Despite the potential of ride-hailing services to democratize the labor market, they are often accused of fostering unfair working conditions and low wages. This paper investigates the effect of algorithm design decisions on wage inequality in ride-hailing platforms. We create a simplified city environment where taxis serve passengers to emulate a working week in a worker's life. our simulation approach overcomes the difficulties stemming from both the complexity of transportation systems and the lack of data and algorithmic transparency. We calibrate the model based on empirical data, including conditions about locations of drivers and passengers, traffic, the layout of the city, and the algorithm that matches requests with drivers. our results show that small changes in the system parameters can cause large deviations in the income distributions of drivers, leading to an unpredictable system that often distributes vastly different incomes to identically performing drivers. As suggested by recent studies about feedback loops in algorithmic systems, these short-term income differences may result in enforced and long-term wage gaps.As they grow in popularity, ride-hailing and food-delivery services such as Uber, Lyft, Ola or Foodora are quickly transforming urban transportation ecosystems 1,2 . These services have revolutionized most aspects of the transportation market. By managing the rides through a mobile application, they lower the entry barriers to the service for both users or passengers and drivers. The rating system facilitates trust between drivers and users, and the flexible working hours make ride-hailing services a popular choice for people starting a new career or a side-job.A key feature of these services is that an algorithm replaces human dispatchers in the task of matching available drivers to the incoming requests. Companies are now able to optimize the matching with unprecedented precision using data they possess on cars, drivers, and traffic conditions 3 , resulting in better service availability, shorter waiting times, and ultimately a boost in efficiency or company profits 4 (optimization refers to maximizing efficiency in a given system, with given supply and demand parameters). On the other hand, in the process of maximizing effectiveness or minimizing waiting times, drivers' interests get sidelined, also, undesirable social outcomes might emerge [5][6][7][8] .Recent studies and media articles raise concerns about the risks threatening workers' well-being, including racial bias, worker safety, fairness to workers, and asymmetries of information and power. As documented in case studies 9-13 , workers are struggling to obtain remedies through official channels 12,14,15 , and strikes have become common in the past years (see Chapter 2 in 15 ) with drivers of Uber, Lyft, Ola, Foodora demanding higher fares, job security, and livable incomes all over the world 16 .The dispatcher systems of traditional taxi services allowed drivers to hear the same information and receive updates about traffic c...