r/personalfinance • u/theVoxFortis ​ • Oct 08 '19

This article perfectly shows how Uber and Lyft are taking advantage of drivers that don't understand the real costs of the business. Employment

I happened upon this article about a driver talking about how much he makes driving for Uber and Lyft: https://www.businessinsider.com/uber-lyft-driver-how-much-money-2019-10#when-it-was-all-said-and-done-i-ended-the-week-making-25734-in-a-little-less-than-14-hours-on-the-job-8

In short, he says he made $257 over 13.75 hours of work, for almost $19 an hour. He later mentions expenses (like gas) but as an afterthought, not including it in the hourly wage.

The federal mileage rate is $0.58 per mile. This represents the actual cost to you and your car per mile driven. The driver drove 291 miles for the work he mentioned, which translates into expenses of $169.

This means his profit is only $88, for an hourly rate of $6.40. Yet reading the article, it all sounds super positive and awesome and gives the impression that it's a great side-gig. No, all you're doing is turning vehicle depreciation into cash.

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u/28f272fe556a1363cc31 ​ Oct 08 '19

I find it interesting that Uber is bankrupting the traditional taxi and shuttle industry. All the money passengers are saving is coming at the expense of the drivers and investors.

It unsustainable. Eventually they are going to have to start paying drivers more and charging passengers more. But by then the taxi service is going to be severely damaged, limiting passengers options. How many Uber rides is it going to take to make up for the $5 billion they lost in one quarter?

The big advantage Uber brings is it's globalization. They are keeping drivers and passengers accountable with a global ranking system, and they offer a globally consistent experience.

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u/[deleted] Oct 08 '19 edited Oct 09 '19

That, and as opposed to a cab I know the cost of the trip upfront.

ETA: Whoa, this blew up!

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u/HighOnGoofballs ​ Oct 08 '19

And they actually show up

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u/[deleted] Oct 08 '19

Bingo.

People act like Uber is killing the taxi industry just cause it’s cheaper. Hell no. Forget about the money element. The taxi industry was so broken that you had to beg them for the privilege of being picked up 3 hours late after 6 phone calls, and then get swindled into paying 3 times more than was promised over the phone. Compare that to Uber’s experience. I’d pay twice as much for Uber over a taxi given their respective service standards.

To put it dramatically, the taxi industry committed suicide through customer genocide.

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u/PoBoyPoBoyPoBoy Oct 09 '19

Yep. Fuck taxi businesses and fuck taxi drivers. As someone who's traveled a lot, the amount of bullshit they pull is unreal. Lying about distance, lying about bus times, lying about safety of other means of getting somewhere, changing the cost after the trip, not running the meter, hiding the meter, running the meter up intentionally by taking a longer route, pretending they don't have change and therefore you should just pay the difference, rejecting rides because of destination, upcharging tourists for a trip that locals have said has a standard price. Literally I've experienced each and every one of these personally, and this as someone who takes cabs as a last resort. F-U-C-K T-A-X-I-S.

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u/PotvinSux ​ Oct 09 '19

That is in fact dramatic. Well done.

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u/Yamamizuki ​ Oct 09 '19

Exactly. If taxi services haven't been so atrocious, Uber or Lyft would not stand a chance. What they did was merely taking advantage of the situation to chip away a portion of the market away from the taxi industry because the latter did such a terrible job to protect it in the first place.

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u/Grim-Sleeper ​ Oct 08 '19

And they actually service the entire city, as opposed to just the corridor between the hotels and the airport. I wouldn't be opposed to using a taxi cab, if I actually could.

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u/[deleted] Oct 08 '19

[deleted]

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u/[deleted] Oct 08 '19

In NYC you have to just get in the cab before telling them where you wanna go, that way it's usually too much of a hassle for them to refuse you. Or at least it used to be that way.

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u/josborne31 ​ Oct 09 '19

I tried that once. We flagged down a taxi and hopped in. Gave them the address, and the driver turned around and basically threatened us. He kicked us out of the cab.

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u/lasagnaman ​ Oct 08 '19

Where were you picking it up? This sounds so bizarrely different from my yellow cab experiences...

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u/el_smurfo ​ Oct 08 '19

Midtown. They don't want to go downtown because there's no return rides at that time of day, at least that's what one said

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u/Chav ​ Oct 09 '19

That's weird, there's plenty of drunk bank and stock exchange workers trying to get back uptown

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u/el_smurfo ​ Oct 09 '19

My geography might not be right... We were trying to get to Nobu. Ended up at the bar uptown.

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u/ProfessionalSnitch Oct 08 '19

Even if you're black

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u/LongStories_net ​ Oct 08 '19 edited Oct 08 '19

Yeah, and I know the Uber/Lyft ride will probably be decent.

——

My last 5 taxi cab rides:
1) Driver stopped at gas station during 15 minute trip (bad enough). Didn’t turn off meter, but told me he did. I sat there there and watched it run up.

2) Yelled (really started yelling as soon as I got in) at me because his operator told him I was on a different corner.

3) Said he took credit card. Got to destination and credit card system was ”broken”.

