Who’s Still Driving After The Latest Uber Rates Cuts?
For the third straight year in a row, Uber has slashed prices of fares. The winter season typically brings with it a decrease in business, from retail outlets to cab drivers, so it’s no surprise that companies like Uber would cut costs to save money. Although lower uber rates are better for riders, the same cannot be said for drivers who are trying to earn a decent income to support themselves and their families.
I would say that I’m an understanding person. I tend to take life in stride, just let whatever comes my way roll over me. It’s a fairly stressless existence, but sometimes there are things that just irk me. I’ve wanted to write about Uber rates and its system of price cuts for some time now, but I couldn’t justify going on a rant until the time was right. Now that Uber has slashed its prices for the third year in a row, I have just a few things to say about Uber drivers and what they’re going through.
More Drivers, Less Money
Uber’s ranks have been growing steadily over the past few years. As the company has gained in popularity, more and more drivers are applying to drive for Uber, and driver sign ups have soared. Drivers like the freedom that Uber brings because they can choose which trips they want to make, and when and where they want to work. Uber lets many drivers be their own boss, but policies are still in place to make sure drivers are thoroughly vetted and qualified to work as an Uber partner.
However, the increase in the number of uber rates cuts has left many without a decent amount of money for their services. Making money through companies like Uber depends entirely on the amount of demand there is for a particular service. With seasonal economies suffering from a slow in business during the wintertime, it stands to reason that Uber partners would have less work. Pretty soon, you have drivers just sitting around, waiting for a job to fall into their lap.
No Job Security
Uber rates cuts aren’t the only big issue for drivers – all of Uber’s drivers are considered contractors, meaning they have no benefits packages, workers compensation or guarantee of a steady paycheck. It’s a trade-off that all self-employed people have to make, but with Uber’s latest price cuts, even busy drivers may not be able to make ends meet.
Well-established drivers might just find themselves working longer hours for less than what they’re worth, which has made both experienced and new Uber drivers angry. You have Uber on the other hand that claims by lowering the uber rates, the drivers will make more. How’s that working for you Uber drivers?
For those whose livelihood depends on Uber income, the option to stay with the company may not be an option. Many drivers have expressed their frustrations by quitting. Those who haven’t quit have participated in strikes. On February 1, 2016, Uber drivers in New York went on strike at Uber’s headquarters in Long Island City, Queens. The protest drew hundreds of Uber employees in New York City, and many held signs expressing their views on the types of cuts the company is making.
Some claim that Uber is cutting fares for drivers without dipping into their own share of the profits. When Uber first started out, the commission rate was only 10%. Eventually, it increased to 20%, and Uber is now seeking another 5% increase on new drivers. Meanwhile, Uber is claiming that the fare price cuts have increased drivers’ profits by 20% due to a higher volume of riders. While some drivers are happy about the increase in business, others plan to stop working with Uber to seek other opportunities.
Coming And Going
The question now is: who’s left driving after these uber rates cuts? As if a 15% cut wasn’t enough, some cities are seeing an astounding 45% price cut for winter. Cities like Detroit have seen Uber slash its prices so much that drivers don’t have money to cover their fuel costs. One Detroit driver complained that he felt like he was “working for free.”
These cuts come at a time when Uber is planning an expansion into countries like China and India, as well as Southeast Asia. Uber is already present in countries other than North America, but the United States is still the big moneymaker out of all of them. Still, the plans for expansion amidst a chorus of outcry over price cuts seem to be in poor taste. India, for example, already has several companies that provide services like the ones Uber has.
Then, There’s The Competition.
Lyft has also lowered its prices for fares in the last year to stay competitive in the new gig economy. Drivers who have considered switching to Lyft to increase their earnings are finding out that the grass isn’t greener on the other side. A competitive market that sees its companies cut prices and increase demand may soon buckle under the strain. Some Uber drivers hope to win rights for minimum wage and be considered official employees of Uber, while some want to organize a union.
A Fruitless Effort
Unfortunately for those protesting, Uber is unlikely to back down from their decision. Many have quit over the uber rates cuts and penny-pinching policies Uber has, but other contractors are waiting in the wings to take their place. These aren’t the seasoned drivers Uber has counted on for several years – the ones that are adding their names to the list of available drivers are new to the gig economy. Many are unaware of previous price cuts and actions taken by Uber.
Frankly, no matter what volume of drivers quit the business, there will always be those willing to participate in a gig economy that is turning into a “race to the bottom.” As uber rates lower, drivers will have to work longer hours to keep up with expenses, many of whom have car payments for vehicles that were purchased to provide Uber services. The endless cycle has to stop somewhere, but it certainly seems like Uber and other companies like them are spiraling toward rock bottom, and it’s unlikely to stop before impact.
I don’t know about you guys, but it seems to me like Uber is screwing a lot of hardworking drivers out of decent pay. Being self-employed or working in a rideshare business is supposed to make you more independent, not drag you under a tidal wave of debt. Uber claims by lowering the uber rates, the drivers will make more, so why increasing their “ride fees” by 90% instead of lowering them?