UBERx is TOO CHEAP & needs to raise prices – FAST – or no one will drive for UBER!

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I have been, for a very long time, a HUGE UBER fan. I have used the service all over the place including places like Rome, Italy and have never had a bad ride. I have, a few times, had drivers take the “long way” to the destination, but UBER has always looked at and seen the scenic route and given me credit back.

21nov14 uber trip

I have seen real value in UBERx. Back in November I was in Dallas and stayed at the Sheraton Dallas by the Galleria. In fact I chose this location just due to UBERx since the hotel is just 4,000 SPG points per night vs. the airport SPG location that costs 7,000 points. So, with some UBER credits I could get around for almost free and save a bunch of SPG points from my SPG AMEX card. With a $20 credit from my referral link I ended up paying less than $10 for the ride. That is real value and even without the referral the price was really good.

26jan15 uber

But as you may have seen, UBER has cut UBERx prices a bunch recently. I think, and I think many drivers will agree, they have cut them TOO far. Just compare the same trip from the Sheraton to DFW airport and look at the price drop. From a greedy standpoint saving money is nice, but I also appreciate UBERx drivers and they have truly cut the price too far. When drivers can no longer earn a living they will stop driving and I think they have reached that level.

After all, UBER takes 20% off the fare. They also take the $1.00 “safe ride” fee. They ONLY pay tolls when you are in the car not on the way to get you or after you get out. See how much the driver must take on their own? At some point it is just not worth it plus UBERx does not, unlike LIFT, have the chance for a tip inside the APP.

What say you? Has UBER brought prices so low that it is just too cheap? You tell me – René
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15 comments

  1. Misses the point, Uber’s got PhD mathematicians working to balance supply and demand, they drop price when they have tons of drivers. In markets where Uber is cheapest it’s precisely because they have tons of drivers that prices are so low. In other places where they have a dearth of drivers they’re subsidiizing the low price by paying bonuses to drivers to bring more onto the road.

    Over the long term, as Uber establishes itself in even more markets, the equilibrium price may well go up. But they are not at all at a margin where they need to do this across the board (though they have already tweaked this a bit in a few markets).

  2. I love Uber. Sometimes I can get Uber black for almost the same price as Uber so I frequently use the black car for a couple of extra bucks. I also tip the driver some cash because I’m not certain that they get much from Uber. Regarding too cheap, I think they know what they’re doing.

  3. Rene, if you think the price of your ride is too cheap, nothing stops you from giving a nice tip. Small dollar value gift cards work nicely 🙂

  4. And I think that Delta does not charge enough. I can fly from NY to FLL for $100. It costs me more to get to and from the airport (even using UBER). Ahhhh, but Delta has competition. And so will Uber unless they keep the prices very low. The drivers choose if and when they will drive. If prices are too low, then the drivers stop driving and DEMAND PRICING sets in to increase the supply of drivers.
    Just be happy and thankful that you’re getting great service as a fair price; and TIP BIG.

  5. Well coming from an uber driver’s prospective, you will get what you pay for. I started driving for uber last summer and have seen fares decrease to the point it does not make sense to drive, unless the rider demand is high. I have been a limo driver for years and always provide exceptional service while driving Uberx. The cheap fares kills morale, cause some drivers have leased vehicles with Uber and have no choice but to drive. These drivers have to work long hours for to make payments. I like the service, but it will hit s breaking point.

  6. @Gary Ahhh… the good ‘ol self-regulating market. How’s that working for wages? It seems like every industry is squeezing workers these days. I’d rather see them sacrifice some profits for better service and luring better drivers than racing to the bottom (pun intended).

  7. Has Uber gotten cheaper? Yes. However, those of us in large cities are using it more and more precisely because it is cheaper. I used to only take Uber out on weekends, now I’m using it to go to Whole Foods, to dinner, the beach, etc, By lowering the prices, they are generating demand. Not necessarily applicable for someone who takes Uber exclusively to the airport, but that’s also not their prime market.

  8. As a uber driver i agree price should competetive. But not to a point that bankcrupt the driver. Uber already the cheapest in ny, they did not need to cut down again, the only reason drivers moving to other company like lyft and gett is that they take care of their driver better, this strategy of uber finally faile in long term, uber cut 36.5% with their so cold blackcar fund and taxes, min fare goes down to 4.50$ where usually takes 20 min for the total job. Car payment+ commercial insurance +gasoline how much u going to end up with per hr? Everyday im seeing young and inexperienced uber driver making accidents on the road, thats it. You fix ur own car as long as less than 1000$

  9. @Ben – As stated in post, most places, I think UBER is too cheap. But man, everything in NYC is expensive and not just UBER 😉

  10. UberX riders are more trash for every day that goes by. The number of misbehaving riders keeps growing. Entitlement is through the roof even for measly $5 driver payouts and less. And no tips. Lowest payout was $1.20 and pax did not tip. Unbelievable cheapskates. Had 4.86 rating on Friday Feb 9th. Driving 3 nights Friday, Saturday, Monday. Same driver same car, same service. Ratings plummet down to 4.79. If I get deactivated at 4.6 then Uber can keep their garbage. The Uber $90 re-activation fee is just another way to get rides delivered for virtually no driver compensation at all. How low can Uber go?

  11. Great answers about supply and demand but totally missing the point.

    I used UberX religiously to get rides to the airport. It was a good 40 minutes and $45 each way which was half the price of a taxi.

    As the price went down to $25 the drivers got worse and the quality of cars followed suit. The last three rides were so bad I gave up using the service all together.

    Hoping another company comes along that provides more quality and not just price. I’m willing to pay more for a better ride, and the $100+ for select/black is too much, so there is a market in there somewhere.

  12. I agree, the price is too low, but for short trips that pays less than $4. Longer trips are ok. Trips under $4 is just not worth the time, because they end up being free rides for the driver where they make no profit after UBER 25%, your gas to get there and back, wear and tear on your car.. The driver end up making $1 or less and then sometime even get bad ratings for that nearly free ride You figure the short trips takes about 20 min each, so too many can be a problem. However, I usually get a balance of short and long riders, so it’s not noticed that much. If the minimum was $5, I wouldn’t mind doing short trips all day.

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