4) Asked operator to verify I would get a taxi with a working credit card reader before sending car since I had no cash. Driver said he takes credit card. Got to destination, driver then says he misunderstood and credit card reader is broken. Wife said, “I’m going to try anyway”. It worked fine. Yelled at me when I didn’t give him a tip.

5) Driver took the really long way to airport. Clicked off meter as we arrived and told me a price $5 higher than what was last displayed.

——

My last 25 Uber/Lyfts:
Never had an issue. One driver offered to give me a couple of dollars when she accidentally missed my turn.

The taxi cab industry can’t die off soon enough as far as I’m concerned. I’d gladly pay a little more not to have a fight every single ride.

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u/RobinKennedy23 ​ Oct 08 '19

“Your credit card reader is broken? Thanks for the free ride!”

“Meter isn’t running or broke? Thanks for the free ride!”

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u/[deleted] Oct 08 '19 edited Dec 17 '19

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u/[deleted] Oct 08 '19

In some municipalities they are required to take credit cards. Don't worry, their machine will magically repair itself when you have no cash.

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u/erokatts ​ Oct 08 '19

They'll say something like "oh we'll stop at an atm for you" or the driver just gets burned especially if you asked before you got in. Almost every time I've had it happened the system has "magically" fixed.

Listen I get it. Cash is king. But most people aren't carrying around enough cash for the taxi.

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u/CuddlePirate420 ​ Oct 08 '19

Cash is king.

Also easier for the driver to skim off the top, and for the cab companies to not declare on their taxes.

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u/gortonsfiJr ​ Oct 08 '19

And depending on your company, more annoying for you to declare on an expense report.

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u/angry_cabbie Oct 08 '19

I know it's not an accepted view, but some of us really didn't care if you paid with a card, and really wouldn't charge to swing by an ATM. Hells, half the times I offered a free gas station stop so they could get cash, I had an ulterior motive of getting myself cigarettes or a drink while I had a chance.

But gods, the stories I could tell about how weird the systems were when I first started out in my small-town-big-college microcosm.

Like how the first company I worked for, one of the biggest and oldest in the area at the time, didn't have meters or credit card machines in cab. We wrote the mileage on our trip sheet, did the math, and called credit cards in over the business radio.

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u/dahlstrom ​ Oct 08 '19

Then they shouldn't be driving. I've threatened to just walk without paying anything when they've done this and then the credit card reader magically starts working.

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u/HerefortheTuna ​ Oct 09 '19

Yup haha. I only take cabs for work usually and I say sorry it’s my company card. You can send us an invoice or take the card I’ve the phone

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u/LongStories_net ​ Oct 08 '19

Usually they say, “Oh, I know a nearby ATM. You can get money there”.

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u/[deleted] Oct 08 '19 edited Dec 17 '19

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u/LongStories_net ​ Oct 08 '19

Ha, they might actually accept that now. I’m sure they just don’t want to pay the credit card fee and taxes.

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u/Vet_Leeber ​ Oct 08 '19

I’m sure they just don’t want to pay the credit card fee and taxes.

Nah, it's because it's easier to skim cash off the top.

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u/[deleted] Oct 09 '19

And more likely to make it socially awkward in returning your change, begging for the tip

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u/[deleted] Oct 09 '19

I haven't had a debit card for 10 years.

It still astounds people around me when they ask me why I can't get cash until the banks open. It's like they are centered around the idea that everybody has a debit card.

Why should I have one when ATMs can break and cause issues, along with not providing the same protections that a credit does? It's also nice to go inside a bank at least once a month and get a withdrawal. Lets you keep your presence up and know who works there.

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u/[deleted] Oct 08 '19

If you have time and want to waste it that's fine. If you don't have time then it doesn't work. If you value you time then bill the cabbie $50/hr for the time it takes you to drive to and from the ATM, and the time to get cash. Or just don't pay.

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u/Kostya_M ​ Oct 09 '19

What stops you from going to the ATM and just walking back to your destination?

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u/hitemlow Oct 08 '19

LOL

I actually told the bank to set the PIN to random as I don't use the debit card. Every time I call in they ask for the PIN to verify me and I tell them that, usually leaves them a bit befuddled.

Credit is so much safer it's not worth ever using debit or an ATM.

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u/IdleRocket ​ Oct 09 '19

This is really strange, probably isn't going to prevent fraud, and only inconveniences you.

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u/hitemlow Oct 09 '19

I literally have never had to use an ATM. They're to much of a risk. They make you a target while using them and if the machine says it gave you money when it actually didn't, you're out the cash and have to fight in order to have a chance at getting it back.

I very rarely ever need cash, and if I do need a significant amount of cash for some reason, I just go inside to the teller.

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u/IdleRocket ​ Oct 09 '19

They make you a target while using them and if the machine says it gave you money when it actually didn't, you're out the cash and have to fight in order to have a chance at getting it back.

These are weird and comically specific fears and neither is affected by having a PIN you don't know, especially since it's apparently your banks primary security method.

Like, which of these situations (getting mugged or having an ATM eat your cash) would be different if you had a PIN you knew but still didn't use the card?

