Originally published at: https://boingboing.net/2018/08/13/for-most-people-driving-for-u.html
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11 Likes
In other news, water still wet and Zuck still sucks. 
18 Likes
I can’t even figure out why anyone would want to do this. I can’t see one positive out of this business model for the driver.
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Had a family member who drove for Lyft for a bit using their “Lyft-Express” model.
You wait in line for an off-rental vehicle for the privilege of paying $250+/week for it.
You have to take a minimum of 20 rides/week. The $250/week is deducted from the rides first.
After a couple of months she ended up actually PAYING to work for Lyft between not getting enough rides to car breakdowns and waiting a week for it to be repaired (you still owe the $250/week while it is out of service!)
She drove because she can’t afford a car, can’t get a job, very low credit rating, and it was basically therapy so she could get out and talk to people. But definitely not a way to make any money at all.
The only way this works out is if you are using your parent’s car. Like a modern-day Lemonade stand where you don’t pay for the supplies or real estate but keep whatever you make.
Another family I know has a son that delivers Pizza for Papa Johns.
Destroyed 2 used cars already, but it keeps him out of the house and “busy” so he doesn’t get into worse trouble. So they subsidize his “work”.
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This business model seems to verge on being MLM. I wonder if drivers get a cut for referring new drivers to the companies.
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My big takeaway from the video was his assertion that to the extent you’re making money, you’re really just taking the equity from your own car. So these companies are essentially offering reverse mortgages for your car.
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It’s not quite that bad. He counted the entire tank of gas, but he didn’t burn it all that day (unless maybe he gets 10 MPG). Still, that might bring him up to a full dollar an hour. I’ve had jobs that worked out the same way.
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I’ve been trying to figure out just what kind of scam Uber is. The drivers don’t make money. The company doesn’t make money either. It’s a big bonfire of investment capital.
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I think the big difference between pizza delivery (even in places where they need to use a car rather than a bicycle or scooter) and Uber/Lyft is that pizzas don’t care what kind of car they are transported in, so you can use a very cheap used car. This means that you don’t have to take car payments or depreciation into account.
On the other hand, ridesharing services have quite strict requirements as to the type and age of car you can use.
10 Likes
Have a look through this lot:
There’s a whole bunch of posts going through it scattered through that site. The link goes to the latest one.
I think the central arguments (up to but not including the link above) are all contained in this paper though:
If I recall correctly, the TL:DR is that the only way Uber makes any kind of sense is if you consider it as a really big loss-leader.
It’s nominally intended to drive all other competitors under by pumping in cash in crazy amounts until everyone else has to fold, with the promise of a massive pay-off once the monopoly has been achieved and prices can be hiked to the point that the business is profitable.
The alternative interpretation is that it is all a con aimed at venture capitalists and there was never any real belief that Uber could ever make money.
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Other than being a scam, for the investors Uber is also a bet that hinges on self-driving cars (Level 5) becoming a reality soon.
Once the VC capital realises that this isn’t going to happen, the bet is off.
The only question is who will be without a chair when the music stops.
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Self-driving cars will always cost more than drivers you don’t pay using cars you don’t own.
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Uber business model is well known: taxis have been around for a long time and in most first world cities the price per ride and per km is fixed per mutual agreement between drivers and local authorities. The price take into account fuel, car use and leave a basic salary to the drivers… taxi drivers earn a decent living, but don’t get obscenely rich.
Therefore, if Uber is cheaper, something has to give. Uber may be a bit more efficient in car usage, but the effect is marginal.
In some rare cities, most notably New York, taxi licenses were absurdly expensive, and Uber could benefit from that situation. But this was more the exception than the rule. In most places Uber simply cannot be cheaper than standard taxis.
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As Mr.Horan puts it on pp. 61-62 (page 28-29 of the pdf):
Uber did not make “driverless cars” a top strategic priority until 2016, its current investors could not have expected them to be the source of financial returns. It is also unclear why investors speculating on “driverless cars” would have clear expectations of who might emerge as the champion of an industry that is still years away from producing a commercially viable product or strongly expect that Uber is more likely to dominate this business than competitors such as Google, Tesla, Toyota, Mercedes-Benz, Ford and General Motors. All of these competitors can realize returns from investment in new software and manufacturing processes at each stage of development, while Uber gets no benefit until the (highly uncertain) point when a maximum level of automation is achieved, and the cost of drivers can be eliminated.
Round and round and round she goes, where she stops - nobody knows!
9 Likes
Based off the video he is located in Provo Utah, but picking up fares in Salt Lake City and the remote towns in the area. If he stuck to his own turf would he have fared better? (No pun intended).
Maybe Lyft’s model breaks down outside of large cities?
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Can’t speak for this guy but in the city I net about a dollar per mile I drive (including to pickups). Considering you can also write-off 54 cents for every mile I end up paying taxes on less than half my net. Also, I have a 2009 car with almost 100k miles on it so depreciation is almost 0. You can make money doing it, you just have to put some thought into it.
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Our car is one of the Volkswagens affected by the “Dieselgate” emissions scandal. So VW is going to buy it back from us, at a price that isn’t affected by its odometer reading. My car, in short, does not depreciate. So I should drive for Uber. Except fuck that.
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- On the one hand, the scam is called the “investor storytime” business model. When you tell your investors a fairytale about how much money they will make once you start charging real money/inserting ads for your service.
http://idlewords.com/talks/internet_with_a_human_face.htm
- On the other hand, it’s not a scam, but a cold blooded long term bet on Uber being able to destroy all traditional competition, become the de facto taxi monopoly, and then being able to charge as much as it likes. As detailed in a multipart series over on Naked Capitalism.
ETA - ninjaed by @L0ki
The biggest investors all know the score and are cool with violating antitrust laws. Other, smaller investors have bought the bullshit about self driving cars hook, line, and sinker.
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This guy is trying to make a living as a Youtuber. It would be interesting to see his investigative reporting on that. My guess is that’s not worth it, either.
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You drove sixteen fares, and what do you get…
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