Uber's General Manager, Alon Lits, explains why the Tap and Ride company is dropping fares.
We see things in a different way, and we have seen this in markets across the world, that lower prices actually mean higher earnings for drivers through higher demand.— Alon Lits, Uber General Manager
Lits says Uber drivers can be doing one of three things when they are online on the Uber platform. Either waiting for a pick-up, driving to a fare-paying passenger, or carrying a fare-paying passenger.
They are only making money when they are carrying a fare-paying passenger. So what we see when prices are lower, the demand for the product is higher. So drivers are now doing more trips every hour.— Alon Lits, Uber General Manager
Lits reiterated that the only unrest occurred in cape Town, and nowhere else in the country. He says they have held information sessions with drivers to explain the rationale behind the price cuts.
We are so confident we are going to see the desired impact of higher demand, that we are guaranteeing drivers that they will earn just as much as they were before the price cut was put into effect.— Alon Lits, Uber General Manager
The guarantee does come with certain qualifying conditions however.