Since last year, Uber drivers suspected that riders were being charged one price, while drivers themselves were seeing another, often lesser price when the trip was done.
Turns out, drivers were right.
In a Bloomberg News interview published Friday, Uber revealed they were indeed charging riders a different amount than drivers saw as the charge for a trip.
That’s significant, Christian Perea, a San Francisco-based Uber driver said, because riders may be charged a higher amount upfront — say, $25 to go downtown — but drivers will only earn a percentage off a smaller charge, like $20, when a trip is complete.
Uber pockets the difference, Perea said.
“More often than not, the driver would end up earning less on that ride then what Uber charged you, the passenger,” Perea said, because the driver would take a more efficient route than Uber’s upfront pricing system “guessed” the driver would take.
“It was in Uber’s interest to charge a little higher,” he added.
Perea is also a writer for the blog The Rideshare Guy, followed religiously by thousands of Lyft and Uber drivers. In September last year, and other times since, Perea and Harry Campbell, founder of The Rideshare Guy blog, calculated fares and fees from many drivers to reveal Uber showed different prices to drivers and riders.
In a statement to the San Francisco Examiner, an Uber spokesperson wrote, “We price routes differently based on our understanding of riders’ choices so we can serve more people in more places at fares they can afford.”
Uber sent an email to its drivers on May 19, and listed a number of changes to how it shows driver earnings, including more transparency, seemingly in response to this issue.
“These changes reflect that there are times when what a rider pays may be higher or lower than what you earn for a trip,” Uber wrote in the email to its drivers.
Riders will “always know the cost of a trip before requesting a ride,” the spokesperson added, and drivers will “earn consistently for the work they perform with full transparency” into what a rider pays and what Uber makes on every trip.
Perea said some newer Uber drivers may not mind the new pay structure, and he lauded Uber’s recent move toward transparency.
However, he also said that Uber has justified rate cuts for drivers saying the company needed to lower prices to entice riders. Charging riders more, he said, runs counter to that argument.
“As a driver I just spent the last four years through six price cuts having my pay basically trimmed to the point where it’s terrible,” he said. “Being told we need to ‘lower the prices’ so more people will take Uber.”
“We knew it was bull the whole time,” he said.