I don't really understand. It sounds great that the drivers would have enough information to decide whether to take a ride or not, but what does this have to do with stopping upfront pricing? In my ideal world, the driver knows everything about the proposed ride, and the rider knows the exact cost of it. Why is that not possible?
Variable payout means some form of fare bidding on driver side, as drivers can reject rides that are too low.
On top of that, they are capping their commission to 25%, meaning that they can't use more profitable rides to offset losses from less profitable ones.
Those two factors combined, means Uber cannot offer fixed pricing upfront without incurring loss.
Can one not simply show the driver the price and let them reject if too low? I don't think variable payout is the thing that lets drivers see the price and reject. Besides, if too many drivers are rejecting rides because of pricing, it would allow Uber to set higher minimum pricing and/or wait times.
Variable pricing also doesn't mean the second - it simply limits the amount they take from it. They still have tools like minimum pricing. I'd even say minimum pricing would be more beneficial to drivers and wouldn't seem unreasonable to customers (of course, they might just choose to walk short distances).
> On top of that, they are capping their commission to 25%, meaning that they can't use more profitable rides to offset losses from less profitable ones.
What? Uber is getting payed for a transaction. How is 25% of a hundred dollar ride not more than 25% off a three dollar ride?
Uber costs are running the service - if drivers truly are contractors, then payment to drivers isn't a cost for uber?
The change to variable priced rides is because the 'cut' of the fare that Uber takes has been standardized to 25% while driver pay remains based on time and mileage.
Giving drivers information about upcoming rides is a separate change.
If a driver is always paid x/minute/mile (total X), customer always pays Y dollars as made up by Uber. Uber takes U, 25% of Y, pays the driver X, where does the rest go if Y-U-X > 0?
How can this ever work without Uber sometimes taking a loss?
Because the driver doesn't know about unforseen factors such as traffic that change in real time during the ride to the pickup point. We do not live in an ideal world.
Uber didn't invent upfront pricing. If you pass the cost of traffic onto the customer then drivers will drive in traffic on purpose and rinse the riders.