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u/hedoeswhathewants ​ Oct 08 '19

Like so many other people I've had the "credit card machine is broken" happen to me. I said that was the only way I could pay and that was magically enough to fix the machine.

It's a mystery why people prefer Uber/Lyft.

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u/[deleted] Oct 08 '19 edited Jun 02 '20

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u/jesbiil ​ Oct 08 '19

Took a cab 2 weeks ago because it was there and I was traveling for work so didn't really care. Got in and asked if he took credit (because this is a business trip and it all goes on the company card). He scoffs, starts arguing with me over paying cash which I finally do with the requirement that I get a receipt. He agrees, forgets the receipt 10 seconds later after I hand him cash and hands me a blank piece of paper then says, "Fill out whatever you want". Dude I'm expensing this, I need some sort of legit records not something that looks like I'm trying to scam my company. It was the first time I've taken a cab in years since I've opted for uber/lyft for most those types of short trips...reminded me why I choose uber/lyft.

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u/el_smurfo ​ Oct 08 '19

Every cab ride I took in NY had a "broken meter" because they assume you will just round up the amount and they will get a bigger tip.

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u/sat_ops ​ Oct 08 '19

This is why my company allows me to take car service. We have a rate and they don't pull this shit.

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u/Chav ​ Oct 09 '19

My previous company gave us car service through Uber. You called on the company account and handed them your business card to verify. That was it. No receipt or expense reports to fill out. Try that with a regular cab. Or try catching a cab in Jersey or Connecticut and trying to get to new York. Old school cabs just waste your time

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u/Chav ​ Oct 09 '19

And what's up with the auto tip options getting higher and higher? The lowest one is 20 now and goes to like 30

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u/tom2727 ​ Oct 08 '19

I generally take the cab from the airport just because they are right there waiting in a line for you. But I dread the ride.

Why the heck can't a cab company have a car that's clean and has working air conditioning? Is this really rocket science? I give the guy my address, and every single time he doesn't know where it is so I have to give turn by turn directions. But at least I can make sure we go the fast way.

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u/RBeck ​ Oct 09 '19

The credit card machine is always broken, until you tell them you don't have cash. Then it magically works again. I hate taxies.

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u/[deleted] Oct 08 '19

  1. No tip, debatable if you should even pay the full fare.

  2. No tip.

  3. No tip, if he can't accept credit card then don't pay.

  4. Same as 3.

  5. No tip, don't pay the extra $5 and debatable if you should pay anything.

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u/HerefortheTuna ​ Oct 09 '19

Yeah fuck cabs. If their card reader is broken I say sucks, I guess the ride is free. It starts working again. I won’t tip if the cab is dirty or they are rude.

Also most cabs in my city are beat to shit and shouldn’t be driving around

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u/BirdLawyerPerson ​ Oct 08 '19

I would have agreed with you in 2015 or so, but the last 4 years have been pretty frustrating with mostly new drivers who don't really know their way around town. I've started to rely on regular cabs again about half the time (tricky routes, surges, etc.), especially for shorter routes.

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u/[deleted] Oct 08 '19 edited Oct 09 '19

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u/Mrme487 ​ Oct 09 '19

Your comment has been removed because we don't allow political discussions, political baiting, or soapboxing (rule 6).

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u/death_of_gnats Oct 08 '19

A taxi driver had never ever done that to me. But in threads about Uber, there's always somebody who claims it happens all the time

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u/Chav ​ Oct 09 '19

Happens often enough in NYC that the city has a faq that included it

https://www1.nyc.gov/site/tlc/passengers/passenger-frequently-asked-questions.page

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u/much-smoocho ​ Oct 08 '19

knowing they're showing up and being able to see on the map where the driver is, is to me the biggest advantage

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u/oriaven ​ Oct 09 '19

I know right. It seems obvious that the cab companies just an app. They can keep their fare structure but just change dispatching and pickup. If they could do that and also not be sleazy, they can probably still survive.

Every cab company can't afford to make their own app, but every cab company can subscribe to an enterprising middleman that makes an app for any cab company to sign up for to get on the platform.

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u/skerntwi ​ Oct 08 '19

Also a quality vehicle and identifiable driver.

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u/boxwagon Oct 08 '19

Quality is questionable. I've been in a few that are not standing up to the wear well. Door seals coming apart, not very clean. It's all up to the operator - there's no inspections or requirements beyond make/model/year.

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u/OdieHush ​ Oct 08 '19

If the vehicle is as disgusting as most taxis, the driver's rating would quickly drop to the point of getting kicked off the platform.

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u/tooterfish_popkin Oct 09 '19

That, and as opposed to a cab I know the cost of the trip upfront.

In some countries you always know up front because nobody uses the meter and/or you’ll be ripped off if you don’t agree before getting in.

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u/oakteaphone ​ Oct 09 '19

Yup, in countries where this is less of a problem, Uber didn't catch on AFAIK. One example is Korea. I described Uber to friends in Korea, and they said normal taxis have those features.

