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Wednesday, January 27, 2016

Uber Winter Slump Promotion is Useless

Uber slashed fares in the Bay Area in an attempt to stimulate more trips. In North Bay and South Bay, this is third time UberX fares were reduced in the past 16 months. A Berkeley to SFO trip that once cost nearly $60 is now $35. Deduct Uber fees, toll, fuel, safe ride fee, and wear and terror from this fare cost. You'll discover Uber drivers are making peanuts performing a demanding job.

The truth is that slashing fares is increasing minimum trips. It is too common to see $5.35 fares traveling distances that once paid $8-9. After time retrieving riders, waiting time, wrong pin drops and inputted addresses, and driving clients to destinations, Uber drivers stand to make $3.20 from this minimum ride. If this trip consumes 15-30 minutes of the driver's time, then drivers are making less than minimum wage providing a professional service. 

According to an Uber email regarding this Winter Slump, "Our goal is to keep your earnings high by getting more riders on the road." This is a failed goal. Many good Uber drivers are averaging less than guarantees, which Uber hasn't matched with all their loopholes. 

Back-to-back trip feature complicates the driving process. If a driver needs to use the restroom or take a break, Uber instructs them to ignore back-to-back trip requests. When drivers ignore these requests, another ride request arrives again. If drivers experience technical difficulty trying to go offline, another ride request arrives and they can't accept this based on the app freezing. Instead of Uber weighing overall acceptance rates which are higher, they use increments of driving times to disqualify drivers from hourly guarantees. A driver got rejected from a weekend night following an 88 percent acceptance rate, but overall acceptance for the week was 96 percent. 

Since business can be slow during off-peak times, Uber is using trips per hour to disqualify drivers. Rather than weigh overall trips per hour in a given week, they measure this through increments of times on the road. For example, a driver is on the road for several different increments of time. Uber is using loopholes to disqualify drivers for failing to meet trips per hour and acceptance rates at those specific times. 

It is not the driver's fault that no clients are requesting enough rides to satisfy promotion requirements. Moreover, clients drop pins and input wrong addresses, further delaying pickups. They request drivers to enter fast food drive-thrus, which will impact trips per hour and fares based on cheap waiting times.

The Winter Slump promotion require drivers to have at least a 90 percent acceptance rate. They must give 2.2 trips per hour during peak time hours in San Francisco. 1.8 trips per hours are required during off-peak in San Francisco. Outside of San Francisco, drivers are required to complete 1.2 trips per hour during off-peak and peak time hours. When clients influence pickups, Uber pin drops are dropped several miles away where business is slow, so drivers are getting disqualified for missing the mark. 

Lyft is obviously winning the ridesharing game. They're making their drivers happy with high weekly earning incentives, whereas Uber is discouraging their drivers with reducing fares and offering low hourly guarantees that feature loopholes. Uber drivers are getting penalized for clients making pin drop and wrong address mistakes. Furthermore, Uber is using increments of time on the road to disqualify drivers for hourly guarantees. 

An Uber driver can maintain a high acceptance rate during the entire week. However, rejecting a back-to-back trip once or twice can impact them from receiving hourly guarantees in that time slot. One to two trips can drop an acceptance rate to 88 percent. Uber will disqualify drivers from receiving hourly guarantees during these driving hours.

This Winter Slump promotion is poor execution on Uber's part. If fares are reduced, this doesn't translate into more business. Lyft manages to keep drivers and riders happy based on loyalty. In our opinion, fares were dropped to stimulate more trips for Uber to appear productive during a really slow period. 

All Uber drivers are now receiving is a higher number of minimum fares. What helped Uber drivers earn money prior to this fare reduction is higher priced fares for longer trips and surge pricing. Clients are waiting for surge pricing to pass before they request a ride. Surge pricing made Uber appealing. It is no longer appealing to make long trips for less money. A higher number of minimum fares are frustrating Uber drivers. 

Offering cheap hourly guarantees, but then disqualifying drivers using increments of time is in no way helping drivers to stay afloat during this slow business decline. Additionally, Uber clients impact driver earnings. Uber's poor request system pinpoints pickup addresses far off. Clients make the mistake to overlook wrong addresses and pin drops, wasting valuable time for drivers to complete trips at a higher frequency. The extra time drivers spend searching for clients can/will affect trips per hour. As a result of this, drivers are disqualified from receiving matched earnings to boost their hourly average to guaranteed rates. 

