Uber guarantees drivers minimum peak hour earnings

Move boosts supply of cars on road and benefits passengers, it says

CAR-BOOKING technology firm Uber has upped the ante in the competition for passengers here - it is guaranteeing its drivers minimum hourly earnings during peak hours.

The move is unprecedented for the taxi business, where cabbies' income is derived solely through fare takings.

The San Francisco-based start-up, which has become a rival to taxi firms in many countries, said the move was to increase its supply of cars on the road here during peak periods and would benefit passengers.

Under the scheme, the app company's private car hire drivers can earn up to $32 an hour during weekday morning peak hours of 6am to 10am, and $27 an hour on weekday evenings between 5pm and 11pm.

An Uber spokesman told The Straits Times last week: "We're constantly trying to optimise driver earnings to ensure consistently high reliability for riders.

"Passengers are able to benefit... especially during peak hours as more drivers are on the road to take advantage of their earning opportunities," he said.

The guaranteed earnings scheme has been rolled out in almost all cities in the United States but was started here only a few months ago.

Under the scheme, the app company's private car hire drivers can earn up to $32 an hour during weekday morning peak hours of 6am to 10am, and $27 an hour on weekday evenings between 5pm and 11pm.

The scheme also applies during weekends, but at different hours and rates.

If a driver makes less than the guaranteed amount in fares in a particular hour, Uber has promised to top up the difference.

The Straits Times understands that the guaranteed rates are not fixed. They are also gross fares, before Uber takes its 20 per cent commission.

But drivers have to fulfil certain conditions, including staying online on the app for 55 minutes of each hour.

They must also complete at least one ride an hour and accept almost all bookings.

Industry experts said the guaranteed earnings scheme is a way for Uber to get drivers to stay on its app and edge out the competition from similar ride-booking systems, such as Lyft, which has a strong presence in the US.

In Singapore, Uber's closest rival is GrabCar, which is run by cab-booking app GrabTaxi.

Drivers under Uber have mixed views about the new scheme.

Mr Alfred Tan, 54, said that with more drivers plying the streets at the same time, there are not enough bookings to go around.

While the guaranteed rates mean he could get at least $290 a day, he noted that in the past, he could make as much as $400 on a good day. "I was getting more jobs with fewer drivers on the road."

Another driver, Mr G. G. Tan, 43, said Uber recently slashed the minimum fare from $8 to $5, denting earnings.

But Uber said: "Cheaper rides ensure the demand is always increasing, so drivers will always have more and more rides to fulfil. As a result, drivers on the Uber platform make more money."

Other Uber drivers, such as Mr Ken Wong, 29, said the guaranteed earnings scheme has helped. "If I take a customer from town to Sembawang, which costs around $25, I may have to travel back to the city with an empty car. So the top-up can cover the petrol costs," said Mr Wong.

Commuters such as Mr Aditya G., 29, a finance executive who uses the Uber service daily, have already benefited.

"Six months ago, it probably took between 15 and 20 minutes to get a booking, but now it takes less than 10 minutes," said Mr Aditya. "I feel there are more Uber cars now on the road."

adrianl@sph.com.sg

A version of this article appeared in the print edition of The Straits Times on June 22, 2015, with the headline 'Uber guarantees drivers minimum peak hour earnings'. Print Edition | Subscribe