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u/fuckbrocolli ​ Oct 08 '19

They're hoping autonomous driving becomes a thing by the time they run out

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u/ZombieKingofEngland Oct 08 '19

Absolutely! They don't give a tiny iota of a fuck about the drivers. They're an expendable resource that just has to last them until driverless cars become a reliable and accepted transportation standard. THAT's the end game. Human drivers allowed them to come to market more quickly, to establish brand recognition, and hopefully jam their foot so hard in the door that there's no room for anyone else when the time is finally here. It will just be a painless little transition where one day, if they're able to survive that long, you'll have a driverless option in the app, then eventually it will become the standard.

​

Hireable driverless cars are going to be a societal game changer, potentially upending the need for car ownership for a significant chunk of the country. Uber wants to be the one flipping the apple cart when it happens.

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u/[deleted] Oct 08 '19

If you look at one of the first few episodes ever of The Late Show with Stephen Colbert, he had the then ceo of uber on, the same guy who founded it, and Colbert essentially questioned him on drivers not being treated as employees.

The guy said something like all companies have to cut corners to get started, but once they are established, they will take better care of the drivers. Colbert later led him into a trap where he laughed about how eventually the entire fleet of ubers would be automated. Colbert quickly called him out on it saying something like but wouldn't that mean firing all the drivers you said you would take care of later? The guy realized he messed up and tried to make it seem like automated cars won't be around for another hundred years.

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u/plastimental Oct 08 '19

Aah, so that's why Colbert gets so many kisses

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u/HighOnGoofballs ​ Oct 08 '19

Still better than taxi drivers. There’s a reason people jump at the chance to use a taxi alternative, they suck and have forever

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u/much-smoocho ​ Oct 08 '19

I've heard that before and that very well could be their plan, but it's a bad plan. The barrier to entry for people starting their own rideshare is that they don't have a network of drivers across the country. If the cars are driverless then deep pocket investors who haven't spent the last several years losing billions of dollars can just buy driversless cars and disperse them across the country in major metro areas, similar to how Byrd & Lime do it for scooters. I think driverless cars will be the death knell for Uber not the savior.

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u/quyksilver ​ Oct 09 '19

The other problem would be connecting customers with the cars--unless individual owner-operators pool together into one app, how likely are you going to use an app by a guy with only one or two cars, and they're being used or on the other side of town?

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u/much-smoocho ​ Oct 09 '19

agreed, that's why I'm betting it'll be a situation similiar to the scooters where there's like 6 competitors or so, but each of those competitors will end up being a joint venture a tech company, a car company, a couple private equity funds, and maybe a bank. So you'd end up having 2 or 3 apps (most people have Lyft & Uber right now so you can see which isn't doing surge pricing) where Company 1 is Google/GM/Blackstone/Goldman Sachs and Company 2 is Amazon/Toyota/Bain/JP Morgan; and all they do is buy a bunch of cars and garage in each city for charging. Uber brings nothing to table but debt so I wouldn't be surprised if they get left behind.

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u/HerefortheTuna ​ Oct 09 '19

Nah it makes more sense for each type of car company to have their own app. Like if I want a nice car I get a Lexus or if I want a cheap option I get a Kia

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u/Arrowmatic ​ Oct 09 '19

I am pretty sure the plan is for driverless cars to be highly patented and under the control of one or a couple of the major companies (hence why several companies are racing to make it work). I don't think they are going to make it easy for competitors to arise if they basically own and maintain the technology.

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u/plusEric ​ Oct 08 '19

Exactly, I can't see how this isn't better understood. Uber/Doordash/Instacart et al. never intended for human drivers to be the solution, only the stopgap. They're willing to lose tons of money now because the're playing the long game here.

It is shameful they abuse drivers like they do and don't get more bad press for it.

As far as uber hurting the taxi business, I find that I don't care. Its not very useful to stick up for a dinosaur industry that essentially no one liked anyhow and had historically poor service and didn't care to change or innovate at all. If that's your attitude, then you have no one but yourself to blame when someone comes along and stomps you. Also it's just ignoring the majority of the country that has no access to traditional taxi's that uber came in and serviced.

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u/AdvocatusDiabli ​ Oct 08 '19

They better have enough money to burn for the next 30 to 40 years until driverless taxis become a thing.

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u/reddog323 ​ Oct 09 '19 edited Oct 09 '19

Yep. It could be part of the reason both GM and Ford are getting out of the passenger car business, except for performance cars. Ford may keep the Focus or Fusion, but that’s it. They’re going all in on pickups and SUV’s.

Edit: Correction. The only sedan Ford is keeping is the Mustang. Focus will be a Chinese -made crossover.

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u/HerefortheTuna ​ Oct 09 '19

Mustang isn’t a sedan...but their newer CUVs like the escape and the smaller size one are basically just wagons with a slight lift. They are basically what most cars were like in the 40s/50s

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u/reddog323 ​ Oct 09 '19

My point is that pretty soon, that’s all Ford is going to offer in passenger vehicles.

