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> Err, the cheaper rates were due to uber subsidising rides with VC money, which was unsustainable. Uber also did start a leasing program for drivers. The chea
by davidf18 9y ago
> Err, the cheaper rates were due to uber subsidising rides with VC money, which was unsustainable. Uber also did start a leasing program for drivers.
The cheaper rates in NYC which are extremely high compared with the rest of the USA were because there was no $125 / 12 hour lease fee because there were no medallions.
Medallion owners would get mortgages (like houses) for the $1.2 million medallions and the high lease fee paid for the medallion mortgage. In fact the other special interests besides Yellow Cab medallion owners were credit unions who financed these mortgages.
A $125 / 12 hour lease fee comes to over $90,000 per year.
By not having to pay these excessive expensive leases, drivers could be paid less money and still make a profit. Drivers who leased the Yellow Cabs still have to pay for gas. Lower costs for taxi service means more time with customers in cabs. Everyone wins except medallion owners and credit unions with the mortgages and politicians bought off by these special interests.
- bosie 9y agoi don't follow your math. can you expand on the increase. $125 / 12 hour means it is around 12 bucks an hour. if you have 3 rides an hour (don't know if doable), it would increase a single ride by 4 bucks. that doesn't seem the end of the world
- kisil_reboot 9y agoAt least in downtown San Francisco, many shared rides cost $4 total.
- murbard2 9y agoI would estimate my typical cab fare in NYC to be around $17-$25. $4 for a single ride is 16% - 23%. That's a big difference.
- BurningFrog 9y ago> A $125 / 12 hour lease fee comes to over $90,000 per year This comes out as 8640 hours per year, which is 360 days. So we're talking about the income a taxi owner can get from a medallion. What an individual taxi driver had to pay to work is a much lower number. Typically a full time job is around 2000h/year.
- chimeracoder 9y ago> The cheaper rates in NYC which are extremely high compared with the rest of the USA were because there was no $125 / 12 hour lease fee because there were no medallions. As explained elsewhere in the thread, Uber does not and has not ever competed with medallion taxis for their main product (Uber X/Uber Black) in New York City. Uber's direct counterpart would be the for-hire cabs which are also regulated by the TLC, and are not required to have medallions. Uber is already subject to the exact same requirements of the TLC that their predecessors were - Uber drivers in NYC have to have a valid TLC license. So there is literally no difference in supply-side regulatory cost there.
- linkregister 9y agoThe share of taxi rides in Manhattan has decreased by almost the same amount Lyft and Uber rides have increased [1]. The overall number of rides has increased in the other boroughs due to Lyft and Uber ridership. 1. http://toddwschneider.com/posts/analyzing-1-1-billion-nyc-taxi-and-uber-trips-with-a-vengeance/ http://toddwschneider.com/posts/analyzing-1-1-billion-nyc-ta...
- davidf18 9y agoInteresting, thanks. It justifies Uber spending more money on marketing to expand market share.
- linkregister 9y agoMaybe, it is very likely that NYC rides need to be propped up with incentives by ridesharing companies. We won't know the economics until somebody tries to IPO or shutters their company.
- davidf18 9y agoActually, the normal Yellow Cab rates are so high in NYC that Uber can still charge rates twice that of Chicago Uber and come out ahead (NYC $1.75 per mile, Chicago $0.90 -- twice the amount).