Uber driver partners are paid 75% of the fare paid by the riders. It follows that when Uber continuously reduce rider fares, partner driver revenue shrinks. Uber has argued that when fares are reduced, demand for their service picks up and drivers can count on getting more customers and an increase in remuneration.
However, according to one Uber Partner driver – who prefers to go by the nickname, Akinsam – the continuous reduction in fares has been translating into shrinking income. Akinsam said that when he started driving for the ridesharing company some three years ago, he could easily make $2,500 a week driving 10-12 hours a day, 6-7 days a week. Recently, he has hardly been making $1,200 a week driving the same hours. He blames this solely on reduced fares.
In addition to the reduction in fares across the board, Uber has introduced a new service called UberPool. UberPool allows a rider to share the ride with another Uber rider headed in the same direction. This reduces the fare per rider by about 40%. Ideally, each of the UberPool riders pay a lower fare and the driver has the opportunity to complete two or more trips at once – a win-win situation for driver and riders.
But according to Akinsam, on more than 50% of the time he accepts UberPool requests, he picks up one rider at the reduced rate but fails to get a second rider. In a number of incidences when Akinsam accepted a second UberPool rider, the second rider immediately cancelled as soon as they noticed from the App that another rider was in the car. Apparently, a number of riders request UberPool with the hope that another rider will not be found so that they can enjoy the lower fare while having the car all to themselves.
The dwindling Uber partner revenue has seen a lot of partners leaving Uber to join the competition, LYFT, where remuneration for partners are reported to be better.
Uber is apparently taking some steps to address the frustration of its driver partners and to attract new drivers to their organization. They recently introduced Fare Boost, a guaranteed surge multiplier, to augment remuneration for its partners. For example, drivers like Akinsam can get guaranteed surges of up to 2.4x or 240% of the regular fare depending on the day of the week and time of day.
Akinsam has seen his weekly remuneration grow by over 50% since the introduction of the Fare Boost. He has increased the number of hours he drives to cash in on the opportunity while it lasts. He believes that the Uber Fare Boost is too good to be sustainable.
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