July 15, 2021
Uber contacted Mission Local after the publication of this article, which has been updated to include the company’s explanation of why it is telling drivers that passengers pay lower fares than they do. Actually. The update can be read in the last part of the subsection âMoney not taken into accountâ.
One weekday afternoon in July, I booked an Uber at my home in Visitacion Valley, a 2.5 mile trip for $ 17.16. My driver – we’ll call him Ryan – showed me how much he made: $ 7.54.
Uber has long claimed that the amount it takes on average fares, known as the “take rate”, is around 25 percent, but the driver only received 44 percent of my payment. . A quick Google search can quickly bring up screenshots that show this is nothing new, and plenty of media outlets have collected data to better understand business participation rates.
What is new is the growing appetite of ridesharing companies. Not satisfied with 25%, they now seem to need or want more – often half the price and in some cases nearly three times the advertised take rate, depending on the end result of 20 recent trips.
Perhaps the most comprehensive attempt to track the participation rate of rideshare companies came in 2019, when the Jalopnik outlet looked at 14,756 fares and concluded that Uber kept 35% of the revenue, while Lyft kept some. 38%. (Uber and Lyft disputed these analyzes but did not provide Jalopnik with datasets upon request demonstrating otherwise.)
However, as the supply of carpooling drivers declined and prices skyrocketed, the split became unseemly. Driver compensation is determined by a base amount, travel time, distance traveled and potential surge pricing, as well as incentives such as completing a certain number of trips within a period of time – and is do not determined by what customers pay.
Mission Local decided it was time to track corporate take rates again. We booked 20 trips in San Francisco with drivers who shared their pay for our trips. Drivers said demand was indeed back and prices were higher, but none said they noticed higher pay per ride.
Unscientific sampling showed that over 10 trips, drivers with Uber received an average of 56% of what I paid; out of 10 with Lyft, drivers received an average of 47% of what I paid. Of the 20, drivers took home an average of 52% of what I was billed.
To calculate how much Uber and Lyft are making, there are certain fees that need to be considered.
For Uber, airports aside, the share is what’s left after city tax, about 3.25%, typically less than a dollar per trip in San Francisco.
Lyft does not show drivers a per-trip charge breakdown beyond what they do. In an email, the company explained that it has replaced the breakdown of drivers’ single trips with a weekly snapshot of how much drivers pay per week. It does so, Lyft wrote, to highlight aggregate income and information rather than individual ride details, which the rideshare company says can be misleading.
One of my Uber drivers, PJ, showed me on his phone that he was being paid $ 11.47 for a 10 mile ride.
He was given access to a cost breakdown that showed a driver’s salary of $ 11.47, an Uber service commission of 44 cents, and city fees of 59 cents, all representing a “customer price” of 12.50. $.
But wait – my The Uber app reported that I paid $ 15.79, or about 26% more. Huh? That would have given Uber $ 3.73 – not the above 44-cent service commission.
A comparison of my Uber app with that of driver James Allen which shows a deviation from the amount I paid. We made two trips together, the first shown here and a second described in the article. (Video by David Mamaril Horowitz.)
In five out of five Uber trips where the drivers accessed the price breakdown, I paid Uber more than the amount Uber showed the drivers that I paid. What I paid was 19.6% -26.3% more than what the driver said by Uber. This would be about $ 3 more per trip.
Eric Dryburgh, field director of the rideshare advocacy organization Rideshare Drivers United, said he had seen or heard of five or six such cases.
But keeping track is difficult, as drivers typically don’t ask to see drivers’ phones, he noted.
Three drivers who have been with the company for several years commented on the missing money, and their response was the same: From their experience, this is not surprising. Adding a driver with over 15,000 trips: “I’ve always known that things aren’t always what they seem.”
UPDATE: Following multiple requests for comment and after the publication of this article, Uber contacted Mission Local to explain their pricing structure. California passengers, a spokesperson said, are charged market fees and driver benefits fees that are excluded from the fares Uber shows drivers.
The driver benefit fee covers worker benefits under Proposition 22, a measure passed last November that established drivers as independent contractors while granting them certain benefits, said Zahid Arab, regional representative of the public affairs for Uber.
These charges need some context. Uber and Lyft wrote Proposition 22 and were part of a group of gig-saving companies that spent $ 224 million to support the proposal, so the driver benefits fee, as well as the cost of the market, can be viewed as self-imposed and likely fixed by carpooling. companies.
Request Why Driver requests do not include these charges, Uber said, “drivers see outages that apply to them during the trip.”
Arab, the spokesperson for the company, added that “Uber’s median turnout has remained the same” at around 25%.
But it is becoming less and less clear what a “catch rate” is. After paying the tourist tax, whatever Uber âtakesâ from the passenger’s payment is under Uber’s control. He can then pay his bills from this “catch” and keep what is left in profit. However, since Uber has yet to make a profit, all of its “outlets” are paying bills – from employee benefits to administrative salaries.
Arab also tied a Twitter feed from company CEO Dara Khosrowshahi disputing the narrative that drivers did not get a bigger discount as travel costs rose.
But the drivers in the 20 races we took certainly didn’t have a bigger share. Uber understood this. END OF UPDATE
High service charges
Back to the corporate walk.
Looking at the last 30 trips on driver James Allen’s Uber app, it looks like the company averaged 24.7% per trip.
This would be in line with Uber’s calculation of 25%, but it also uses the inaccurate customer price that Uber has consistently shown drivers on our journeys – the one that excludes market fees and driver benefit fees. .
As an example, if Allen’s claim is to be believed, he kept $ 12.33 of the $ 16.46 Uber reported as billed, or 75% of my payment. Still, factoring in the market and the benefit costs, I paid $ 19.76, giving the driver 62.4%, Uber 34%, and the city 3.6%.
If we count market fees and driver benefits as money that goes to Uber, where else could it go? – and subtract the city cost of about 3.25%, the company pocketed an average and a median of 42% in the trips I took. In a single tariff, its share was equal to or less than 25 percent, and that was exactly it.
On the average I was getting at the time, Allen, a driver rated at 4.99 with over 4,000 rides, said, âI just wish I had full transparency on how much Uber is. overhead, so I’m ‘I’m okay with them taking a 25 percent cut, but I just want to know what the numbers are. “
The Bay Area driver said 10-20 customers have complained this year about the price of his ride and, in response, asked them how much they are paying.
Usually when this happens, Gantt says, less than half the price goes to him, and about half the time he gets a third.
âThe fact that two-thirds go to Uber or Lyft feels like a seizure of money that is only intuitively felt by drivers or drivers,â he said.
The problem is something that Eric Dryburgh of Rideshare Drivers United has said drivers disagree with.
âDrivers are very confused at this point even what the commission is,â he said. “We spoke to the drivers, and what we heard from the drivers is thatâ¦ the fares that the passengers pay are much higher than the actual payment that the drivers receive.”
A driver who asked to be called Molhado, who has worked for both companies for about seven years, also wants to know, so he frequently asks customers about their rates. He said that from what he noticed, companies kept about 50 percent of almost all the trips he questions, and sometimes 60 percent to 70 percent.
“All the time they change the prices, sometimes the customers are complaining, ‘Why are they charging me double or triple?'” He said. “Not for me – for me it’s regular.”
He dropped me off and we checked our rates: he got about half.
“Does that sound like 25% to you?” ” he said.
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