7 ms·

Uber has done nearly everything right. I think its main vulnerability is that its laborers are a fickle bunch and Uber hasn't done enough to inspire any loyalty

Uber has done nearly everything right. I think its main vulnerability is that its laborers are a fickle bunch and Uber hasn't done enough to inspire any loyalty. All Uber drivers I talk to alternate between Uber and Lyft and exploit any promotions or incentives either firm offers. Uber has the opportunity to revolutionize not just logistics but also on-demand employment, but has lagged in the latter, leaving the door wide open for Lyft and other services that carve out a big niche of Uber's market. I think Uber should immediately offer the following services to its drivers: - Tax planning, withholding even if it's 1099 income or if the driver has other sources of income. - Matching IRA contributions with one year vesting. - healthcare subsidy - continuing education, or some way to level up in life by driving with Uber. - Some incentive for being a loyal, exceptional driver. - Car financing/leasing/sharing and insurance packages tailored at would-be Uber drivers who don't own a vehicle. I know that more and more of these sorts of ideas are being tried by both Uber and Lyft, but investors need to realize that the workforce is being trained to be opportunistic and disloyal. Many of the drivers I've interviewed (during my ride) despise Uber the corporation or boast about their fair weather support. Many reflect back on how Uber used to be better for drivers, etc. Uber's main battles have been fought with regulators and with Lyft, but now the best strategy is figuring out how to become the Uber of on-demand employment.

