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South African Uber drivers have expressed their unhappiness over the internet ride-sharing service cutting its fares by up to 20%.
Last week, Uber announced a decrease in fares in Johannesburg, Cape Town, Durban and Pretoria to boost demand during the quieter winter period.
READ: Uber cuts winter fares by up to 20%
The company said the move is targeted at driving up demand and helping driver-partners of the service earn more. Uber has also promised minimum payment guarantees for partner-drivers in a bid to provide confidence in the price-cut.
Uber drivers are not employees of the business but they rather partner with the company and earn a percentage of each fare.
However, about 50 Uber driver-partners in Cape Town stopped working last week Wednesday night and headed to the company’s Greenpoint offices to demand answers.
READ: Uber: CPT strike reports 'exaggerated'
Uber also told Fin24 last week that a “small number” of drivers had decided to stop using the app amid the price cuts.
READ: 'Small number' of Uber drivers boycott app
And some Uber partner drivers have emailed Fin24 to explain their unhappiness over the price cut.
Fin24 user and Uber driver Fabricio says Uber is winning out of the price cuts but that driver-partners may be losing out.
“The more trips we do at a reduced rate the more 20% to 25% commissions Uber get. So, they make more money without incurring any more costs. For example, a 5km trip at old rate would be say R40 - on the new rate this is say R35. Now instead of doing two (passenger trips) per hour I do three per hour as the public uses Uber more, right? Uber gets 20% of the 3 trips (3x35=105) R21.00 as opposed to the R16.00 it would have received from the R80.00 (40x2). So this demonstrates how the lowering of prices benefits Uber i.e about a 30% increase in earnings without incurring any additional cost, as opposed to the drivers/owners. Whose income is reduced and incurs a cost for every kilometre driven?”
Fin24 user and Uber driver JR Makhubela told Fin24 that the price cut could result in drivers working longer hours.
“This will result in partners working too long to cover. Drivers will try work even if they are tired to cover the cuts. This will put riders and drivers at risk. Because of driving long hours.”
Fin24 user and Uber driver Daniel wrote of his issue with the price cut:
“It is a problem because the fare for Uber is cheap and petrol (price) is up. But the demand from customers point of view has grown up. What frustrates people is that we do not own these cars - we share the money in four different ways: Uber app, petrol, owner of the car and driver. I would suggest to increase the drivers to own their cars through banks or loans or rental.”
Fin24 user and Uber driver Dovhani wrote that he thinks he’ll struggle to make the same money as before:
“It is very very difficult to make R2 000 since this decrease of money. Before, if I completed a 38 kilometres trip, I was earning R300 and few rands. But now I get R240 for the same trip, which is very much different.”
But Uber last week publicly said that its price cuts can boost earnings for drivers. The company said it had also come to this conclusion by using its advanced data analysis technology.
“Price cuts are designed to help drivers. A driver who is logged into the Uber app is doing one of three things: sitting idle while waiting for a trip, on their way to pick up a rider, or carrying a rider to their destination. The third scenario is the only time a driver is earning a fare,” said the company last week.
“Price cuts boost demand so more people are requesting more rides with Uber, meaning drivers will spend more time with riders in the backseat and less time sitting idly waiting for a request,” Uber added.
Uber said it also made driver-partners aware of the impending price cuts before they happened.
Disclaimer: All letters and comments published in Fin24 have been independently written by members of the Fin24 community. The views are therefore their own and do not necessarily represent those of Fin24.
