Uber changes pricing in new trial for Auckland drivers

Saturday, 20 July 2019

Under Uber's trial Aucklanders will pay 19 cents less per kilometre but 12c more per minute.

Drivers are considering quitting Uber as the ride sharing company trials a new pricing model in Auckland.

Uber's pricing works by charging riders per kilometre and per minute on top of a base rate of $1.30.

Phil De Buyzer, a full-time Uber and Ola driver, doesn't want the price changes to come to Christchurch.

But from next week the price per kilometre will drop from $1.35 to $1.16 while the per minute rate will rise from 30 cents to 42c.

Uber said the change was in response to feedback from drivers about being stuck in traffic during short trips being 'a major pain point'.

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Auckland IT professional and part-time taxi driver Kapil Vyas is paying off his $125,000 Tesla S through ride sharing apps.

'This is an attempt to rebalance the earnings split between time and distance. The trial is designed to reward driver partners for their time on the road, not just the distance they travel,' an Uber spokeswoman said.

But Auckland drivers fear this 'rebalance' could leave them worse off.

Auckland Uber driver Phil said it was rare for him to be stuck in traffic during short rides.

'Most people catching Ubers aren't stuck in traffic because they live close to the city. So decreasing the price per kilometres and increasing it per minute will only benefit Uber and the customer,' he said.

'The only thing drivers want is an increase in the kilometre rate, that's how we make money.'

Part-time Uber driver Kapil Vyas has been driving for the ride sharing company for a year, as a way to earn extra money on the side and pay off his Tesla S.

Vyas said the price rebalance would only help drivers if they were stuck in traffic, but even then most rides were on fixed rates.

Ola takes a commission of 18 per cent from drivers.

He said this would incentivise drivers to only work peak hours where they could earn more stuck in traffic.

'That's not fair because drivers should be available 24/7 and if everyone is working at the same time we'll miss out on rides,' Vyas said.

'Over the past year drivers have already flooded the market making it hard to make money.'

Vyas said he would quit Uber if they made the trial permanent and work for Ola, Zoomy and corporate taxi company Blacklane.

Phil said he too was considering leaving Uber.

'I don't know which drivers they consulted. Driver's have got no choice. You either accept the rate or you don't drive for them. It's uneconomical for me to drive for Uber at that rate so I probably will quit,' Phil said.

'We're not making a lot of money off it anyway, and $1.16 per kilometre is just ridiculous. All the fuel prices have gone up in Auckland and they've not even taking that into account.'

Phil drove for Uber, Ola and Zoomy 20 hours a week and made about $200 to $300.

'It's not a lot when you take into account fuel, which alone is about $60 a week, insurance, and maintenance.'

He said although Uber still had the largest market share and was the most popular among customers, he preferred Zoomy because it took a smaller cut and was New Zealand owned.

Uber takes a commission of 25 per cent to 28 per cent, higher than competitors Zoomy which takes 15 per cent and the rapidly growing Indian company Ola, which takes an 18 per cent cut.

Kiwi ride share company Zoomy charges a base fee of $1.20, a service fee of 50c, a cost per km of $1.30 and 30c per minute.

In Auckland Ola charges a base fee of $1.30, a booking fee of 55c, a cost per km of $1.35 and 30c per minute.

Christchurch driver Phil De Buyzer said he did not support the price changes and did not want it to come to his city.

De Buyzer said over the last year the increased competition and popularity of e-scooters had made it harder for drivers to make money.

'When I started two years ago I was making up to $2500 a week doing 70 hours. Now I'd be lucky to make $1200. Then last year Lime scooters took a big percentage of the rides in the CBD so the drivers got hit again.'

De Buyzer said he had taken passengers on Uber and Ola to the hospital that had injured themselves riding on e-scooters.

'The driver, in this whole umbrella of ride share is the loser all the way. The winners are the riders, because they get a cheap ride and the company because they make more money,' De Buyzer said.