Startups

Uber Wants To Take Over The French Market With Aggressive Bonus Tactics

Comment

Image Credits:

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 for some drivers to lure drivers. Under-funded French startups can’t compete financially with Uber’s offering with similar bonuses, but rely 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.

It’s a very attractive bonus as Uber pays us more than they take from us An Uber driver

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.

Recruiting More Drivers Or Killing Competitors?

I asked Uber about all these bonuses. Uber sees them as incentives to make drivers discover the service. It’s the first step to build a long term relationship.

“This industry in general is growing, and we all need new drivers,” Uber said. “We don’t force our partners to work exclusively for us. They always have the choice. We are convinced that our technology has many advantages.”

Now that it’s harder to recruit drivers in France, urban transportation companies have no choice but to be more effective in the stagnant pool of drivers. But does Uber need more drivers in Paris? Uber rarely suffers from surge pricing in Paris, and there are many available cars when you open the app.

“It doesn’t have any supply issue,” Hascoet told me. “Our rides-per-hour ratio is much higher than Uber’s, while still being able to answer to 98 percent of ride requests.” According to him, Uber’s tactics are specifically targeted towards its French competition.

“It doesn’t need more drivers,” Cardoso told me. “It wants to kill competition.”

Uber’s Image

Today’s news comes after multiple incidents in the U.S. In New York, Uber has used DDoS-style techniques against Gett Cars. In San Diego, Uber voluntarily kept drivers off the road to drive prices up with surge pricing.

For French drivers, Uber’s strategy is great to boost their incomes. But its image suffers. The company is seen as the giant American player that tries to invade France. Interacting with Uber is very cold.

“When you go to Uber’s offices in Paris, it’s like going to the Social Security office,” an Uber driver who wants to remain anonymous told me in a phone interview. “We fill out a form with our problem on an iPad and it tells us if we have to send an email or if we should stay.”

In the end, startup founders are complaining about Uber’s tactics, but they are not illegal. It’s unfair for French competitors, but Uber benefits from hundreds of millions of dollars in funding. It can use bonuses to gain market share.

“There are many things that we didn’t like with Uber, but we don’t have the capacity to turn things upside down. We don’t have any choice. Uber pays us pretty well and it tries to make the most of it.”

The following are emails recently sent to Uber drivers in Paris.

Uber France Bonuses

De: partenairesParis@uber.com
Envoyé: lundi 3 février 2014 18:45
À: [REDACTED]
Objet: Uber : Nouvelle prime exceptionnelle !

Cher Partenaire,

Vous le savez, nous cherchons toujours de nouveaux moyens de vous satisfaire et de rester le meilleur réseau de partenaires VTC du marché. C’est pourquoi nous mettons en place dès aujourd’hui et à titre expérimental une nouvelle prime, pour laquelle vous avez été sélectionné.

La demande explose en ce moment, aussi bien sur Berline que sur uberX, et les utilisateurs ont besoin de chauffeurs connectés autant que possible et à tout moment.

C’est pourquoi nous mettons en place une prime qui récompense la stabilité et la durabilité de votre connexion au réseau :

A chaque fois que vous enchainerez trois courses sans vous déconnecter de l’application ni refuser une course, vous recevrez une prime de 10 €.

Pensez-y : il n’y a pas de commission sur les primes, cela correspond donc à une course de 12,50 € (10 € après commission) OFFERTE toutes les 3 courses ! En respectant les critères, vous pouvez rapidement et aisément accumuler des centaines d’euros de prime par semaine.

Cette prime est pour l’instant en phase expérimentale en vue d’être éventuellement élargie à tout le réseau, c’est pourquoi il est normal qu’elle ne concerne pas tous les partenaires à l’heure actuelle.

A très bientôt sur le réseau Uber.

L’équipe Uber.

Screen Shot 2014-02-28 at 17.30.37

An earlier version of this article had the following headline: Uber Wants To Take Over The French Market By Using ‘Dumping Tactics’

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

1 day ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo