Uber’s Newest Way To Make A Buck: A Pet Surcharge

Photo: Getty

Uber is rolling out a new trip mode called Uber Pet. Unfortunately, this does not mean Uber will be bringing a pet to you, as I initially hoped. Instead, it’s a trip mode for when the rider is also transporting a pet, which will now include a small additional fee of $3 to $5, according to The Verge. The pilot will roll out in Austin, Denver, Nashville, Minneapolis-St. Paul, Philadelphia, Phoenix, and Tampa Bay for now.

Like many of Uber’s app tweaks and pricing changes, Uber Pet simultaneously addresses a real concern while also giving Uber a chance to slap on a surcharge for something that used to be free.

In the past, if a rider was transporting a pet, any (decent) person would, hopefully, message or call the driver before they arrived and let them know, then give them a nice big tip for being so accommodating. If the driver was allergic or preferred not to have a pet in their car, one of them cancelled and hailed another.

Of course, this process probably happened far less often in practice than one would hope in a functional society with manners and norms. In reality, riders often expect drivers to transport them and their belongings no matter what, no questions asked, however unfair that may be.

In this way, Uber Pets makes a lot of sense. Drivers who don’t want to transport pets don’t have to and, more importantly, don’t have to fight with riders who don’t tell them they have a pet until they try to get in the car. And those who are willing to allow pets in the car get a couple of extra bucks for their flexibility.

But, as The Verge noted, drivers aren’t getting all of that pet surcharge. Uber says they’re only going to get a “significant portion,” with Uber, presumably, keeping the rest:

Meanwhile, drivers who don’t feel like shepherding creatures of the four-legged variety can opt out in the preferences section of the driver app. If, however, they choose to welcome those pets as passengers, they will be guaranteed to receive a “significant portion” of the surcharge on top of their standard trip earnings.

We asked Uber to clarify what they mean by “a significant portion,” a pretty vague term that can mean almost anything. The answer we got was also pretty vague: “Drivers will receive nearly all, or the majority of the surcharge,” an Uber spokesman wrote in an email. “That amount they receive varies by pilot city.”

In any event, there’s plenty of precedent for Uber using surcharges masked as a customer “amenity” to pad their coffers. Most notably, New York Times journalist Mike Isaac wrote that Uber’s $1 “safety fee” had nothing to do with safety, but instead was a masquerade to “add $1 of pure margin to each trip”:

It was April 2014, and Uber was announcing a new $1 charge on fares called the Safe Rides Fee. The start-up described the charge as necessary to fund “an industry-leading background check process, regular motor vehicle checks, driver safety education, development of safety features in the app, and insurance.”

But that was misleading. Uber’s margin on any given fare was mostly fixed, at around 20 to 25 percent, with the remainder going to the driver. According to employees who worked on the project, the Safe Rides Fee was devised primarily to add $1 of pure margin to each trip. Over time, court documents show, it brought in nearly half a billion dollars for the company, and after the money was collected, it was never earmarked specifically for improving safety.

Likewise, Uber’s entire business model, such as it is, is simply about taking a cut of driver earnings, a cut Uber routinely fluctuates in a way drivers often find confusing, opaque, and increasingly onerous on their ability to make a living. So it is very much in keeping with Uber’s entire business that it would take a cut of the pet fee while letting drivers keep “a significant portion” of it for themselves.

Taking this into account, another way to look at Uber Pets is not strictly as a customer amenity, but as yet another surcharge Uber gets to take a cut out of in an attempt to stumble upon a profitable business somewhere in the ridehailing realm. Good luck to them.

Read More

Leave a Reply