5 ms·

I drove for them for a while. This is from an old email in 2014, they loved to ignore the costs drivers incur, and slyly referred to earnings instead of profit:

• mcintyre1994 10y ago
  > Prices will be reduced by 20% for both riders and drivers Do they refer to their share of the fare as the driver's price? If so that's quite clever in that they can say the price you pay is going down when they give you a paycut..
  • kirykl 10y ago
    They still took their commission off the top of any payout. For the promotion they were subsidizing the rates at which drivers earned, to mask the % reduction to riders
  • tyingq 10y ago
    Ugh, that's terrible. Since the highest fixed costs (fuel, car payment) are part of the driver's "earnings", it's clearly a more than 20% cut for the driver. Trying to act like both reductions are 20%, as if they should be the same is disingenuous.
    • rahimnathwani 10y ago
      "Since the highest fixed costs (fuel, car payment) are part of the driver's "earnings", it's clearly a more than 20% cut for the driver." A couple of problems with your position: - Fuel is not a fixed cost. It's a variable cost. More trips -> more miles driven -> higher fuel cost. - The presence of large fixed costs (as you say 'car payments') means that increases in total revenue will have a tendency to increase overall profit Let's say I have a business which has large fixed costs, but no variable costs. If my price per unit goes down by 20%, but I sell 25% more units, then my revenue is up. But, because my costs are fixed, my profits are also up by exactly the same amount. If you had said that the drivers have large variable costs (fuel, maintenance) or that the opportunity cost of the drivers' own time was high, that would be more convincing.
      • tyingq 10y ago
        You're right, wrong terminology. Was trying to express that the largest costs of the trip are the driver's fuel and car costs. By "fixed" meaning the driver has no obvious way to change those other than whatever car they bought in the first place. So, a 20% cut in revenue to the driver is significantly more than a 20% cut in earnings/profit.
        • rahimnathwani 10y ago
          "So, a 20% cut in revenue to the driver is significantly more than a 20% cut in earnings/profit." I wasn't talking about the implication of a 20% reduction in revenue. I was talking about a reduction in 20% in per unit price, with a simultaneous increase of >=20% in unit volume. Together, these would create an increase in revenue. Given that at least some costs (car payments) are fixed, we cannot know whether this 20% reduction in price will reduce driver profit, without knowing (i) the marginal cost per unit, and (ii) what the % increase in unit volume is. For example, if fuel costs (and additional maintenance costs) are 25% of the price of a ride, then decreasing ride price by 20% whilst increasing # rides by >=27% would increase both revenue and driver profit.
          • tyingq 10y ago
            Not on a per mile basis though. A pay cut combined with more hours isn't exciting to me.
            • rahimnathwani 10y ago
              "Not on a per mile basis though. A pay cut combined with more hours isn't exciting to me." But this is highly dependent on your situation. If you're already working full time and/or have a comfortable and stable life style, this might be OK. If someone has 20 hours available to work evenings during a week, but is only utilised for 10 hours per week, then an increase in hours (e.g. from 10->15), alongside a reduction in per-hour profit (e.g. $15->$12), might be welcome.
          • ThrustVectoring 10y ago
• deleted 10y ago
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