Most importantly, back-to-back trip feature is disqualifying drivers. If drivers are unable to accept a trip while on another trip, they are penalized for this through their acceptance rate dropping below the minimum rate during that given time slot. Allow drivers to disable this back-to-back feature. Get rid of this horrible feature. It is a nuisance to use the restroom, especially when back-to-back trips continue to arrive. As previously mentioned, Uber tells their drivers to allow those trips to expire. However, they disqualify drivers for hourly guarantees during that time slot, such as Friday and Saturday night between 5pm-2am for high peak times or Sunday night 8pm-4am. 

Uber clients can't input Point A to Point B, and then back to Point A. Back-to-back trip requests arrive 3-4 minutes before reaching destinations. Nevertheless, current client will need a trip back to their pickup address. Drivers must anticipate the second client will cancel trip. If not, this client will call and ask their driver what is the delay. What they don't know is their driver is still on an active trip.

Why not measure overall acceptance for the entire week, rather than use a specific time period to disqualify hourly guarantees? Maybe Uber doesn't want to match drivers for all times driven, so they use a poor measuring system. They realize business is slow. Their fares are bottom of the barrel. Uber is trying to increase overall trips, but is hurting their drivers in the process.  

One Uber driver reported earning less in 5 weeks than in 4 days during September-December months. After Uber lease payments, gas expenses, Uber fees, toll, airport fees, and safe ride fees, this Uber driver earned $700 driving completing 208 trips and driving 130.8 hours. This Uber driver is now struggling to make enough money to pay his bills. 

This is why Uber needs to integrate a tipping feature to help their drivers. They kept telling drivers they would introduce an in-app tipping feature for 2 years now. No word of this tip feature yet. They also need to figure out how to increase their driver's hourly earnings to higher amounts. 

Drivers must pay car payments, lease payments, toll cost, gas expenses, and are known to offer perks in rides (water, candy, gum and etc). Uber should implement better promotion requirements to accommodate drivers. This current promotion is manipulating drivers to drive in San Francisco. It also disqualifies drivers based on trips per hour and acceptance rates. However, your ride platform is causing these issues and clients are making mistakes with pin drops and inputting wrong addresses. 

Uber drivers will need to make immediate adjustments. They should only wait for 5 minutes at pickup locations. If clients call and tell drivers to drive to another pickup address, drivers should cancel using "wrong address" prompt. Upon arrival, wait 5 minutes, and if clients don't arrive you should cancel as a "No-Show." Accept all back-to-back ride requests. If you need to use restroom, cancel this trip within a few minutes as "don't charge rider." 

Uber is not reacting to disqualifying drivers for missing trips per hour requirements and acceptance rates. Drivers can score a high acceptance during the entire week and miss an hourly guarantee match for missing one ride request that pushed them under 90% during that increment of time. If you drive during peak times, make sure you match trips per hour and acceptance rates in that time slot. 

The following time slots are measured up against your driver earnings: 

Monday-Thurs:

(SF) Peak times: 7am-9am 
(SF) Peak times: 5pm-7pm

Outside SF: 

Peak times: 7am-9am
Peak times: 5pm-7pm

Friday:

(SF) Peak times: 7am-9am
(SF) Peak times: 5pm-2am

Outside of SF:

Peak times: 7am-9am
Peak times: 5pm-2am

Saturday:

(SF) Peak times: 5pm-2am

Outside of SF:

Peak times: 5pm-2am


Be certain to maintain a 90 percent acceptance rate during any of these time periods. During SF peak times, drivers are expected to average 2.2 trips per hour. What is obvious that Uber is trying hard to not qualify drivers. Their back-to-back trip feature is part of the acceptance rate problem. Furthermore, clients are making request mistakes to waste time. This request issue is impacting trips per hour average. Cancel these clients making request mistakes, which some are gaming the system using their destinations as pickup addresses to avoid surge pricing. 

Don't believe reduced fares will increase you earnings. It will increase the number of trips you take per week, require more production on your part, increase the number of safe ride fees Uber receives, increase your time on the road, and all of this will make you the same hourly fares as before. Decreasing any prices will stimulate business, but in the service sector the providers are losing out. 