cm2012 10y ago
They are really worried about their contractors being classified as employees. That would be an existential threat.
- grandalf 10y ago
  I know that is Uber's view, I think it's mistaken and unsustainable. The lack of a sustainable policy is what creates the existential risk.
  - r00fus 10y ago
    Sustainability and big-bang VC startups seem to be mutually exclusive.
- Fricken 10y ago
  They have to last until their vehicles are autonomous. If drivers were phased in to paid training maintaining the fleets and troubleshooting kinks in the system, shitty jobs will become good jobs. Most drivers will leave, but a solid chunk of them could be brought in through an apprenticeship program that certifies them in mechanics, robotics, software, remote assistance, ground crews, electricity. Robotaxis are a whole new industry that's just gonna pop up nationwide they'll be maintenance intensive in so many ways. There's good lifelong careers there, because after Robotaxis arrive they aren't going away, and the potential market is so huge that no single competitor will be able to scale fast enough to dominate the way Uber has in the rideshare wars- it will be too capital/labour/politics/logistics intensive for that. I recommend checking out this demo video that showed up on Kyle Vogt's twitter feed yesterday. The news barely touched it, it's a dashcam timelapse of a 20 minute autonomous drive through hectic downtown San Fransisco traffic: https://www.youtube.com/watch?v=1Tp6Ubf6mE4 https://www.youtube.com/watch?v=1Tp6Ubf6mE4 Nobody really knew where the GM/Cruise/Lyft arrangement was at until this demo dropped, and it turns out they are advanced. Kyle Vogt is some kind of fucking dude. This industry is going to go kaboom. There's Apple, Zoox, Ford, the Germans, they've all committed massive resources, it's hard to know exactly where the state of the art really is, but they all read the same research papers papers, they all have talent onboard, they all have deep pockets, they're all moving with a sense of urgency. If Trump keeps the full stack operation within our borders, it'll be a vital new industry. If that 1 trillion dollar infrastructure budget goes through, we'll be rejiggering our cities and everyone will have a good job that hopefully doesn't require a $50,000 degree. If Trump can make friends with the world and scale back the military industrial complex we might be able to pay for it.
  - JohnJamesRambo 10y ago
    I know this probably paints me as ancient but that video was so scary to me. I cannot escape the helpless scared feeling of an app driving me into a busy intersection. Maybe I've had too many apps and programs fail and crash.
    - hyperbovine 10y ago
      You mean to say you're afraid of being driven around by somebody's minimum viable product? What could possibly go wrong? ;-)
fullshark 10y ago
Uber's racing to make their drivers obsolete. They view them as an unwelcome cost and have no desire to spend resources making them loyal.
- grandalf 10y ago
  All it takes is a few upsurges in populism and Uber might be forced to do it on someone else's terms and without preparing investors for it. Even with first world labor standards, Uber is a superb business model. I had Uber eats delivered the other day by a guy driving a beautiful newish BMW who seemed like an out of work white collar worker, not a livery driver. There is tremendous value in having short-term, minimal commitment structured employment options available, the services I recommend offer more value to employees than they cost because they are hard to find in a turnkey fashion for someone who needs them.
  - throwaway91111 10y ago
    Forced how? I have friends that eat because of Uber. What leverage do they have against Uber? This is a tragedy of the commons problem: Uber is footing an addiction to cheap transport nobody knows how to satiate.
    - beguiledfoil 10y ago
      >Uber is footing an addiction to cheap transport nobody knows how to satiate. Just ride a bike. Not an option in the burbs, for sure, but taking an uber is not an efficiency gain the way public transit or bicycles are. IMHO low density communities will die. They cannot be saved.
      - poink 10y ago
        Bikes aren't an option in a lot of cities, either. I live ~1.5mi from my office in Atlanta, but I'm nowhere near crazy enough to ride a bike down Piedmont Rd.
taxicabjesus 10y ago
> I think Uber should immediately offer the following services to its drivers: The taxi industry pioneered the 'independent contractor' business model. Some of the services you suggest cross the line between 'contractor' and 'employee', especially 'healthcare subsidy'. The owner/operator whom I drove for says that the company only provides liability insurance (to cover the cab company's liability) as a part of her contract with the cab company. If she wanted collision coverage, she had to buy that separately, because insurance == employment. When I signed up I was told that I should buy my own worker's compensation policy, but I never did this. Most people don't want 'on demand' employment, they want stability. Because of outsourcing and automation, the economy doesn't need as many workers anymore. Uber's business model is entirely dependent on this phenomenon. Drivers -- taxi drivers, 'rideshare drivers', trucking drivers, etc -- would benefit from a union. Arizona is not a union-friendly state; I don't know if taxi drivers elsewhere have unions.
- byoung2 10y ago
  Most people don't want 'on demand' employment, they want stability. Because of outsourcing and automation, the economy doesn't need as many workers anymore. Uber's business model is entirely dependent on this phenomenon. Do you see this phenomenon going away anytime soon? My grandparents' generation worked at a single company for life. My parents switched companies maybe 3 times in their careers. I have worked for 9 companies in the last 12 years. The trend has been toward shorter and shorter stints, with less and less benefits. My daughter's generation probably won't remember a time where people spent years working for companies, and it will seem natural to string together a series of gigs and odd jobs.
  - taxicabjesus 10y ago
    > Do you see this phenomenon going away anytime soon? The economic paradigm has to change. I think something will shift, eventually. Searching for 'john gatto livelihood' just now brought up this link: http://www.wtp.org/archive/transcripts/john_taylor_gatto.html http://www.wtp.org/archive/transcripts/john_taylor_gatto.htm... - John Taylor Gatto (1991 New York State Teacher of the Year) Interview By Jerry Brown, March 25, 1997 It's probably worth reading the whole thing, but if you're pressed for time just search for '[break]', and read his take on two groups who have been able to implement mostly 'independent livelihoods' for virtually all of their members. > My grandparents' generation worked at a single company for life. And their grandparents were probably much more independent. > it will seem natural to string together a series of gigs and odd jobs. "You see that house on the hill? If you work hard enough, some day I'll live there." (This was not said by Travis Kalashnikov). 'Gigs and odd jobs' are not the path towards a fulfilling life. Edit: My friend recently pointed out to me that I value freedom more than anything else, which is why I stuck with taxi driving for so long... But the whole time I was working on something bigger...
slightleep 10y ago
Uber cannot afford to do any of the things you've listed because Uber cannot sustain the subsidies it is already giving out to its drivers. Moreover, Uber doesn't want its drivers to be educated about the true cost of operating a vehicle for Uber because if they realized how much it cost, most wouldn't do it. The only one of your bullet points Uber has pursued is the last one -- they rope drivers into car leases in hopes that when they eventually ramp up the amount of money they collect from each fare their drivers will be locked into driving for Uber so they cannot leave.
- alpb 10y ago
  I wonder how come Lyft can do these things and Uber can't. This is from 2 years ago: https://thehub.lyft.com/blog/2015/01/14/partners-ehealth-top-health-insurance-marketplace https://thehub.lyft.com/blog/2015/01/14/partners-ehealth-top... Every Uber driver I talk to in Seattle say that Lyft is way better in terms of pay/perks but they can't get enough rides because Uber simply has a larger user base.
  - argonaut 10y ago
    I'll admit that lately I've been mostly taking Uber because it's cheaper than Lyft. So that probably explains it - Lyft simply doesn't cut prices as aggressively. (But I still check both because sometimes Lyft is cheaper).
  - qq66 10y ago
    Lyft is more expensive, which explains its better pay and its smaller ridership. I don't think this is sustainable because of what you've observed, which is that the smaller ridership pushes drivers away from the platform, making Lyft less appealing to even the people willing to pay (longer wait times, smaller chance of getting a carpool, etc).
    - schnable 10y ago
      I think it depends on the market. Lyft here (Philadelphia) is the same price as Uber just about, and they both run promotions all the time. Car availability is the same in my experience and most drivers seem to do both. Drivers seem to indicate that they get better subsidies to drive from Lyft.
jaclaz 10y ago
>All Uber drivers I talk to alternate between Uber and Lyft and exploit any promotions or incentives either firm offers. This is what is generally called "attempt to survive".
yamaneko 10y ago
Why the downvotes? I saw a couple replies why this isn't a viable strategy for Uber, but it doesn't make his post of low quality, does it?
- grandalf 10y ago
  I was just wondering that myself :)
- __derek__ 10y ago
  I didn't downvote, but it reads very fanboy-ish, to the extent that I wondered whether that person has invested in Uber.
  - grandalf 10y ago
    hah, I haven't invested. If you read more closely my comment is very critical of Uber.
notyourwork 10y ago
> All Uber drivers I talk to alternate between Uber and Lyft and exploit any promotions or incentives either firm offers. This is no different than any other for hire industry though. They are making the choice that best benefits them financially. Uber knows this, lyft knows this, basic economics and human instinct to better their own situation. There will always be more drivers though so I doubt they are concerned about the problem to be honest. The barrier to being an Uber driver is so low.
varelse 10y ago
When in Austin, I've talked to a lot of former Uber drivers who have moved to other ridesharing services like Wingz. I have yet to find one that doesn't prefer their current service over Uber.
paulddraper 10y ago
I thought Uber wanted its drivers classified as consultants, not employees. Though measures would work against it.
serge2k 10y ago
How much of these can you offer before they are considered employees and you have to actually start treating them as such?