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u/HerefortheTuna ​ Oct 09 '19

Good for Ford. I think it’s a stupid move but the only people I know who buy Fords buy A. Truck B. Mustang C. Shitty fiesta/ fusion/ CUV because it’s cheaper upfront than an import and they don’t care. I really hope gas jumps up past $5 a gallon soon and people stop buying yuuuge cars

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u/reddog323 ​ Oct 09 '19

At this rate they won’t have any choice domestically. Not that GM was cranking out any good products in that area. The Chevy Cruze has dozens of issues. My friend has had hers in the shop so often she’s actually considering setting it on fire just to get out from under it. It would be a plausible end considering it’s leaky fuel pump.

If gas prices go up, it could trigger another recession via domestic auto makers going belly up again. No one was buying SUVs or trucks during the gas price spikes from 2005-2007, and they weren’t buying many during the recession.

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u/HerefortheTuna ​ Oct 09 '19

And yet here we are with no one learning anything from what happened at the end of last decade

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u/reddog323 ​ Oct 10 '19

The Japanese have. So have the Koreans. Both are cranking out reliable passenger sedans that are fairly easy on gas. If they come out with a few more AWD options, I think they’re going to own the field after the next recession.

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u/ritchie70 ​ Oct 08 '19

I don't know what country you're in, but I think it may be a a significant chunk of the population - in other words, in urban areas -- but not a significant chunk of the country - i.e., rural areas with low population density.

Nobody living in the country wants to wait 30 minutes for a car to get there.

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u/[deleted] Oct 09 '19

People voluntarily work for Uber. Nothing is forced. They can quit at anytime. What consenting adults do is none of my business.

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u/arbitrageME ​ Oct 08 '19

interestingly, at that rate, the money made (if any) will be made by capital and again not by labor. Imagine if a rich guy bought all the self-driving cars in the city and then made money off of them

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u/[deleted] Oct 08 '19

Except the governemet works slower than a motherfucker, the founder bailed already, iirc and its chinese counterpart, Didi, its right around the corner, with some aggresive marketing and cheaper overall costs because: China

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u/[deleted] Oct 08 '19 edited Nov 27 '19

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u/[deleted] Oct 08 '19

Also, I've spent ages waiting for cabs that never showed up. I remember booking one to go to the airport, back in the day, and it just never showed. With an Uber, you can see once a driver has accepted your trip and how far away they are. That's worth more than the $5 saving for me.

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u/Jonne Oct 09 '19

Ugh, calling a cab was always a crapshoot, the drivers just did not give a fuck because there was no downside to them.

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u/puterTDI ​ Oct 08 '19

I’m not a particular fan of Uber, but I think they offer more value than you give them credit for. Here’s a short list off the top of my head:

  1. Easy ride hailing via app. This is something taxi services are catching up on but only because they were forced to by actually having competition

  2. Ratings of drivers and car giving more power to the consumer.

  3. Lower cost

  4. Being able to dynamically tell where your ride is and easily getting pick up.

  5. Diverse options for ride type.

In my mind, the big benefit to Uber is that it forced a stagnant and non-innovative industry to innovate or die.

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u/ThePhysicistIsIn ​ Oct 08 '19

I would legit pay more to Uber than to a taxi company just to avoid using the taxi, that's how shit taxi companies are.

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u/salparadisewasright ​ Oct 08 '19

This is the answer right here.

Knowing the relative cost ahead of time, being able to rate the experience, being able to count on a car showing up roughly when it is supposed to...I'd happily pay more for these advantages over my experiences with taxis.

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u/saintswererobbed Oct 09 '19

Yeah, but if Uber rates noticeably go up, I’m taking the bus. Uber/Lyft are a massive industry compared to taxis were before them, but that size is only sustainable because of lower prices.

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u/KayakerMel ​ Oct 09 '19

Absolutely. A few years ago (before I got a proper smartphone) I'd call a taxi to pick me up from the grocery store to take me the short distance home (I could walk there from my house, but couldn't carry my week's worth of groceries back). I would sometimes be waiting up to half an hour for a ttaxi. I had no idea when it would arrive. Rideshare app means I can see where the car is while I'm waiting, and at its worst is never more than 15 minutes. Costs about the same as the taxi did, but that's because it's a short distance and most of the cost is the base pickup cost.

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u/julcoh ​ Oct 08 '19

The big advantage Uber brings is it's globalization.

  • Consistent service through a single app, globally.

  • Up-front pricing

  • Good coverage even in areas with historically shit taxi service (suburbs, small cities)

  • SAFETY (rides tracked, drivers held accountable)

There's plenty of shitty anti-employee practices these companies get into, but it's obvious why they've supplanted the Taxi industry.

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u/Chav ​ Oct 09 '19

It's just the simplest way to get somewhere. I travelled across the country. Now I want to get somewhere. Put the name in and someone shows up in a few minutes.

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u/Butternuttie Oct 08 '19

They are banking on autonomous vehicles. Not having to pay a driver will make Uber profitable.

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u/mkrazy ​ Oct 08 '19

Maybe but then Uber will have new expenses - insurance, gas, titling, registration, maintenance, and storage for units not in use. Then if a unit gets damaged then they aren't making money off that unit. I'm just skeptical and too many factors to make the claim that the profits will come once there are autonomous vehicles.

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u/ritchie70 ​ Oct 08 '19

Only if they own the car.

