Uber’s mobile apps present a pleasing simplicity of costs: You know the fare upfront, and the only math left is how much to tip. But the factors governing your driver’s profit on any one ride, and over their ongoing business, are far from simple.
A recent report by Columbia Business School professor Len Sherman, which he unveiled with the gig-work-optimization app GigU at the Web Summit Rio conference, tries to dispel that financial fog by crunching data shared confidentially by a few experienced drivers. Sherman’s conclusion: By deploying algorithmic pricing and shifting costs, Uber has revved up its U.S. “take rate” to above 50%.
Sherman and GigU researchers recruited three veteran Uber drivers who requested the platform’s data about their trips: one in Texas with about 20,000 rides since 2015 and two in Florida with a decade of experience each, one with some 18,000 trips and the other with roughly 11,000.
Charts in Sherman’s report generated from those details show rider per-mile fares and driver per-mile earnings staying coupled until Uber’s 2019 initial public offering, with drivers keeping 80% to 85% of the fare.
But from the pandemic onward, and especially after Uber’s 2022 launch of “upfront fare” pricing and its turn to profitability in 2023, the two figures scissor apart until driver shares drop below 50%.
As Sherman notes, that easily exceeds Apple’s longstanding, long-resented 30% cut of many App Store transactions.
He is not the only researcher to find platform shares that high. A study published last week by Consumer Reports cited analysis by Princeton’s Workers Algorithm Observatory on ride-hail data from Oregon that calculated take rates of 44% for Uber and 52% for Lyft.
That is not an inevitable outcome, as Sherman’s report illustrates with an example of government intervention: a settlement with Uber and Lyft negotiated in 2024 by Massachusetts Attorney General Andrea Joy Campbell that set minimum pay rates. GigU estimated that it raised per-mile pay for Boston drivers to $2.31. The number in Dallas? $0.89 a mile.
Uber and Lyft each point to an external cost they cover but can’t control: commercial insurance for drivers.
Uber’s press office sent a statement reading in part that “Professor Sherman relies on a few individual stories to make sweeping claims about Uber’s business nationally” and pointing to a January post in which the company cited a take rate after insurance and other third-party costs of 21% worldwide in Q3 of 2025. That post also put “median driver earnings per utilized hour” in the US above $30 an hour with tips included.
Applying the math outlined in that post to Uber’s Q1 2026 earnings, with $26.4 billion in gross bookings for mobility, $6.8 billion in mobility revenue, “Other” expenses, mostly insurance, of $3.51 billion, and operating income of $2.03 billion, shows about the same take rate.
But Uber’s filings don’t specify a driver take rate or break out U.S. figures. That is why Sherman and GigU (an honoree in the social-good category of Fast Company‘s Most Innovative Companies program) had to rely on the details Uber provides to individual drivers.
“Uber never provides counterfactual data to refute report findings,” Sherman gripes. His read of the firm’s filings: “carefully constructed to provide just enough to satisfy SEC reporting requirements, but never enough to actually learn anything real about their operations or economics.”
Lyft, for its part, said its fee per ride averages “approximately 14% of what passengers pay,” with a 30% cap announced in April that returns any monthly excess back to drivers. Lyft’s response did not cite a driver take rate.
Sherman’s report emphasizes how much insurance costs can fluctuate, even for the same driver on the same route. Levi Spires, for example, saw “estimated commercial auto insurance and operational expenses” on his receipts for 100 Uber Reserve trips over two years from Ithaca, New York, to Syracuse Hancock International Airport, about 60 miles away, range from $13.75 to $50.
Uber’s self-insurance has also enabled it to hoard billions of dollars in cash, the activist group Consumer Watchdog reported in late May, from $6.7 billion in insurance reserves reported in Uber’s 2023 annual report to $12.5 billion in its 2025 annual report.
“The most headline-grabbing factoid from my research is undoubtedly the 50% Uber take rate figure,” Sherman says. “But to me, the most startling finding was the analysis of Uber’s commercial insurance rates, as it ties together a grand scheme for Uber to squeeze driver pay, pad insurance reserves and generate more unrestricted cash flow, in a devilishly effective master plan.”
Uber’s response said insurance eats up 17% of a fare in Texas and 15% in Florida. Both Uber and Lyft have lobbied for changes to state insurance regulations. Uber did not address questions about how much those costs can vary or the critique that self-insuring lets the company stash cash.
Sherman’s report advises riders and drivers to use price-comparison apps and “decision support tools” without naming any. GigU CEO and co-founder Luiz Gustavo Neves puts in a plug for the free Obi app for riders and, unsurprisingly, endorses drivers using GigU’s Android app, which costs $49.95 a year for real-time estimates of ride requests’ profitability.
Neves also cites Empower as a more equitable sort of ride-hail service, since it charges drivers a subscription to offer transportation and then lets them keep 100% of fares. But Empower doesn’t provide commercial insurance and has spent years defying regulators in Washington, D.C.
Sherman sees Uber as standing alone in shaping its economic fortunes.
“Uber is the only US company that has the ability to set consumer prices, supplier pay rates and the reported figures for its biggest non-labor cost item [insurance],” he says. “Uber does so with zero transparency on how prices, pay rates or its expenses are determined despite growing evidence of raising prices, squeezing driver pay and inflating their reported insurance costs.”
But has that spurred the three drivers Sherman studied to quit Uber? No. As far as he and GigU can tell, all three remain on the road.