Uber is testing a new tiered-fee program that could cut profits for drivers, especially those who drive part-time according to a report in Fortune.
The experiment is taking place in San Francisco and San Diego, where Uber used to take 20 to 25 percent cut of every fare. Now some drivers in San Francisco are working under a tiered system where Uber gets a 30 percent cut of the first 20 rides in a week, 25 percent for the second 20 rides and then 20 percent for every ride after that for the rest of the week. A slightly lower threshold with the same percentages is being tested in San Diego.
Uber has tested taking different percentages from drivers before in different cities, trying to find a balance between getting as much revenue as possible, keeping prices low and still attracting and keeping drivers. The newest experiment is looking to see if the change will impact how many drivers the company has on the road.
Part-time drivers might not be happy about the change though. While they can set their own hours, the new system definitely incentivizes drivers to work more hours if they want to make the same amount of money they did before. That's almost certainly part of Uber's goal, keeping more cars on the road for a longer time, but if it discourages part-time drivers enough to send them away from the platform entirely it's not going to help the company. For now, the testing will just be in those two cities, although theoretically it could be implemented elsewhere if Uber thinks it's working well.