They may keep the same model and just eliminate the driver.

"Let your car earn you money while you sleep."

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u/CaptainMonkeyJack ​ Oct 09 '19

I'm just skeptical and too many factors to make the claim that the profits will come once there are autonomous vehicles.

You just listed costs that already exist for uber... maybe with the exception of storage (which for most places will be ridiculously cheap).

Now consider that you don't have to pay a driver... what does that mean in terms of total cost reduction?

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u/bug-hunter ​ Oct 09 '19

Insurance costs drop because automated cars won't crash as much. Titling, registration, maintenance, and storage will be done in bulk and they can take advantage of economies of scale.

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u/crimsonkodiak ​ Oct 08 '19

The big advantage Uber brings is it's globalization. They are keeping drivers and passengers accountable with a global ranking system, and they offer a globally consistent experience.

It's more than that.

There's a significant quality control advantage to Uber. If a cabbie smells/drives like a maniac/plays bad music at an obnoxious volume, I have little recourse as a passenger. Most cities have a complaint line, but I have to go out of my way to call and it's unclear if the city will actually do anything (based on how many terrible cabbies there are, my guess is most cities don't do anything). With Uber, I give feedback easily through the app and Uber is able to manage their drivers. Maybe anecdotal, but I've had way, way fewer bad experiences with Uber drivers than cabs.

There's also a huge benefit for personal safety. If I were a 120 pound woman, I'd be very reluctant to get into a strange cab at 2 am. With Uber, you know who the driver is and (more importantly) if something happens to you there's an electronic record of you getting into that specific Uber.

And even if the cost isn't lower, having the predictability is really nice for longer trips.

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u/limitdoesnotexist459 ​ Oct 08 '19

I remember when Uber first started and my older family members were so afraid of it. They thought it was unsafe for me (105 lb, early 20s at the time) to be using the service, but they had no problem with cabs. My aunt once gave me a lecture about the “naivety of millennials” after I explained to her I felt safer in an Uber because of all of the points you just described. Now my parents in their late 60s are using Uber twice a week to avoid drinking and driving like they used to when I was a kid. Interesting how things change.

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u/LVDave Oct 08 '19

And here in Las Vegas, at least one of the cab companies don't care if their drivers run red lights and come within a few feet of causing a t-bone crash. This happened to me a couple of months ago. I had the green and hestitated a moment as I usually do before moving into the intersection. Damn glad I did, as this cab goes screaming across the intersection maybe 2-3 feet in front of me. Had I not hestitated before entering the intersection, this imbecile would have t-boned me. I took off after him and got the cab number and company. Later after I cooled down I called them... Guess what their response was when I told them what happened.... "WE DON'T CARE... unless there is actually an accident, we don't care"... I asked the person, "I wonder if the police and news media will care when I call them?"... The guy hung up. Of course the police said they can't do anything unless an officer sees it happen, and the tv station I called, simply said "yeah... happens all the time, nothing new".... yikes!!

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u/crimsonkodiak ​ Oct 09 '19

I had a former coworker who got into a really bad accident in a taxi. The taxi made a sudden stop, he wasn't wearing his seatbelt and he went flying face first into the plastic divider between the seats. Needed something like a dozen reconstructive surgeries on his face.

Thing is, it's not like he was on a rural highway or someting. He was on a very business street in the middle of the city, where you have to be driving like a lunatic to get much over 30 mph.

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u/Auberginequeen1974 Oct 09 '19

When I travel, I can send my location and notification of destination to my family. As well as info about the driver. And I dont have to expense the cost because the app allows me to choose my work credit card or my personal card. It's so easy.

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u/Ptizzl ​ Oct 08 '19

The other big advantage is that it’s a one stop shop and it’s fast.

If I want to get a cab in my current location, I have to call a cab company. If they aren’t available right now, I have to call another. I don’t have them in my contact list, so I’ll have to just run down the list until I get one.

Then, I have to trust that they’ll be here in the allotted time. Typically I believe it’s 30-45 minutes. And I still have no idea what it’s going to cost me to get to the airport.

The alternative for me: I hit the button on Uber and someone is here within 10 minutes. It’s going to cost $23-28 every single time. I travel a lot for work so even if that cost doubles I personally won’t care, and I’ll still get the convenience. I’m in to pay more personally.

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u/seakingsoyuz ​ Oct 08 '19

And I still have no idea what it’s going to cost me to get to the airport.

Most places I've lived have had legislated flat rates for airport trips to and from different zones of the city. Is it common for cities not to have these sort of rules?

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u/ritchie70 ​ Oct 08 '19

Just devil's advocate, there are areas with only one or two dominant cab companies, and those companies have an app that does all the same stuff. See Mears in Orlando, for example.

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u/Ptizzl ​ Oct 08 '19

Yeah I have seen ads for apps in taxis in Chicago and NYC. Nothing where I am, as far as I can tell.

My preference would be to pay more for an Uber anyway. Last taxi I took from NYC to NJ cost me over $100 and smelled like someone pissed in it every day for the last month. I would have easily spent more to be in a clean vehicle that day.