Since Christmas, an Uber driver earned $25, $23, $19, $19 and $15 per hour, in that order. They completed 35, 40, 29, 64 and 40 trips, consecutively. Their hours on the road: 19, 25, 19, 39 and 30, sequentially. In the past 5 weeks, they earned $700 after all fees and payments were deducted. How is driving with Uber profitable? 

During the holidays, driving with Uber made sense. Ever since Christmas to right now, Uber is not a good option to earn money. Our recommendation is to get a day job to weather this storm. You're tiring yourself and wearing out your vehicles trying to make up lost earnings on the road. You don't get tipped from clients, because Uber is delaying a new tipping feature. You get disqualified for segments of time during this Winter Slump promotion. To begin with, it is an unappealing promotion.  
Lyft drivers are earning as much as $1,500 working 40+ hours per week. If Uber drivers want to match Lyft drivers, be prepared to bring your sleeping bag and pillow on the road. It will take you 100 hours in the East Bay and South Bay to match this payout. In San Francisco, it will take 80 hours to receive a $1,500 payout after fees. Slow business and low fares are impacting the bottom line. Once gas prices increase, drivers will wise up and jump ship to a better job.



Convenience and flexibility don't matter if you don't earn enough money to survive. Make your own schedule and drive whenever you want is not worth the effort. Per trip hour average once reached $15+. Now it is less than $9, quite possibly lower than this amount. Minimum fares are impacting earning potential. Short airport rides net drivers only 50 percent of fares because of airport fees. Minimum airport fees should apply so drivers won't receive $4-6 fares after fees. 

This Winter Slump is the worst ever. It didn't take that long for some drivers to sink financially. The past 5 weeks proved to be costly to drivers. Reducing fares have a huge bearing on overall earnings. Manipulative graphs and charts attempt to convince drivers that cheaper fares mean higher earnings and more trips per hour. When a ride app has multiple technical issues, such as pin drops, unable to stay online in poor cellular areas and unable to shut trips down in these regions, drivers lose the ride service game. In the not-so-distant past, drivers could earn $350 driving 8-10 hours. Now, it takes 20-25 hours to reach this total. You spend more time on the road and exhaust gas to make less money. 

Wake up and smell the coffee. Review your number of hours, total trips and hourly average. It will show you the real truth. Don't rely on graphs and figures that trick drivers into believing they are making more money with reduced fares. 

Lyft figured out that loyalty matters most. Their riders will spend the money to remain a part of a community. In return, drivers are happy to work more hours and complete trips. Price doesn't always matter. Why does Uber keep reducing prices? Lyft won't be pushed out of ridesharing. 

Uber did feature multiple holiday promotions that increased production. Drivers were proud to be driving with Uber. However, their Winter Slump promotion is a bust. Measuring peak and off-peak time increments eliminate matched earnings. Complete 7 trips in peak-time, reject one trip to use the restroom, and get disqualified in that time slot. Don't meet the per trip average in that time slot? You get disqualified for matched earnings. Driven when it's slow, you miss trips per hour requirements. It doesn't matter if you qualify for weekly acceptance and/or total trips per hour over all hour worked. Uber is weighing time increments at different times. You must begin 67% of your trips in SF, or miss out on SF guaranteed hourly matches. 

Unfortunately, driving with Uber is not good right now. Uber clients are telling Uber drivers to go with Lyft. Lyft drivers are making much more money with far better incentives. What if Uber can introduce random promotions where they offer $5-$10 per trip completed at a certain time? That would definitely motivate drivers to work. Manipulating promotions to increase production in SF is basically changing the ridesharing landscape. 

No local policies were passed to designate pickup locations for drivers in Downtown San Francisco. Drivers are still receiving tickets. Parking enforcement issue tickets at BART stations, as well. Uber clients are not helpful with reducing these incidents. They still request trips at bad locations, make drivers wait in tough spots, and stand in conflicting areas. 

The best tip we have for drivers is to increase their hours on the road. You will have to sit longer, complete additional trips, risk rating issues, and exhaust more fuel and put wear and tear on your vehicles. Just remember, drive where you want to drive. Don't allow an unappealing promotion to force you to change your driving habits. Like driving in the East Bay? South Bay? North Bay? San Francisco? Then choose your driving regions to perform ridesharing services.

Good luck!