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Uber and Lyft drivers worry wages aren't keeping up with rider fares

While rider fees continue to increase, recent media reports suggest not all drivers believe they are reaping the benefits.
Credit: AP Photo/Richard Vogel, File
In this Jan. 12, 2016 file photo, a rideshare car displays Lyft and Uber stickers on its front windshield in downtown Los Angeles, Calif.

With just a tap of a button, ride-sharing apps have given riders the ability to get from point "A" to point "B" without the use of taxis or other forms of public transportation. 

Millions of drivers have signed up for Uber and Lyft during the two most prominent ride-sharing companies' roughly 10-year existence. Lyft stock recently went public, and Uber is expected to begin trading publicly in May. But, some drivers worry about getting their fair share of rider fares.

Last month, drivers in Los Angeles refused to pick up passengers for one day after Uber slashed drivers' per-mile rates, according to VOX. And, The Guardian reports some drivers still feel like they're getting short-changed.

A study by JP Morgan found that between 2013 and 2018, such transportation platforms accounted for as many participants and dollars as other transportation sectors combined. However, between 2013 and 2017, the earnings for drivers fell by 53 percent.

As one Uber driver explained to The Guardian, price surges are sometimes showing up for riders but not drivers. The ride-sharing company has admitted in a recent IPO filing that it plans to decrease driver bonuses to save money and keep classifying its drivers as independent contractors, according to The Guardian. In some places, Lyft has decreased the per-mile rates for its drivers. However, the company says it simultaneously upped the per-minute rates in those areas.

Uber confirmed on its website that it is increasing its per-minute rate and decreasing its per-mile rate for UberX, UberPool, and UberXL. The company says it's more value on time for more "consistent and dependable earnings" and says it doesn't expect average driver earnings to change. 

When asked about the discrepancy between riders' payment and drivers' wages, an Uber spokesperson responded with the following:

"Riders are notified in advance via the app of when fares are higher than usual, and drivers have full transparency into what riders pay, what Uber receives and what they earn on every trip." 

Lyft says it is in the process of changing its payment model for drivers and can understand the current confusion over price increases. Right now, Lyft drivers get paid a base rate, time and distance rate. Drivers are eligible for bonuses based on tips and get bonuses during peak hours. 

Back in August, however, Lyft announced it would be shifting away from the current system and to "Personal Power Zones." Under that system, drivers will earn a guaranteed bonus when in range of a power zone, when demand is high and the ride is located in a high-demand "heat map." That system emphasizes time and mileage. A Lyft spokesperson confirmed the business is looking to have the new model completely "phased in" by May. 

The spokesperson provided the following statement: 

  • We announced Personal Power Zones (PPZ) back in August and we are in the process of phasing out the Prime Time incentive, and moving towards PPZ’s which is a clearer, more reliable way to find high demand and score a bonus on the next ride. We guarantee a bonus when the pickup is in the zone — no matter where the driver is are when they accept the ride.
  • The Guardian article focused on a driver in SF, which is a market where 50% of drivers see PrimeTime and 50% see PPZ. Our goal is to get 100% of drivers in SF to PPZ by May.
  • This article perfectly sums up how driver pay is calculated and how it is separate from what a passenger pays.

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