EXCLUSIVE: Drivers will get a "top up" every week to ease fare reductions

While it shouldn’t have taken this long for Uber to clear up the air, the company says it’s got "payment guarantees" in place to ensure that drivers don’t lose any money provided they are putting in the work. What that means is that Uber will "top up" driver earnings while it observes how the fare reduction works in the market. "Top up" payments will be paid to drivers at the end of each week, says Uber.

On why it reduced its fare prices in the first place, Uber says the move was made to “stimulate business for driver-partners.” The company also says it had notified drivers of the fare reduction as well as the reasoning behind it 24-hours before effecting the changes.

“Drivers were given more than 24hours notice about the price cut and we held dedicated workshops and focus groups on ensuring drivers understand the temporary earning guarantees we have put in place,” Uber says in a statement to Pulse Tech.

One of Uber’s [former] drivers, speaking under the condition of anonymity, said he was not aware of any dedicated workshops or focus groups prior to the price reductions, although he did affirm that he could not speak for every driver in Lagos.

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“These lower prices are not always permanent and we’ve promised that we will monitor partner economics on a daily basis as well as host a once weekly focus group for driver-partners to attend should they have any questions about this fare reduction,” says Uber.

The company also defends its 25% commission in the statement saying, “Some people have heard that our service fee is 15% in other cities, this is incorrect! We have a standard service fee in all cities which is between 20–25%. The cost of running the Uber app comes out of Uber’s service fee from each fare.”

Uber also adds that the service fee is to maintain its app and ensure that it is functioning optimally across the board: “This service fee has been put in place so the app can be continually improved in order for it to be seamless and efficient for riders and drivers so that we can market to riders.”

If you have been finding it hard to find rides on Uber over the past two weeks, Uber says the fare reduction has caused demand to skyrocket and it is trying to get more cars on the road. Of course, it’s hard to say how many drivers [if any] have left Uber’s platform for Taxify’s — especially since there aren’t any numbers to back it up — because that is also a factor in why Uber can get enough drivers on the road, even if it won’t admit it.

In the meantime, Uber says the price reduction is not permanent and could be reviewed upwards once it knows for sure that driver-partners are not making the same or more than they used to before the fare reduction. Taxify has already changed its prices, albeit in a bid to get Uber drivers to switch to its own platform.

Uber is still sticking with its reduced prices so there must be something right about its decision that everyone else is not seeing. It will be interesting to see how that translates to its bottomline.

UPDATE: Further investigation reveals that there is no fixed amount or process to how Uber gives drivers the "top up" amount. One driver, speaking anonymously, said he received N300 last week whilst implying that the "top up" is dependent solely on Uber, regardless of how many rides the driver takes on. More updates as new information comes to light.

UPDATE: In response to the above, via a statement made exclusively to Pulse, Samantha Allenberg, Uber's spokesperson for Africa says: "To ensure driver-partners do not lose out on earnings during the early stages of this price cut, we have promised to ‘top up’ their fares to the same hourly earnings before the price cut. For example, this guarantee ensures that the driver-partner does not lose out while we see how the price cut works. Top ups will be paid out at the end of the week.

As long as the driver-partners meet the minimum requirements of completing one trip every 2 hours and accepting 80% of requests, driver-partners will receive these top-up guarantees. If drivers stay within the service area Uber expects drivers to meet the requirements."