Uber makes that money by relying on a network of thousands of drivers who are not technically employees of the company, but rather independent contractors — the company calls them “driver-partners” — who receive a percentage of its fares.
From the very beginning, Uber attracted drivers with a bait-and-switch. Take the company’s launch in LA: In May 2013, Uber charged customers a fare of $2.75 per mile (with an additional 60¢ per minute under eleven mph). Drivers got to keep 80 percent of the fare. Working full time, drivers could make a living wage: between 15 and $20 an hour.
Drivers rushed to sign up, and thousands leased and bought cars just to work for Uber — especially immigrants and low-income people desperate for a well-paying job in a terrible economy. But over the last year, the company has faced stiff competition from its arch-rival, Lyft. To raise demand and push Lyft out of the LA market, Uber has cut UberX fares nearly in half: to $1.10 per mile, plus 21¢ a minute.
Uber drivers have no say in the pricing, yet they must carry their own insurance and foot the bill for gas and repairs — a cost of 56¢ per mile, according to IRS estimates. With Uber’s new pricing model, drivers are forced to work under razor-thin margins. Arman, for instance, made about $20 an hour just a year ago. And now? Some days he doesn’t even break minimum wage.
"Bait and switch" is a favorite maneuver at Uber which recentlyy wedged its way in the New Orleans market. It did so only by agreeing to operate its "Uber Black" limo service rather than the "UberX" taxi-like ride sharing scheme which is where its bread and butter is made. They clearly intended to defy this agreement almost immediately.
Here they are pretty much doing exactly that.
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