Uber is testing new driver algorithms in the US which will allow drivers to see the fare and drop location before accepting a trip, according to a Reuters report. It is unclear whether Uber will roll this feature out in other markets, including India, if this test is successful.
The pilot is being run in 24 US cities as of now and the fares being paid by the consumers will remain unchanged. The test is underway in cities across Texas, Florida, and the midwestern states, the report added.
Uber initiated a similar pilot in the state of California which went live in the aftermath of the 2020 battle over the status of gig workers. The company informed Reuters that its latest pilot is not related to gig worker regulation as many cities where this pilot is being conducted do not have gig economy reforms on their agenda
The changes are likely to incentivise drivers to cancel fewer rides by offering them clarity over trip details upfront. It remains to be seen what impact this will have in India where customers have often complained of frequent driver cancellations.
What will be the impact of this feature on Uber?
The company did not disclose the financial impact of these changes which means that it will see an increase in its costs, Reuters suggested. Uber’s head of mobility in the United States and Canada, Dennis Cinelli told Reuters that the company had to reduce earnings for long trips so that drivers refrained from avoiding short rides.
The company revealed that data from some cities have shown a 22% increase on average in driver earnings. The earnings are from trips in which the distance to the pickup location is longer than the trip itself, the report said.
Ola’s efforts to reduce driver cancellations in India
People in India have been troubled by the frequent ride cancellations on Uber and Ola. Ola’s Co-founder and CEO Bhavish Aggarwal even conceded that the reason behind these cancellations is the second-most popular question posed to him by users.
Ola Cabs announced in December 2021 that it would let drivers see an approximate drop location and payment mode before accepting a ride. The company has not released any initial data on whether this has improved the success rate of rides booked by users. An article in The Hindu suggested that the problem continues to plague the residents of Bengaluru despite Ola’s intervention.
Understanding the reasons behind cancellations
Most cancellations are a way to avoid the high commission structure of ride-hailing apps, as suggested by a report in Entrackr. Ola and Uber drivers have long been struggling to make enough money, the report added.
A driver interviewed by Entrackr informed the website that if he manages to convince five to seven passengers to cancel their ride on the app, he can easily make an additional Rs 300-400 every day which adds up to Rs 9,000-Rs 12,000 a month.
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