What’s better than an Uber ride? A cheaper Uber ride, naturally!
That’s Uber’s strategy to gin up extra business during the colder months, when ridership typically falls off. According to the company, “We’re cutting prices in more than 100 U.S. and Canadian cities, giving riders one more reason to head out of the house, ditch their keys, and avoid parking.”
Cheaper Uber rates are great for customers, of course. But what about Uber drivers, who are already grumbling about their skimpy incomes and lack of benefits? Won’t lower fares translate into even less take-home? To address their concerns, Uber proposes a version of the trickle-down theory of economics:
Higher demand means more time moving people, less time spent waiting around and more money for drivers. And if drivers aren’t busier, prices will go back up again. In addition, we are guaranteeing earnings for drivers to ensure that no one is disadvantaged. That’s 24/7 incentives to put drivers at ease.
The company notes that it has lowered prices the past two years in some cities, and in those cases, driver earnings indeed increased.
“Our goal for 2016 is simple: better, smarter way of getting from A to B that saves riders money and increases earnings for drivers.” A laudable outcome, to be sure. But it’s like having your cake and eating it, too: easier said than done.
Indeed, Uber’s strategy has been questioned by many, including Harry Campbell, who oversees The Rideshare Guy blog, who commented thusly on the promised win-win scenario: “Unfortunately, we’ve been through this before, and that is a total lie. When rates go down, it may increase passenger demand but drivers most definitely make less. And if they’re doing more trips per hour, their expenses are also higher.”
Consumers, then, who reside in one of the affected metro areas can look forward to lower winter fares. But they should also be prepared for a frostier ride, from disgruntled Uber drivers working more and earning less.
Reader Reality Check
With lower rates, will you use Uber more?
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After 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.