New rate decreases in Charleston Uber fares will make trips cheaper for riders, but possibly less profitable for drivers looking to bring in an extra income working for the app service.
The company recently dropped fares for Charleston from $1.75 a mile to $1.25 per mile. Uber will still get 20 percent of the cost of each ride and has offered to make up the difference if drivers rake in less money, permitting they meet certain requirements.
Uber spokeswoman Kaitlin Durkosh said in an email that it hasn’t made cuts elsewhere in the Palmetto State, but said Uber has “done price cuts in many markets.”
“What we’ve seen from other cities is that price cuts boost demand so more people are requesting more rides with Uber, meaning drivers will spend more time on trips and less time sitting idly waiting for a trip request,” she said in an email.
Uber, an app that lets those needing a ride request one on their phone, is supposed to pay drivers for any income they lose in the rate change if they meet specific thresholds. For example, for Uber to make up a difference in income, a driver has to accept 90 percent of requests in an hour and has to complete a specific number of trips depending on the time of day.
In an email sent out to drivers obtained by The Post and Courier, Uber said “our goal is to make longer trips more affordable.”
In the case of Uber driver Michael Watson, who only works for Uber when he’s not at his day job as a software developer, making less money from driving means cutting some of the amenities he has for riders.
For example, Watson pays for a monthly unlimited car wash service, which he would utilize before going driving for Uber.
“That’s something I’m going to cut out. ... I’ve gotta find a way to recover ... that 30 percent that I’m essentially losing,” he said.
He also plans to stop offering his riders use of his XM satellite radio. And he’ll no longer get up early to be in downtown Charleston to give people rides to the airport.
“It’s no longer worthwhile to me. ... it’s not worth it,” he said.
He said he also thinks fewer drivers are going to want to work during unpopular hours.
“I’m not going to drive to Mount Pleasant to pick you up just to take you to the airport,” he said. “It’s not worth it to me anymore to go out of the way.”
Watson also questioned whether cutting fare prices is going to actually bring in more customers. He also thinks cheaper rides hurts quality, he said.
Tom DeLorenzo is both a rider and a driver, like Watson. He said he’s already seen a dropoff in quality of Uber rides, something that a decrease in rates is going to contribute to, he said.
“I am a regular rider and I’ve seen the decline already in riding experience and that will continue as driving compensation approaches minimum wage,” he said in an email.
DeLorenzo said he has not gotten complaints from drivers on prices.
“Our rates were already low,” he said. “Not a single one of my 1,000+ riders has said Uber is pricey. To the contrary, on a regular basis I hear how affordable we are.”
South Carolina got Uber last summer. This past legislative session, the state Legislature passed a bill regulating the company and similar Uber-like companies.
Rich Piotrowski, a driver like DeLorenzo, said that Uber has already seen a decrease in the quality of Uber rides.
But like Watson, Piotrowski still isn’t going to leave working for Uber at the moment.
“Myself, personally, this cut isn’t enough to make me do it.”
The new fares for Charleston could help the company, Watson notes, but he doesn’t know if they’re necessarily going to help the drivers.
“Uber obviously, they collect a lot of data,” he said. “We’re not privvy to that data, but I’m sure they’re doing it in the best interest of the company. Whether that is (in) the best interest of the driver, we don’t know, and I think that’s ultimately that gray area that will be determined.”
The decision of whether to stay or go comes down to the driver, though.
“It’s one of the consequences of being in a free market,” he said, “is Uber can decide to drop their rates if they want to and we ultimately decide whether we want to drive or not.”
Reach Allison Prang at 937-5705 or follow her on Twitter @AllisonPrang.