Uber to raise London fares to help pay for electric vehicles - MSE News

Former_MSE_Callum

Uber is to raise fares in London by 15p per mile from next year to help drivers buy electric cars...

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'Uber to raise London fares to help pay for electric vehicles'

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One-Eye

The firm expects this to raise more than £200 million over the next few years, which will be used to help drivers swap to electric cars.

That's 30,000 miles for each of Uber's 45,000 drivers to raise £200m.

I await details of Uber's scheme to spend £200m subsidising drivers (at £4500 each) buying electric vehicles and/or installing charging points.

Maybe the Mayor of London could get involved to ensure it happens as promised, and even to extend the scheme to other minicabs and taxis.

aj23_2

But they are saving it in their cost of petrol, so why are we being penalized for them saving money in the long run?

esuhl

aj23 wrote: »

But they are saving it in their cost of petrol, so why are we being penalized for them saving money in the long run?

Because you'll benefit from cleaner air in the long run. Petrol is heavily taxed because of the harm is causes to society. Electric vehicles cause less pollution, so we want everyone to be motivated to switch to electric cars in future.


Petrol taxes and Uber fees are a good, effective way of doing that. It's a good idea in principle.

BUT...

You've got to acknowledge the "cynical side" of Uber. They've had negative press coverage over driving standards, passenger safety, price gouging, conspiracy to evade law enforcement, zero-hours contracts, unfair competition with licensed taxis/minicabs, etc.

Air pollution is a major problem for London, and addressing this makes Uber look "more socially responsible" to the mayor/councils.

As a PR exercise, announcing a price rise as an "environmental surcharge" is quite clever. No one wants to pay more for the same service... but paying to help the environment feels like a "good deed", and customers will be more willing to swallow the price increase AND have a better impression of the company.

It's easy to imagine that London will be the first city in the UK to ban non-electric cars in the near future. There are Congestion Charge and Low-Emissions zones already. How long till there's a "zero emissions" zone...? By getting in early, they're making their business more resilient and capable of capitalising on any changes.

Also, the levy goes directly into a "personal savings account" for the driver to buy an electric car. Again, that sounds like the customer is doing a "good deed" by paying a surcharge, knowing that it will go to a "real person" rather than an anonymous company, but...

How long will it take for a driver to save enough money to replace their car with an electric model? Probably a few years... during which time Uber will have that money... and be able to earn interest on it and re-invest some into the business. All this extra cash doing nothing must look pretty good on a company's balance sheet.

What happens if a driver leaves Uber before saving enough to replace their car? Do they they forfeit the savings? This "green tax" could end up being very profitable for the investors.

Very clever.

CKhalvashi

aj23 wrote: »

But they are saving it in their cost of petrol, so why are we being penalized for them saving money in the long run?

But it may also help them some way towards earning minimum wage.

As I have said many times before, running around on sub-£1/mile really is not viable.

CKhalvashi

esuhl wrote: »

How long will it take for a driver to save enough money to replace their car with an electric model? Probably a few years... during which time Uber will have that money... and be able to earn interest on it and re-invest some into the business. All this extra cash doing nothing must look pretty good on a company's balance sheet.

Uber is believed to be shedding cash. It will be interesting to see how quickly a share issue is required when the levy starts to be paid out.

Also, there are obvious issues around withholding pay for drivers, as presumably they won’t want this coming on their taxable income (especially with the new levy announced in the budget). If I were driving for them I wouldn’t want to be taxed on money I can’t get my hands on, especially as it’d likely be a significant sum of my profit.

What happens if a driver leaves Uber before saving enough to replace their car? Do they they forfeit the savings? This "green tax" could end up being very profitable for the investors.

Very clever.

But effectively amounting to theft from their drivers. It’s highly unlikely given their past record that this money would be paid to their drivers, and by my reckoning 15p per mile = 150000 passenger miles with passengers for something like a Hyundai Ioniq. Vehicles being used as minicabs don’t last 250000 miles in city centres, in towns outside London they do, however this isn’t Uber’s market.

So I can’t be accused of a conflict of interest, I am no longer financially connected to the trade in any way.