Urban transportation company Uber is fighting very hard to conquer France. It doesn’t hesitate to redistribute bonuses of up to $1,100 a week to its drivers — these bonuses are higher than Uber’s revenue from these drivers. In other words, Uber is willing to operate at a loss to lure drivers. Under-funded French startups can’t compete financially with Uber’s offering with similar bonuses, but relay on a more relationship-building approach.
“Uber is a steam roller that wants to flatten everything,” Chauffeur-Privé co-Founder and CEO Yan Hascoet told me in a phone interview. “People need to know how Uber does business, in particular when it comes to anti-competitive practices. We are looking into possible legal actions regarding their strategy.”
“Uber does not like competition,” he said. “We have close to 1,000 drivers in Paris, and have seen 10 percent weekly growth”
There are many urban transportation startups in France, such as LeCab, Chauffeur-privé, SnapCar, Allocab and Drive. Some services (like LeCab) buy and operate their own cars. But for other services drivers have to bring their own cars. In the latter case, many of them have signed up to multiple urban transportation services. For example, they can switch between Uber and Chauffeur-Privé throughout the day, as Chauffeur-Privé has a mixed model.
Encouraging Driver Loyalty With Money
Uber has three different strategies right now in Paris to encourage driver loyalty.
The first one targets drivers who use multiple services. Uber wants to convince them to only use Uber. Drivers have a weekly bonus that depends on the number of rides they do every week. For fashion week, these bonuses will be augmented by €100. That’s why Uber recently sent out an email to drivers. “As always, you will have to have a rating above 4.5 stars and an acceptance rating above 80 percent during the week to qualify for the bonus,” says the email.
If you are an UberX driver and do more than 40 rides a week, you get $480. For 60 rides, you get $760. And finally, for more than 75 rides, you get $1,100 (respectively €350, €550 and €800). Let’s say that on average an UberX ride costs $25 in Paris (€18). Uber takes 20 percent, representing $370 per week for 75 rides (€270). Uber is willing to give away $1,100 every week when it generates $370 in revenue, or three times its revenue.
For black car drivers, you will get $345 for 40 rides, $620 for 60 rides and $970 for 70 rides (respectively €250, €450 and €700). In France, black car and UberX drivers are both professional drivers with a limo license. Only UberPOP accepts non-professional drivers.
“It’s a very attractive bonus as Uber pays us more than they take from us,” an Uber driver told me in a phone interview.
Second, Uber is launching a new referral strategy. Existing Uber drivers can convince other professional limo drivers who don’t already work for Uber. As a reminder, in France, urban transportation startups can’t recruit brand new drivers for the next two months due to an ongoing conflict with French cab drivers. To get more drivers, an important part is luring drivers on other services or convincing existing ones to drive more for Uber. But, according to competitors, Uber still receives many applications from existing professional license holders.
If you refer a new Uber driver and this person does more than 20 rides on Uber, you receive $690 (€500). On the other hand, the new driver will receive $345 (€250). It adds up with the other bonus described above. Uber is spending more than $1,000 dollars for 20 rides.
“It’s a scandal,” LeCab founder and CEO Benjamin Cardoso told me in an email. “We should name and shame these dumping tactics.”
It doesn’t end here. Many French companies allow you to say where you want to be dropped off directly within the app. For example, Chauffeur-Privé drivers can accept a ride before they drop someone off. This way, they don’t have any downtime between rides.
To counterbalance that, Uber is giving drivers $14 (€10) if they do three Uber rides in a row, or $28 (€20) for five rides in a row. “It’s an experiment that we are doing with a few drivers,” an Uber spokesperson told me in a phone interview.
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