New Uber pay rates are hurting earnings, drivers say

Uber
CEO Dara Khosrowshahi.
Matt
Winkelmeyer/Getty Images

• Uber
  recently
  changed its pay structure in some cities to prioritize trip
  time over distance driven. 
• The company says the new structure will help drivers to
  better estimate their earnings from a given trip and help keep
  their cut consistent.
• Still, some drivers posting on social media said that the
  structure has hurt their earnings and that the changes have made
  it more difficult to make money on long-distance trips. 

A new Uber pay
structure that prioritizes time over distance as they pertain to
driver earnings has some drivers frustrated with the company.

Last week, the ride-hailing giant shifted the payout rates for
drivers in about 14 cities,
USA Today reported. The changes are designed to provide a
more consistent payout, regardless of trip variations, it said,
adding that overall earnings shouldn’t change.

“We’re putting more value on time to help create more consistent
and dependable earnings, no matter where your next trip takes
you,” Uber said on its blog when it announced the changes in
October. A spokesperson clarified that
the rollout would be gradual, with a handful of cities getting
the update last week.

Some drivers weren’t so convinced about the payout remaining the
same. They took to social media to voice their concerns. 

One driver said that he was making about $20 less per night after
the changes took effect in Phoenix.

“This is pretty crippling to a full time driver,” he said in a Reddit forum for drivers. “I don’t
know if I can support myself anymore.”

Another said the move is effectively “subsidizing lower
mile city trips by taking earnings from people that do a lot of
long trips.”

And while the change is relatively small — Uber has long paid
drivers based on actual trip length while charging customers a
pre-determined fee that it estimates for the trip — the changes
are part of a longer trend that has left some drivers unhappy
with the company.

“A lot of these services are getting cheaper and cheaper for the
consumers,” Harry Campbell, a driver who runs the wildly popular
The Rideshare Guy
blog, told The Ringer last week. “But I think for the
driver’s side things have actually probably gotten a lot worse.”

Other drivers said they planned to
find slower routes to make up for the slashed distance
rates. Even if the payouts end up about the same, one said he
will likely cancel any ride of more than 50 miles.

To see how the changes might work, Campbell used 144 historical
rides from a driver’s account over the summer and compared the
payouts with what they would be now. Not surprisingly, the payout
for trips of more than 10 miles starts to decrease, while many of
the shorter trips see an increase. 

The Rideshare
Guy

“We are constantly working to make earnings more consistent and
dependable for drivers, while making our service more reliable
anytime you need a ride,” an Uber spokesperson said in response
to questions from Business Insider. 

Read more:

Uber follows Lyft in announcing a rewards program — here’s how it
works

Uber has repeatedly been criticized
for not paying drivers — which it classifies as contractors
rather than employees —
a livable wage. According to a study commissioned by New York
City, the median Uber driver takes home $14.17 per hour, the
second-lowest among four major ride-hailing companies in the
city.

The company has taken some steps to combat this, including a
beta
driver rewards program that provides things like cash
back on gas purchases and tuition assistance for an online
college program.

“We know how frustrating it can still be when you don’t know
whether accepting a trip will be worthwhile,” Uber said
on its blog. “The goals of this update are to give you more
confidence that every trip is worth your time, even when you
encounter heavy traffic or unexpected delays, and to help create
more dependable earnings from trip to trip.”