Uber protest signs

Uber passengers may be celebrating the latest round of price cuts as the company continues on its mission to undercut the cost of car ownership. But drivers are none too pleased, arguing that the bargain pricing is threatening their ability to make a living via the service.

In Los Angeles, more than 50 area Uber drivers gathered in North Hollywood Tuesday evening to protest the cuts. This, a week after Southern California Uber drivers aligned themselves with the local chapter of the Teamsters union (as independent contractors, drivers can’t technically unionize) citing the need to fight for better working conditions. LA area drivers held a similar protest outside Uber’s Santa Monica offices in June of this year.

Last night, driver Aya Valilar, an 18 month veteran of the service, told CBSLA, “None of us have anything against the app. We love the app. I’ve experienced four cuts since I started. It was $2.50 a mile when I started a year-and-a-half ago, and now we are at $1.10 a mile. You can’t make a living off of that.” John Dabbah, another driver, echoed these frustrations, saying, “At the beginning, it was $2.50 a mile. People, they financed cars, they bought cars. They made money at the beginning. Now they are dropping the price day after day without even asking the driver.”

These issues should come as no surprise to Uber who surely hears directly from its drivers and likely  monitors the online communities which have been overflowing with messages of anger and frustration. The UberPeople.net thread “Driving in LA since the latest pay cut,” contains a littany of comment deriding the new pricings. One, by user QuietViolence, reads in part:

Driving at the new rates is a nightmare. One $4 fare after another, and with each of them, I’m just thinking, “This should be $6-7, and just last week, it was.” It adds up or, more properly, really doesn’t, very fast. But almost as bad as the pay cut itself is the smile the company continuously tries to paint on it. Each time there’s been a cut, there’s an email saying, “You see, though you’ll be making less each trip, you’ll actually just be making the same amount of money because you’ll have more trips! Uber is getting bigger! Isn’t that great?!” Yes, I’ll be doing more work for less money and you expect me to smile and be happy the company is doing well, despite the fact that this is my only job and it was a pain BEFORE all of this? I signed off earlier than usual last night because I was honestly almost in tears because of my frustration. I just could not continue to put a happy face on this insanity for the sake of the riders. It makes me think that the company thinks I am deeply stupid.

Another driver, posting under the handle “getemtheresafely,” replies with, “I feel your pain sister!!!!……6 months, 520 rides, 14,000 miles and $ 8,043.00 for me doesn’t really mean squat considering my expenses.”

Last night’s North Hollywood protest were organized through a series of bulletins posted to several driver message boards, including UberPeople and the r/Uberdriver subreddit alerting members of the community to the planned gathering. There are already plans to stage a second, similar protest in the same area on Friday of this week.

LA area drivers are not alone in this fight. The Seattle Ride-Share Drivers Association organized its own act of defiance last week, encouraging UberX drivers to honk their horns in downtown Seattle to protest low wages. San Francisco area drivers also organized a protest yesterday, with the group’s call to action revealing the level of discontent among these drivers:

If you are a Uber driver please support us. We need your help to get results.

This protest is a direct action against the “bait and switch” tactics Uber uses with its drivers. Uber will be eliminating the $1 per fare “safe driver fee” and will begin charging drivers $10 per week to use its phones. How much less will you take home next month? The theme of the protest will be, “What do U stand for?”. Our focus should be on what we stand for, what we stand against. This protest is not about Travis, cabbies, Lyft, or others. This is about what we want, what our values are. Signs, billboards, and other things should be about US, not them.

Drivers please attend, if you cannot, please shut off your phone, during the time of the protest. Ask friends to sign up for Uber. On the protest date ask your passengers and friends to request a ride, then ask them to text the driver a message reminding them that there is a protest of Uber with other drivers happening. Ask them to cancel after 2-4 minutes of placing the request. Ask passengers to urge our lawmakers to vote “Yes” on AB 2293

A brief chronology:

December 2013: $3.00 base fare, $2.35 per mile, .50 per minute minus 20% Uber commission

January 2014: Uber “temporarily” lower fares by 30%, lowers commission from 20% to 5%

April 2014: Uber raises commission from 5% back to 20%, “temporarily” gives $1 per fare to drivers as “safe drivers fee”

June 2014: Uber announces further fare reduction of 20% for passengers, while paying drivers Jan. 2014 fares. Uber also announces to “partners” that the $1 per fare promotion will end on 8/31, and Uber will begin charging $10 per week to use its phones (which can only be used for maps and receiving virtual hails).

With the removal of the $1 per fare “safe drivers fee” and addition of $10 per week for the Uber phone we will be making almost 30% less per fare than we did in December 2013.

In response to the LA protests, Uber offered a statement that reads:

Drivers are making more money now due to higher demand than they did before the price cut. We will continue to work with them individually to ensure their small businesses thrive.

A similar response by the company to the Seattle protests states:

Uber offers individuals the freedom, economic opportunity and flexibility to start their own businesses. We remain committed to helping the thousands of Seattle driver partners grow their small businesses.

Uber is no doubt an amazing and innovative business. I am a regular rider and have argued in the past why the company more than deserves its nearly $20 billion valuation and why its long-term potential far exceeds that sum.

But it seems like the biggest obstacle to the company achieving this lofty potential is the bull in a China shop methods the company takes to dealing with its own drivers and regulators in its various global markets. Rather than communicating with these constituencies and seeking a mutually acceptable solution to whatever problem is at hand, Uber has proven time and time again that it would rather lower its head and run full steam ahead, consequences be damned. This strategy has no doubt helped Uber get very big, very fast, but at what cost? If the company builds its empire on a shaky foundation of distrust and resentment, that size can quickly become a liability not an asset.

Uber and its competitors have displaced the legacy taxi industry by making local transportation a more attractive proposition for both riders and drivers. Like any two-sided marketplace, it takes a balance among both groups for things to function efficiently. If Uber has trouble retaining drivers things come to a screeching halt rather quickly.

No wonder Uber CEO Travis Kalanick is counting down the days until he can replace these flesh and blood drivers with driverless vehicles. Oh, the efficiency!

[Image via Alex Diaz, Twitter]

  1. Uber is a technology platform that is evolving the way the world moves. By seamlessly connecting riders to drivers through our apps, we make cities more accessible, opening up more possibilities for riders and more business for drivers. From our founding in 2009 to our launches in over 200 cities today, Uber's rapidly expanding global presence continues to bring people and their cities closer.

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      Past Investor
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      Past Investor