"lowered rates" for Uber drivers

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(Snyder Reed) #1

I know that everyone is tired of seeing post after post about “lowered rates” for Uber drivers.

Well, here is another one…sort of, and I warn you now, if you don’t like to read, skip over this post because it is a long one.

Before you start calling me names (I know many will), I ask that you at least READ and consider what I am saying…then go ahead and call me whatever name you want and tell me how stupid I am and that I should just quit or find another job if I don’t like it…blah blah blah, I have seen and heard them all.

But first, some facts about me:

  1. I have a “regular” job that I work Monday thru Friday that is enough for me to live off of comfortably with proper budgeting.

  2. My livelihood does not DEPEND on driving for Uber, I do ride share to earn extra money so that I don’t HAVE TO budget properly.

  3. Gun to my head, I prefer to drive for Lyft anyway. Uber passengers in my home market (Los Angeles) are kind of entitled assholes for the times that I drive (weekend evenings).

  4. I am a 20 percenter. That means that I have been doing this since before many of you but not all of you and I remember some of the “good old days” of Uber, when you could make decent money most of the time.

This does not make me better than anyone, I am just fortunate that I don’t “need” Uber. I believe that everyone deserves good things and don’t like seeing anyone being taken advantage of.

Now that you know a little about me, you will see that I don’t represent a large portion of the drivers who rely on Uber to make ends meet and that I could conceivably, “walk away” from this without it affecting me too much.

Now onto the meat of the problem…

When I started driving for Uber, the passenger price was DIRECTLY related to the driver pay using this formula;

Miles Driven + Time To Destination + Surge Multiplier (if any)

This meant that my NET pay was ALWAYS whatever Uber charged the passenger minus 20% and minus the “booking fee” (it was called the “trust & safety” fee back then).

From my signup date, Uber has dropped the per mile and per minute amounts a few times, claiming that lower rates meant the more people could afford Uber and would use the service, and that what we lost with the lower rates would be made up for by increased volume of riders…well, that was their claim anyway.

In reality, it just meant that drivers had to do more trips to earn the same amount.

Somewhere in 2015, Uber decided to change the way that passengers received information on Surge Pricing. Instead of drunk people trying to figure out what 4.3% meant in so far as their ride and waking up to a Uber bill of $70 for something that was normally $12, Uber changed the passenger experience to show them what the cost might be with all the confusing math taken out of it. Thus in 2016, Uber rolled out Upfront Pricing.

Upfront pricing was SUPPOSED to be good for both passengers and drivers because no longer could the passenger say that they did not know how much it was going to be, it would tell you upfront that getting from West Hollywood to Silverlake (approximately 6 miles for those that are not in the Los Angeles area) on Halloween at 2am was going to cost $324.

All looked to be good until passengers started to complain (yes, I know they do that a lot) about the upfront prices and asking the drivers why it was costing so much. This prompted drivers to start asking passengers how much the upfront fare quote was and having drivers compare their Gross fare against the passengers receipt.

Low and behold, there was a difference and more often than not, it was in Uber’s favor.

Uber had changed the dynamic and were no longer charging the passenger based on the ACTUAL distance and time plus surge pricing (if any). Instead they were using a computer-generated estimate and padding the fare to make up for any possible errors.

This caused many drivers to cry foul since it appeared that they were being short changed and were not getting a piece of the “extra” fare.

Technically, Uber HAD NOT changed the agreement that drivers had signed up for. The were still paying the drivers what they had agreed to

Miles Driven + Time To Destination + Surge Multiplier (if any)

This did not sit well with a lot of drivers and they filed a Class Action Suit claiming that Uber was cheating them out of their “fair share” of the inflated cost and surplus fare.

Uber agreed (after several emails) to pay the difference only for the fares that had surplus AND only for the drivers that contacted Uber about them.

In addition to the TOS update, they “simplified” driver receipts to show only NET EARNINGS instead of GROSS earnings as they previously did. This caused mass hysteria from drivers who DID NOT read or understand the information that Uber sent out.

All caught up?

