Uber tests taking 30% commission from new drivers

The ride-hailing service is testing a new, tiered fee structure that could cut into part-time drivers' pay but reward full-time drivers.

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
2 min read

Uber is trying out a tiered fee structure that affects new drivers in San Francisco and San Diego. Andrew Caballero-Reynolds/AFP/Getty Images

Uber is testing a fee structure that charges new drivers in San Francisco and San Diego a 30 percent commission -- 5 percent more than it takes from its current drivers.

The ride-hailing service, which matches passengers with drivers via a smartphone app, typically takes a 20 percent to 25 percent flat commission. But this new fee structure, which it began testing in April on a small number of drivers, is tiered. In San Francisco, these new drivers are charged a 30 percent commission for their first 20 rides, then it's dropped to 25 percent for the next 20 rides. After 40 rides, they're charged 20 percent. San Diego has the same system, except the price changes every 15 rides.

"This pilot is a limited test for a small percentage of new UberX driver partners," an Uber spokeswoman said. It "offers a structure where drivers have the opportunity to earn more based on the number of trips they drive."

This move, which was first reported by Forbes, is the latest in Uber upping driver fees. In September, it was revealed the ride-hailing service was raising its commission from 20 percent to 25 percent in San Francisco. These fee changes have upset drivers across the country -- hundreds have reportedly staged protests or stopped driving for Uber.

Uber is the world's largest ride-hailing service, operating in more than 250 cities in 57 countries. It's also the second highest-valued venture-backed company in the world with a valuation of $41.2 billion. Earlier this month, rumors floated that Uber may soon receive new funding that could value it at $50 billion.

Uber drivers protested fare cuts and fee hikes in October in San Francisco. James Martin/CNET

The new fee structure only affects drivers who started working with Uber after April 1. It is also only for UberX drivers, who are people who drive their own cars, rather than those who work for Uber's town car or sport-utility vehicle services. Uber says drivers who work 40 hours per week only need to drive two to three days to get 30 to 40 rides, which means full-time drivers have an advantage over part-time drivers.

Drivers say that increased commissions cut into their hourly rates. When fees went from 20 percent to 25 percent, some drivers said the amount of money they made per passenger went down by as much as 25 percent. Uber says it hasn't yet decided if it will test the tiered system in cities besides San Francisco and San Diego.