11 ms·

What makes U&L lower cost? Just the lack of driver health insurance and benefits?

by kzhahou 11y ago

mahouse 11y ago
If you think that's not much, think of the difference in taxes between the US and northern Europe.
- toomuchtodo 11y ago
  So your business is workable because it evades taxes? What is this, Russia?
  - mahouse 11y ago
    I'm not saying it's Uber's case, but yes, in many cases, some businesses only exist because they evade taxes. That's the reason lobbies exist.
    - toomuchtodo 11y ago
      My argument is that we shouldn't allow businesses to exist that flout the law, taxes or otherwise.
      - Grishnakh 11y ago
        So you think we should shut down the oil companies and agriculture companies and all the large banks?
        toomuchtodo 11y ago
        > oil companies Yes. They've known about their products causing climate change for decades. They should be liquidated. > agriculture companies Some, not all. > and all the large banks Only the ones that are "too big to fail" or those engaged in illegal activities.
        Grishnakh 11y ago
        Sounds all good to me, but good luck getting Congress to go along with that.
        saryant 11y ago
        So... who provides the energy that makes our lifestyle possible is this magical world of yours?
        toomuchtodo 11y ago
        Oh come on. Enough sunlight hits the earth in an hour to power worldwide consumption for a year. It takes an infinitesimal amount of land if you were going to use solar alone [1]. There is enough wind power potential in the US midwest, from North Dakota to Texas, to power the entire US 4x over [2]. There's enough generation capacity to move 77% of light vehicles in the US over to electric immediately. There's plenty of energy to go around. Fun fact: The latest budget bill that passed at the end of 2015 had one of the largest subsidies (ITC production tax credit) for solar and wind generation installation ever. [1] http://cleantechnica.com/files/2015/05/Land-art-AreaRequired1000.jpg http://cleantechnica.com/files/2015/05/Land-art-AreaRequired... [2] http://www.energy.gov/sites/prod/files/2015/05/f22/Enabling-Wind-Power-Nationwide_18MAY2015_FINAL.pdf http://www.energy.gov/sites/prod/files/2015/05/f22/Enabling-... (page 6)
        Grishnakh 11y ago
        I interpreted his "liquidate them" comment to mean basically forcing the companies to break apart and sell everything off, (perhaps seizing all their assets judicially). So, presumably, we'd still have a bunch of oil companies, but they wouldn't be the ones we have now, or nearly as powerful, and their current owners would all be up a creek.
  - theworstshill 11y ago
    Jokes on you, taxes in Russia are a flat 10% last I heard. Edit: why do you think its that small? Yes, because noone paid it when it was larger.
thephyber 11y ago
Taxi companies don't necessarily hire employees. The whole medallion controversy in NYC was that the market value of the medallion had outpaced the rent the taxi owner could charge the driver for that shift. * U&L don't own the cars, so they don't need to enforce a price floor to stay n business. If the drivers in one city saturate the market and driving becomes unprofitable, U&L lose some rev-share, but no capital investments. * Taxi companies are required to disclose their costs on the outside of their car (in most jurisdictions), meaning it can't change often like U&L's dynamic pricing and it also acts as a price floor where U&L don't have one. * Also, U&L can hire more drivers than the fixed number of taxis in any jurisdiction defined by the government, thus moving the city higher on the supply curve and driving down the cost below what taxi companies need to cover their expenses.
Animats 11y ago
Basically, yes. Yellow Cab is in trouble because they lost some liability lawsuits.[1] In one, they only had $1M in coverage and had to pay out $8M. [1] http://www.sfgate.com/business/article/SF-jury-finds-Yellow-Cab-liable-for-8M-accident-6352539.php http://www.sfgate.com/business/article/SF-jury-finds-Yellow-...
fweespeech 11y ago
Lack of driver health insurance, lack of benefits, lack of liability from crashes, reduced compliance costs via skirting local regulations [e.g. Background checks for Uber/Lyft are cheaper than the more thorough checks in some municipalities] http://www.texastribune.org/2015/10/07/background-checks-center-city-fights-uber/ http://www.texastribune.org/2015/10/07/background-checks-cen... http://www.cnet.com/news/ubers-background-checks-dont-catch-criminals-says-houston/ http://www.cnet.com/news/ubers-background-checks-dont-catch-...
- Grishnakh 11y ago
  Background checks are a canard. How do the cab companies check the background of someone from Uzbekistan? They can't, they can only go back as far as that person has been in the country, which isn't very long judging by their mastery of English. U/L do carry insurance for their drivers when they're driving a passenger, and it's probably more than the regular cab companies carry (which is why SF Yellow cab is going bankrupt: they weren't insured for enough for one of their incompetent drivers, according to the article). Also, U/L have deeper pockets than any local cab company/coop, so civil suits will net higher payouts too if it came to that. As for health insurance, from what I've read a lot of cab drivers aren't full-time employees either, so they also don't get health insurance, or benefits.
