Monday, January 12, 2015

Slow New Year's Eve for UberX, according to drivers telling clients

Several UberX drivers told clients that driving on New Year's Eve produced small earnings. These UberX drivers revealed their unhappiness driving on this slow night; short and cheap rides, no surges until 12:30am, low surges, and excessive downtime made New Year's Eve a bust.

According to Uber, all Partners across the world completed 2 million rides. For the most part, Uber earned great money from their Partners completing these 2 million rides. However, several UberX drivers who drive in the Bay Area and Los Angeles, shared that they struggled to generate decent income on New Year's Eve and early New Year's Day.

Sidecar and Lyft drivers earned plenty of money driving on New Year's Eve. Sidecar drivers can adjust ride multipliers between 1x-5x to earn lucrative fares. Furthermore, Sidecar bonused drivers with 25% and waived their standard 20% commission. They gave the top driver in each region a $500 bonus for generating the most trip earnings. Lyft activated Prime Time, which rewarded their drivers with tips. Both Lyft and Sidecar allow their riders to top drivers via the ride sharing app.

UberX drivers don't receive tips. No in-app feature is available to accept tips. 99% of Uber clients never tip their drivers in cash. Every UberX driver who is online at least 20 hours a week is losing hundreds of dollars in tips per month. San Francisco riders rarely tips their drivers in cash. The best regions to make tips on the UberX platform are within North Bay and East Bay cities.

On New Year's Eve, Uber deducted 20% commission from existing UberX drivers, 25% commission from new UberX drivers and greater than 20% commission from black car, SUV, XL, and taxi drivers. Uber claimed that UberX drivers could earn at least $50 per hours between 7pm-3am. Uber messaged drivers that driving between 12:30am-2:30am could earn them $80 per hour. If this were the case, why did drivers get discouraged and stop driving on the ride platform? No guarantees?

Uber drivers who were lucky enough to service North Bay cities made a bundle giving rides at 7.1X+. This high surge pricing turned mediocre trips into gold nuggets. It was a gold mine to complete trips in North Bay cities. Client ride apps showed high trip activity in Napa. No Uber cars were available in this city after 12:30am.

Business in San Francisco remained constant after 12:30am and well into the early morning, but surge pricing stayed low and far below typical weekday and weekend nights. No surges exceeded 2.8X. Most of the surged activated at 1.2X-2.5X. San Francisco drivers appeared to have lost out on lukewarm business. Are clients getting smarter to avoid accepting surge pricing?

UberX drivers cover these high demand areas. These "red" regions are supposed to generate quick rides at high multipliers. Nevertheless, driving 20-30 minutes through these surged regions didn't produce any rides. It is common for clients to order rides and cancel once the surge drops. How is this fair for drivers trying to survive earning decent fares? It's unfair to allow this request/cancel activity.

One Uber client shared that ridesharing companies who continue to increase commission and lower fares will eventually push out many drivers. In an economic sense, drivers can no longer afford fuel, maintenance, and repair costs. The most unappealing aspect of ridesharing is payment delays.

For example, rides given Monday-Wednesday are not paid out until the following Thursday. Direct deposits arrive once every Thursday morning, which these funds are allocated to bills and weekend driving expenses. Monday-Wednesday driving suffer from a system that delays these payments.

God forbid any unexpected car repairs and maintenance expenses. As of result of these drawbacks, drivers will lose valuable opportunities to make money and exhaust savings and/or gas money to afford repairs. Even worse, personal vehicles endure excessive wear and tear - thousands of miles per month depreciate vehicles.

If anything, Uber should consider reducing commission, increasing fares, and adding a tipping feature to reward good drivers. Uber clients share that cheap prices are the least of their concern. They enjoy the convenience and reliability of Uber. Why continue to compete with price? Want to push out the competition based on cheap prices? This is the wrong road to take.

Uber recruits great drivers with nice rides. Clients appreciate riding in quality vehicles. Riders identify Lyft as a ridesharing platform with subpar vehicles. Soccer-Mom vans, old import cars, damaged cars, dirty vehicles, and other unappealing rides are common on Lyft.

