Taxi drivers have been ferrying people around America’s cities for decades with the biggest change to the sector coming when Uber burst onto the scene and made us all rely on our phones to get a ride. Now, the ride hailing app is facing an uncertain future as drivers grapple with increased competition for rides, lower fares and the ever-looming threat of self-driving taxis.
For many Americans, life as an Uber driver seems like a good way to make a little extra money on the side. They already have a car, have a phone to accept lifts with and know their way around their hometown pretty well. However, in recent years changes at Uber have made it increasingly hard to make a living on the app.
Now, a new report from the Register has outlined the challenges drivers relying on the app face. Everything from much lower fares for rides and increased competition to pick people up mean that Uber isn’t offering the stable income it once did:
Len Sherman, a Columbia business school professor, last month explained in an online essay that Uber in the past guaranteed drivers a minimum fare, following the business model used by taxis.
“But two years ago, Uber switched to a new pay model — Upfront Fares + Destination (UFD), giving Uber complete discretionary control over how its opaque algorithms determine driver pay,” he said.
“At about the same time, Uber also introduced ‘Trip Radar,’ an online auction scheme, in which multiple drivers vie in a race to the bottom to accept low pay offers. Uber’s former practice of guaranteeing minimum driver pay for every trip was thus replaced by a policy where Uber now only has to pay the minimum any driver will accept for each trip.”
Changes to the way Uber runs have hit drivers hard, with some even taking to the streets of New York to protest changes and threaten strike action over the way Uber operates. For anyone who can’t deal with the changes, they’re walking away from Uber once and for all.
One Uber user who the Register spoke with reported that the number of drivers in San Francisco is plummeting. According to the driver, who wasn’t named by the report, the number of drivers in the city has dropped from “roughly 2,000” in 2023 to “about 1,800” active drivers at any one time this year. By 2025, the Register suggested that the number could be closer to 700.
While the lower profits for drivers is hitting the number of people who want to work for the app today, another factor is looming large over the company’s future: self-driving taxis.
In San Francisco, Waymo has been offering rides since 2021 when it launched the trusted tester program. Now, almost anyone can hitch a ride in a crisp self-driving Jaguar across SF or farther afield in cities such as Phoenix, AZ. And this has Uber drivers worried, adds Futurism:
“To put it bluntly, we are cooked,” one person posted in an Uber forum dug up by the newspaper. “We’re done for. In the age of artificial intelligence and automation, we’re the first to be impacted in a major way.”
Self-driving taxi outfits, most notably Google-owned Waymo, have steadily grown their fleets of autonomous vehicles. According to its most recently published figures, the company is giving over 100,000 paid rides a week in San Francisco, Phoenix, and Los Angeles.
Despite the rapid rise in ridership that Waymo is witnessing in San Francisco, the company’s threat to Uber may be overestimated by taxi drivers in the city. Futurism adds that the cost of every self-driving Waymo sits at around $300,000 and so far the company hasn’t turned a profit. In fact, Waymo is reportedly operating at a loss of around $2 billion so far this year.
So it might not be a question about when Waymo makes Uber obsolete, but rather if it can survive long enough to make Uber obsolete.