Now comes the part where you will call me an idiot (if you haven’t already)…

Why the new TOS is BAD for Drivers….

Uber’s new TOS has solidified a NEW way of lowering rates WITHOUT actually lowering them.

What bothers me about all of this is how drivers here are all ready to jump all over anyone that that suggests that what Uber is doing is wrong.

“Nothing changed”

“Uber is paying you for time and miles, just like you are supposed to get”

“But you are being paid the same as they always did”

These and many more similar sentiments are what the indoctrinated drivers all say.

I wonder just how many of these drivers realize that they have had the wool pulled over their eyes with the latest TOS and that they just agreed to a rate freeze?

Observations:

  1. Uber has saturated the market in pretty much every city.

  2. Uber currently has a larger share of the ride share industry than their competitor Lyft does.

  3. Uber has changed how people travel about and made their service near indispensable.

  4. Uber realized that drivers would not continue driving if they lowered rates again.

  5. Uber needs to start making more money so that their investors don’t dry up or leave.

Question:

How can Uber combine all these observations, take take advantage of their large market share, their indispensable service, start making more money and pay the drivers less money without lowering the fares?

Answer:

Separate the driver pay from what they charge the passenger and get the drivers to agree to a rate freeze instead of lowing rates.

This allows Uber to raise the fares and start earning more per trip because they no longer have to worry about paying the driver based off of the actual fare like it USED TO BE.

That’s right, Uber did change things and all these drivers unwittingly allowed Uber to dupe them into agreeing to a very well hidden rate cut.

Now they can charge the passenger 6x surge and pay the driver 1.5x surge.

Now they can quote a ride as costing $49 and taking 35 minutes to complete and then pay the driver $19.42 and it only took 23 minutes to actually do.

How do they get away with it?

Uber brags to the passengers that they got them to their destination 12 minutes faster and isn’t that great?

Uber promises to pay drivers what they already were supposed to pay the drivers and then allow drivers to put each other down when they try to discuss it. Yup…you are doing Uber’s dirty work for them and you are happy and proud of yourselves for doing a great job of it.

Uber then updates the pay statement to show you your actual earnings with their cut already removed, so you can see how little you were actually earning. And to add insult to injury, Uber shows you how much they charged the passenger and they show you how much Uber makes…almost always more than the 20% or 25% that you ORIGINALLY agreed to.

Tell me again how you didn’t have your fares cut?


(Hassan) #2

Waiting for the first negative/positive comment… Too long, I don’t have time to read:):):):slight_smile:


(Laura Lee) #3

It’s funny I’ve been hanging in there waiting for uber to get better but they just keep getting worse one of my Pax told me a while back that Uber was trying to saturate the market and have the cab industry deleteit like cassette tapes and that after the cab industry goes away uber would raise the rates back up and make black drivers in themselves happy now it seems that they have raised the rates drivers are not getting any of that I will keep driving for lyft for now


(Abel) #4

Oops my mic was picking up the TV LOL when I meant to say they would raise the rates for drivers and themselves guess that was not their tactic


(Chris Stipe) #5

It seems to me that the prearranged pricing is a de facto rate increase that they simply don’t have to pay the driver on. Uber has managed to find the lowest amount that drivers are willing to drive for and is paying the drivers that lowest figure. They did it systemically by continuing to lower the fares for the passengers and therefore the drivers pay over time. Now that they have the drivers at the point that they want, they can raise what they charge the passengers without access what they charge the passengers without having to pay the drivers any more thanks to the new terms of service agreement.


(Marsha_Smith) #6

No negative comments from me. Great post and informative… You get it. They lowered drivers pay without actually lowering it.


(Jeremy Mwan) #7

Great post!! Very well written and very articulate. However, call me stupid if you want to but isn’t Lyft essentially doing the same thing? They also have the upfront pricing…


(Cody Parker) #8

To the best of my knowledge, their upfront pricing will adjust if the quoted price is more than the actual price. Also, most of the fare differences are within a few cents of the driver payment.


