# When Will Rates Increase?



## gdougher (Jul 20, 2014)

For what its worth, I've been doing this for about 3-4 weeks now, and I'm not giving in the towel, but, cutting down on the hours I spend driving and focusing on Lyft instead, where I can keep relatively similar rates. I only find Uber beneficial if I go a long time without a Lyft ping (rare) or have a Lyft ride that takes me into the Boston suburbs and don't want to waste gas on driving alone back into the city. I don't plan on turning in my phone, because Uber definitely has a function in leveraging my Lyft income.

I've been wondering, amidst price cuts, when Uber will actually *raise* prices. I know there's a lot of anti-Uber sentiment here, but, I was hoping to at least have a mildly anti-acerbic conversation about this. 

It might seem asinine to talk about pay increases, but, given the release of the Uber API and the need to shore up Uber's popularity to a critical mass level to defeat any regulations against it, but, I wouldn't be surprised if we are reaching the tipping point from slashing prices to small fare increases. Uber's synonymous and its' every move is in the news here in Boston, the mayor and most of the city council has voiced approval, the introduction of UberPool will allow them to offer a basement rate discount option as an alternative to UberX prices, and they need to make more money somehow. I don't know if they will raise prices and then raise the commission % (wouldn't put that past them), but I do think/desperately hope that there will be a point in the new

Until then, I am keeping my Uber driving at an absolute minimum and trying to service areas (the suburbs) where I get passengers who rate me well (went from a 4.44 to a 4.75 in 3 weeks doing this strategy), are underserved by both taxis and public transportation, and generally have longer trips. No one's getting a ride 3 blocks in downtown Boston from me until then.


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## OldTownSean (Aug 14, 2014)

Rates will increase for sure if drivers decrease. I personally am going to be promoting lyft hard to my uber customers. It pays better and you get tips. Currently in Scottsdale, lyft drivers can give new customers a code that gives them a $25. free ride and the driver gets $10. credit when they use that code. Best bet many of my uber customers will be getting that code. These cheapass uber riders certainly won't complain about getting something free!

F me uber? 
No, LOL F U


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## chi1cabby (May 28, 2014)

I feel that these lower rates are not sustainable even in the short term, especially in small and mid-sized markets.


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## NicknTulsa (Jul 16, 2014)

I just flat out tell clients when they ask, "are you available...", "no, Uber rates are too low, I only work during busy times."


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## OldTownSean (Aug 14, 2014)

NicknTulsa said:


> I just flat out tell clients when they ask, "are you available...", "no, Uber rates are too low, I only work during busy times."


I wouldn't even take personal calls on uber ... charge them on square or cash


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## gdougher (Jul 20, 2014)

Right - FWIW, I don't buy Uber's b/s that it is "permanent" or to help drivers. All it is is a marketing ploy at the end of the day to build up a customer base that can act as proxies to shore up political support. They need a powerful enough constituency to buy into this new way of arranging transportation - not necessarily to kill the taxi industry. And then UberPool will be the bargain basement option, UberX will be an affordable, albeit slightly more expensive option.

I think once it becomes clear that there will not be significant new legislation and/or legislation protecting Uber, then prices will go back up and/if UberPool becomes successful. Wouldn't be surprised if that's sooner rather than later


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## Oc_DriverX (Apr 29, 2014)

Uber's recent trend with UberX is certainly not to increase rates but to keep stepping them down. They are about to have the driver's eat the price cut from earlier in the summer in the LA/OC area. You will know when the next cuts are coming. Uber will announce a discounted fare for riders (10-25%) for an indeterminate amount of time. If this happens, then expect that a few months later the rates will be permanently cut to near those levels at which time the drivers will end up with another pay cut.


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## chi1cabby (May 28, 2014)

Oc_DriverX said:


> Uber's recent trend with UberX is certainly not to increase rates but to keep stepping them down. They are about to have the driver's eat the price cut from earlier in the summer in the LA/OC area. You will know when the next cuts are coming. Uber will announce a discounted fare for riders (10-25%) for an indeterminate amount of time. If this happens, then expect that a few months later the rates will be permanently cut to near those levels at which time the drivers will end up with another pay cut.


I don't see how rates could go any lower, really! Non surge rates are barely breakeven. Small & midsize market drivers are making making below poverty level wages already!


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## Oc_DriverX (Apr 29, 2014)

chi1cabby said:


> I don't see how rates could go any lower, really! Non surge rates are barely breakeven. Small & midsize market drivers are making making below poverty level wages already!


Personally, I agree with everything you say. I just don't think Travis believes it. Between his pissing match with Zimmer at Lyft and his desire to drive Uber rates so low that everyone will abandon car ownership, my guess is that he will keep dropping the fares. I really hope I am wrong.


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## ubrad (Jul 28, 2014)

Uber is in the process of creating a perfectly efficient market. Transportation is a commodity, which means users will seek out the lowest prices. This means prices, and thus wages, will trend downwards until they approach the cost of operating the vehicle. What this means for us drivers:

- Anyone driving a gasoline vehicle will be priced out of the market. UberX will be served only by vehicles with the absolute lowest operating costs.
- If you're happy with rates now, prepare for them to drop. If you're unhappy with rates, prepare to be offended when they drop. Rates will drop until Uber isn't able to supply enough drivers to meet the market demand for transportation.
- The more drivers there are, the fewer surges there will be. Surges aren't just an indication of a lot of riders, they're a reflection of unmet demand. More drivers = more supply = less unmet demand = fewer surges.

