How Uber Pays Their Drivers?

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Uber Technologies Inc., better known simply as Uber is an American International Transportation Network, with headquarters in San Francisco. It was founded in 2009 by Trasis Kalanick and Garrett Camp. Uber is basically a platform that connects drivers with those in need of a ride. Uber has developed an app that enables smart phone users to register for a ride from wherever they are. Drivers having their own vehicles register with Uber and are informed via the app about a prospective ride in the vicinity of the driver’s current location.

This business model was so successful that Uber had soon spread its wings and currently operates in 300 cities of 58 countries. Several start-ups were quick to imitate the model and the process is known as Uberification.

Uber has met with resistance in many countries of the world. The giant is seen as greedily gobbling up the local taxi services. The user and the driver however will probably disagree. Users may have to pay more for their ride, but they do get the comfort of a point to point service. Drivers too have by and large had a good experience with Uber.

How Uber Pays Its Drivers:
The matter of whether an Uber driver is an employee or under contract is being debated in the courts. At present Uber treats all drivers as independent operators under contract to Uber.

Payments to the drivers are made by wire transfer on a weekly basis. A complete log of the payments is also provided to the driver. Drivers report that the payments are always on time.

The rate of payment for drivers varies from country to country and the gross earnings may vary from city to city within the same country.

One standard is maintained globally; all fuel expenses, insurance, maintenance, taxes are paid by the driver.

In Los Angles, Uber charges the customer $0.18 a minute and $1 per km. A rider fee of $1 per ride is added on. The rider fee does not vary and goes directly to Uber. In addition to the basic fare surge pricing at peak hours raises the fare by a pre-determined amount. If the current surge is 1.3, then the fare (minus rider fee) is multiplied by 1.3. Off the billed amount the rider fee and 20% of the rest is kept by Uber and the rest transferred to the driver’s account, where it becomes available to the driver weekly.

In other cities in the US the rate of payment to the drivers is the same, but the price per min/km is higher thereby increasing the gross earnings of the driver.

In countries like India where Uber is a start-up, not yet looking to make a profit, drivers get a very good deal. Uber will stand guarantor to a bank loan for a new vehicle if the owner contracts with Uber. This helps previously employed drivers become independent. Uber has various schemes for the drivers. A driver who is on call 12 hours a day and makes 4 trips is guaranteed a payment of Rs 2,500 per day. Uber billing in India has three levels.

  • Uber XL: Base Fare Rs 85 +Rs 12 per km +Rs 1.50 per minute
  • Uber : Base Fare Rs 55 + Rs 9 per km +Rs 1 per minute
  • Uber Go: Base Fare Rs 40 +Rs 7 per km + Rs 1 per minute

Drivers with billing amounts in excess of Rs 2500 per day get the higher amount.

Drivers who do not wish to work full time get paid on a per ride basis. They collect 80% of the Billed amount and an additional Rs 200 per ride from Monday to Thursday and Rs 300 per ride Friday to Sunday.

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