Uber raises rates in Utah to appease frustrated drivers

Hackenstein

Well-Known Member
SALT LAKE CITY, UT — (KUTV) Uber drivers have been heard. The ride share company has told drivers that fares in Utah will return to their pre-January rates.

The announcement comes after several Uber drivers complained and others, like Brian Gordon, quit.

Gordon thought driving for Uber would be a good way to pay down some credit card debt, even though it meant having to buy a car.

"I spent about $9000 to buy a vehicle, specifically for Uber, to drive," he said.

But what began as a profitable enterprise for Gordon has recently been costing him more money than he is making.

In January, Uber cut its rates for riders which in turn cut the take-home pay for drivers. Gordon said he now makes about half of what he made before the fare cut and he can't afford to keep driving.

“I quit just after they dropped the rates," he said.

It's the same story for Scott Christensen, who is an accountant by day. Using his accounting skills, Christensen crunched the numbers to show exactly what the fare drop meant for drivers.

Albeit less than before, Christensen admits that drivers make some money while delivering passengers. But he says those lower profits quickly evaporate when drivers factor in having to drive back after dropping someone off.

"I can get 40 percent of the miles home before I start losing money," he said.

Worse, Christensen says he feels mislead by Uber, which he claims marketed to get drivers to come work for the ride share company.

"I just think it's ethically wrong," he said.

Uber has cut fares before, though this is the first time doing so in Utah. According to Uber's website, the company does so to try and get people out of their homes in colder months, writing: "The single most effective way to boost demand during the winter slump is to cut prices for riders."

But winter is long gone and the low fares in Utah have remained until this week.

By phone, Uber wouldn't say how many drivers have quit as a result of the rate cuts, claiming those statistics don't exist. Uber did say, however, that rate cuts could be a good thing for drivers who stick it out. Uber says more people are enticed to try out Uber while fares are low, downloading the app and becoming regular users.

Gordon questions whether or not that philosophy works. He says Uber is all about supply and demand and when there are fewer drivers on the road it becomes a problem for riders. Gordon says many riders could find themselves waiting longer for rides or paying what Uber calls "surge pricing" – a price-spike which kicks in when demand for rides is higher than the supply of drivers.

"If more and more drivers find this isn’t profitable, that means less drivers on the road which will create more surges and things like that," Gordon said.

Still, Uber claims they have not seen any increase in surge times in Utah since the rates went up in January.

Uber also brushed off accusations they mislead drivers telling Get Gephardt, Uber is meant to be a job to supplement other income, not replace a regular full time job. Most drivers only average about 10 hours a month driving for Uber.

http://kutv.com/news/get-gephardt/uber-raises-rates-in-utah-to-appease-frustrated-drivers
 
Top