News Uber

Uber is now allowing drivers to set their own rates.

How much should you charge?

Drivers are now able to set their own fares on Uber in select cities in California. Why California? Because drivers worked together to get AB-5 pushed through legislation so that Uber and Lyft can classify them as employees. One of the main arguments as to why drivers are employees was that they were not able to set their own rates. To counter this, Uber has decided to allow drivers to set their own rates.

There is a minimum fare (because dumb drivers work for less) but you can set a price and wait for a rider that is willing to agree to that price, which may take a while if you set it higher than other drivers.

So what is a fair price if this came to Houston?

Well, being an active driver, I can not answer this question as it can mean we are colluding. However, here are some guidelines: The taxi rate in Houston for example is set at $2.20 a mile. Divide this by 87 cents (what the rider gets charged) and it is roughly 2.5x cheaper for a Uber than a cab.

One thing to keep in mind though is the level of service you provide. Customers are always willing to pay more for better service. For the most part, we all know you get what you pay for. If you have a higher rating (4.95 or more) and thousands of rides under your belt, you can easily charge a rider more than 2.5x the price. Of course, this would be a lot better if Uber also gave riders the chance to choose save their favorite drivers.

So what do you think? Is this a good or bad thing? Leave your comments below!

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