In a blog post today, Uber says it will guarantee wages in every city that it is cutting prices. The company has faced fierce criticism from both drivers and the media over its wage policy. Some drivers claim that lower prices have likewise cut their take home pay substantially.
In response, Uber claims that decreased fares translate into more trips and, ultimately, higher wages. In the image above, Uber seems to be arguing that, in Chicago, although fares have dropped 23%, average hourly bookings have gone up 12%.
Still, the average effect means that not everyone benefits all the time from wage changes. Indeed, I frequently hear complains from Uber drivers in San Francisco that their wages have dramatically declined over the last year.
Uber seems to be taking this to heart.
In the past, Uber has implemented price cuts without a guarantee for drivers. However, this time around, we’re trying a new approach. We’re so confident in the earnings gains drivers will see that we’re making earnings guarantees in every city where we’re cutting prices. We feel that it is important for drivers to have this kind of certainty and comfort going into a price cut.
The post also notes that price cuts are coming to dozens of major cities.
The sharing economy was supposed to be a buffer against the long recession. It remains to be seen whether ridesharing services can really help under-employed workers make a decent wage.
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