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Uber is testing a new earnings algorithm in 24 US citieshoping to gain more drivers than it lost during the pandemic, reported Automotive News.
Changes being implemented in pilot programs allow drivers to view payment and destinations before accepting a ride and algorithm increases incentives for drivers to take short trips.
The changes represent the most extensive updates to Uber’s driver payment algorithm in years and does not imply changes in fares for passengers.
Drivers have long demanded to be able to see the fare and destination before accepting a ride, but Uber has resisted, arguing that such an option could influence drivers. drivers pick trips or discriminate against passengers in disadvantaged neighborhoods.
“We believe that this feature really improves the competitiveness of our platform compared to others“, said Dennis Cinelli, head of mobility for Uber in the United States and Canada, emphasizing that
wage changes would not affect consumer prices.
Cinelli said the company hadn’t seen any discrimination from drivers in California since the modality launched there in 2020.
“Otherwise we would not have implemented it at this point,” Cinelli said, adding that Uber had the ability to disable drivers who repeatedly decline rides based on race or low-income areas.
Providing drivers with payment details in advance meant the company also had to cut earnings for longer trips to prevent drivers from avoiding short trips, Cinelli said.
Uber said data from some cities with paid in advance have shown an average increase of 22% in the earnings of drivers for trips where the distance to the pick-up location is longer than the trip itself. The test has been implemented in cities in Texas, Florida and the Midwest.
Some drivers have complained that the new algorithm seemed arbitrary and doesn’t allow them to calculate pay per mile. But others commented that advance fare information allowed them to select only higher-paying trips, and that they have had higher profits since the altered algorithm was released.
The expansion will depend on the results, “If we don’t see that it attracts and retains drivers, we wouldn’t implement it anymore”Cinelli said.
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