Uber Raises London Prices By 10 Percent Amidst Driver Shortage

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Uber raises London prices by 10 percent amidst a shortage of 200,000 drivers and a surge in demand since the end of the UK lockdown in July

Ride hailing company Uber has raised its prices by 10 percent in London, as it seeks to add drivers to the platform amidst a shortage, the biggest increase in the city since 2017.

The price of a trip to the airport has also been increased by 25 percent during peak times.

The company says it is short of 20,000 drivers and needs to raise prices to attract them. The company isn’t reducing the commission it charges to drivers, instead passing the cost to passengers.

But the company says hiring more drivers should reduce surge pricing, meaning the average fare increase for riders should often be lower than 10 percent.

Image credit: Uber
Uber chief executive Dara Khosrowshahi. Image credit: Uber

Surge in demand

Uber is one of many companies hit by the unpredictable conditions caused by the Covid-19 pandemic.

It says demand in London has spiked nearly 20 percent since the UK’s lockdown ended in July, up from a normal 10 to 15 percent annual rise in demand.

Demand in Birmingham and Manchester is 30 percent higher and it is 40 percent up in Nottingham.

The company says it has the same number of drivers on the books as in 2019, but some 10,000 of them have not been active in recent months.

Some of these may have switched to food or package deliveries during the pandemic and have not returned to carrying passengers. Uber hopes to lure them back with a pay increase.

Higher costs

The increase is also intended to offset higher costs for drivers, including higher operating costs and rising petrol prices.

Uber said last month it would offer bonuses of £500 for drivers who refer friends to the platform.

The company has been obliged to offer benefits such as a minimum wage to drivers since a UK Supreme Court ruling in February confirming that its drivers are employees, and not self-employed, as it had argued.

“We’re making these changes to help provide a better rider experience, by signing up more drivers to meet the growing demand,” Uber said in a statement.

“We know people rely on Uber to book a safe trip around London and this small fare increase will help reduce wait times. As always riders will get a fare estimate before booking their journey.”

Chief executive visit

As part of the plan Uber chief executive Dara Khosrowshahi also flew into London for 24 hours last week in his first international trip since the pandemic.

Khosrowshahi met with Uber drivers and the GMB trade union at Soho House, and met for the first time with London mayor Sadiq Khan in a visit negotiated by GMB.

In April Uber said it would spend $250 million (£186m) on a one-time stimulus package aimed at getting drivers in the US back on the road.