Good news for workers! Uber is raising prices, which means you can feel a little less guilty about using the private taxi service, because its drivers will finally get paid a fair wage, right? Not so fast: while Uber is raising its booking fee, it won’t pay drivers any more.
Uber’s official commission rate is 25%, but it also charges a booking fee to customers. That raises its effective commission by quite a bit. According to numbers from the Rideshare Guy, the median commission for Uber rides in San Francisco last year was 39%. Now Uber has raised the booking fee, between $0.20 and $0.35 depending on the city. This in turn raises the effective commission to over 40%. That means that Uber gets more money for every ride taken, while the drivers don’t get an extra penny.
The Rideshare Guy’s post includes a fascinating breakdown of a typical Uber fare. To summarize, a 10-minute, three-mile journey will cost the rider $9.40. How much of that goes to the driver? $5.74, making Uber’s effective commission on this ride 39%. Overall, says the Rideshare Guy, this change raises Uber’s commissions by around 4%.
It’s a funny time for Uber to do this. While it’s certainly not the worst press it’s gotten in the past month, it does add on to a list of travails. Most recently the company has been accused what appears to be deep institutional discrimination against women, and Uber’s CEO Travis Kalanick was forced to quit the White House’s economic advisory council after what appeared to be undermining of an anti-Trump protest sparked the #DeleteUber movement, losing the company 200,000 customers.
Right now it seems that Uber is in the business of driving licensed taxis out of business by undercutting them, before jacking up prices after it has eliminated the competition. But it’s a race against time: Uber lost $3 billion last year, and that can’t last too much longer. One thing is certain, though: protesting against Uber is working, so if you don’t like the company’s policies, then don’t use it.