Uber's new Auckland pricing trial criticised for 'ripping off' drivers

Pricing adjustments have been made for the two-month trial.
Pricing adjustments have been made for the two-month trial. Photo credit: Getty

A new Uber trial designed to reward its Auckland drivers for their time spent in traffic has been criticised for causing financial stress. 

From 23 July to 16 September, Auckland Uber drivers will earn a higher rate per minute but a lower rate per kilometre. The new rate structure is an attempt to "reward driver-partners" for short-distance trips that take a long time during traffic and congestion, says Uber.

The time rate has increased from $0.30 to $0.42 - but the distance rate has been cut by almost 15 percent, from $1.35 to $1.16 per kilometre. 

Not all Uber drivers are satisfied with this new pricing, the changes coming a mere week after they were informed of the trial.

"It's a rip-off," says one Auckland-based driver, who has worked for the company for three years. He wishes to remain anonymous.

"Now drivers have to make their money during peak hours - but for a lot of drivers, peak hours aren't worth it. There's just too much traffic. So, what about the drivers who are working during the day?"

The driver claims a number of workers are already feeling the financial impact of the reduced distance rate.

"We're hurting already... fares have definitely dropped," he told Newshub.

"This trial benefits the customers but not the drivers."

His frustration comes as the new rate structure, designed to "help create more consistent earnings from trip to trip", means drivers who prefer off-peak work may suffer significant cuts to their usual earnings. 

"Being stuck in traffic during short trips has been highlighted as a major pain point. This is an attempt to rebalance the earnings split between time and distance," a spokesperson for Uber told Newshub.

"The trial is designed to reward driver-partners for their time on the road, not just the distance they travel. We encourage driver-partners to give us feedback."

Before the new rates, a 5am weekday 26km trip from Ponsonby to the airport, averaging 24 minutes, cost customers $44.02. Now, it's costing $41.97. If it's a return trip, the fare is cut by over $4.

On their website, Uber claims "this is not a fare cut" but admits "per-trip earnings may vary slightly... the new rates should help you earn more for trips where you are stuck in traffic."

Example fares during the trial.
Example fares during the trial. Photo credit: Uber

"How is this going to help us? Uber is exploiting drivers. They are trying to save money at the expense of their partners," says the driver.

The man also believes the trial was implemented to create more competitive ride prices - particularly as the ride-share company Ola increases in popularity.

"Their opposition is starting to have an impact. Over half the rides are Ola now," he says.

Instead, the driver suggests Uber leaves the per-kilometre rate and increases the wait-time charge.

"That would be an honourable thing to do for their drivers," he says. 

An Uber spokesperson told Newshub that the data will be reviewed at the end of the trial to see if the changes have been beneficial for their driver-partners.

For drivers who operate outside of peak travel times, the new pricing does indicate that bigger trips will result in big cuts over time.