cm2012 10y ago

They are really worried about their contractors being classified as employees. That would be an existential threat.

grandalf 10y ago
I know that is Uber's view, I think it's mistaken and unsustainable. The lack of a sustainable policy is what creates the existential risk.
- r00fus 10y ago
  Sustainability and big-bang VC startups seem to be mutually exclusive.
Fricken 10y ago
They have to last until their vehicles are autonomous. If drivers were phased in to paid training maintaining the fleets and troubleshooting kinks in the system, shitty jobs will become good jobs. Most drivers will leave, but a solid chunk of them could be brought in through an apprenticeship program that certifies them in mechanics, robotics, software, remote assistance, ground crews, electricity. Robotaxis are a whole new industry that's just gonna pop up nationwide they'll be maintenance intensive in so many ways. There's good lifelong careers there, because after Robotaxis arrive they aren't going away, and the potential market is so huge that no single competitor will be able to scale fast enough to dominate the way Uber has in the rideshare wars- it will be too capital/labour/politics/logistics intensive for that. I recommend checking out this demo video that showed up on Kyle Vogt's twitter feed yesterday. The news barely touched it, it's a dashcam timelapse of a 20 minute autonomous drive through hectic downtown San Fransisco traffic: https://www.youtube.com/watch?v=1Tp6Ubf6mE4 https://www.youtube.com/watch?v=1Tp6Ubf6mE4 Nobody really knew where the GM/Cruise/Lyft arrangement was at until this demo dropped, and it turns out they are advanced. Kyle Vogt is some kind of fucking dude. This industry is going to go kaboom. There's Apple, Zoox, Ford, the Germans, they've all committed massive resources, it's hard to know exactly where the state of the art really is, but they all read the same research papers papers, they all have talent onboard, they all have deep pockets, they're all moving with a sense of urgency. If Trump keeps the full stack operation within our borders, it'll be a vital new industry. If that 1 trillion dollar infrastructure budget goes through, we'll be rejiggering our cities and everyone will have a good job that hopefully doesn't require a $50,000 degree. If Trump can make friends with the world and scale back the military industrial complex we might be able to pay for it.
- JohnJamesRambo 10y ago
  I know this probably paints me as ancient but that video was so scary to me. I cannot escape the helpless scared feeling of an app driving me into a busy intersection. Maybe I've had too many apps and programs fail and crash.
  - hyperbovine 10y ago
    You mean to say you're afraid of being driven around by somebody's minimum viable product? What could possibly go wrong? ;-)

