Uber drivers must give the ride sharing service a bigger cut of their fares, under a new test by the company.
Some new UberX drivers in San Francisco and San Diego now work under a tiered-fee program that requires them to hand over a bigger share of their fares for certain rides than has been the norm for the popular service, Uber confirmed to Fortune.
Starting last month, this small group of new drivers in San Francisco have had to pay the following fees: 30% for the first 20 rides during any given week, 25% for the next 20 rides, and 20% for the rest. The scale is slightly different in San Diego, requiring fewer rides to hit the next threshold.
Previously, Uber has taken a 20% to 25% cut from all ride fares in those two cities. While it started with a standard 20% fee, Uber has lowered or raised its fee to help attract new drivers and extract additional revenue from established cities. Drivers for Uber’s more high-end services, like Uber Black, Uber Select, and UberXL already pay 25% to 28% in fees.
The company is running this experiment to see how it will impact the supply of drivers on the road, according to an Uber spokesperson.
But with that said, the new model will likely penalize part-time drivers, forcing them to work more to earn what they had in the past. Because Uber drivers have the flexibility to choose how much and how frequently they pick up fares, many drivers use the service as merely an extra source or income or for pocket money.
This is Uber’s first such experiment with tiered pricing, the company said, and it has no current plans to implement it in other cities.
- What Wildfire Smoke Does to the Human Body
- Teens Are Taking Wegovy for Weight Loss
- Why Pence Launched His Presidential Bid in Iowa
- Prince Harry Breaks Royal Convention to Testify in Court
- Elliot Page: Embracing My Trans Identity Saved Me
- How a Texas High Jumper Has Earned Nearly $1 Million
- The Best TV Shows of 2023 So Far
- 7 Ways to Get Better at Small Talk