[awwstn]

Here's what I think led to this:

UberX was priced appropriately for the market, but Uber wanted a larger cut of revenue. (Say average ride was $12, Uber gets $2.40.)

In January, Uber announced a 20% decrease [1] in UberX prices. (Continuing hypothetical, average price could be $9.60, and Uber gets $1.92)

This week, Uber adds the $1 safety fee, of which drivers get none. Now, continuing my hypothetical averages, the average ride costs a consumer $10.60 (less than before), and Uber takes $2.92 (more than before), and the driver is taking the loss.

Crafty, I guess.

[1][edit: here's the 20% price drop in January I mention above: http://techcrunch.com/2014/01/09/big-uberx-price-cuts/ ]

[ZoF]

For that to be true the average ride would have to be under 25$. (which it probably is)

I agree that this makes some sort of sense viewed from that angle, I don't think it's a pricing structure that jives well with the brand as a whole though. I think one of the strengths of Uber was the clear pricing model and this layer of obfuscation doesn't help that.

[cbsmith]

My understanding from talking to drivers is that when they announced the price change for UberX, they cut their commission from 20% to just 5%. So that means Uber now gets $1.60 and the driver gets $11.40 from a $13 fee. If this is a margin growing scheme, everyone at Uber needs to take remedial arithmetic.

[aetherson]

They raised the commission back up to 20% at the same time they added the $1 "safety" fee. Here's a reference:

http://www.geekwire.com/2014/uber-adds-1-safe-rides-fee-pass...

My read is that they thought they could keep Lyft from taking their market-share by losing money on every ride and relying on their deep pockets, but then Lyft got a comparable amount of money to Uber, and Uber was like, "well, guess we won't be waiting them out."

[cbsmith]

Ouch, that shift back to 20% is gonna hurt them bad with drivers, and the $1 adds insult to injury.

[pmorici]

No, in Baltimore at least Uber has _always_ taken a 20% cut. What they don't mention in the article is Uber also started charging drivers a $10 per week "Data" fee for use of the Uber phone you have to have to get fares. So they are recouping more than just $1 per trip.

[ballpoint]

I'd be really surprised if Uber thought the short-term value gained through the extra income would be larger than the long-term loss of value through goodwill caused by adding this charge. All of Uber's rhetoric is about the long game.

[sliverstorm]

Supposedly this is developing into a theme. Uber doesn't want to take a cut in revenue, and higher prices drive away customers- so the drivers usually get the shaft.