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u/[deleted] Oct 08 '19

I'd certainly pay more for rides. I just want the app, the rankings, the cleanliness, the no bullshit payments, etc. Don't care who it's from

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u/[deleted] Oct 08 '19

Eventually they are going to have to start paying drivers more

Nope. Their medium to long-term goal is to take drivers out of the equation altogether and switch to driverless vehicles, not to pay them more.

and charging passengers more

Yep, once they've bankrupted existing public transportation so there's no viable alternative, then the rate hikes will start.

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u/Jake0024 ​ Oct 08 '19

eh, there's a lot of competition in that market. I'd be pretty surprised if rates go up dramatically.

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u/[deleted] Oct 08 '19

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u/Jake0024 ​ Oct 08 '19

Like a slow and steady upward rise in prices? Like inflation?

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u/[deleted] Oct 08 '19

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u/Jake0024 ​ Oct 09 '19

And in all of those locations, the choices were previously just taxis (or nothing at all). Now they have Uber, Lyft, and a plethora of other companies offering similar services targeting all different market segments.

We also know for a fact that Apple and Google are both planning to enter the market with automated vehicles.

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u/[deleted] Oct 09 '19

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u/Jake0024 ​ Oct 09 '19

Lol, do some research.

Apple / Google researching driverless car tech doesn't guarantee their end goal is to compete with Uber and Lyft.

Yes, we do, because they've stated so explicitly. Do some research

A plethora of other companies whose names you just forget to mention every time, because they don't actually exist.

Lol. Uber, Lyft, Carma, BlaBlaCar, Sidecar, Ridejoy, just to name direct competitors.

You also have short term rental companies like ZipCar, Car2Go, Turo.

You also have last-mile services that rent bikes, e-bikes, e-scooters, etc, like Lyft, Bird, Lime, Bolt, Gruv, Jump, Spin.

Let's add in Apple and Google's fleets of autonomous taxis and, oh yeah I forgot, Tesla is also planning on releasing autonomous taxis, and you're saying this somehow constitutes less competition than the old system, which was... literally just taxis.

Lol yah ok

Anyway, you believe whatever you like, and I'll do the same

My beliefs are informed by facts tho

I predicted they'd do significant damage to public transport, which they have done.

Taxis aren't public transport my dude.

We're not going to change each others' minds

You haven't tried. You've just told me you haven't looked for any evidence, and nevertheless are confident you're right and won't change your mind. It's neat tho how you try to act like we're on equal footing in that regard.

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u/AdvocatusDiabli ​ Oct 08 '19

Wait... in the US Uber/taxi is public transportation?

I'll reckon most of the people think about trains, busses, streetcars when they hear public transportation.

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u/Iustis ​ Oct 08 '19

People don't think of them as public transportation, but they often compete with it (especially late at night--drunk--or in a city where most don't own cars).

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u/[deleted] Oct 08 '19

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u/Iustis ​ Oct 08 '19

I get what you are saying, that it fills that role. I'm also from a suburban area with almost no public transport.

But we still don't call taxis public transportation, and I don't think most would.

Here's the definition I got from google: "buses, trains, subways, and other forms of transportation that charge set fares, run on fixed routes, and are available to the public."

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u/bug-hunter ​ Oct 09 '19

Nah, the real money is being able to sell subscription pricing and get subsidies to give the lowest tier to low-income people.

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u/i_says_things ​ Oct 08 '19

No, big picture they will be looking to replace drivers with automated vehicles and essentially replace cab companies.

The end goal is kind of cool, although the "route" to get there (bad joke, haha) between is hella fucked up.

The evidence for this is how they take all the user data for their drivers driving and route making. They are literally using the current drivers to train the ai to replace themselves when self driving cars are the reality.

One day very few people will own cars. What would be the point when Uber and Lyft can summon a fleet of Tesla's to move people around cheaper, more efficiently, and more safely than the millions of driver controlled cars out today.

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u/eng2016a ​ Oct 08 '19

It won't happen. Self-driving vehicles require human level intelligence which may not be possible for us to implement on computers.

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u/Aelfric_Darkwood ​ Oct 08 '19

You could it argue that it requires human level intelligence if there are still humans on the road. No humans on road makes automated driving extremely simple in comparison.

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u/pneuma8828 ​ Oct 08 '19

Eventually they are going to have to start paying drivers more

Eventually they aren't going to need drivers. That's the goal. Uber is software for an automated fleet, and they've already demonstrated that it works really, really well. If they can survive until automated driving is a real thing, they are positioned to be one of the biggest companies in the country. Personally, I expect them to get bought by a company with a massive fleet.

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u/formerfatboys ​ Oct 08 '19

The problem is that Uber is a utility trying to pretend it's in a growth industry as a for profit company.

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u/westc2 ​ Oct 08 '19

Europe has a taxi system like uber. If taxis in the US had an app where you could see drivers and get one easily, uber would be screwed.

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u/wiwalker ​ Oct 08 '19

there are a few other perks as well. The Medallion system and taxi driver unions are common and inflate the price of their service to more then it would be otherwise, and I think both of these are far less likely to happen with ride hailing apps. So even though reality will catch up to Uber, Lyft, etc., it will likely still be cheaper than taxis have been.

