Recently Uber has announced some new policies which will help the drivers to know full details about the payments they receive and speed up the process of payments. The primary payoff for the drivers is the fact that Uber will not be taking a 25% share of commission from the fares between drivers and passengers anymore in all the cities of the United States.
Confirmed Upfront Payment
Uber has announced that from now on they will be officially determining Upfront Prices for the passengers depending on what the driver thinks their riders are going to pay. Uber will be using an algorithm which will decide the price of the journey based on specific factors such as their pickup locations, their destinations, their neighborhood, etc. This means that the total pay a driver receives will be separated from the payments earned from the passengers. The passenger fares will be calculated by distance and time, and up or down adjustments will be calculated over the estimated distance and time. As a result, Uber would be funding driver promotions such as Boost and Quest, and at the same time use any extra earning to make more profit for the company.
Not anything new
This policy is not something quite unexpected; people in the rideshare business who knew the policies of Uber could have predicted this kind of step from before. Long before the policy of Confirmed Upfront Payment, Uber had made a claim to the drivers that to make more profit they had to decrease the fares. Drivers would be earning more if the fare was low, considering the increased number of customers. But it was observed that this policy proved to be a loss for many drivers.
It is being estimated that customer price rates will increase in the future, but drivers would still be receiving fewer incomes from the company. Uber will continue to take the drivers' cut, and keep on paying a minimal fare to their drivers. Other companies such as Lyft might also be undertaking such policies to maintain its competition with Uber.
Uber will be sharing full details regarding fares with their drivers, such as how much the rider pays, how much the driver makes that payment, and Uber's profit or loss share on the fare. Also, if there are any promotions for the rides, they will be displayed to the driver. Transparency is very beneficial for these kinds of services because it helps in accountability for the workers, which can prove to be beneficial for the future. For instance, if the drivers are not getting the payment they deserve and the company makes more money than they are supposed to by unfair tactics, the workers will at least be aware of those and will have proper details as evidence of the misconducts by the company.
Reason for increased transparency
Tom Fellows is a Product Director at Uber. He has said that several drivers working at Uber had expressed their doubts regarding the fare they receive from the company. For this reason, the company has decided that it would be convenient to make the financial picture completely visible and understandable to the drivers, thus bringing clarity and building trust in the minds of Uber drivers.
Other than the introduction of complete transparency system, Uber has undertaken some policies to improve the Uber earning experience.
Initially, as per Uber's payment scheme, the drivers could collect real-time money as per their reward only after completion of their pay period. But now, Uber will be allowing drivers to receive instant payments; i.e., Once a driver earns rewards in their Uber app, the amount will be available in real time for immediate payment. Although certain drivers are noticing that their Quest and Boost incentives are varying from time to time, still it is being expected that this policy will be staying for a while.
It might happen that you are not eligible to be using Instant Pay. There are also other services on offer that allow you to have access to your pay anytime you would like to, for example, Active Hours, Ingo Money, GADA Secure Pay, etc.
Improved Trip Processing
During the starting years of Uber, the drivers' pay used to be calculated by a step by step system which made the whole process of trip analyzing very slow. As a result, the system was highly criticized by the drivers as it made a comparison of their income after Upfront pricing very difficult. But lately Uber has announced that they would be improving the processing of the drivers' pay for their trips, making it a quick as well as the systematic process.
The Ultimate Payoff
From an employee's point of view, it is nice to have a transparent picture of the financial picture of the company he is working in, especially the part of the picture concerning his income. From a company's point of view also it is also profitable as it builds trust in the minds of its workers, thus resulting in better work quality. But in the case of Uber, the truth is that these changes will not be bringing much of a difference in the earnings of Uber drivers. Also, by saying that Uber is transparent, they are also confirming the fact that they will try to increase the commission rates by paying the base amounts to the drivers and observing how much they can charge their passengers.