Uber Wants To Kill Surge Pricing, Which Is Good For You But Bad For Drivers
In a piece of news that leaves me feeling warm with excited relief, Uber wants to kill surge pricing. However, for the people making their livelihood driving for Uber, the reaction is quite different.
While surge-pricing – the act of increasing rates during popular times — has been the scourge of many Uber users, the recent announcement to banish surge-pricing has drivers up in arms. After all, this is a straight up pay-cut for many drivers, who wouldn’t be mad?!
Nathan Sapp, one of the many drivers affected, shared his concerns in an interview with NPR, saying that he plans his 40-hour work week around surge-pricing. “I definitely keep up with the news regarding events in town,” said Sapp, “They could be business meetings, conventions. They could be specific sporting events.”
After considering the financial effects of Uber’s new policy Sapp estimated losing as much as $700 a month in income, and he has a family to support and consider.
An Atlanta-based Uber driver David Thrasher echoed Sapp’s concerns, bluntly saying:
“Surge is absolutely make or break. If there was no surge, ever, I wouldn’t be able to afford doing this at all.”
Uber is currently one of the most competitive taxi services available, with new drivers being added all the time. The average rate for a non-surge ride is still less than 2/3rd of a taxi, not to mention there is no tipping option.
Of course, on the other side of the conversation sits the rest of us who can’t afford a $45 dollar Uber after a busy night out, but could swing a $20 ride at 3am. The normalcy of surge-pricing (especially in event-heavy cities like NYC) has certainly forced Uber to lose some poorer customers for a smaller pool of higher-paying clients.
So what’s more important to them as a company – more customers or happy and sustainable employees?
In the meantime, they’re working on implementing data in their cars that will be able to predict high-demand areas without the obvious signaling of a political rally or a popular concert.
“To find those Tuesday nights when it’s not even raining and for some reason there’s demand — and to know that’s coming. That’s machine learning.”
As fascinating and terrifying as that is, it still doesn’t answer how they plan to incentivize their drivers to stick with them after a significant pay cut. My guess is Uber will lean on the economic desperation and competitive market. That is to say, they will do nothing and let their drivers stay and suffer or leave in disappointment.
In the meantime, it’ll be nice for cheapskates like myself who feel threatened on the train at 3am but want an occasional night out. The actual date that surge pricing will fully end is still to be determined.