Uber Cuts 3,000+ Jobs Globally Amid Restructuring, AI Algorithm Faces Scrutiny

Uber is undergoing a significant global restructuring, including a reduction of approximately 3,300 corporate jobs, representing about 10% of its total workforce. This move aims to streamline operations, cut management layers, and create a "simpler and faster" business, according to CEO Dara Khosrowshahi. The company also plans to increase its in-office presence, with less than one percent of employees expected to work remotely. These are Uber's most substantial layoffs since 2020.

Concurrently, Uber is facing a major class-action lawsuit in Europe, initiated by around 240,000 drivers across several countries. The lawsuit, filed in Amsterdam, alleges that Uber's AI-powered "Upfront Pricing" algorithm unlawfully uses automated decision-making and profiling to set driver pay and assign jobs, violating data protection regulations like GDPR. Drivers describe the algorithm as "soulless" and "scary," claiming it manipulates earnings by exploiting their personal data and pushing down fares to the minimum they are willing to accept.

The legal action claims that this algorithmic system has resulted in significant income losses for drivers, with some in the UK reportedly losing an average of over £5,000 annually. This European lawsuit follows a similar class-action case filed in California, both challenging Uber's algorithmic practices concerning driver compensation. Uber, however, maintains that its pricing is determined by trip details rather than driver behavior. The company was also recently fined €825 million by the Dutch data protection authority for automated account deactivations without proper notice, a decision Uber intends to appeal.