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Uber's low fares spark backlash: drivers protest pay cuts, customers may face surge pricing

TAMPA — Uber dropped its fares last week to entice more riders, but it's a strategy that could backfire, harming both drivers and customers.

Drivers say it will slash what they make working for Uber and expose customers to record surge pricing — particularly with Gasparilla two weeks away.

More than 50 drivers gathered Thursday in downtown's Lykes Gaslight Square Park to protest the 32 percent price cut that went into effect over the weekend. At times during the rally, users who opened the Uber app couldn't request a driver.

Instead, their screens said: "No cars available."

These protests will continue as long as necessary, said longtime driver Joshua Streeter, 41, who is on the Tampa Bay rideshare steering committee.

"We're going to protest for as long as it takes until someone from Uber does something," Streeter said. "How long it will take, I don't know. We have enough anger that we have the support of the drivers now."

He said it's "entirely possible" that the protests will continue through the month, which would include Tampa Bay's favorite pirate-themed holiday: Gasparilla. He expects surge pricing to reach 10 times the normal rate during the Jan. 30 parade.

"Seasonality affects every business, and Uber is no exception because when people hunker down at home, demand for rides drops," read a statement from Uber. "We've learned that the single most effective way to boost demand during the winter slump is to cut prices for riders."

But local drivers say they're now operating at a loss if they drive for Uber.

The new fare is 65 cents a mile, but Uber takes 20 to 25 percent. That means drivers are making anywhere from 49 to 52 cents per mile, compared with the 54 cent mileage deduction rate set by the government.

Uber charged $1.80 per mile when the company started in Tampa Bay in April 2014. Cabs are still $2.40 per mile.

Uber driver Larry Carpenter, 49, doesn't buy the company's argument that the drop is seasonal.

"This is Tampa, not New York or Detroit or Chicago," he said. "It's not cold like it is there. … We have more people here, more traffic, more everything during January, February, March."

In attempts to placate drivers, Uber also outlined new guaranteed earnings for drivers, ranging from $10 to $15 an hour before Uber's cut. But drivers said there are stipulations that make it difficult for them to earn those rates.

Drivers have to be online for 50 minutes of every hour, accept 90 percent of requests and complete 25 percent of rides.

Carpenter said he worked 20 to 22 hours Saturday and Sunday and only qualified for the "guaranteed" rate on one hour. His account was credited $7.38.

Uber did not respond to requests for comment.

"I'm actually pursuing other employment opportunities at this time, but right now, I don't really have any other option," Carpenter said. "This is what I've been doing for a year."

With rates dropping, there's some skepticism that more drivers might take part in a process known as surge manipulation.

Public Transportation Commission executive director Kyle Cockream, who runs the agency that regulates Hillsborough's for-hire vehicles, explained that process at Wednesday's PTC meeting.

Drivers will text each other and arrange a coordinated effort to simultaneously log off the Uber app. Doing so triggers the company's surge algorithm, creating a false supply-and-demand issue. Prices jump to increase supply. When the surge pricing reaches a high enough point, drivers log back on to make more money.

"We're pretty confident that's happening here locally based on what the drivers have told us," Cockream said.

Carpenter and Streeter said they've heard of drivers in Tampa Bay doing that. Both said they never have.

Many of the drivers at Thursday's protest have spent the past two years going to PTC meetings to defend Uber against regulators.

"We could care less at this point what happens to them here," driver Jonathan Gibson said. "It's not worth it."

Contact Caitlin Johnston at cjohnston@tampabay.com or (813) 226-3401. Follow @cljohnst.

Uber's low fares spark backlash: drivers protest pay cuts, customers may face surge pricing 01/14/16 [Last modified: Friday, January 15, 2016 8:19am]
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