HolidayBuyer's Guide

Uber's cheaper rates: Good for you, but some drivers hate them

Livid drivers came to Uber's New York office to protest a rate cut from Friday. It's just the latest incident that has gotten the startup in hot water.

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A crowd of Uber drivers gathered Monday to call new fare cuts unfair.

Photo by Sonia Rincon/1010 WINS

Uber drivers don't think their time is so cheap.

More than 100 drivers for the ride-hailing company held a strike and protest outside Uber's Queens, New York, offices on Monday, offering a vocal response against Uber's latest rate cuts. The company on Friday slashed its New York City prices by 15 percent in hopes of goosing rides during a typically slow part of the year.

"With these prices, I won't do it. I'm going to quit," driver Rafael Espinal told CBS New York.

The San Francisco startup, which connects drivers and passengers through its smartphone app, doesn't directly employ these drivers, instead classifying them as contractors. However, it still sets drivers' rates and the commission Uber pays itself.

The protest illustrates the dilemma Uber faces as it balances the needs of its drivers with keeping you interested in its service. It's also the latest in a series of controversies Uber has faced as it builds its service globally. Traditional taxi drivers have protested the company amid concerns Uber would hurt their businesses. Uber drivers have also sued to try to get the company to classify them as employees, which would force the company to foot the bill for Social Security, health insurance and other benefits. In addition, the company has been dogged by several sexual assault complaints against its drivers.

An Uber representative said that since the price cuts went into effect, drivers have spent less time between trips and increased their average hourly earnings by 20 percent, compared with two weekends before.

"As we have always said, price cuts need to work for drivers," the representative said in a statement. "If for any reason they are not, we will roll them back as we have done in other cities before."

As part of the cuts, a typical fare from Midtown Manhattan to LaGuardia Airport dropped to $37.12 from $43.67.

Those new fares, which Uber claims are lower than New York City taxis, don't sit easy with the city's taxi drivers union either.

"Once you have a large player in the industry lower its rates, then there's a desperation for everybody to start lowering their rates," Bhairavi Desai, co-founder of Taxi Workers Alliance, told CBS New York. "So what happens to the drivers? How are people expected to survive?"

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