4 ms·

I make a habit of talking to taxi drivers about Uber. Consistently they say they drive taxis because there is no money in driving for Uber (which of course that

I make a habit of talking to taxi drivers about Uber. Consistently they say they drive taxis because there is no money in driving for Uber (which of course that tells us less than it seems, because they are self-selected to be people who prefer driving taxis). One told me something new: I asked, as I often do, if they don't make money then why are there so many Uber drivers? This man said that some Uber drivers are trapped by car loans: They are working-class people who took out loans to buy their Uber cars. All cars lose value the moment they are driven off the lot and these cars are driven hard and for high mileage, so their resale value is low. He said these drivers keep working for Uber because they have to try to pay off the loans. (I know nothing else about that story other than what one random driver told me; I'm hoping others can contribute some better knowledge about it.) It struck me: Not only does Uber treat their workers like contractors and give them no benefits or other employee protections, but they ask (often) working class people to provide Uber's capital. Arguably, it's like General Motors calling factory workers 'independent contractors' and asking them to bring their own machinery. In contrast, taxi drivers lease the cab for a shift, AFAIK; they have no long-term capital investment or debt trap. It's almost as if Uber's main business proposition is a loophole in labor rules that allows them to shift almost all costs onto their own workers. That said, I hesitate to pile on, even for a company I don't like personally (which is why I take cabs). Let's not let the hype exceed the reality. EDIT: A few clarifying edits

nebabyte 10y ago
> AFAIK; they have no long-term capital investment or debt trap Medallions?
- hackuser 10y ago
  > Medallions? The medallion owners make a long-term capital investment. The drivers lease the car per shift or per 24 hours, and have no such investment. (As I understand it.)
- lokedhs 10y ago
  My understanding is that very few places have a medallion system. It's apparently quite common in the US, but I can't say I've heard about it anywhere else. Does anyone have statistics on this?
  - hackuser 10y ago
    How do other places control supply of taxis, or do they not do that at all?
    - lokedhs 10y ago
      I don't know, and it's likely they don't do it at all. Why would the number of taxis need to be controlled? I don't know much about the taxi industry and perhaps there is some good reason for it that I am simply not aware of?
      - hackuser 10y ago
        My baseless assumption always has been that it is for two reasons: * It's one of those situations where the free market fails. Because anyone with a car can give someone a ride, it creates a race to the bottom and nobody can make money. You'll note that one criticism of Uber is that they create exactly that situation. * Safety and fraud prevention for customers Note that the community has an interest in quality transportation, including for tourists.
        lokedhs 10y ago
        But does controlling the number of taxis achieve those goals? The countries that I have experience with all have regulations attempting to ensure those very things that you mentioned, but none of them actively limits the number of taxis.
sixothree 10y ago
I get that same discomforting feeling seeing advertisements for pizza delivery. It's core to many businesses but the employees are often the ones providing the equipment. I've heard this referred to as modern day share cropping.
- hackuser 10y ago
  Pizza delivery employees generally don't take out loans to buy cars for the job, AFAIK.
fstuff 10y ago
Trapped in a car loan thing is their Xchange leasing program. They give sub prime car loans to anyone with a pulse if they agree to do drive for uber. Their car payments are taken directly from their driver income. These leases are expensive, a corrola costs about 150 a week to lease. People got trapped because after signing uber dropped rates and the driver can't afford their payment and have to work more hours for the same money. Somne simply work to make the payment and no longer earn money for themselves. If you remember the driver that got in a argument with the CEO, this is what he was taking aboutvwhen he said he lost 90k Check out point #5 https://consumerist.com/2016/05/31/5-things-you-should-know-about-ubers-xchange-leasing-program-its-costs/ https://consumerist.com/2016/05/31/5-things-you-should-know-... Better article https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2016-05-31/inside-uber-s-auto-lease-machine-where-almost-anyone-can-get-a-car https://www.google.com/amp/s/www.bloomberg.com/amp/news/arti... Quote from above article He leased a 2016 Toyota Corolla from Xchange in November, paying $155 a week. Two months later, Uber slashed fares nationally. Soon Hofstede had trouble keeping up with his payments. He went from making $200 in a weekend to $140 in a weekend, he said. "It got to the point that I would drive just to meet my payment," he said. "If you were short on your payment for a week it would roll onto the payment for next week. It starts adding up." End qoute

nebabyte 10y ago

> AFAIK; they have no long-term capital investment or debt trap Medallions?

hackuser 10y ago
> Medallions? The medallion owners make a long-term capital investment. The drivers lease the car per shift or per 24 hours, and have no such investment. (As I understand it.)
lokedhs 10y ago
My understanding is that very few places have a medallion system. It's apparently quite common in the US, but I can't say I've heard about it anywhere else. Does anyone have statistics on this?
- hackuser 10y ago
  How do other places control supply of taxis, or do they not do that at all?
  - lokedhs 10y ago
    I don't know, and it's likely they don't do it at all. Why would the number of taxis need to be controlled? I don't know much about the taxi industry and perhaps there is some good reason for it that I am simply not aware of?
    - hackuser 10y ago
      My baseless assumption always has been that it is for two reasons: * It's one of those situations where the free market fails. Because anyone with a car can give someone a ride, it creates a race to the bottom and nobody can make money. You'll note that one criticism of Uber is that they create exactly that situation. * Safety and fraud prevention for customers Note that the community has an interest in quality transportation, including for tourists.
      - lokedhs 10y ago
        But does controlling the number of taxis achieve those goals? The countries that I have experience with all have regulations attempting to ensure those very things that you mentioned, but none of them actively limits the number of taxis.

sixothree 10y ago

I get that same discomforting feeling seeing advertisements for pizza delivery. It's core to many businesses but the employees are often the ones providing the equipment. I've heard this referred to as modern day share cropping.

hackuser 10y ago
Pizza delivery employees generally don't take out loans to buy cars for the job, AFAIK.

fstuff 10y ago

Trapped in a car loan thing is their Xchange leasing program. They give sub prime car loans to anyone with a pulse if they agree to do drive for uber. Their car payments are taken directly from their driver income. These leases are expensive, a corrola costs about 150 a week to lease. People got trapped because after signing uber dropped rates and the driver can't afford their payment and have to work more hours for the same money. Somne simply work to make the payment and no longer earn money for themselves. If you remember the driver that got in a argument with the CEO, this is what he was taking aboutvwhen he said he lost 90k Check out point #5 https://consumerist.com/2016/05/31/5-things-you-should-know-about-ubers-xchange-leasing-program-its-costs/ https://consumerist.com/2016/05/31/5-things-you-should-know-... Better article https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2016-05-31/inside-uber-s-auto-lease-machine-where-almost-anyone-can-get-a-car https://www.google.com/amp/s/www.bloomberg.com/amp/news/arti... Quote from above article He leased a 2016 Toyota Corolla from Xchange in November, paying $155 a week. Two months later, Uber slashed fares nationally. Soon Hofstede had trouble keeping up with his payments. He went from making $200 in a weekend to $140 in a weekend, he said. "It got to the point that I would drive just to meet my payment," he said. "If you were short on your payment for a week it would roll onto the payment for next week. It starts adding up." End qoute