Why For Uber and Lyft Drivers, New Years Eve Was Mostly a Bust
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So here is my list that summarizes what I believe contributed to the lack of surge on Uber and Lyft. This was great for passengers but not so great for drivers. Because of all the warnings about excessive surge and promotions by Uber to drivers about how much money they’ll make, many more drivers were on the road and were competing against each other for rides. Some drivers definitely did very well from a long surged ride but many struggled to get any rides, either before or after midnight.
- Uber emails and popup warnings about excessive surge pricing
- Many passengers are now much more aware of surge pricing after the Halloween Surge Pricing
- Many more drivers this year than last year (relative to demand)
- More drivers on NYE than Halloween
- More competition from cabs and other services, such as Sidecar
- Bad publicity (surge pricing) and safety issues on Uber
- Better public transportation options
Too many drivers?
So I started my New Years Eve gauging overall demand from the early afternoon. I already received reports from Facebook groups and other local drivers that it was a bit quiet during the day. As the evening approached, some drivers were having trouble getting rides in general. There were some reports of some drivers doing well in other cities but mostly people couldn’t get a ride and some went home early. In some cities, drivers saw a higher surge after midnight but this could have been attributed to more demand or less drivers or a combination of both. I believe some drivers just went home early and didn’t think driving around drunk people with no surge or PT was worth it.
There were some drivers who did very well over Halloween with record setting surge amounts, and other drivers who did well, so I believe even more drivers wanted to take part of that for NYE. Also, there were probably some drivers who missed driving on Halloween and wanted to drive on NYE to make up for it, so there ended up being more drivers out on the road on NYE than Halloween.
I decided to go out there myself but I wanted to try something new. It didn’t end up working anyway but I turned on Sidecar. I managed to get a few rides (just one an hour) but surprisingly I was doing better than some who couldn’t get a ride for two and sometimes three hours because there were just too many cars around them. There were some who did well, got a long surge ride before midnight, but most drivers didn’t do too well.
On Facebook groups, I tried to just report what I saw and not make many generalizations to keep from being too negative and then forcing even more drivers off the road. Even though I knew it was quiet, I would always check the Uber and Lyft passenger apps to see what kind of surge or PT was on the map. If there was a sudden surge where I was, I would turn it on and see if I can get any surged (or PT) rides with the rest of the time on Sidecar. I kind of knew Sidecar would be a huge gamble but wanted to try it anyway. I knew I wasn’t really going to be making a ton of money on NYE anyway and if I did, I would be very lucky.
Lyft Charged At Least 50% PT on NYE
It was then I discovered that Lyft was just charging at least 50% PT across the board in some cities from 7-10pm and again 12-3am as part of the driver guarantee. Most of us thought that Lyft would be making up the difference between the actual surge and what . Most of the time, Uber didn’t have any surge. I don’t think Lyft will get much backlash over it but I think this may have pushed more people from Lyft and into Uber.
Was it weather related? Protest Related?
After talking with a few other drivers, some noted that the city was quieter than last years NYE, even though it was not as cold as last year. I noted that some people shifted their plans to avoid the protests over the recent shootings of African Americans by white police officers. There were similar protests in a few major cities across the US. On the news, some people said they were going out anyway while some said they got into the city early to see the festivities and then leaving before the protests.
Public Transportation?
Also, public transportation systems in many cities were open late, free or both, which may have encourage many more people to just take the train or bus into the city and avoid using Uber.
Uber’s Bad Publicity?
I managed to do a few Sidecar rides in the last few days and some passengers noted that they are using Sidecar to avoid all the bad publicity and safety going on with Uber, which I thought was very interesting. I never thought people would avoid using Uber because of the bad publicity, but the safety issue is definitely a big issue. However, I don’t see taking Sidecar as any better than Uber as both are using normal drivers.
Uber Warnings and past surge shock
Uber also sent out emails and also displayed a popup warning potential passengers of excessive surge rates. They did this last year and there was still huge surges during last year New Years Eve. I believe now with the bad publicity about surge pricing from Halloween, more passengers are actually paying attention to it. If you are not drunk, it is very hard to miss the giant warnings about surge rates.
New Uber Cities vs Existing Uber Cities
Also from the Uber Facebook forums, I noticed that drivers in smaller or newer Uber cities did better than drivers in larger, more mature cities. The newer cities tend to have fewer drivers relative to demand, thus higher surge and higher earnings. Now, I am sure there are some new Uber cities out there who have too many drivers and not enough passengers as its too new, so it goes both ways.
More Competition?
In some cities, there were taxi companies (Flywheel to mention one) that were having special NYE promotions. There were various other taxi companies in various cities giving out promotions. Some drivers noted seeing many full cabs and they attributed to the promotion and that cabs were “stealing” passengers from Uber. I don’t think this was the case. Yes, taxis were probably taking a few passengers away but cabs are almost always full on busy nights. Try hailing a taxi in NYC on a Friday night. Its very hard. I remember seeing about 100 cabs fly by me on a Sunday afternoon in NYC, all full of people. The only reason why I noticed was because I saw a couple try to hail one on 5th Avenue and they never got their cab. One issue with cabs is that you never seem to be able to find one when you need one the most.
Sidecar didn’t have any passenger promotions for NYE, but their recent free shared rides promotion definitely increased their brand awareness in many cities and could have attributed to some reduction in the level of surge of Uber and Lyft.
Did Uber change the Surge Algorithm?
So this is purely conjecture, but does anyone think that Uber dialed down the surge pricing algorithm? It would be pretty easy for them to do if too many people are complaining about surge pricing. For Halloween, I think that they were just testing a few different elements of the surge pricing algorithm, such as higher surge amounts and surge pricing down to tenths instead of quarters. I believe now that they saw how bad it got, they may have dialed down the surge pricing model a bit. However, there were some isolated reports of surge pricing rates over 8x for a brief limited of time so adjustments could have been made on a local scale.
We would never know of course as they keep all of the information a secret. I don’t believe that this alone caused the lack of surge because there were just too many competing factors as listed above to blindly believe that the lack of surge was Uber’s doing, but this is always something I think about.
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