surge pricing strategies and predictive modeling algorithms (Patel n.d.). To decrease user frustration, however, the company does not implement surge pricing at all times, and instead uses additional data analysis techniques to determine what the short- and long-term effects will be on the users whenever the company is considering implementing its surge pricing (Patel n.d.).
CONCLUSIONS AND RECOMMENDATIONS
Based on the research conducted for this report, the following are the conclusions regarding what information Uber collects from its users and how that information is used:
- Information collected by Uber includes personal and demographic information from its users, along with location information, insurance, financial institutions the user has services with, what pages or sites the user was on prior to opening the app or webpage, among others. One of the primary concerns regarding Uber’s data collection is the lack of clarity regarding how long the app collects data for after a ride or delivery has been completed, and whether the company continues to collect unrelated information while the Uber app is running in the background of the user’s device.
- Uber predominantly uses its collected data to improve its services and offerings for all users and to have better controls in place to predict supply and demand on a city-by-city basis. The information however also benefits the company in terms of its surge pricing techniques, which allow the company to charge more for rides or deliveries at specific times, which can significantly increase the company’s profits.
On the basis of these findings, it is recommended that users consider their own privacy values before determining whether to continue to use, or to create, Uber accounts. The individual user can also opt out of sharing some, though not all, information with the company, which may be something users want to consider.
As the sharing economy continues to profit from user information, consumers and the general public need to be aware of their own values regarding personal information before engaging in sharing economy services.
Etherington, Darrell. 2016. “Senator Al Franken Asks Uber for More Clarity on New Location Data Sharing.” Tech Crunch. Accessed November 28, 2018. https://techcrunch.com/2016/12/21/senator-al-franken-asks-uber-for-more-clarity-on-new-location-data-sharing/
Lutz, Christoph, Christian Pieter Hoffmann, Eliane Bucher & Christian Fieseler. 2017. “The Role of Privacy Concerns in the Sharing Economy.” Information, Communication & Society 1-20. https://www.dx.doi.org/10.1080/1369118X.2017.1339726
McGrath, Felim. 2017. “The Demographics of Uber’s US Users.” Global Web Index Last Modified August 16, 2017. https://blog.globalwebindex.com/chart-of-the-day/uber-demographics/
Patel, Neil. n.d. “How Uber Uses Data to Improve Their Service and Create the New Wave of Mobility.” Neil Patel. Accessed November 29, 2018. https://neilpatel.com/blog/how-uber-uses-data/
Ranzini, Giula, Michael Etter, Christoph Lutz & Ivar Vermeulan. 2018. “Privacy in the Sharing Economy.” European Commission. Accessed November 28, 2018. https://www.bi.edu/globalassets/forskning/h2020/privacy-working-paper.pdf
Uber Engineering. 2015. “Pulse of a City.” Uber. Last Modified August 18, 2015. https://eng.uber.com/pulse-of-a-city/
Wilhelm, Alex. 2015. “Uber Acquires Part of Bing’s Mapping Assets, Will Absorb Around 100 Microsoft Employees.” Tech Crunch. Accessed November 28, 2018. https://techcrunch.com/2015/06/29/uber-acquires-part-of-bings-mapping-assets-will-absorb-around-100-microsoft-employees/