LONDON — Uber is raising its prices in London by 10% on Thursday as part of an effort to attract more drivers to the platform, marking the biggest price increase in the U.K. capital since 2017.

It is also increasing the price of an airport journey during peak times by 25%.

Ride-hailing apps have been struggling to meet passenger demand around the world in recent months and cities like London have been impacted particularly badly. When passengers do manage to find a driver, they’re often forced to wait longer than normal and pay surge pricing rates.

Uber believes these issues can be resolved if there are more drivers on the platform but it needs to invest more in labor for this to happen. Instead of opting to reduce the commission it takes on each journey, however, Uber has decided to ask passengers to pay more.

The San Francisco-headquartered company said passenger demand has spiked almost 20% in the U.K. since the nation’s lockdown ended in July. To meet the increased demand, Uber said it needs to hire 20,000 extra drivers across the U.K. before the service returns to normal levels. Hiring more drivers will also help to reduce surge pricing, meaning that the average fare increase for riders will often be lower than 10%, Uber said.

“We’re making these changes to help provide a better rider experience, by signing up more drivers to meet the growing demand,” an Uber spokesperson said.

They added: “We know people rely on Uber to book a safe trip around London and this small fare increase will help reduce wait times. As always riders will get a fare estimate before booking their journey.”

U.K. Uber drivers have complained about pay and workers’ rights ever since the app was launched in London in 2012.

Uber has long argued that drivers are self-employed but in February the U.K.’s Supreme Court upheld a ruling that Uber’s drivers should be classified as workers rather than independent contractors. Uber is calling for a “third way” for

classifying gig workers which offers them some protections but still ensures flexible working.

Some drivers stopped working for Uber during the coronavirus pandemic and moved on to new jobs where they qualify for employee benefits such as sick pay and holiday pay, but less flexibility. Drivers realized that they could also use their cars to transport food instead of people.

“Many ride-hail drivers have switched over to delivery during the pandemic and have found that pay is comparable, and they don’t have to deal with people,” industry expert Harry Campbell told CNBC in September.

In April, Uber said it would spend $250 million on a one-time stimulus aimed at getting drivers back on the road.

*By Sam Shead, CNBC*

 

**My Take**

Lack of Uber drivers on the platform is not a United Kingdom issue, this problem is happening all over the world.   Pre-pandemic, Uber had reached historic lows paying its drivers.  During the pandemic there were no riders requesting rides, therefore no drivers were needed.  Now with the world opening back up riders are coming back by the masses.  The problem is Uber did not prepare for how to bring drivers back.   The bottom line is that so many drivers were reaching their burnout levels for low pay leading up to the lockdowns of the pandemic, drivers I talked to said they would come back once Uber restructures driver pay.

The past few months as ridership all around the world is picking up at an extremely fast pace, drivers have seen no change in the pay rate.  No raise given for the per mile rate, no raise given on the per minute rate, and still no multiplier only flat surge.   Uber on the other hand, has raised customer prices 200%-350% for airport rides, late night rides, actually all rides.   The simple fix seems like it would be with more money coming in from passengers, raise the driver rates.   Uber claims that with more passengers waiting longer periods for rides using the Uber app, and lack of drivers, that logistics have become much harder and accommodating passengers is taking more people working on the platform.   You would think that less drivers, more riders, would equal more for Uber and at very least some raise in rates for drivers too.   As we all know this is not the Uber way though.

As much as I don’t like Uber coming up with a “third way” of classifying drivers in the U.K., I really hate the idea of drivers being forced to be workers, especially since we now know even the new “worker” classification would still be 100% union.  Also, under the Uber’s proposed “third way” workers would get some protections but would also be guaranteed flexible working hours.

Summary:   Uber needs to get its house in order while at the same time staying fully clear of unions. Simply using old Uber gimmicks to bring back drivers only works for short periods.  Uber needs to finally show its drivers they matter on even some small level to the company, in reality there is NO Uber without the drivers.  Take away the minute rate and raise the per mile rate for drivers, that is where real headway will be made!

One thought on “Uber hikes prices in London by 10% as it tries to lure back drivers

  1. matt thompson says:

    SJ I whole heartedly agree, good mile rate is only thing that will bring good drivers back.

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