Uber NYC GM to striking drivers: “This was an experiment and we learned something”

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After a week in which New York Uber drivers voiced their frustrations with the company’s recent policy changes through a series of protests and social media campaigns, the company has heard their concerns and adjusted course accordingly.

At the heart of the dispute was a recent decision to force drivers on Uber’s premium UberBLACK and UberSUV tiers to accept requests from passengers seeking economy UberX and UberXL rides. As we explained last week, each tier of Uber’s service pays different rates, has different minimum fares, and attracts different customer demographics. And while Uber provided internal data that shows the average driver actually made more under the new multi-tier system during a two month (optional) beta test, riders very loudly opposed these changes.

Today, Uber reversed course on its decision, sending an email to New York area drivers that reads, in part, “Effective immediately, UberBLACK and UberSUV partners can choose when and where to receive UberX requests.” The company further explains that these premium tier drivers will have an option within Uber’s partner app to toggle on and off the acceptance of UberX and UberXL fares.

Pando spoke to Uber NYC GM Josh Mohrer over instant messenger today about the recent unrest. He had the following to say:

We believed that implementing this option city-wide would be of financial benefit to our partner drivers, as our pilot clearly showed that drivers earned up to 50% more per hour by cross-listing their vehicles with uberX. Ultimately, we seek to empower our partners as small business owners. After meeting one-on-one with hundreds of drivers who had concerns about this option, we decided not to implement it universally for all New York City partners. We have a culture of experimentation. So much of what we do are experiments (UberRUSH, UberFAMILY, etc.) This was an experiment and we learned something.

Mohrer reiterated that this multi-tier system was an NYC-only experiment, adding that Uber’s business in each market is different. (For example, UberX drivers in New York are commercial livery drivers, not ride-share drivers like in other areas.)

He explains that what ultimately led to the reversal was a series of heart-to-heart conversations with some of the region’s most long-standing drivers, those whose families he’s met and who have met his. When asked whether such sit downs are common or were a rare occurrence in light of the recent protests, Mohrer adds, “Our doors are open 10-5pm every day, and we have face-to-face with dozens of driver partners every day about various things.”

Uber is no stranger to controversy and as such the initial opposition to this change was written off as something that would quickly blow over. Mohrer says:

We’re met with resistance on so many fronts — when we got to NYC everyone in the industry here told us we were crazy. [People say] ‘You guys won’t last 6 months. You don’t know how this works. We have a way of doing things.’ So when we met resistance with this change we more or less expected it. Now I realize this was different.

According to Mohrer, many drivers concerns dealt with more than just the income opportunity available under this new multi-tiered system. For example, some customers were concerned with the demographic of customer they’d be dealing with during economy tier rides, while others expressed concern over additional wear and tear on their vehicles created by driving more miles to earn the same or greater income per hour.

There were a variety of points brought up in the meetings. Some partners aren’t only solving for economics. Some have strategies of when/where uberX pick-ups make sense for them and want to be able to toggle back and forth. Keep in mind we were guaranteeing (meaning, we pay the difference if they don’t hit the #s) $ 50/hr gross fare for SUV and $ 45/hr for BLACK just to get partners to try it out. … At the end of the day, while the economic benefits are more or less black and white, if our partners want choice, they’ll have it.

Mohrer acknowledges that the UberX service is growing faster in New York than either UberBLACK or UberSUV. But he stops short of pointing to this growth as the underlying motivation for this short-lived policy change. This growth is well balanced on both the the supply and demand sides, he says.

But a busier/larger/more liquid service means much faster pick-up times which correlates with higher earnings. Less time to pick-up means more minutes per hour earnings.

Uber may not always strike the right balance of listening to its detractors (be they internal or external) and reflecting those concerns in its actions. But at least in this case, Mohrer and the New York market leaders appear to have taken the happiness of drivers seriously. It’s unfortunate that it had to come at the tip of a proverbial bayonet, but such is life in the “move fast, break things” world of startup disruption. It would be nice to see Uber HQ take on a bit of this kindler, more compassionate tone demonstrated in New York this week.

“I think – and i really truly believe this – that most driver partners are extremely happy with Uber,” Mohrer says.

***

Read the full email sent to NYC area drivers below:

From: Uber NYC
Date: Fri, Sep 12, 2014 at 10:50 AM
Subject: Choose When and Where to Receive uberX Requests

On September 1st, we instituted a change that allowed all BLACK and SUV drivers to receive uberX and uberXL trip requests. After two weeks the results are clear: UberBLACK and UberSUV partners made more money than ever before. Black car partners are now grossing over $ 50/hr and SUV partners are grossing nearly $ 60/hr.

Over the last week, we met with partners individually to discuss this change. Many told us how much they value uberX trip requests, which enable them to get a faster return trip from an airport, find a trip back to Manhattan from the outer boroughs, minimize downtime between trips during off peak times, and most importantly, earn more money per hour.

We also heard about times when partners would prefer to have the ability to choose only Black and SUV trips.  As our hourly guarantee ends tonight, we’re taking the next step forward. Effective immediately, UberBLACK and UberSUV partners can choose when and where to receive uberX requests. To learn how, see details at the bottom of this email. [Editor’s note: Bolding in original email.]

Our goal is for Uber to be the best financial opportunity and to ensure that you continue to have the freedom and flexibility that the Uber platform offers. If you’d like to discuss this or any other issue in person with an operations manager, please sign up for an appointment here: [REDACTED]

Thanks,

Uber NYC

[Editor’s note: Instructions on how to switch between uberX and non-uberX options that followed this email have been omitted.]

  1. Request a car from any mobile phone via text message, iPhone and Android apps. Within minutes, a professional driver in a sleek black car will arrive curbside. Automatically charged to your credit card on file, tip included.

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