The big news in Uber business in South Africa this week is the increase in price per kilometer by Uber. 50c per kilometer is a significant price considering the economics of the fuel prices going down as well. The rational in the price increase is two fold and can mean more to the driver than to client.
The logic according to Uber is that the drivers or the “driver partners” need to earn more in order for them to have better incomes. The rationale therefore is that the driver can meet their day to day expenses more as they have increased accumulated earnings per trip serviced to clients. The concept of Uber in South Africa is such that the driver gets to make their money whilst Uber gets its cut so to speak.
8 Rand per kilometer in Johannesburg up by 50 cents may accumulate to more for the driver. The outcry for the client is having to pay more, however at the end of a distance of 40 km you pay 320 Rands as opposed to 300 Rands at the old prices, which would be 20 Rands more. Is the service worth the extra 20 Rand, perhaps is what the client has to answer for themselves.
Uber though goes on to state that the price increase will help them to make more investments, meaning there is a portion of where they earn more by the increase such that they and no just the driver has more revenue at their disposal. So is the increase about the driver or about the business. The more the drivers the more revenue, the happier the driver and the happier will be Uber.