Advertising’s Role as a Safety Net for Uber Drivers Suffering From Lost Fares
As more and more cities across the country are allowing the use of Uber – the ridesharing app that has swept the nation over the past decade – and other similar companies (Lyft etc.), the competition between these rivals is growing. As a result, their fares are constantly surging or decreasing in an extremely unstable manner – leaving the apps’ drivers with an unreliable source of income. After its recent thirty percent decrease in fares in order to gain some customers from its competitors, Uber’s drivers are turning to companies like Fiverr to make up for their lost income. How? Advertising. While Uber publicly frowns upon the use of advertisements by its drivers, the decision to play advertisements in their cars is ultimately at the drivers’ discretion. Fiverr is an app that allows drivers to create profiles for themselves which display their ratings and reviews with the hopes of making them attractive to advertisers.
Uber drivers are using their vehicles as mediums for companies to display their ads and commercials for the demographics marketers have been trying to reach for quite some time: the wealthy upper crust of society. Not only can advertisers play their ads for a notoriously hard to reach demographic, but they can also tailor their ads to reach those who would find them most interesting. Through the use of the recently developed app Viewswagen, drivers can ensure advertisers that their ads will be played to people who are the most likely to be influenced by them. Viewswagen is a service that aims to be a platform for advertising used by ridesharing drivers and companies everywhere. It analyzes a passenger’s destination and route with the goal of preparing and ultimately playing an ad for them that would most likely fit their needs. For example, if someone was riding to a bar, Viewswagen would be inclined to play a Budweiser ad. Because of this newly promised assurance, Uber drivers will be able to raise the prices of their advertising slots accordingly and hopefully make up for lost revenue.
This relates to the course because it discusses the sale of ad slots. Uber drivers with high ratings, good reviews, and frequent shifts are able to price their ads at a relatively high rate compared to drivers who perhaps aren’t as well rated or don’t go on shift quite as often. Meanwhile, advertisers will have a higher value per slot for certain drivers or route/destination slots offered through Viewswagen. In order to maximize profits, for example, drivers should consider using second price auctions and market clearing prices. Ultimately, this article reflects the concept of selling ad slots through the use of auctions – a topic which is discussed often in class.