Harry here. I’ve always had a problem with the lack of transparency when it comes to TNCs like Uber and Lyft. There are countless examples of this, but today we’re going to focus on the commission they charge their drivers. For an app that just ‘connects passengers and riders’, it sure does seem like they take a big cut, and that number is only increasing.
Over the past few weeks, RSG senior contributor Christian Perea and I have been examining the real commission that Uber takes from its drivers, and today we’re presenting that information in an infographic. If you’d like to share this infographic on your own website, feel free to copy the embed code at the end.
TNCs like Uber and Lyft have long advertised that they charge only a 25% commission of the fares they earn. However, these figures ignore the “Booking Fee” that both companies assess on top of each ride, which goes solely to the TNC. The resulting effects of this fee and the 25% commission mean that when passengers step outside of their Uber and only see a $5 charge, the driver will only get around half of that.
To make matters worse, Uber and Lyft have consistently cut prices so that most drivers are now driving twice as far to earn the same $10 dollars that they made only two years ago. The result is that drivers are forced to drive longer hours while incurring heavier expenses.
Related: The Case Against Upfront Pricing
In the infographic below, we examined a collection of UberX trips in San Francisco to show what the real take home pay of an Uber driver looks like and show that these “Booking Fees” translate into a much higher commission than the 25% these companies advertise.