fullshark 10y ago

Uber's racing to make their drivers obsolete. They view them as an unwelcome cost and have no desire to spend resources making them loyal.

grandalf 10y ago
All it takes is a few upsurges in populism and Uber might be forced to do it on someone else's terms and without preparing investors for it. Even with first world labor standards, Uber is a superb business model. I had Uber eats delivered the other day by a guy driving a beautiful newish BMW who seemed like an out of work white collar worker, not a livery driver. There is tremendous value in having short-term, minimal commitment structured employment options available, the services I recommend offer more value to employees than they cost because they are hard to find in a turnkey fashion for someone who needs them.
- throwaway91111 10y ago
  Forced how? I have friends that eat because of Uber. What leverage do they have against Uber? This is a tragedy of the commons problem: Uber is footing an addiction to cheap transport nobody knows how to satiate.
  - beguiledfoil 10y ago
    >Uber is footing an addiction to cheap transport nobody knows how to satiate. Just ride a bike. Not an option in the burbs, for sure, but taking an uber is not an efficiency gain the way public transit or bicycles are. IMHO low density communities will die. They cannot be saved.
    - poink 10y ago
      Bikes aren't an option in a lot of cities, either. I live ~1.5mi from my office in Atlanta, but I'm nowhere near crazy enough to ride a bike down Piedmont Rd.

taxicabjesus 10y ago

> I think Uber should immediately offer the following services to its drivers: The taxi industry pioneered the 'independent contractor' business model. Some of the services you suggest cross the line between 'contractor' and 'employee', especially 'healthcare subsidy'. The owner/operator whom I drove for says that the company only provides liability insurance (to cover the cab company's liability) as a part of her contract with the cab company. If she wanted collision coverage, she had to buy that separately, because insurance == employment. When I signed up I was told that I should buy my own worker's compensation policy, but I never did this. Most people don't want 'on demand' employment, they want stability. Because of outsourcing and automation, the economy doesn't need as many workers anymore. Uber's business model is entirely dependent on this phenomenon. Drivers -- taxi drivers, 'rideshare drivers', trucking drivers, etc -- would benefit from a union. Arizona is not a union-friendly state; I don't know if taxi drivers elsewhere have unions.

