Uber Turns Passive Data Into Active Earnings

Rumblings about monetizing passive data have been part of the tech sector conversation for years.

Until recently, however, it hasn’t been easy to point to concrete examples of companies making their passive data work for their bottom line. That’s now changed, and one front-running example is Uber’s Driver API.

What “Passive Data” Means

Passive data is information a business collects as a side effect of doing its main job. Every ride on Uber produces a trail of it: when and where the trip happened, how far it went, what the fare was, what the driver earned and how the passenger rated them. Nobody fills out a form to create that data. It simply piles up.

For years, most companies treated that kind of data as an internal resource, useful for running the business but not much else. The idea of opening it up to outside developers, so they could build new products on top of it, was talked about far more often than it was done.

How the Driver API Works

With over 1.5 million Uber drivers on the road, logging trip, financial, rating and profile information, there is an obvious market for developers building driver-experience-enhancing apps: a direct, practical step toward monetizing passive data.

A new API for developers to make driving more rewarding — introducing the Uber Driver API: https://t.co/wsaChlTuuP

— Uber Developers (@UberDevelopers) October 26, 2016

According to TechCrunch, Uber revealed the Driver API on October 26, 2016. Uber had offered developer tools for reaching riders for more than two years, but this was the first time it let outside developers build products specifically for drivers.

The API has three main parts. One covers the driver’s profile, including their rating. Another covers trips, with details like distance and fare. The third covers payments, showing what the driver was paid, when and how much. Uber also suggested that driver ratings could act as a reputation score, helping new services “bootstrap trust” with drivers or reward them.

Drivers stay in control. Just as you approve an app that wants to log you in with a Facebook or Google account, a driver has to authorize any app before it can see their Uber data. TechCrunch reported that access was limited at launch, with public documentation available for developers who wanted to apply.

This applied data isn’t only boosting Uber’s profile: It’s creating opportunities for enterprise, giving established players and up-and-coming developers a huge market to tap into, and a chance to partner with a massive startup success.

As TechCrunch reports, Uber has already reached out to developers interested in creating tools. Drivers can access a CV-building tool, track their tax owings, or connect to an auto repair rewards system.

TechCrunch listed the early partner projects in more detail. Besides the resume builder, they included a Sears Auto Center loyalty program that rewarded drivers based on completed trips, an app that recommended routes from combined trip data to help drivers earn more, a Stride app for keeping track of taxes and earnings, and an upfront payment app called Activehours.

Uber’s step into monetizing data won’t just endear them to developers eager to enter a new market. This is a partnership-building tool, and a vanguard example to other companies looking to transform data into new business opportunities.

Who Owns a Driver’s Data?

The Driver API rested on a simple principle: the data is about the driver, so the driver decides who gets to see it. In the years since, that principle has moved from a product feature to a legal fight, especially in Europe.

In April 2023, an appeals court in Amsterdam ruled largely in favor of drivers who had used Europe’s GDPR data protection law to demand information from Uber and Ola. According to TechCrunch, the drivers were seeking data such as passenger ratings, fraud probability scores, earnings profiles and how trips were allocated. The court found that several of the platforms’ decisions, including assigning rides, calculating prices and deactivating accounts over suspected fraud, counted as automated decision-making, so drivers were entitled to information about the logic behind them. It also ruled that the platforms couldn’t rely on trade secret exemptions to deny drivers access to their data.

What It Means for Companies Sitting on Data

Uber’s 2016 move showed one way to put passive data to work: let the people the data describes share it with services that help them. It’s a model that builds goodwill as well as products, because the people generating the data get something back.

The legal cases that followed are a reminder of the other side. If your business runs on data about people, expect them to ask what you hold and how you use it, and expect regulators to back them. Companies that plan for that openness from the start, as the Driver API’s permission model did, are in a better position than those that treat the data as theirs alone.