Uber warned in its Initial Public Offering (IPO) prospectus that driver dissatisfaction will increase. From Bloomberg:
Throughout the IPO prospectus, Uber alludes to tensions that have long been obvious to anyone who has driven for or ridden in an Uber. Uber’s operations are far from profitable, and anything more than a token gesture to its unsatisfied workforce would pose a barrier to stemming the losses. The company warned the situation will get worse. “As we aim to reduce driver incentives to improve our financial performance, we expect driver dissatisfaction will generally increase,” it said in the filing.
Why must Uber always mess with what a driver earns? The driver is the person who supplies the vehicle, the gas, the insurance, the phone with unlimited data, and is the one who does all the work. Uber provides the software.
When Uber wants more money, they take money from the driver. It doesn’t make sense. If Uber wants more money, they should charge passengers more.
The price for an Uber is too cheap
Many of my trips as an Uber driver involve picking people up from or dropping people off at government subsidized housing. Want to know where all the subsidized housing projects are in your town or City? Become an Uber driver.
Why are people who cannot afford housing without government assistance using Uber instead of public transpertation? I imagine they use Uber like anyone else because of the convince. I imagine it’s also because the price of Uber is so low, it’s not cost prohibitive, even for folks living in subsidized housing.
The more money Uber takes from the driver, the less satisifed the driver will be. It’s basic human nature. When Uber takes more money from the driver, it’s not like the driver’s car payment suddenly decreases. It’s not like drivers suddenly pay less for gas or auto insurance.
There needs to be a law
This warning from Uber to would-be investers makes the proposed law in Connecticut even more important. It would cap rideshare companies from taking more than 25 percent of what the passenger pays. It would also require 75 percent of what the pessenger pays go to the driver. One of the reasons Uber was able to flurish was because it fell outside state and local regulations. Laws that applied to the taxi industry did not apply to Uber. That needs to change. Local and state governments should take action to stop Uber from gouging drivers for more money. The money a driver makes stays in the local economy. The money Uber takes from the driver does not.
If Uber needs more money, they should raise prices for passengers. What a novel concept! Better yet, Uber should allow drivers to set their own prices. We should be able to set our own per mile and per minute rate and then allow passangers to choose who drives them based on our prices. When passengers request a ride, they would see a list of vehicles along with the total price it would cost for that vehicle to get them to their destination.
I drive a full-sized sedan with a roomy backseat and a massive trunk. I should be able to charge more money than a driver with a Honda Fit with its cramped backseat and its tiny trunk. According to Uber’s pricing, a ride in my vehicle costs the same as a ride in a Honda Fit.
In short, Uber is a software company. It provides software that connects people who need a ride with people who want give a ride.
Uber also facilitates the credit card processing required between the passenger and the driver. That’s not unique or anything special. What’s unique and special is the software that matches passengers with drivers.
Uber needs to treat its drivers as partners. Without drivers, the company would not exist. Uber will get to a point where more drivers will stop driving for the service than it can replace with new drivers. There’s a finite amount of people willing to drive strangers around in their personal vehicle. When Uber burns through that number, it’s game over. Every time a driver stops driving for Uber because they’re disatisfied, that’s one more person who will warn others not to drive for Uber. What’s it like to drive for Uber? Don’t do it! It’s a trap!