Lower Rates Mean Higher Prices

Apparently Uber’s last round of price cuts has resulted in much higher prices.

Have you noticed that since the last price cuts your area has been surging more frequently and for longer durations?  I don’t know if it’s just New York or if it’s everywhere.  But I see the same thing in northern New Jersey as well.Before the price cuts, I was really beginning to tire of driving for Uber because it never surged anymore.  A year ago at this time it surged consistently in the evenings – making evenings a good reliable time to drive.  Then through the fall and winter it almost never surged.  The reliable evening surges totally disappeared.  And as we all know, it’s hard to make a good day’s pay without a few surge fares thrown in.

Then came the winter price cuts and with those it became really impossible to make any decent earnings.  But it seems 3-4 months into the price cuts it has begun surging more and more often.  All of Manhattan has been surging from mid-afternoon on for at least two weeks now.  Northern New Jersey has been surging for longer than that and they’ve always had much lower rates.

When you realize surge pricing kicks in when there aren’t enough drivers to meet the demand, it looks like so many drivers must have completely quit after the last rate cut that there are now not enough drivers.  Which means Uber may have crossed the line (finally) on low prices.  It means enough drivers got fed up and said, “no more”, that there now aren’t enough drivers to fill the demand.

It’s good to see that drivers finally had a bottom line, under which they were no longer willing to drive.  Sadly for the passengers though, low rates are translating into much, much higher prices. Before the price cuts passengers were learning that if there was a surge in their area all they had to do was wait it out for 2-3 minutes.  But now we’re seeing all-day surges.  Before the price cuts, when it surged, you wouldn’t get any trips.  But now, passengers have seen that they can’t just wait it out.  So we’re actually getting trips now during surges.

I’m writing this at about 3:00 in the afternoon on a Friday, and all of Manhattan is surging anywhere from 1.4x – 2.6x.  And anything over 1.2x is more than people were paying before the price cuts.  And wide swaths of the most populous areas of northern New Jersey are surging right now up to 3.4x – which puts them at a higher rate point than New York’s normal rate!

Maybe Uber will learn the hard way that you can only cut rates so much before massive numbers of drivers defect for better opportunities.

12 thoughts on “Lower Rates Mean Higher Prices”

  1. 99% of the country Never surges, ever….
    The ‘lower fares me income’ policy is the single biggest fraud ever perpetrated on the American worker….

  2. I wouldn’t say Uber crossed the line causing them to lose drivers. The fact that there are more surges will bring them back. Just driver’s quitting means more demand and more income for drivers which will bring new drivers.

    Uber wins either way. More drivers means happier and more customers and fewer drivers means higher prices and more people applying to drive. This is how a free market works, like it or not.

    1. Yes, I think you’re right. And it is how the free markets like. After seeing this – I feel like maybe Uber should lower rates even more!! Seriously. It gets rid of drivers and then those remaining make more.

      1. Will you continue driving in the hope of surging coming back and having less drivers, which tree did you fall from?

    2. Uber should have left things alone. Drivers got smart, hope drivers don’t take the 10$ uber is offering to drivers for competitions pay receipts.

  3. its all about patient id say! but san antonio drivers right! ibe had yellow cab drivers roll up to me joking about how uber messing ub the business for them, and im like, well buddy let me get your phone number i’ll send you an invitation so you could start working for uber… he just just started laughing (high five me) and said you tha man! lol but yeah! ive been very busy these days Jb

  4. Off topic but still Uber related.

    I drove for UberNYC for about 2 years but I lived in NJ. I tore my ACL on March 1st, same day I had to renew my TLC insurance…Long story short = lost my TLC plates. Now the only option I have is to work UberNJ, begrudgingly but slow money is Better than No money.

    So I get my NJ plates and I add another vehicle. It seems the app never made the change, so I’m shown with the old plates But I still receive and I’m able to complete jobs. I just tell the rider Uber hasn’t made the change. This goes on for about 5 weeks until of course someone reports it to Uber.

    Fine no problem after I’ve done over 100 trips, let’s get the Background check. The check comes back I’m rejected because I got more than 5 Violations in 5 years.

    Here is the Kicker, 2 violations for parking tickets, 2 suspensions because of those unpaid tickets and 1 for a seat belt.

    So basically Uber isn’t letting me drive because of old parking tickets (paid for), even after I pleading with them to reconsider and that I had been a decent partner, 4.78 rating.

    Even worse, those tickets were given to a relative, they weren’t even mine.

    1. Are you really a partner, is uber sharing their profits or taking less commission?

      Where is the reward for being a partner or having a 4.78?

      Wake up.

      1. Uber is going to set their prices at whatever brings them the most profit and drivers will continue driving as long as they feel it is worthwhile for them personally, and riders will continue using it as long as it’s competitive. The pay sucks for the drivers but they stay for other reasons. You can’t fight economics.

  5. A friend is now an Uber. He’s so sweet & offers free treats & bottled water. He gets bad reviews & has no idea why. He posed this to Uber to no avail. Is their system rigged to send drivers at cost to regain points? I suggested he suggest that ALL reviews involve REASON FOR RATING. If no reason is given, how do you improve?

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