Yahoo Finance Aussie Uber drivers let rip over 'brain-dead' new price tactic: 'Despicable'
The ride-sharing service is updating how fares are calculated and it's gone down like a lead balloon for drivers.
Uber customers might be pleased by a recent price drop announcement, but some drivers are seething. The ride-share company said how fares will be calculated will change on August 7.
Geoff* told Yahoo Finance the pricing change will see him paid less per trip. He said it's a serious blow during the cost-of-living crisis, particularly while fuel remains so expensive.
"This despicable company is coming after drivers again," he said. "Every time they announce something, it's a loss for drivers. [They will] start taking pay out of driver's accounts...that's theft."
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Currently, Uber's cut from a driver's fare is 27.5 per cent. Drivers also have to take GST out of their earnings as well.
The change has been sold as a benefit to both customers and drivers, as better pricing would increase demand and therefore improve the opportunity for drivers to earn more.
But Geoff said this could have the opposite effect.
"It's a brain-dead idea...you're gonna lose all your drivers," he told to Yahoo Finance. "They're all gonna go to DiDi... You don't shoot the part of the business that makes you all the money."
Geoff said the ride-sharing service should introduce a tiered commission rate based on how many trips a driver has made. He claimed this would provide an incentive for drivers to do more trips.
'At what point is this slave labour?': Drivers slam Uber
That was the question asked by another Uber driver, Tim*, who told Yahoo Finance the changes are a punch to the gut.
"Uber's low rates are a major reason for our inability to get out of poverty," he said.
"Uber is not giving us any chance at all. We are treated like slaves while they rake in billions.
"I always thought the more you work the more you earn. Last week it cost me $250 to earn $600 in about 40 hours."
He said he worked today for three hours and covered some of the busiest spots in Sydney. But he didn't get a single ride during that time frame.
"How can I earn a living? How can I eat, let alone pay rent?" he said.
When Tim started Ubering in 2021, he said it was enough to support him and his three kids. But now he feels forced to work seven days a week just to keep a roof over his family's head.
What is Uber's new pricing model?
Uber didn't outline exactly how much fares would drop for consumers, however, it's set to be on average less than 5 per cent across the country.
Yahoo Finance put the drivers' claims to Uber.
A spokesperson said the pricing model aims to strike a balance between "providing quality, safe and affordable rides for Aussie passengers" while also "creating compelling earnings opportunities for drivers".
Drivers were sent an email last week that the changes would kick in next month.
“We will be changing the time and distance rates used to calculate rider fares,” the email said.
“The changes will include different time and distance rates based on geography, as well as the time of the trip.
“In most cases, the rates will be lower than those currently used. We anticipate that these changes will lead to an increase in rider demand and result in more trips for driver-partners.”
Yahoo Finance understands Uber Eats will not be impacted by the price change.
The Transport Workers Union (TWU) has called on the company to rethink the new model.
“Some of the most vulnerable and underpaid workers in our economy are once again facing cuts to their earnings in a market that’s in free fall," TWU national secretary Michael Kaine said.
"Rideshare drivers with no rights to minimum wage or other entitlements have spent the night wondering how they’re going to pay the bills next month."
'Final straw': Drivers leaving Uber over pay
Tim said he is actively trying to leave Uber as a result of the price change, while Geoff said he is also looking into another ride-sharing service and might jump ship.
He suggested thousands of drivers could "switch off the app" when the pricing model kicks in until "they reverse this total stupidity".
Blair Davies, CEO of the Australian Taxi Industry Association, warned Uber's move could see a big exodus of drivers.
"You would have thought that a company like Uber should, in the current environment, be trying to lift the incomes of drivers, not be doing things that reduce them," he told Yahoo Finance.
"It's hard to imagine that they're going to see more drivers attracted into the platform in an environment where their trips are potentially being paid less."
He said he was "confused" by Uber's new pricing model for two reasons.
One, he said there isn't a large lack of demand for ride-sharing services or taxi services at the moment, and two, it's coming just before the Fair Work Commission (FWC) is set to look at the gig economy industry.
From August 26, the FWC will be given better powers to establish minimum standards, like penalty rates, reimbursing employee expenses, and superannuation contributions, for gig economy workers.
This could have a massive impact on the way Uber drivers are paid, but it's unclear whether customers will have to cop that when they hop in a car or have food delivered to their home.
*Names changed to protect identities.
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