Our recent UberX fare reduction announcement (up to 40%) in Lagos, Nigeria, created some concern amongst driver-partners across Lagos, many of whom worried that this would mean there would be loss of earnings. These worries have been accompanied by some speculation regarding Uber. So we wanted to take this chance to clear up some facts!
Drivers won’t lose out – we have guarantees in place
Driver-partners are important to us and we have ensured that drivers will still earn the same. We do not want drivers to be out of pocket, therefore, we have taken all the financial risk by offering driver-partners payment guarantees. Any driver-partner who is still putting in the hours and accepting the requests, should not see a drop in income. We are confident that driver-partners have no need to fear lower earnings. The reason Uber has lowered its rider fares is to stimulate business for our driver-partners.
We have also put in place payment guarantees to make sure that none of the driver-partners have to worry about the risk of losing money as a result of the recent fare reduction.
What this means is that to ensure drivers do not lose out on earnings during the early stages of this fare reduction, we have promised to ‘top up’ their fares. For example, this guarantee ensures the driver does not lose out while we see how the fare reduction works. Top ups will be paid out at the end of the week. It’s that simple.
Our 25% service fee ensures the app is seamless
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. 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 and continue to create economic opportunities for the people of Nigeria!
Our experience has shown the success of fare reductions
We always consider driver economics in each of the cities that they operate in and after six years of experience, what we‘ve seen in cities across the world is that lower fares mean greater demand, lower pickup times and more trips per hour — increasing earning potential and creating better economics for drivers.
This is not the first time we have reduced fares, in 2015 we implemented the temporary fare reduction which we are happy to say it was a success. These reductions had resulted in an improvement in the volume of rides requested on the Uber app.
Drivers are independent contractors
We do not employ any drivers nor own any vehicles. Uber driver-partners are independent operators, this is what drivers love the most about the app! It makes it possible for them to be their own boss; the technology and flexibility of the Uber app enable driver-partners to start, run and grow a small business on their own terms.
There are many reasons why Nigerians choose to drive with Uber. Some do it for the freedom to drive when they like; they’re in charge of their own lives and they work for as long or for as little as they want, following a schedule that suits their needs. For others, partnering with Uber offers an economic opportunity during hours where it can be difficult to find work or for those interested in additional income while going to university or starting a business.
We always speak with drivers
We respect driver-partners as valuable partners with a voice and a choice and we want driver-partners to feel they can talk to us about anything at any time. Drivers were given more than 24hours notice about the fare reduction and we held dedicated workshops and focus groups on ensuring drivers understand the temporary earning guarantees we have put in place.
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. In the unlikely event that the lower prices don’t result in driver-partners making the same or more, we will rethink the fare reductions!
Uber is committed to being the most affordable option for all Nigerians to get around. Driver-partners are our vital in achieving this vision. So, when we succeed in making Uber the best way to move around for all Nigerians, everybody wins.
Why I am struggling to get a car?
Demand has been exceptionally high since the fare reduction went live and we are working tirelessly to get more cars on the road. Please keep on trying and we expect wait times and reliability to return to normalize very soon.
Have any more questions? Please reach out to us via the help section in the Uber app or help.uber.com
Team Uber Lagos