byoung2 10y ago
Most people don't want 'on demand' employment, they want stability. Because of outsourcing and automation, the economy doesn't need as many workers anymore. Uber's business model is entirely dependent on this phenomenon. Do you see this phenomenon going away anytime soon? My grandparents' generation worked at a single company for life. My parents switched companies maybe 3 times in their careers. I have worked for 9 companies in the last 12 years. The trend has been toward shorter and shorter stints, with less and less benefits. My daughter's generation probably won't remember a time where people spent years working for companies, and it will seem natural to string together a series of gigs and odd jobs.
- taxicabjesus 10y ago
  > Do you see this phenomenon going away anytime soon? The economic paradigm has to change. I think something will shift, eventually. Searching for 'john gatto livelihood' just now brought up this link: http://www.wtp.org/archive/transcripts/john_taylor_gatto.html http://www.wtp.org/archive/transcripts/john_taylor_gatto.htm... - John Taylor Gatto (1991 New York State Teacher of the Year) Interview By Jerry Brown, March 25, 1997 It's probably worth reading the whole thing, but if you're pressed for time just search for '[break]', and read his take on two groups who have been able to implement mostly 'independent livelihoods' for virtually all of their members. > My grandparents' generation worked at a single company for life. And their grandparents were probably much more independent. > it will seem natural to string together a series of gigs and odd jobs. "You see that house on the hill? If you work hard enough, some day I'll live there." (This was not said by Travis Kalashnikov). 'Gigs and odd jobs' are not the path towards a fulfilling life. Edit: My friend recently pointed out to me that I value freedom more than anything else, which is why I stuck with taxi driving for so long... But the whole time I was working on something bigger...

slightleep 10y ago

Uber cannot afford to do any of the things you've listed because Uber cannot sustain the subsidies it is already giving out to its drivers. Moreover, Uber doesn't want its drivers to be educated about the true cost of operating a vehicle for Uber because if they realized how much it cost, most wouldn't do it. The only one of your bullet points Uber has pursued is the last one -- they rope drivers into car leases in hopes that when they eventually ramp up the amount of money they collect from each fare their drivers will be locked into driving for Uber so they cannot leave.

alpb 10y ago
I wonder how come Lyft can do these things and Uber can't. This is from 2 years ago: https://thehub.lyft.com/blog/2015/01/14/partners-ehealth-top-health-insurance-marketplace https://thehub.lyft.com/blog/2015/01/14/partners-ehealth-top... Every Uber driver I talk to in Seattle say that Lyft is way better in terms of pay/perks but they can't get enough rides because Uber simply has a larger user base.
- argonaut 10y ago
  I'll admit that lately I've been mostly taking Uber because it's cheaper than Lyft. So that probably explains it - Lyft simply doesn't cut prices as aggressively. (But I still check both because sometimes Lyft is cheaper).
- qq66 10y ago
  Lyft is more expensive, which explains its better pay and its smaller ridership. I don't think this is sustainable because of what you've observed, which is that the smaller ridership pushes drivers away from the platform, making Lyft less appealing to even the people willing to pay (longer wait times, smaller chance of getting a carpool, etc).
  - schnable 10y ago
    I think it depends on the market. Lyft here (Philadelphia) is the same price as Uber just about, and they both run promotions all the time. Car availability is the same in my experience and most drivers seem to do both. Drivers seem to indicate that they get better subsidies to drive from Lyft.

jaclaz 10y ago

>All Uber drivers I talk to alternate between Uber and Lyft and exploit any promotions or incentives either firm offers. This is what is generally called "attempt to survive".

yamaneko 10y ago

Why the downvotes? I saw a couple replies why this isn't a viable strategy for Uber, but it doesn't make his post of low quality, does it?

grandalf 10y ago
I was just wondering that myself :)
__derek__ 10y ago
I didn't downvote, but it reads very fanboy-ish, to the extent that I wondered whether that person has invested in Uber.
- grandalf 10y ago
  hah, I haven't invested. If you read more closely my comment is very critical of Uber.

notyourwork 10y ago

> All Uber drivers I talk to alternate between Uber and Lyft and exploit any promotions or incentives either firm offers. This is no different than any other for hire industry though. They are making the choice that best benefits them financially. Uber knows this, lyft knows this, basic economics and human instinct to better their own situation. There will always be more drivers though so I doubt they are concerned about the problem to be honest. The barrier to being an Uber driver is so low.

varelse 10y ago

When in Austin, I've talked to a lot of former Uber drivers who have moved to other ridesharing services like Wingz. I have yet to find one that doesn't prefer their current service over Uber.

paulddraper 10y ago

I thought Uber wanted its drivers classified as consultants, not employees. Though measures would work against it.

serge2k 10y ago

How much of these can you offer before they are considered employees and you have to actually start treating them as such?