Tuesday, February 02, 2016

How an Uber driver is surviving recent fare cuts

Uber price cuts and slow business decline have put many Uber drivers in bad financial distress. When Uber claims that price cuts are going to stimulate additional rides and increase income, they really mean it will increase minimum fares so there are more safe ride fees going to them. 

An Uber driver is struggling to make money the past several weeks. Reducing fares again in the East Bay, the third time in the past 16 months, has increased the number of minimum fare rides. Trips that once cost $9-$10 are now $5.35. The most rides a driver can complete per hour are four trips. They receive $3.20 after Uber fee and safe ride fee. Uber is claiming 41% of the total trip.  

Uber clients tend to make mistakes requesting the wrong address, drop pins at distant locations and travel to close destinations that don't exceed minimum cost. At $.85 per mile in the East Bay and $.16 per minute, plus $1.50 pickup cost and safe ride fee of $1.35, drivers receive 61% of minimum fares. This is no good for drivers who need to earn 75-79% of all their fares. 

An Uber driver must cash out their change and recycle bottles and cans to drive. They don't have any money in their bank account to replenish their Fastrak account. This means they must avoid going into regions where clients may request a ride over a toll bridge. If drivers cross a bridge without ample funds, Fastrak will generate a violation that gives a driver 90 days to cover this amount or risk DMV registration lockdown. Don't take a risk to ruin your future for a independent contractor job. 

An Uber driver has to do what they have to do in these tough times. Driving with Uber is unprofitable right now because the rates are too low to make a living. Three rounds of price cuts in 16 months have dropped prices nearly 50%. Before these price cuts, there were additional rate decreases. 

Make adjustments to weather the financial storm. If you must get another job and reduce driving with Uber, this may be a good move to improve your financial landscape. Low fares translate into low pay, low earnings. It is basic Economics 101. 

Don't believe in fabricated lies. Your Uber Weekly Summary will tell the true story about your real earnings. Good luck absorbing low fares and making less money. 

This Uber driver is recycling bottles and cans to keep afloat. They stopped paying several bills because their weekly earnings dropped 75+%. This is the worst time to drive with Uber. Aside from Super Bowl week, Uber earnings since Christmas week have disappointed many drivers. 

Accepting minimum fare after minimum fare is cutting into the bottom line. Airport rides 7 miles or less will only pay drivers $6.50-$7.16 after all fees are deducted from total trip cost. We've heard of UberX drivers receiving $4-$5 to complete airport trips that are too close and include the standard airport fee. Once Uber cut a deal with the major airports, there is an automatic fee that is deducted per trip. 

Hopefully, Uber wises up and restores fare prices. Uber drivers are getting tired of price cuts. Lucky for Uber that gas prices are low, or they risk having less drivers on the road. With less supply, surge pricing would jack up prices. As a result of surge pricing, clients will start to complain. What clients fail to consider is that fares are so low right now that activating surge pricing will still give them a fair deal.