  - fweespeech 11y ago
    > Background checks are a canard. How do the cab companies check the background of someone from Uzbekistan? In other words, "Hey, Uber hires known felons and its okay because I can think of a scenario where background checks fail." By that logic, stop visiting the doctor, using seat belts, or any safety device known to man because it can fail for some non-0 fraction of the time. > U/L do carry insurance for their drivers when they're driving a passenger, and it's probably more than the regular cab companies carry (which is why SF Yellow cab is going bankrupt: they weren't insured for enough for one of their incompetent drivers, according to the article) http://www.propertycasualty360.com/2015/02/09/uh-ohuber-has-some-coverage-issues http://www.propertycasualty360.com/2015/02/09/uh-ohuber-has-... http://www.buzzfeed.com/kenbensinger/ubers-yawning-insurance-gap#.edxlxR64w http://www.buzzfeed.com/kenbensinger/ubers-yawning-insurance... http://www.forbes.com/sites/harrycampbell/2015/10/07/why-are-so-many-las-vegas-uber-drivers-lying-to-their-insurance-companies/2/ http://www.forbes.com/sites/harrycampbell/2015/10/07/why-are... > Drivers can answer no and effectively lie to their insurance company (while also committing insurance fraud) but still receive coverage, or they can say yes and they would be immediately denied coverage. Additionally, they could even be dropped from their policy for disclosing that they are a rideshare driver. > Since it’s not really in Uber’s best interest to disclose the lack of collision coverage during Period 1, many drivers don’t discover that they’re not covered until it’s too late. I’ve been researching rideshare insurance options in Nevada since Uber went live and spoken with hundreds of Uber drivers yet we haven’t been able to find a single insurance carrier willing to insure rideshare drivers. Some carriers offer a commercial policy but the cost is prohibitive at $3,000-$5,000 a year. > Meanwhile, risk-averse insurance companies have been excruciatingly slow to adapt to this new and innovative form of transportation. I maintain an up to date list of insurance options by state for Uber drivers on my site and you’ll notice that Nevada is not currently on that list. There literally isn’t a single option for drivers which unfortunately is somewhat typical. A majority of states in the US still don’t offer a rideshare friendly personal insurance or hybrid policy for Uber drivers which means a whole lot of drivers are forced to lie to their insurance carriers or find a different line of work. There are some pretty significant gaps in that coverage that shift the burden to drivers, depending on the state. In fact there is an entire business built around the fact there are massive holes in that policy: https://www.metromile.com/uber/ https://www.metromile.com/uber/ > Traditional auto insurance policies may not provide clear coverage for drivers who participate in ridesharing programs. The partnership between Uber and Metromile means you’re insured 24/7, whether you’re using your car for personal use or driving with Uber. Now, Metromile offers complete clarity to Uber driver partners. The difference with Uber is the driver gets fucked instead of the Taxi/Uber company. > As for health insurance, from what I've read a lot of cab drivers aren't full-time employees either, so they also don't get health insurance, or benefits. I'm not even going to bother with this one. I've pointed out enough holes already.
gkoberger 11y ago
There's a lot of snarky answers, but some things off the top of my head why Uber can be cheaper: * More efficient (less down-time driving around) * People use their own cars (no need to buy/maintain taxis) * Less overhead (no need for managers, dispatchers, etc) * No taxi medallions * More popular, so more rides * Subsidized by VC money (Okay, kinda snarky, but legitimate) The last point about subsidization sounds bad, but their goal is (likely) to just get enough market share that they've already won by the time self-driving cars come out (and can cut costs significantly then).
- artursapek 11y ago
  I am really looking forward to self-driving cabs. When I see what the job does to people I usually feel bad for them. It sucks getting in a cab whose driver is a jerk, but I honestly can't expect them to be happy with a job like that. People shouldn't have to be doing that job.
Tiktaalik 11y ago
I'm not up to date with the state of SF transportation rules and U&L. Are U&L still ignoring rules designed to provide access to those with disabilities? This article is pretty old at this point (2014) and I don't know if the situation has changed for the better. http://www.sfgate.com/news/article/As-Uber-Lyft-Sidecar-grow-so-do-concerns-of-5240889.php http://www.sfgate.com/news/article/As-Uber-Lyft-Sidecar-grow... Ignoring the people with disabilities, as they are more expensive to service is one (problematic) way to lower costs.
- fancyketchup 11y ago
  > Are U&L still ignoring rules designed to provide access to those with disabilities? In my city one of the options (besides SUV, black car, etc) is for persons with disabilities. The app seems to have some options to switch between requesting a driver with a wheelchair-compatible car and the city's own paratransit service. I've never used it myself, so I can't comment on the implementation.