Conducting a survey in the East Bay will reveal the reason many riders dislike Lyft. The most common complaint directed toward Lyft is their poor quality vehicles.

Uber should focus on ride experience and vehicle quality. They have smart, intelligent, interesting and educated drivers to perform ride services. Why not sell this to the ride community? Reducing fares, increasing commission and restricting car years will push drivers out. These drivers will eventually choose other ridesharing companies as a secondary alternative to boost income.

To sacrifice a night driving on New Year's Eve and early New Year's Day, ridesharing drivers deserve to make taxi money. Taxis are still making far more money after expenses are paid in full. Sidecar gave their drivers plenty of opportunity to make lucrative earnings with no commission, 25% bonus and $500 given to top performer in each region. Furthermore, Sidecar drivers could receive tips from an in-app feature available within the rider app.

In comparison to Sidecar, Lyft drivers receive Prime Time to increase overall earnings. Commission incentives for hours completed, driver tips, and high frequency of ride requests make driving for this Pink Mustache company lucrative.

Unfortunately, unappealing surge pricing, short inexpensive rides, no-shows, cancellations, and too much downtime doomed UberX drivers on New Year's Eve. The average UberX driver in the Bay Area earned $600, before commission of 20%-25%+ is deducted, for New Year's Week. Leading up to 2014, UberX drivers made a fortune driving on New Year's Eve. Ask any UberX driver you know if they were happy with their earnings on New Year's Eve a few weeks ago.

Uber 2015 outlook: 

  • Take into account implementing an in-app tipping feature. To this day, Uber hasn't listened to clients and drivers about adding a tipping feature. Your competitors allow tips. You don't have this option. Why not?  
  • Encourage clients to accept surge pricing as a way to reward drivers for giving cheaper rides at non-surged times. Clients receive many long rides for cheap. Drive assume the cost of giving these affordable rides. Under these conditions, clients shouldn't complain about surge pricing. Clients request rides and cancel them to eliminate surge pricing. If riders cancel, a good policy is to delay the next ride request. IMDb requires their members to wait a few minutes after posts are submitted. Adopt this policy to improve efficiency. 
  • Change cancellation policy. No more hooking drivers on long requests and being no-shows. New clients should have a time limit and distance to cancel ride. If a driver travels 8 miles and greater and the client decides to cancel,  a cancellation fee and/or a partial trip cost should be assessed to accounts. This is the reason why taxis don't show up in furthermost neighborhoods. Passengers are no-shows, move around, cancel, and leave taxi hanging. It has to be fair.  
  • Change vomit clean-up fee to reimburse drivers $250 like Lyft does. No more $30-$60 payouts unless your staff can clean this vomit to know how it feels for drivers. When vomit episodes occur, your clients cost Uber drivers and your company money. Why allow this to happen? Drivers lose valuable time and also incur damage to their vehicles. Worst of all, drivers must clean disgusting vomit that may be infectious. 
  • Offer commission incentives. Work a certain number of hours and qualify for cheaper commission. Lyft featured Power Hours to give drivers all earnings made during these designated times. A loyal Lyft driver shared that Lyft rewards their drivers with commission incentives to work a certain amount of hours. These incentives encourage Lyft drivers to drive more often. 
  • Unlock Uber phones to allow download of Google Maps. The one-dimensional in-app navigation feature lacks multiple routes. It keeps re-routing until drivers make U-turns. Charging drivers $10 per week for a locked phone is unfair. This phone has no text messaging, phone and email capabilities. No app downloads are permitted. Only an ineffective Apple Maps is available to use on this locked iPhone, which is possibly the worst GPS app in the market. This default navigation feature caused quite a few Lyft drivers to get deactivated.  
  • Faster ride payouts. Driving Monday-Wednesday is tough when all resources are utilized on weekends. Thursday direct deposits are allocated to bills and weekend gas. This poor cash flow system is what gives taxi drivers a huge advantage to remain operable. Ridesharing drivers lack resources to sustain driving greater than 22 hours a week. Waiting 8-10 day payout for Monday-Wednesday trips is too long. 
  • We will think of additional changes to improve 2015. 

Happy Ubering!