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Uber tries to 'rebuild the love' with drivers. Can it work?

The ride-hailing company is bleeding drivers and has spent the last six months trying to make things better. Drivers say they still want more.

dara-with-seattle-drivers

Uber CEO Dara Khosrowshahi (center) meets with drivers in Seattle to hear about their experiences with the ride-hailing company.

Uber

If you strolled through Uber's headquarters in downtown San Francisco earlier this year, you'd have seen the company's notoriously aggressive 14 "cultural values" illuminated across conference room video screens. They urged employees to "always be hustling," practice "principled confrontation" and get in other's faces by "toe-stepping" -- among other things.

But you won't see those "values" projected onto walls anymore. They've been replaced with photos of Uber drivers from around the world, with a quote from each about why they drive for the ride-hailing company.

It's a symbolic move -- meant to set the tone for a new Uber. After a year of scandals and a major executive shakeup, including the unceremonious removal of co-founder and CEO Travis Kalanick, the company is working on major damage control. Part of that means mending relationships with drivers.

Drivers have become increasingly unhappy with steadily lower pay, longer working hours and little to no support. They've staged protests, filed lawsuits, quit driving for the company or switched to rival Lyft. It added up to abysmal driver retention over the past couple of years. Of 2.5 million drivers in about 75 countries, only 20 percent said they would stick with the company for more than a year, according to an April report by The Information.

Yet Uber's very existence depends on retaining drivers. Without them, it doesn't have customers. And without customers, Uber as a company would fold. So until self-driving cars take over, drivers are Uber's lifeblood.

"Drivers are at the center of the Uber experience," Rachel Holt, the company's vice president of operations and marketing in the US and Canada, said during a press call in March. But "we've underinvested in the driver experience, and relationships with many drivers are frayed.

"We are now re-examining everything we do in order to rebuild that love," Holt continued.

Ch-ch-changes

One incident in early March drove home how bad things had become between Uber and its drivers.

A grainy black-and-white dashboard video leaked to Bloomberg News featured then-CEO Kalanick sitting between two women in the backseat of a car, shimmying his shoulders to Maroon 5's "Don't Wanna Know." But then things get ugly.

The driver, Fawzi Kamel, tells Kalanick that Uber's lowered fares have been hard for drivers. "You're raising the standards, and you're dropping the prices," Kamel tells Kalanick, who gets visibly angry. The video ends with Kalanick yelling at Kamel, "Some people don't like to take responsibility for their own shit. They blame everything in their life on somebody else."

Three months later, Kalanick was ousted by five of Uber's major investors. New CEO Dara Khosrowshahi, formerly the CEO of travel site Expedia, is determined to be a different kind of Uber leader. Since joining in August, he's been traveling the world -- on an Uber apology tour of sorts -- meeting with regulators, passengers and drivers.

During one meeting in Seattle in October, Khosrowshahi announced, "I will stand with drivers."

But Uber knew it had to make things right with drivers even before Khosrowshahi came on board.

Not long after Holt pronounced the rebuilding of love, Uber said it was instituting what it called "180 days of change" -- a six-month initiative in which Uber added 38 perks aimed at helping drivers earn more while making their work less stressful.

"We spent quite some time just really deeply listening to our drivers," said Aaron Schildkrout, Uber's head of driver product who said this month he's leaving the company. "We set off to make a genuine change in that relationship."

The 180 days kicked off in June with in-app tipping -- something Lyft had long offered. Uber later added a feature that paid drivers extra if they had to wait for customers, along with 24/7 phone support and an easier passenger pickup system through the app. Uber also began paying drivers to return riders' lost items, like phones. And it let drivers know if they had a long trip ahead of them, so they could choose whether to accept that fare.

"We have seen a pretty dramatic improvement of drivers' trust of Uber," Schildkrout said. "But we also know we have a long way left to go."

Going into 2018, Uber says it wants drivers to have more of a voice within the company. It launched in-app feedback earlier this month that lets drivers suggest improvements anytime. And it created a driver advisory forum, made up of drivers from around the country who'll be flown to San Francisco twice a year to discuss pressing issues with executives. The first meeting will be in January.

"Before it was more of an 'us versus them' attitude," said Simon Kwok, a driver in Seattle who runs an information portal called Rideshare Dashboard. "It shows they're somewhat committed to turning around their attitude to drivers."

Now comes the big question: Can Uber convince drivers to stay?

It's the earnings, stupid

Drivers say they're hopeful about Khosrowshahi and the changes over the last 180 days, but there's still a crucial issue: pay.

"It still seems a lot of drivers aren't earning what they're expecting or what they're hoping," said Harry Campbell, a Los Angeles driver who runs a popular ride-hailing blog called The Rideshare Guy.  "They start making some money but then very quickly their expenses start to add up."

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Uber's commission used to be a cut from each fare, typically around 25 percent. But this year, the company changed its structure to "upfront pricing." That helps passengers, who now know beforehand how much a trip will cost, but Uber's cut is now variable -- it's sometimes lower than 25 percent and other times much higher. Drivers are paid a base fare plus a per-mile and per-minute rate.

Most US drivers say it's tough to make more than $15 an hour with Uber. Subtract expenses, like oil and gas, and earnings start to hover around minimum wage.

"Drivers are being forced to work longer hours for the same amount of money," said Moira Muntz, spokeswoman for the Independent Drivers Guild, which represents more than 60,000 ride-hailing drivers in New York City. Uber's initiatives so far have been incremental, she said. "They aren't going to make up for years of pay cuts."

But higher wages aren't the only things drivers would like to see from Uber in the coming year. They also want the company to optimize the number of cars in a given area so they don't have to wait too long for a ride, provide better compensation for its UberPool carpool service and just communicate better.

"What Uber has to focus on is spreading more of the benefit to drivers," Campbell said. "For consumers, it's really been the golden era of ride-sharing. Now they need to do a lot of the same for drivers."

Uber says the last six months represent only the beginning of a more transparent and open relationship.

"We really believe that these new programs are going make sure that drivers and their voice and their feedback are at the heart of everything we do," Holt said in an interview. "For us, we really think of this as just the start."

We'll know next year if drivers agree. 

First published Dec. 21, 5 a.m. PT
Update, 12:06 p.m and 2:28 p.m.: Clarifies Uber's "upfront pricing" structure and adds that Aaron Schildkrout is leaving Uber.

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