What makes U&L lower cost? Just the lack of driver health insurance and benefits?

by kzhahou 11y ago

What makes U&L lower cost? Just the lack of driver health insurance and benefits?

mahouse 11y ago

If you think that's not much, think of the difference in taxes between the US and northern Europe.

toomuchtodo 11y ago
So your business is workable because it evades taxes? What is this, Russia?
- mahouse 11y ago
  I'm not saying it's Uber's case, but yes, in many cases, some businesses only exist because they evade taxes. That's the reason lobbies exist.
  - toomuchtodo 11y ago
    My argument is that we shouldn't allow businesses to exist that flout the law, taxes or otherwise.
    - Grishnakh 11y ago
      So you think we should shut down the oil companies and agriculture companies and all the large banks?
      - toomuchtodo 11y ago
        > oil companies Yes. They've known about their products causing climate change for decades. They should be liquidated. > agriculture companies Some, not all. > and all the large banks Only the ones that are "too big to fail" or those engaged in illegal activities.
        Grishnakh 11y ago
        Sounds all good to me, but good luck getting Congress to go along with that.
        saryant 11y ago
        So... who provides the energy that makes our lifestyle possible is this magical world of yours?
        toomuchtodo 11y ago
        Oh come on. Enough sunlight hits the earth in an hour to power worldwide consumption for a year. It takes an infinitesimal amount of land if you were going to use solar alone [1]. There is enough wind power potential in the US midwest, from North Dakota to Texas, to power the entire US 4x over [2]. There's enough generation capacity to move 77% of light vehicles in the US over to electric immediately. There's plenty of energy to go around. Fun fact: The latest budget bill that passed at the end of 2015 had one of the largest subsidies (ITC production tax credit) for solar and wind generation installation ever. [1] http://cleantechnica.com/files/2015/05/Land-art-AreaRequired1000.jpg http://cleantechnica.com/files/2015/05/Land-art-AreaRequired... [2] http://www.energy.gov/sites/prod/files/2015/05/f22/Enabling-Wind-Power-Nationwide_18MAY2015_FINAL.pdf http://www.energy.gov/sites/prod/files/2015/05/f22/Enabling-... (page 6)
        Grishnakh 11y ago
        I interpreted his "liquidate them" comment to mean basically forcing the companies to break apart and sell everything off, (perhaps seizing all their assets judicially). So, presumably, we'd still have a bunch of oil companies, but they wouldn't be the ones we have now, or nearly as powerful, and their current owners would all be up a creek.
- theworstshill 11y ago
  Jokes on you, taxes in Russia are a flat 10% last I heard. Edit: why do you think its that small? Yes, because noone paid it when it was larger.

thephyber 11y ago

Taxi companies don't necessarily hire employees. The whole medallion controversy in NYC was that the market value of the medallion had outpaced the rent the taxi owner could charge the driver for that shift. * U&L don't own the cars, so they don't need to enforce a price floor to stay n business. If the drivers in one city saturate the market and driving becomes unprofitable, U&L lose some rev-share, but no capital investments. * Taxi companies are required to disclose their costs on the outside of their car (in most jurisdictions), meaning it can't change often like U&L's dynamic pricing and it also acts as a price floor where U&L don't have one. * Also, U&L can hire more drivers than the fixed number of taxis in any jurisdiction defined by the government, thus moving the city higher on the supply curve and driving down the cost below what taxi companies need to cover their expenses.

Animats 11y ago

Basically, yes. Yellow Cab is in trouble because they lost some liability lawsuits.[1] In one, they only had $1M in coverage and had to pay out $8M. [1] http://www.sfgate.com/business/article/SF-jury-finds-Yellow-Cab-liable-for-8M-accident-6352539.php http://www.sfgate.com/business/article/SF-jury-finds-Yellow-...

fweespeech 11y ago

Lack of driver health insurance, lack of benefits, lack of liability from crashes, reduced compliance costs via skirting local regulations [e.g. Background checks for Uber/Lyft are cheaper than the more thorough checks in some municipalities] http://www.texastribune.org/2015/10/07/background-checks-center-city-fights-uber/ http://www.texastribune.org/2015/10/07/background-checks-cen... http://www.cnet.com/news/ubers-background-checks-dont-catch-criminals-says-houston/ http://www.cnet.com/news/ubers-background-checks-dont-catch-...

