Beginning September 1, in L.A. (soon to be worldwide) Uber is going to start charging their drivers a $10 a week phone fee on top of a new safety rider fee and the 20%( was 5% initially) they already take. That is going to come out to almost 25%( someone has to by the lobbyists and pending lawsuits) of the fare going directly to UBER. Since Uber is slashing prices to beat or compete with licensed taxis it’s causing the drivers some serious coin. Uber said it will temporary make up the difference but long term who knows?
I predict in the future, Uber will also implement a surcharge for the added insurance it would need to cover the mandated 1,000,000 commercial insurance. Doesn’t Uber realize that their drivers are on a budget and by constantly changing their policies they’re hurting their drivers bottom line. Lucky for Uber for every one driver that quits there are 10 ready to take their place but that might all end soon they way things are going.
Two things I see that would really hurt Uber and its drivers, one is flooding the market with too many cars and this change the rules as we go concept. By flooding the market, you’ll have 10x’s the drivers with the same demand equals lower income for the drivers. The way I see it UBER is a hugely resourced outfit who are doing business their way. A $500 sign on bonus is also great! They start off providing decent returns to drivers, but as a market/ area matures with slower growth and fewer new riders their startup subsidies start to dry up (driver’s get a $250 bonus just to complete 20 jobs between 5 pm Thursday and midnight Some drivers got the 20 jobs in 2 days in about 15hrs driving). That sort of handout can’t go on for ever. Any cost to UBER will be reviewed and management will see if they can stop or get the driver or rider to cover it -it’s just business. Squeeze and keep squeezing the workforce till there are rivers of blood, then pull back a bit. They don’t know how far they can push till there are bodies on the ground. It’s new to them as well, and the drivers are part of the experiment.
Will this business plan be sustainable? Well we’ll just have to wait and see…….