Over the past few months, many drivers have noticed a drop-in surge and prime time. Now we know that people haven't changed and business is as usual, so what is the explanation for these discrepancies? In some states, such as San Francisco, there are no more surges, and surge prices have dropped in other areas from 2x to 1.25x. In this article we will try to find the reasons and explain:
Surge Income Based Drivers
If you are a driver that relies solely on surges than your marketing mix is no good. Relying on only one source of income is narrow vision management. The surge situation proves this. While some drivers would take over $70 per surge, or big event, parking or waiting in specific areas, are now all over. Creating a new income strategy is the new driver age.
App evolution
The old app system would lock a driver to a ride until the ride was over. But, in the new system app would choose the closest driver for dispatch to new requests, even when the driver is driving towards the accepted trip, which is not so good for surges and primetime rides. Although the old system would make quite a bit of money for drivers, it was not an efficient way.
Due to these inefficiencies, the research and development teams in both Uber and Lyft worked on improving the methods and algorithms for ride-share distribution.
JIT (Just in Time)
JIT is a manufacturing (supply chain) process that pulls a resource through the system as, and when it is needed, this reduces inventory costs and makes internal workflow fluid. The process also takes a holistic approach and determines how to work the flow to prevent bottlenecks and build-ups. This system is the backbone of Back-to-Back driving.
Back to back riding enables a driver to have a second ride ready immediately after the first ride finished, basically a Just in time process, where passengers are the resources and drivers are the processes. It pays well for Uber and Lyft to have drivers working constantly.
This new system prevents surges and prime time by making drivers ready for immediate tasks. This is the software's holistic algorithm approach, and it is natural that it was developed after so many years. Since it took time for the developers to analyze the data and realize that the whole ride share process is one distribution system, or supply chain process, where there are queues, bottlenecks, resources, and processes to manage. Now the new system prevents the build-up of surges and reduces the pressures of prime time and as such can reduce the large boost factors that they had previously offered.
The bland maps
The new mapping system creates a blander map approach, where there are less dark colors to cover. Drivers are inserted into areas on the map and using all the historical data, as well as the new queuing approach; drivers reach their fares in about three to five minutes at any given moment. This radically reduces passenger waiting time, increases passenger satisfaction and gives drivers more rides per hour.
Drivers will no longer need to seek out hot spots since they won't exist, or in some circumstances exist only when a major festival or event will take place. Don't forget that since there is an even distribution over a mapped area, even cinema, theater and bar exit times are covered in a much more pragmatic way.
The Changing Driver Approach
The new app feature includes a balancing algorithm that checks to see if a driver assigned to a particular passenger is as close as they claim to be. If the system sees another driver closer, it will cancel the first driver and offer the passenger to the closer driver, at the same instance it will assign a new passenger to the first driver, taking into account the time it would have taken to reach the canceled passenger. That way the first driver is not penalized at all, and in fact might even get a passenger quicker than continuing to drive to the first one.
This has caused some consternation with drivers and passengers since sometimes a driver accepts a certain rated passenger as much as a customer chooses a particular driver or car. Consider the passenger seeking an American car and getting an Import, or a driver accepting a five-star passenger and ending up with a four-star drunk. Yes, shit happens.
Quest and Boost
These are the keywords now to follow. The syntax develops as the app evolves. The new system also uses pre-quotes that the nervous passenger agrees to pay up-front to ensure a ride and not have to deal with the payment issue at the end of it. The fact that most passengers pay more with a pre-quote is irrelevant. Quest and Boost bonuses place drivers closer to boosted drive areas, and also maintains a constant load of passengers for the full-time drivers.
Uber Pool and Lyft Line
Uber Pool and Lyft Line are taking more ride-share sharing passengers off the private ride-share scene, especially since the payment is now the same. These are to blame for the decrease in surges. Most ride sharing rides are in fact for either large groups of people in the same workplace or college and for individuals that prefer to save on transportation costs. Maybe because they're on a low-income budget or a transportation covered budget, whatever the reason, they are not a part of this new trend.
Conclusions
As time goes by and systems evolve, people learn more, new applications are added, and more drivers hit the streets. It is only a matter of time when ride-share driving income will become identical to taxi driving income. Add to the self-drive cars expected to hit anytime in the next decade and rideshare driving, taxi driving, and limo driving will be phased out, not immediately, but in twenty years from now…who knows?