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Something related, tho not something I've previously heard or read about, is whether Uber is rationally deciding that its current 'low' prices/fares are optimal

Something related, tho not something I've previously heard or read about, is whether Uber is rationally deciding that its current 'low' prices/fares are optimal, from the perspective of maximizing profits. In a lot of comments on this thread people claim to prefer to pay a higher price than tip. If driver's are upset at poor pay, I'd expect Uber to care – all else being equal. And if Uber could increase its profits by raising prices, I'd expect it do so. I wouldn't expect all price increases to fully benefit drivers alone. So, given that Uber seems to be applying significant pressure to keep prices and fares low, why are they doing so if not to maximize their long-term profits?

aaroninsf 10y ago
As a customer accustomed to being catered to by Uber, you might indeed expect Uber to care. In actuality both Uber and Lyft have been _relentlessly_ driving employee wages ("contractor rates") down to the lowest possible sustainable level. That's their business model of course: colonize a regulated industry and make hay as long as possible using technology to dodge established regulation while externalizing as many costs as possible. Works out great! Except for the employees. My mother drove until last week for both Uber and Lyft in the Bay Area. Over the last 18-20 months her take home earnings were reduced to about _one third_ what they were when she began. So she gave it up. Personally I cannot _wait_ for regulation to catch up with these companies. Of course, they might completely eliminate their driver base via self-driving fleet vehicles before it does... ...though I suspect their business model if they're still around at that point (or that of whoever 'disrupts' them) will be leasing self-driving cars from private individuals. Why maintain a fleet when it's clear asking subcontractors to do so for you is so profitable?

aaroninsf 10y ago

As a customer accustomed to being catered to by Uber, you might indeed expect Uber to care. In actuality both Uber and Lyft have been _relentlessly_ driving employee wages ("contractor rates") down to the lowest possible sustainable level. That's their business model of course: colonize a regulated industry and make hay as long as possible using technology to dodge established regulation while externalizing as many costs as possible. Works out great! Except for the employees. My mother drove until last week for both Uber and Lyft in the Bay Area. Over the last 18-20 months her take home earnings were reduced to about _one third_ what they were when she began. So she gave it up. Personally I cannot _wait_ for regulation to catch up with these companies. Of course, they might completely eliminate their driver base via self-driving fleet vehicles before it does... ...though I suspect their business model if they're still around at that point (or that of whoever 'disrupts' them) will be leasing self-driving cars from private individuals. Why maintain a fleet when it's clear asking subcontractors to do so for you is so profitable?