(Brahim Decker) #9

I drive exclusively Lyft now and can confirm that. The largest difference I ever saw was about $1 and that was because I knew the area and took a shortcut for the pax because they were running late.


(Garrent George) #10

Great well thought out analysis. How do we optimize this knowledge? It is time to STAND UP to Uncle Uber. We need to educate drivers, by sharing this in any and all forums. It is even more important to educate the public. Educate your riders that they are in fact being taken for a ride TWICE each time they use Uber. Educate the PUBLIC through local,and national credible media outlets. For example have a rider request you and compare his inflated prequoted price with your actual meter. Contact local and state politicians and regulatory agencies, and encourage your clientele to do the same. OR, you can sit back, whine and bitch and moan about it and be shocked when they take it to the next level. The ball is in our court—lets hit it .


(Christian Odom) #11

There seems to be an almost endless supply of drivers willing to run their vehicles into the ground for proverbial peanuts. Taxi companies learned long ago that unionization was the best way to deal with these situations. Unfortunately, with unions also comes dirty politics and tampering. But also the standards of workmanship tends to decline…hence dirty cabs and rude, reckless drivers. All that you said is not news…you just did a nice job of summarizing the situation.

I don’t have a solution…and I’m not certain there is one. Unfortunately greed is part of the human condition, and the money changers will be served…buyers beware.


(Lisa Markee) #12

the only solution I can think of is (and I shudder to state this) government regulation. Keep in mind that I am of the firm opinion that the less government we have, the better, but the only way I see this improving is to have the local or state governments pass a law, just like they did with taxis, that the fares per mile and time period must be posted in writing (or in the app) and that the provider may not exceed those fares without notice (letting the passenger know surge is happening) and that the actual provider (the driver) must be commensurately compensated when that happens.


(Jack Dolen) #13

I agree that the gig economy needs to be reviewed at the federal level. Similarly, we may need government intervention just as we did 120 years ago at the beginning of the industrial revolution, (circa 1900).


(Mark Moore) #14

Can you NAME three cities where taxi drivers still belong to a labor union? I drove cab when it was teamsters from 1977- 1984, the cabs were cleaner and the standards were higher than any your Uncle Uber ever rolled out. Almost all cabs are and have been independent contractors for decades, except some small local companies, which few if any are union. You are 101% right that the gig economy needs more regulation, but this should be at the state and local levels. Only the most basic rules should come from feds.


(Kelly Hector) #15

This is hilarious, I said pretty much all of this in my other group (in a shorter version). lol. It got overlooked. They pulled the bait and switch…NOW they can start making a profit because they’ve done the research and figured this is probably their threshold to keep the drivers that are willing and raise what they are charging the passengers. I believe it was always planned this way they just had to test out the limits. They are just putting a gap in the profit margins which is common sense. I suggest all full timers run now.


(Bector Ernest) #16

When you think about it this was their plan all along. Get the drivers use to the rate cut, change the TOS, raise the rate back up to what passengers are willing to pay, don’t raise pay to drivers. We get the scraps. Well I will say this. The next 1099 we get better only show how much we actually received since Uber is no longer just an agent between us and the passengers. Now Uber contracts for our services to support their customers.


(Melinda Foster) #17

Does this not make them a trsnsportation company and not, as they claim, a technology company that simply matches riders and drivers for a small commission? Should they not then be subject to the same regulations as other transportation companies. How is Uber any different than a cab company that has owner/operators??


(Jonathan Green) #18

My state, CT…is clamping down on surge pricing and implementing some regulations for driverless autos, from what is being reported…I’ll post again when I’ve read the applicable laws that are coming out, regular legislative session just ended Wednesday…smh! :thinking:


(Peter Nelson) #19

I’m a 80/20% also . I didnt kno there was a rate freeze. that explains why my rider was charged $12.36 and I only got $6.30. I was pissed… Its so unfair. Thanks for your post. What can we possibly do


(Harold Young) #20

Agree, written well and thought out.
I have no problem with being paid what I agreed.
All bussines get as much money as individuals will tolerate in respect to goods or services.
Retail, internet, New cars & real estate to name few.