How Rider Prices and Driver Earnings Work in an Open Marketplace | What Moves Us | Uber

(music) – Jonathan thank you so
much for taking the time to sit down with me today. I want to start with the fundamentals. Uber operates an open marketplace. Can you walk me through that? – Absolutely. An open marketplace means just that: It’s open to everybody who
wants to make a living. You can drive whenever you
want, wherever you want, and however you want. We offer broad access to
work and we expand access to mobility for riders. The freedom and flexibility
that this affords is hard to understand,
until you actually try it. In a typical 9 to 5
job you can’t just come and go as you please. – All of that flexibility
sounds really great. But I think lot of
people are worried about having too many drivers
and that meaning low wages. – Uber wants every driver
to earn as much as they can. But earnings are also
tied to the marketplace. It’s not as simple as raising rates. – Why isn’t it just as
simple as raising rates? – We’ve raised rates in the past. And we’ve seen two things happen. The first effect is on the rider side. Higher rates means fewer
people request rides. That’s not good for drivers. Secondly anybody who has a license and passes a background
screening can be a driver. So as soon as we raised
rates, more drivers joined the network. – So even more drivers join the network, what does that mean? – More drivers results in
fewer riders per driver, and that negatively affects earnings. – Why not just limit
the number of drivers? – Well if we were to
restrict access to drivers, we would not have an
open marketplace anymore. It would violate the
principle of Expanding Access. The other thing that it would do is that because there would be
fewer drivers for any number of riders, it
would increase the amount of surge pricing. Ultimately it would
make Uber more expensive for its riders. – Won’t you have times anyway
when the number of drivers is higher compared to
the number of riders? – We are in an open marketplace. So earnings are always gonna
be function of market demand. If you drive on a Friday
night, for example, there will be lots of demand
and lots of earnings potential. But if you drive in a
comparatively slower time like the middle of a weekday, for example, your earnings potential
is going to be lower. – I understand, but it just
sounds like Uber is saying to drivers, sorry you’re at
the mercy of the marketplace. – You should really talk to Jenna who is working on a lot
of our efforts to help build the technology to better
balance our marketplace. – Hey Jenna. – Hey Katherine. – Hey good to meet you. – Nice to meet you. – So I was just talking to
Jonathan and he was saying that driver earnings are a function of demand. Can you tell me more about that? – Jonathan’s right. The more rider demand, the
more earnings opportunities for drivers, but that’s
where Uber can help. Looks like our ride’s here. – Hi, Jenna? – Hey, Christopher? – Yes, come on in. How are you today? – [Jenna] Good how are you? – [Christopher] Good. – So Christopher, Jenna
here works for Uber, and we were just chatting
about how Uber can increase demand, so that drivers can earn more. – That sounds good to me. – So we’re always trying to
increase earnings opportunities for drivers by increasing rider demand. We do this through things
like rider discounts or products like Uber Pool
that attract more riders based on its affordability. More riders means more
opportunities to earn for drivers. – So Christopher, Uber
is an open marketplace. How did you get stuck driving on Saturday? – I didn’t get stuck. I’m going back to school,
and so during the week, I’m busy with school work. So I can open an Uber app wherever I am and drive around the
city. Plus on Saturdays, you can make more money. – We want drivers like
Christopher to be able to plan ahead of time. So we give them information in the app that helps them decide
when and where to drive based on past trends. It’ll usually be times like
commute hours or around events. We can’t actually control earnings, but we can help drivers
understand when and where to drive to make the most of
their time on the road. – And when drivers are
earning on the platform, more drivers will want to drive. That’s how an open marketplace works best. (music) – Supporting an open marketplace for riders and drivers,
that what moves us.

10 Replies to “How Rider Prices and Driver Earnings Work in an Open Marketplace | What Moves Us | Uber”

  1. The one thing Uber should do if the driver has to drive more than 6 min. They should pay them a getters fee. Because a lot of times it is not worth it to get the customer when they are going less then the effort it took to get there.

  2. Haha, supply and demand is one factor in driver's earning, but how the earnings are divided between Uber and it's drivers is also a factor. Is this also worked out in a way to benefit the driver?

  3. Uber continually says increasing prices negatively impacts ridership. What they really don’t like is increasing prices that are shared with drivers. In the past 2 years, they have increased the “booking fee” 6 different times from 50 cents per ride to nearly $4 per ride. They don’t seem to mind increasing rider prices, but only if they don’t have to share revenue with drivers. The 6th booking fee increase was recently hidden along with the Uber Comfort rollout with no announcement to drivers or the public.

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