Harry here. One of the biggest complaints we hear from drivers is around topics of pay – every driver wants to earn more and see higher rates but will it ever happen? Today, senior RSG contributor Christian Perea takes a look at the few situations that could force Uber to raise rates and examines how likely they are.
After three years of fare cuts, it’s easy to wonder if Uber will ever increase its rates again. I single out Uber here because it is the largest ride-hail company and has the most market share. So Uber plays the biggest part in setting prices for the industry.
Over the last few years, Uber has led the vast majority of steep price cuts for drivers. Whenever Uber lowers prices, Lyft follows within a few weeks. Even smaller rideshare companies like Via, Fasten, or Fare are forced to set prices in line with what Uber pays. This means Uber is the dominant player in the ride-hail market and effectively sets prices.
This is known as oligopolistic competition. (What is that? See Khan Academy)