Uber’s new rates are designed to make driver payout more consistent, but some say it has decreased their earnings

Uber CEO Dara Khosrowshahi. Matt Winkelmeyer/Getty Images
  • Uber recently changed its pay structure in some cities to prioritise trip time over distance driven.
  • The company says the new structure will help drivers to better estimate their earnings from a given trip and help keep their cut consistent.
  • Still, some drivers posting on social media said that the structure has hurt their earnings and that the changes have made it more difficult to make money on long-distance trips.

A new Uber pay structure that prioritises time over distance as they pertain to driver earnings has some drivers frustrated with the company.

Last week, the ride-hailing giant shifted the payout rates for drivers in about 14 cities, USA Today reported. The changes are designed to provide a more consistent payout, regardless of trip variations, it said, adding that overall earnings shouldn’t change.

“We’re putting more value on time to help create more consistent and dependable earnings, no matter where your next trip takes you,” Uber said on its blog when it announced the changes in October. A spokesperson clarified that the rollout would be gradual, with a handful of cities getting the update last week.

Some drivers weren’t so convinced about the payout remaining the same. They took to social media to voice their concerns.

One driver said that he was making about $US20 less per night after the changes took effect in Phoenix.

“This is pretty crippling to a full time driver,” he said in a Reddit forum for drivers. “I don’t know if I can support myself anymore.”

Another said the move is effectively “subsidizing lower mile city trips by taking earnings from people that do a lot of long trips.”

And while the change is relatively small – Uber has long paid drivers based on actual trip length while charging customers a pre-determined fee that it estimates for the trip – the changes are part of a longer trend that has left some drivers unhappy with the company.

“A lot of these services are getting cheaper and cheaper for the consumers,” Harry Campbell, a driver who runs the wildly popular The Rideshare Guy blog, told The Ringer last week. “But I think for the driver’s side things have actually probably gotten a lot worse.”

Other drivers said they planned to find slower routes to make up for the slashed distance rates. Even if the payouts end up about the same, one said he will likely cancel any ride of more than 50 miles.

To see how the changes might work, Campbell used 144 historical rides from a driver’s account over the summer and compared the payouts with what they would be now. Not surprisingly, the payout for trips of more than 10 miles starts to decrease, while many of the shorter trips see an increase.

Uber payout rates new versus old

“We are constantly working to make earnings more consistent and dependable for drivers, while making our service more reliable anytime you need a ride,” an Uber spokesperson said in response to questions from Business Insider.

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Uber has repeatedly been criticised for not paying drivers – which it classifies as contractors rather than employees – a livable wage. According to a study commissioned by New York City, the median Uber driver takes home $US14.17 per hour, the second-lowest among four major ride-hailing companies in the city.

The company has taken some steps to combat this, including a beta driver rewards program that provides things like cash back on gas purchases and tuition assistance for an online college program.

“We know how frustrating it can still be when you don’t know whether accepting a trip will be worthwhile,” Uber said on its blog. “The goals of this update are to give you more confidence that every trip is worth your time, even when you encounter heavy traffic or unexpected delays, and to help create more dependable earnings from trip to trip.”

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