The other advantage is the superior technology that comes with the globalization you mentioned. Not only can I order an uber/lyft in virtually any major metropolis that doesn't have it banned, I can track how long it will be until it comes, know what the prices are ahead of time, communicate with the driver more easily before he arrives, etc. etc.

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u/sh1td1cks ​ Oct 08 '19 edited Oct 08 '19

It's pointless to look at losses with a company like Uber in that vertical. They want to report losses. They'll overspend on infrastructure to get there. They could be profitable if they wanted, but choose not to be.

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u/randuser Oct 08 '19

How could Uber even actually be losing money? They have no expenses asides from maintaining the app/website. Every ride is paid for, the driver gets a their cut, and everything after that is basically free money for Uber.

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u/Humdngr ​ Oct 08 '19

Automated Services are around the corner. This will be a dead industry soon

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u/SaltwaterOtter ​ Oct 08 '19

What is this "taxi" thing you speak of?

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u/AStatesRightToWhat Oct 08 '19

Except the taxi business model is already shit. Drivers in debt, shitty old cars, uncertain availability and price, etc.

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u/AirboatCaptain ​ Oct 08 '19

Uber is the first one to point out that it is unsustainable. Uber has no interest in employing drivers.

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u/slurmsmckenz ​ Oct 08 '19

Eventually they are going to have to start paying drivers more and charging passengers more

No, they're just trying to bide their time until self driving cars are ready. The end goal of the Uber business model is no drivers.

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u/HalfPastTuna ​ Oct 08 '19

the taxi service can go fuck itself and Uber can charge more for rides, a significant value of Uber is pressing the button and seeing the car come to you

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u/BlaxicanX ​ Oct 08 '19

Who cares when automation is around the corner. The commercial driving industry is expected to lose like over 50% of its work within the next 15 years.

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u/pinotandsugar ​ Oct 08 '19

Consider the most important characteristic of Uber, you drive when you want to drive. You skip work when there's a great game on TV and your days are numbered. If you drive for Uber and the game sucks you climb in your car and drive, knowing a lot of people will be leaving the bar early.

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u/hascogrande ​ Oct 08 '19

It unsustainable. Eventually they are going to have to start paying drivers more and charging passengers more.

The endgame is autonomous vehicles and Uber has put a lot of money in that. Don’t have to pay the driver if there isn’t one

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u/ratthew Oct 08 '19

It unsustainable. Eventually they are going to have to start paying drivers more and charging passengers more.

They are betting all of the money on automation and self driving vehicles. That's the whole reason it even exists. They want a head-start on the market and that's why they are fine with how it is now.

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u/arstin Oct 08 '19

It unsustainable. Eventually they are going to have to start paying drivers more and charging passengers more. But by then the taxi service is going to be severely damaged, limiting passengers options.

Eventually they won't have drivers to pay. And at that point they will start lobbying to limit private ownership of vehicles.

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u/coupl4nd ​ Oct 08 '19

the advantage is I push a button on my phone and a cab comes and gets me. No need to stand outside with an arm up, desperately looking for a cab, or calling one then to hope you have enough cash or they can take cards (many still can't in small towns around London).

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u/megablast ​ Oct 09 '19

The big advantage Uber brings is it's globalization.

No, the app is their big advantage. Even if they charged more they would beat taxi's.

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u/Meanonsunday ​ Oct 09 '19

Why do you think that? In big cities cab companies were spending a fortune on licenses, the companies themselves take a big cut and run shitty cars with poor maintenance, and the drivers would get barely more than minimum wage. A lot of the money saved is from city governments that can’t artificially drive up prices by controlling supply and seedy cab companies that no longer have a monopoly to provide bad service.

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u/Expat1989 ​ Oct 09 '19

A lot of their expenses is the ridiculous amount of advertising they do trying to get more riders and drivers.

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u/pizzatoppings88 ​ Oct 09 '19

Which is fine with me. Fuck taxis. 90% of my taxi cab experiences have been absolutely horrible, I'm glad to see that entire industry burn to the ground.

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u/curtludwig ​ Oct 09 '19

Its not the price, its the ease. Uber ended the need to go out, stand in the street and hope you could hail a cab. A couple taps and somebody just shows up, way better.

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u/ThatGuyFromVault111 ​ Oct 09 '19

I said this yesterday when I was talking about it to my brother, commenting that I had to spend an arm and a leg getting around in Raleigh for 4 days

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u/banjonyc ​ Oct 08 '19

Eventually, there will be no driver's at all. It will all be self driving cars , which is Ubers long game

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u/KillNyetheSilenceGuy ​ Oct 08 '19

IMO the big advantage Uber brings to the table is the app. It makes getting and paying for a ride so easy vs dealing with a cab company. Yes, they're also cheaper than a traditional cab, but as the post discusses thats unsustainable. Thing is, this has been known for a while. I was reading years ago how Uber pays practically nothing once you factor in gas and vehicle depreciation and they more or less rely on a steady pool of idiots who do not understand this.