DOWNTOWN — Jenny Lee works for an arts education nonprofit, which takes her to schools in the West and South sides. When she needs to take an Uber or Lyft for work, they are “quite expensive,” costing $20-$30 even for short trips.
By contrast, such trips closer to where she lives in Lakeview East are “only ever 12 bucks,” she said.
“Even though my work pays for these, we’re a nonprofit and we don’t have an unlimited budget,” Lee said. “So often times, when I have to go somewhere, it feels like this is maybe way too much for how far I’m actually going.”
A recent study shows Lee’s experience may be part of a larger pattern of Uber and Lyft charging higher prices for riders being dropped off in predominately non-white neighborhoods of Chicago.
The study, from two researchers at George Washington University, showed ride-hailing fares in Chicago increased per mile for trips where a person was dropped off in a neighborhood with a high percentage of non-white residents.
Researchers Akshat Pandey and Aylin Caliskan said their study found dynamic pricing models — used by ride sharing services but not taxis — have been found to lead to “racially-based price disparities.”
The study also concludes riders may see their fares change if they’re picked up or dropped off in neighborhoods where residents skew younger or where most residents haven’t obtained a college degree. People are also being charged more when getting picked up in areas with more expensive homes, according to the study.
The researchers said such riders may be facing “social bias.”
The two said their study is the first “large-scale fairness” review of algorithms used to determine the prices set by ride-hailing apps.
Chicago was chosen for the research because it has laws that ask ride-share companies to disclose their fare prices, according to the study. Uber and Lyft rides in Chicago are among the most expensive in the country, thanks to new taxes on single rides in certain areas of the city.
The study used U.S. Census data and data from more than 100 million ride-hailing trips in Chicago between November 2018 to December 2019.
Kate Lowe, an associate professor of urban planning at University of Illinois at Chicago, said she was not surprised about the role race may play in the pricing of Ubers and Lyfts within the city’s geography.
Lowe, who studies transportation, said ride-hailing apps can have an important role in expanding access for residents of non-white neighborhoods and low-income households.
“What this study shows aligns with what many people across social sciences find, which is — in a world characterized by structural racism — market mechanisms are often going to reflect and reinforce structural racism,” she said.
An Uber spokesperson said the company does not condone discrimination through algorithms or users and praised studies researching the impact of dynamic pricing.
Still, the spokesperson said the study may have overlooked numerous other factors in its analysis.
“It’s important not to equate correlation for causation, and there may be a number of relevant factors that weren’t taken into account for this analysis, such as correlations with land-use/neighborhood patterns, trip purposes, time of day, and other effects,” the company statement read. “We look forward to seeing the final results.”
A Lyft spokesperson responded similarly to a recent article about the study in Salon, saying the analysis was “deeply flawed” and race did not factor into its dynamic pricing.
The authors said in a statement to Block Club Chicago the study demonstrates “price discrimination correlates highly with the demographics of pickup and dropoff locations.”
“These findings cannot provide direct insights on causality, yet precisely quantify the unintentional disparate impact that puts historically disadvantaged groups residing at particular neighborhoods at a further disadvantage,” the researchers said.
This same pricing model has been researched before. The study points to a 2015 analysis that showed The Princeton Review, a test prep company, charged higher prices to individuals in areas with more Asian Americans.
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