Some 200 Uber drivers have picketed Uber’s Cape Town office after the company said it was cutting prices on its entry-level UberX service by up to 20% to spur demand in the winter months, it has been reported.
Eyewitness News said the drivers were worried that a decrease in fares from R7/km to R6/km would affect their income.
TechCentral reported on Wednesday that the Internet-based ride-sharing service would cut prices for its UberX service in Cape Town, Johannesburg and Durban by up to 20% to spur demand in the normally quieter winter period.
“During winter, riders tend to venture out less and this can be tough for driver-partners as this time spent idle is time they’re not earning,” the company said in a statement.
“Over the years, we’ve learnt that the single most effective way to help driver-partners get more trips is to cut prices for riders,” it said, citing examples from Lagos, Warsaw, Istanbul and Perth. “The increase in demand meant payments to driver-partners using Uber went up.”
Watch a report from Eyewitness News:
The company said that although the price cuts benefit those using Uber, they’re “ultimately designed to help Uber driver-partners”.
“We know that this period is considered a slow time for driver-partners and through experience, we know price cuts help both riders and driver-partners,” said Uber sub-Saharan Africa GM Alon Lits.
Lits said that while each city “adjusts to the new prices”, Uber is putting in place “minimum payment guarantees” for driver-partners. “If the amount driver-partners make on the road isn’t what we expect, we’ll reassess this price change.”
Bloomberg reported that the decision to cut prices in South Africa followed a reduction in fees in 80 cities in North America in January, also to spur demand during a slow period. — (c) 2016 NewsCentral Media