Grishnakh 11y ago
Background checks are a canard. How do the cab companies check the background of someone from Uzbekistan? They can't, they can only go back as far as that person has been in the country, which isn't very long judging by their mastery of English. U/L do carry insurance for their drivers when they're driving a passenger, and it's probably more than the regular cab companies carry (which is why SF Yellow cab is going bankrupt: they weren't insured for enough for one of their incompetent drivers, according to the article). Also, U/L have deeper pockets than any local cab company/coop, so civil suits will net higher payouts too if it came to that. As for health insurance, from what I've read a lot of cab drivers aren't full-time employees either, so they also don't get health insurance, or benefits.
- fweespeech 11y ago
  > Background checks are a canard. How do the cab companies check the background of someone from Uzbekistan? In other words, "Hey, Uber hires known felons and its okay because I can think of a scenario where background checks fail." By that logic, stop visiting the doctor, using seat belts, or any safety device known to man because it can fail for some non-0 fraction of the time. > U/L do carry insurance for their drivers when they're driving a passenger, and it's probably more than the regular cab companies carry (which is why SF Yellow cab is going bankrupt: they weren't insured for enough for one of their incompetent drivers, according to the article) http://www.propertycasualty360.com/2015/02/09/uh-ohuber-has-some-coverage-issues http://www.propertycasualty360.com/2015/02/09/uh-ohuber-has-... http://www.buzzfeed.com/kenbensinger/ubers-yawning-insurance-gap#.edxlxR64w http://www.buzzfeed.com/kenbensinger/ubers-yawning-insurance... http://www.forbes.com/sites/harrycampbell/2015/10/07/why-are-so-many-las-vegas-uber-drivers-lying-to-their-insurance-companies/2/ http://www.forbes.com/sites/harrycampbell/2015/10/07/why-are... > Drivers can answer no and effectively lie to their insurance company (while also committing insurance fraud) but still receive coverage, or they can say yes and they would be immediately denied coverage. Additionally, they could even be dropped from their policy for disclosing that they are a rideshare driver. > Since it’s not really in Uber’s best interest to disclose the lack of collision coverage during Period 1, many drivers don’t discover that they’re not covered until it’s too late. I’ve been researching rideshare insurance options in Nevada since Uber went live and spoken with hundreds of Uber drivers yet we haven’t been able to find a single insurance carrier willing to insure rideshare drivers. Some carriers offer a commercial policy but the cost is prohibitive at $3,000-$5,000 a year. > Meanwhile, risk-averse insurance companies have been excruciatingly slow to adapt to this new and innovative form of transportation. I maintain an up to date list of insurance options by state for Uber drivers on my site and you’ll notice that Nevada is not currently on that list. There literally isn’t a single option for drivers which unfortunately is somewhat typical. A majority of states in the US still don’t offer a rideshare friendly personal insurance or hybrid policy for Uber drivers which means a whole lot of drivers are forced to lie to their insurance carriers or find a different line of work. There are some pretty significant gaps in that coverage that shift the burden to drivers, depending on the state. In fact there is an entire business built around the fact there are massive holes in that policy: https://www.metromile.com/uber/ https://www.metromile.com/uber/ > Traditional auto insurance policies may not provide clear coverage for drivers who participate in ridesharing programs. The partnership between Uber and Metromile means you’re insured 24/7, whether you’re using your car for personal use or driving with Uber. Now, Metromile offers complete clarity to Uber driver partners. The difference with Uber is the driver gets fucked instead of the Taxi/Uber company. > As for health insurance, from what I've read a lot of cab drivers aren't full-time employees either, so they also don't get health insurance, or benefits. I'm not even going to bother with this one. I've pointed out enough holes already.

gkoberger 11y ago

There's a lot of snarky answers, but some things off the top of my head why Uber can be cheaper: * More efficient (less down-time driving around) * People use their own cars (no need to buy/maintain taxis) * Less overhead (no need for managers, dispatchers, etc) * No taxi medallions * More popular, so more rides * Subsidized by VC money (Okay, kinda snarky, but legitimate) The last point about subsidization sounds bad, but their goal is (likely) to just get enough market share that they've already won by the time self-driving cars come out (and can cut costs significantly then).

artursapek 11y ago
I am really looking forward to self-driving cabs. When I see what the job does to people I usually feel bad for them. It sucks getting in a cab whose driver is a jerk, but I honestly can't expect them to be happy with a job like that. People shouldn't have to be doing that job.

Tiktaalik 11y ago

I'm not up to date with the state of SF transportation rules and U&L. Are U&L still ignoring rules designed to provide access to those with disabilities? This article is pretty old at this point (2014) and I don't know if the situation has changed for the better. http://www.sfgate.com/news/article/As-Uber-Lyft-Sidecar-grow-so-do-concerns-of-5240889.php http://www.sfgate.com/news/article/As-Uber-Lyft-Sidecar-grow... Ignoring the people with disabilities, as they are more expensive to service is one (problematic) way to lower costs.

fancyketchup 11y ago
> Are U&L still ignoring rules designed to provide access to those with disabilities? In my city one of the options (besides SUV, black car, etc) is for persons with disabilities. The app seems to have some options to switch between requesting a driver with a wheelchair-compatible car and the city's own paratransit service. I've never used it myself, so I can't comment on the implementation.