Another aspect to the Uber/Lyft discussion that I have seen, is that the current method of inducing drivers to use their own cars for part time income, is that this is a placeholder system until driverless cars are available to eliminate the human element. Both Uber and Lyft are fighting for the future share of that business, and they (and their shareholders) are willing to be unprofitable until that time comes. The humans are only temporary.
The question is will they run out of money before that technology is deemed safe and gets approved, if ever.
Last analysis I saw said they’d be losing money if they weren’t paying their drivers. Driverless cars still need gas and repairs. Some Uber drivers are may already be losing money (basically working for minimum wage while driving their car into the ground) so for some driver’s their exploitation model may mean it’s cheaper for them to have human drivers than no drivers.
(Not to mention that future of driverless cars that can actually pick up and drop off at arbitrary locations is still very far off)
This is no doubt true. Between accelerated depreciation, the lack of benefits, the insurance issues, and the personal risks, most drivers make very little real profit, if at all. Whatever money that drivers make now will continue to be squeezed as Uber struggles to survive as a public company. I can’t guess at the realistic timeline for driverless cars, but there are no doubt significant issues to overcome to make it viable. Nonetheless, lots of smart people think it will happen. It’s just one of the many ways in which automation will continue to eliminate the need for low-skilled humans.
I remember reading a quote once that was (paraphrased): “Amazon’s stock has been the greatest shareholder-to-customer wealth transfer in history”. It’s amazing how much can change in a decade.
This is such a weird mindset, and it doesn’t even bear out in a lot of cases. For example, in Toronto, one of the Uber options is to hail a taxi, where you pay metered taxi rates on the ride. The driver opts in to this service and pays uber a fee to advertise on the uber app as an available taxi.
Multiple taxi drivers I talked to told me that they do this because many users now will let an available taxi drive right by, but will happily grab one from the uber app because it deals with payment and customer service (which is notoriously terrible from taxi drivers and companies).
IMHO, Uber could match taxi prices in most cities and people would still use them for those very reasons: not worrying about payment, you know who your driver is, what route you took, and your rate before you get in, customer service is with uber, not the driver, and this is true in every city you might visit.
On top of that, they can carpool multiple folks, save them money, make the driver more money, and provide a feature taxis simply can’t without an app.
Those are genuine value-adds that taxi companies could absolutely provide if they got their acts together, but won’t.
So, why the focus on unprofitable, below taxi rates?
Interestingly enough, one of the better apps for hailing a ride here in Munich is made by a car rental company (Sixt), who offer in one app car rentals, zip cars a la Car2Go/DriveNow (both mergered into ShareNow) and get a cab ride.
I think we are going to see more combined apps, where you can mix and match bikes, e-scooters, car sharing and cab rides. Oh, and public transportation while we’re at it.
On an unrelated note, Uber ran an ad campaign here in Munich, but only on subways and trams, and the ads were so muddled that they came across as a scam to passengers. Text on the video screen flashing too fast to read. Stuff like that.
Yeah it’s beyond my pay-grade for sure… I think you’re right that Uber would still have loyal customers even if they raised their rates to taxi levels, but I think the fear is that their overall number or customers would drop and then the whole “we will grow forever” game is over. They can’t just be a moderately-profitable taxi company because their stock-value is based on the expectation that they’re the future of transit… not a cab-hailing service that externalizes capital costs.
I suspect they have to keep the rates low because they’re actually competing for customers of other forms of transit - not cabs… They’re attracting pedestrians and public-transit users who wouldn’t necessarily take a cab unless it was fairly cheap, or people who wouldn’t otherwise be making the trip in the first place. The goal is to show investors that they are growing growing growing (never mind the cost-per-ride issue and the lack of an economy-of-scale).
But that’s just a guess - I only know that I’m a pessimist and I tend to read pessimistic articles!
In this city (Vancouver), if you pull your phone out and call a taxi at 2AM, here’s how it will go:
Call the cab company and wait on hold for 20 minutes
Provide your address to an operator who will inform you that a cab will come get you, someday, maybe.
Wait for an indefinite period of time, wondering if any cab is on its way.
Give up and accept that no cab is going. Go back to step 1.
Repeat steps 1-4 for as long as it takes to get lucky and flag down a cab that just happens to be passing by.
Realize that the cab you’re in is actually from the same company that you called but wasn’t there specifically to pick you up and in fact didn’t even know that you were waiting and thus you would be in the exact same situation if you hadn’t bothered to call at all.
Download the the local cab company app so that next time you’ll be ready.
Don’t install the app because for some #*$&*ing reason it wants every possible permission to run, including access to your photos and camera.
Next weekend, go back to step 1.
To be clear, I think Uber is sketchy AF but there’s a reason customers love it. The taxi experience still SUCKS even in many large cities.
(Edited to add: Yes, I know we have Kater and it’s actually what I use most of the time these days, but that is a pretty new development).
But that is so easy to fix, it could literally be done in six months, taking away Uber’s main advantage.
And I would love for this to happen. The sooner the better! I edited my post to reflect that Vancouver does have Kater now, which operates like a cab company in that it owns its fleet and its drivers are employees, but has a good app. The issue is that it only operates in a very small geographical area at the moment.
On a side-note, the Sixt-app keeps a nice percentage of the fare from the cab-drivers …
I’ve gone through pretty much all apps available for hailing a ride in Germany and never really felt any advantage compared to calling the taxi-hotline.
Also, for advance-booking (early flight, have the cab at desired time at your address), long distance trips, and especially the ETA of your ride provided by a human are not to be found in any app.
Not only do we have in my city app-powered cheap taxi drivers, but also app-powered cheap taxi drivers who, if you have the right mobile number, will drop off a remarkable number of things if you know how to ask. Uber can fuck right off (though I imagine Travis et. al. are right behind the idea of surge-priced coke).
Go to a hotel and get one there. (Yes it is a very inconvenient work around)I am aware of the problems of late night Vancouver cabs. I just don’t think Uber is the answer.
I think that when they take a loss on a fare for promotional reasons that is a marketing expense. The crazy thing is that even when their empl^H^H^H^Hcontractors can’t make a decent wage Uber is often paying them more than they charge riders. So I suspect that is a big part of it.
Taxis in my city come close with apps, etc, but Uber is still cheaper. On the other hand, taxis are still safer for drivers and passengers, due to a long history of regulators responding to crimes and abuse.
This exact situation exists in many cities. SF was so bad it spawned Uber. To be clear, the Taxi companies have themselves to blame for this disruption, and their choice to complain rather than fight back with better customer service and an app network is entirely on them. Uber doesn’t have a monopoly on “apps that can hail drivers, handle payment, ratings, and customer service” after all. They just needed to get serious and organized and missed the boat.
I kinda expected second-mover advantage to play a role here - someone that did everything uber does but without the asshattery:
ride hailing
route tracking via gps
driver / customer rating
payment
customer service complaints via app, NOT via argument with driver
federated so it works in multiple cities
I mean, that’s all you really need. Basically the opentable of ride hailing apps, without all the price shenanigans. Charge a buck a ride to the cabbie, same way Uber does for metered trips.
