A Fin24 user, who previously owned two cars linked to internet ride-sharing app Uber, has written a letter about why he plans to exit the service after it implemented price cuts earlier this month.
Earlier this month, Uber announced that it’s cutting fares in Johannesburg, Pretoria, Cape Town and Durban by up to 20% for the winter period.
Uber says it expects the price drop to drive up demand and spark greater earnings for partner-drivers who take a share of each fare earned.
However, the move has been met with resistance from a small group of partner drivers in Cape Town, according to reports. Uber doesn’t employee drivers as the company partners with them and shares a stake in each fare.
Below is Fin24 user Niel Smit’s letter that outlines the issues at play regarding the price cuts.
“I am a partner with Uber and used to have two cars running 24/7 with four drivers since their inception Cape Town and specifically in Stellenbosch, which naturally has a total different user structure than that of Cape Town city bowl.Initially it was a very ‘sweet deal’ earning income whilst being available for trips. Later that was changed and changes just escalated, changes announced without prior notice or very short notice without any deliberation with partners/drivers. These are always accompanied by statements that try to calm partners/drivers that it will be a benefit to them, which they are not. It seems to us that Uber makes changes that benefit them very well but the brunt of that is paid by the partners/drivers in longer hours, more maintenance and higher fuel usage. Once you are in, you are stuck having to stay in to afford the repayments on a vehicle and not making enough to start saving for the next vehicle.
Attempts to engage in conversation with Uber is returned with ‘ready made’ and perfectly ‘decent’ answers in emails that in short say ‘thanks for talking, live with it, if you look hard enough you will see the change will benefit you’.
Today I have only one car and one driver still in service as it is too financially prohibitive to keep more than that up. I keep the car to keep a very loyal and highly rated driver employed. We do not make profit and certainly the car will not last until it's financing term has come to an end. The service and earnings do not take into account that cars will deteriorate quickly due to the odd 5000km's driven per month. When that car reaches its end we will exit the system and will have to find ways to make ends meet.Make no mistake, the Uber service is a great idea to riders and I wish it to continue for a reasonable time into the future, yet is saddens me to say that the ones who are ‘subsidising’ the reasonable prices are the partners/drivers. I hope they change the fee structure so it once again becomes a win/win for all involved as in the starting days.”
Meanwhile, Fin24 reached out to Uber for comment on Fin24 user Niel’s letter and this is what the company had to say:
“We’re committed to making Uber the most affordable option to move around town, and we know we can make that happen while making Uber the best platform for driver-partners to earn a living. The more riders take advantage of the price cuts, the longer they will be in place. We’re confident drivers will earn the same or more when the cuts help increase their trips.At this stage of our growth, we have done a lot of price cuts, so we have a good sense of how they work and a lot of data to back up our assumptions. We’re confident drivers will earn the same or more when the cuts help increase their trips - and we have put in place minimum payment guarantees for driver-partners. And if the amount driver-partners make on the road isn't what we expect, we’ll reassess this price change.”