Story at a glance:
- Prices on Uber and Lyft have shot up, thanks to a driver shortage in the pandemic.
- Drivers aren’t paid based on what customers pay.
- Drivers are making $30 or more per hour on Uber and Lyft in the top markets, the companies say.
Uber and Lyft fees have skyrocketed in many cities, more than doubling in some cases, The Los Angeles Magazine reported. But that doesn’t mean the hardworking drivers are seeing all that money.
On a normal basis, a ride from Downtown Los Angeles to LAX used to cost between $40 and $50. Now, the same destination will cost users between $100 and $120.
According to The Washington Post, what is reving up prices is a shortage of drivers due to the pandemic.
But drivers aren’t paid based on what users pay any more. They are now paid based on their time and distance, with predetermined surge bonuses by Uber and Lyft.
“In 2020, many drivers stopped driving because they couldn’t count on getting enough trips to make it worth their time,” Uber said in an April statement. “In 2021, there are more riders requesting trips than there are drivers available to give them—making it a great time to be a driver.”
A former Uber engineer who spoke to WaPo under the condition of anonymity said the spike in prices will not accommodate the drivers, however.
Spokesman Matthew Wing said Uber’s median take rate, or money it divides with its workers, has been the same. However, he did not disclose the average that would account for potential disparities at the highest end of the spectrum.
.“On some trips, riders are offered a binding fare that is less than the time and distance rate, and Uber bears the expense of the difference,” he said.
In fact, some drivers say the recent changes to Uber’s policies have a tendency to lower one’s pay like in the case of Rondu Gantt who has been a driver for Uber and Lyft for the past three years.
“It’s worse,” Gantt said of the current system. “It’s not a transparent pay system. So you don’t actually know how much the passenger’s paying, whereas the old system it was a multiplier based on demand at that given time.”
Uber CEO Dara Khosrowshahi said last month that earnings from drivers were high, and the company has an initiative to bring back Uber drivers with a $250 million incentive program for drivers in some cities that saw wages spike amid the shortages.
New York, Chicago and Philadelphia Uber drivers’ median income per hour was about $36 or $37, and it was $33 in Austin, exceeding their typical earnings. Lyft spokesman Eric Smith said its top 25 markets were making about $30 an hour on average and $35 an hour in some of its busiest locations in May.
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