Uber taxi drivers have gone on strike after receiving a significant pay cut in New York, prompting an Uber spokeswoman to claim that its drivers are not suffering financially.
Uber, which has about 35,000 drivers, lowered its pricing for customers by 15% in New York City on Friday for all of its services.
Solo riders using UberX now pay a base fare of $2.55 instead of $3, and a minimum fare of $7 instead of $8. The cost per minute also went from $0.40 to $0.35 and the cost per mile fell from $2.15 to $1.75.
Uber spokeswoman Alix Anyang told am New York that the drop in fares was to get more people using the service in the slower winter months. She said drivers are not suffering financially as more demand means less idle time in the car.
“Since the price cut, drivers have spent 39% less time between trips, which has increased average hourly earnings by 20% compared to two weekends before,” she said.
Uber commission has been raised from 20 to 25 percent. Lower prices and high commission are to be rolled out with Uber across 100 cities.
Taxi app Lyft also said it would lower customer prices in 33 markets, but not in New York.
The pay cuts prompted 350 drivers to protest at the company’s Queens office over the weekend, waving dollar bills, some holding banners saying that the taxi company had made billions but would leave drivers “homeless”, as reported by am New York. The rally was organized by the New York Taxiworkers Alliance, which includes yellow cab drivers.
The group has called for a 72-hour strike starting Monday, where Uber drivers can use apps to pick up non-Uber customers.
“It’s better for me to work at McDonald’s,” said 29-year-old driver Abdel Badiaa. “This is terrible. I make $50 a day for 12 hours. Before, [about] $100.”
Some drivers told CBS Local News that they took up Uber financial assistance to buy a car and feel trapped as it will take five years to pay back the loan and high interest.
Take-home pay excludes the cost of leasing a black car and petrol.
Uber said if the new pricing system does not work they will change it back within a few months, however drivers have said they cannot afford this experiment.
Meanwhile Uber has made other changes to its service, including having Bopit children’s toys in the back of cars to distract drunken passengers. The company also plans to launch food delivery service UberEATS in 10 cities.
Facebook also announced a partnership with Uber in December that will allow US customers to order taxis through Facebook’s own Messenger app.