Last month Uber made some big changes to their driver referral program, but the only problem is they forgot to tell everyone. Sign-up bonuses have always been one of the bright spots for new drivers, since who wouldn’t want an extra $500 for signing up, right? While the process wasn’t perfect and had its flaws, at the end of the day, a lot of people got paid. In fact, it’s one of the main sources of revenue for this blog, so in a way we depend on referrals too.
But over the past few weeks, I have been getting an avalanche of e-mails from new drivers who were not getting paid their sign-up bonus. This in itself isn’t out of the ordinary but after investigating, I found that at the end of July, Uber started testing new driver guaranteed earnings instead of sign-up bonuses in several of its top markets. So what exactly does that mean?
Bait and Switch?
If we look at the bonus structure in Los Angeles before the change at the end of July, new drivers were getting a $700 bonus after completing 75 rides within 30 days and the referring driver was also getting $500. But after July, new drivers were getting a $700 earnings guarantee within their first 75 rides instead of a $700 bonus on top of their earnings.
The problem with a $700 guarantee is you’re likely to earn close to $700 from 75 rides anyway! Most affected drivers who have reached out to me from Los Angeles have earned in the $5-$600 range (or more) within their first 75 trips, so they basically got a ‘bonus’ of only $100-$200 (but in the form of a guarantee). That’s obviously a big difference, and what compounds the problem is that every driver I talked to was not aware that it was a guaranteed earnings bonus until after they hit the required trips.
Where’s the Communication?
I’ve often criticized Uber for their lack of communication with drivers, but this was just a bad idea from the get go (Lyft has had their own moments to be fair). I’ve met with dozens of people at Uber on the driver operations side, and I know they didn’t maliciously came up with this program, but it really comes off as a deceptive business practice.
Since Uber’s inception, they have always offered sign-up bonuses to new drivers if/when they signed up using another driver’s code. The program has gotten a bit more complex over time, but the gist of it has always been the same: as long as you sign up with a current driver’s code, you’ll get a sign-up bonus of $XXX after doing YY number of rides, in addition to the money you earned on the rides.
The new system based on guarantees though is completely different, since it offers a “guaranteed earnings” amount after doing a certain number of trips. So not only is the guarantee not a real guarantee, but they’ve also completely changed their bonus structure. Meanwhile, since Uber never sent out a single e-mail or communication about this, new drivers are under the impression that they are going to receive a sign-up bonus since that’s the way it’s always been.
Even Uber’s Confused
This probably won’t come as a surprise, but even the Uber CSRs are confused about this one. I’ve seen multiple screenshots now of Uber CS reps confirming the new driver would get a sign-up bonus after completing the required number of rides only for that driver to e-mail back later on after they met the requirements and have the same CS rep tell them that it was actually a guarantee and not a bonus.
This screenshot below pretty clearly states that the new driver in Washington will get $350 after 40 trips with no mention of a guarantee.
After this driver completed the 40 trips, she e-mailed in to Uber to inquire about the $350 and this is what Uber told her:
I’ve personally received
dozens hundreds of e-mail chains like the one above over the past few weeks from pissed off drivers, and I can only imagine how much ill-will this is causing among new Uber drivers. Here’s a driver who actually likes working for Uber but has been really turned off by the whole sign-up bonus fiasco.
I really enjoy driving … it’s just so horrible … I’ve read a lot on forums about people having the same problems. I don’t understand why they are using deceptive language when advertising a referral amount. I wouldn’t even care .. I’m not depending on that money or anything, but it’s the fact that they communicated to me an offer without being clear about it. I expect companies/people to do what they say they will.
Another driver who actually gave me a ride to the airport last month texted me the following:
I hit 75 rides and was supposed to get $700 for doing so. My referrer got her $500 but now Uber says that since I earned $674 on my first 75 rides, they will only give me the difference of $26. I am so upset by this deception. Is there anything I can do?
Any help would be great. Imagine how disappointed and betrayed I felt.
When I got that message, I went straight to my computer and started writing this article. $700 is a lot of money to a new Uber driver, and many of them work hard in their first month to hit the 75 rides so that they can be paid their bonus. Other drivers are relying on the money to pay credit cards, car payments or even their rent and this new ‘guarantee’ system has really screwed them over.
What Can You Do?
If this has happened to you, I wouldn’t give up hope just yet.
#1. Uber is Working to Fix This
I reached out to Uber about this situation and after looking into it some more, they actually agreed the new promotion didn’t go as planned, and they’re reaching out to affected drivers and will offer them the original amount as a bonus to clear up any confusion. Here’s the e-mail they sent out to affected drivers:
I also know of at least a few drivers who have also been able to use the in-app help feature to get this issue taken care of. So if you’ve been affected by this, hopefully you’ll receive an e-mail from Uber, but if not, I’d proactively reach out via the app to Uber by going to Help->Account & payment->Getting Paid->I have a different payment issue.
#2. Go Drive For a Competitor
There are a lot of reasons to drive with Uber, but if you’re unhappy about the way you’re treated, remember you always have the right to go drive for a company like Lyft or another one of their competitors. I think drivers really have more power than they realize, but sometimes you have to be willing to fight back against policies that you feel are unfair.
DoorDash is also a good alternative to Uber since they have such a strong footprint throughout the US and have built their app out so the vast majority of orders include a tip. Beyond that, I think every rideshare driver should try out delivery as an alternative or backup plan to rideshare driving since the “busy” hours for delivery occur when rideshare is slow (lunch time) or over-saturated due to Uber promotions.
#3. Confirm With Uber If Your City Offers A Bonus or A Guarantee
I know if I were a brand new driver and this was my first experience with Uber right out of the gates, I’d be pretty upset. But that being said, if working for Uber is still something you want to do, do it. There are some things, like communication around new driver bonuses, that Uber does poorly, but they still provide a unique work opportunity for many people.
If you’re a new driver considering signing up with Uber, I’d advise sending Uber an email and specifically checking whether your city offers a guarantee for new drivers or a sign-up bonus for new drivers. Either way, you’ll probably still want to use someone’s code to sign up. But it seems like after this failed experiment, Uber may be switching back to good ol’ sign up bonuses in most cities.
I think Uber has the right to implement whatever structure they want for their sign-up bonuses or guarantees, but the way they handled this experiment highlights the disconnect between corporate employees and drivers. The second I heard about these new guarantees, I knew they were a bad idea and were going to cause a lot of confusion and anger for new drivers. And clearly, they did.
To Uber’s credit, it does seem like they recognized this promotion was a failed experiment and are working to rectify the situation for all affected drivers. This hasn’t always been the case, but I hope it becomes a trend. For new driver bonuses or promotions or whatever they want to call them going forward, my hope is that they provide WAY more communication around exactly what the terms are for referrers and new drivers. As a new driver, you should know exactly what the terms are before you get started and most importantly, be able to track your progress. If you work your butt off to do 75 rides in 30 days and you were expecting a $700 bonus, a $26 bonus can seem like a real slap in the face.
Drivers, what do you think about Uber’s testing of guaranteed sign up bonuses? Is it shady business practice to switch the structure overnight or does Uber have the right to do whatever they want?
-Harry @ RSG
Burnt Out Talking To Passengers? Deliver Food With Caviar!Click to Sign-up!
Latest posts by Harry Campbell (see all)
- The Rideshare Guide: Everything You Need to Know about Driving for Uber, Lyft, and Other Companies - February 16, 2018
- RSG069: Will Uber Ever Be Profitable? An Interview with Len Sherman - February 6, 2018
- 2017 Rideshare Taxes For Uber and Lyft Drivers - February 2, 2018