This isn't because Uber is evil or hates drivers, or Travis is delusional. It's simple high school economics. They profit by matching people who desire a service (riders) with those who provide a service (drivers), so they will seek to maximize those matches by lowering prices to the point where they attract the greatest number of riders. It is true that Uber doesn't care about any single driver - they only care about the total number of drivers on the road.

As a driver, we have but one recourse: stop driving if you feel the rates offered by Uber are too low. When a surge is on, you may choose to reconsider your choice to drive. But never get complacent and just accept Uber's rates. Don't think of Uber as your permanent job, think of it as taking advantage of a fleeting opportunity. You should continually be evaluating whether Uber's rates make it worth it for you to drive, and remember that you can (and should) stop driving just as quickly as Uber can change fares.


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## Oscar Levant (Aug 15, 2014)

Oc_DriverX said:


> Personally, I agree with everything you say. I just don't think Travis believes it. Between his pissing match with Zimmer at Lyft and his desire to drive Uber rates so low that everyone will abandon car ownership, my guess is that he will keep dropping the fares. I really hope I am wrong.


CEO wants Uber to be cheaper than owning a car, hoping people will stop buying cars and use Uber.

This totally negates Americans' nature: we LOVE our cars, and we only use Uber to prevent DUIs. If Uber were free, many of us would still drive our cars.

Uber is a DUI prevention service, without that, it would be out of business. Sure, there are some types of trips not DUI motivated, but most of it is. 
Also, airport trips in the morning, but I dont' get up that early. Most of my night trips are people going out to have dinner, and drink, in order to avoid a DUI and not killing someone. It's always going to be a friday and saturday night business. So, the logic CEO is using will never wash.


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## Nick Manning (May 3, 2014)

In Chicago, Uber dropped already low prices by 15%.


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## Oc_DriverX (Apr 29, 2014)

ubrad said:


> Uber is in the process of creating a perfectly efficient market. Transportation is a commodity, which means users will seek out the lowest prices. This means prices, and thus wages, will trend downwards until they approach the cost of operating the vehicle. What this means for us drivers:
> 
> - Anyone driving a gasoline vehicle will be priced out of the market. UberX will be served only by vehicles with the absolute lowest operating costs.
> - If you're happy with rates now, prepare for them to drop. If you're unhappy with rates, prepare to be offended when they drop. Rates will drop until Uber isn't able to supply enough drivers to meet the market demand for transportation.
> ...


Your analysis may be correct. The one thing that Uber is missing is that they had a quality component to their product, that I would argue was worth something. If they want to just try to find the bottom, then they will end up with a product that is not much more than a commodity. And the problem with that is that anyone else can show up and do the same thing, and customers won't know or care about the difference. Quality won't matter. Uber was actually in a great spot when they were cheaper than cabs AND they had a quality difference. But they seem to be throwing away the quality component as they lower prices. People will pay up for quality. I know its a different market, but people pay Tiffany for the blue bags.

As another poster has mentioned, a lot of Uber business is DUI prevention. That is the best time and used to be the most profitable time to drive. They may be able to get some people out of their cars, but many will still use them for ordinary tasks, such as shopping and errands. Uber will be hard pressed to fill that role for many people. And, with rates being so low, drivers would be crazy to work midday to fulfill that role. The rates are so low ($0.80 base in LA/OC and $1.10/mi.) that a driver really has to think twice about going more than 1.25 miles to a pick up.

$0.80 base * .8 net commission = $0.64 Even the most optimistic about their running costs would be hard pressed to get 2 miles out of that. With the net rate a $0.88/mi ($1.10 * .8) you can't cover the same amount of "dead miles" as you used to. You almost have to practice extreme "stop and drop" and really convince yourself that dead time between runs is not work time, or else your hourly numbers will look horrible.

Ironically, I shouldn't be here posting but should be heading out to drive, but that motivation has greatly decreased.


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## Dadwith2boys (Aug 29, 2014)

Minneapolis / St. Paul

$6.00 Minimim Fare
$0.60 Base Fare
$0.23 / Min + $1.65 /Mile
$1 Safe rides fee


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## chi1cabby (May 28, 2014)

Dadwith2boys said:


> Minneapolis / St. Paul
> 
> $6.00 Minimim Fare
> $0.60 Base Fare
> ...


Your rates are headed south...
Safe Rides Fee is going away end of this month.


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## Daemoness (Aug 27, 2014)

OC_driver, I agree with you about the quality component. Uber would have been better off focusing on that and advertising better while keeping rates up. If you check Yelp reviews in Chicago, you will see many "never again" ratings. Chicago has one of the lowest rates, I don't understand why, cars cost the same to operate here as elsewhere.


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## Chip Dawg (Jul 27, 2014)

Prices will go up when Uber buys out Lyft or they (Lyft) go out of business


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## Oc_DriverX (Apr 29, 2014)

Chip Dawg said:


> Prices will go up when Uber buys out Lyft or they (Lyft) go out of business


It would be great for drivers still driving, but I don't think there is any guarantee of that.


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## UberNoob (Aug 14, 2014)

Chip Dawg said:


> Prices will go up when Uber buys out Lyft or they (Lyft) go out of business


Nah, even if Lyft goes belly up or gets bought out, prices will still continue to come down because Uber will have monopolized the market and they can do whatever they want at that point and lowering the rates will almost guarantee riders will almost always choose to rideshare rather than drive themselves, especially in the city.

And at point, a driver will have no choice in the matter. He/she either quits or keeps driving because you won't be able to drive Lyft since it won't exist anymore. And for most, they will keep driving for the pennies on the dollar earnings because they have no choice.


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