Uber recently cut its UberX prices by up to 40% in Lagos, Nigeria, creating concern amongst driver-partners across Lagos, many of whom worried that this would mean loss of earnings, just two after a similar contest with Uber driver-partners in Kenya and India.
However, according to Uber, it will ensure drivers do not lose out on earnings during the early stages of this price cut.
“We have promised to ‘top up’ their fares. For example, this guarantee ensures the driver does not lose out while we see how the price cut work. Top ups will be paid out at the end of the week. It’s that simple,” said the firm in a statement to TechMoran. The compensation covers the drivers in case of a drop in income. The price cuts are expected stimulate business for driver-partners like they did in Kenya before Uber gave in to driver demands.
There have been reports that Uber charges a 15 percent commission for drivers in some markets like India and a quick Google search shows this could be true and can also disputed. But regardless of what Uber charges in other markets, the commissions will always be there.
Been doing this for years
This is not the first time Uber has reduced fares, in 2015, it implemented the temporary price cuts which it says was a success. These cuts had resulted in an improvement in the volume of rides requested on the Uber app. In Kenya, the price cut reportedly gave drivers 70 percent more trips until the competition hired goons to demonstrate against the price cut, turned ugly and forced Uber to increase the prices.
Uber says it gave its driver-partners more than 24hours notice about the price cut and held dedicated workshops and focus groups on ensuring drivers understand the temporary earning guarantees it had put in place. And the good news is that the price cuts are not permanent.
Price cuts not permanent
“These lower prices are not always permanent and we’ve promised that we will monitor partner economics on a daily basis as well as host a once weekly focus group for driver-partners to attend should they have any questions about this fare reduction. In the unlikely event that the lower prices don’t result in driver-partners making the same or more, we will rethink the fare reductions.” the firm promised.