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MIT Study:Median Uber and Lyft Profits Less Than Half Minimum Wage; 30% Lose Money
- h66p6qb84p4a1 9y agoavksa33naw5x
- elmar 9y agoa business model based on the lack of mathematical and financial skills of the participants.
- elmar 9y ago"If you are using either Uber or Lyft, stop. Now. You are contributing directly to the growth of the precariat and the debasement of work. The fact that you use an app to distance yourself from the exploitation of desperate and not very savvy drivers doesn’t change the nature of what you are doing." Yves Smith @yvessmith
- alexandercrohde 9y agoWho are you quoting?
- smcl 9y agoThis is a direct quote from the linked article
- elmar 9y agoUpdated post with source - Yves Smith @yvessmith
- williamstein 9y agoThe article.
- forinti 9y agoSenator Elizabeth Warren once said that financial contracts should have disclaimers such as other products have (this is safe for children older than 3 years, don't drink too much of this, etc). She was talking about mortgages. Maybe we should have something along those lines for this type of company, especially since these companies have a good deal of knowledge that they are not sharing with their workers.
- CalRobert 9y agoEvery person I have known who drove for these services had given zero - zero! thought to depreciation. Sure, it covers gas money but when your $24,000 car is worth $5000 in three years it won't be a great deal.
- pwagland 9y agoMr Money Mustache also did a piece on how much you really made driving uber: http://www.mrmoneymustache.com/2017/11/22/mr-money-mustache-uber-driver/ http://www.mrmoneymustache.com/2017/11/22/mr-money-mustache-... One of his quotes from that article: “Imagine developing a company specifically to take advantage of people’s ignorance of how expensive it really is to drive their own car. What would this company look like? “ (the answer is of course that it would look like very much like Uber or any other ridesharing company)
- scarface74 9y agoa business model based on the lack of mathematical and financial skills of the participants. Like state lotteries?
- mrits 9y agoIt would be interesting to know if a lot of people are just doing things wrong that they can correct. The price of the car seems like a critical decision based on insurance and depreciation.
- sp332 9y agoThis is a lot worse than I thought. Last I heard Uber was subsidizing fares, and they're losing tons of money. If it's still not enough for drivers not to lose money, then the difference between what riders are paying and what the service actually costs must be immense.
- CoryG89 9y agoInteresting. I've discussed this with others on HN previously. Seems this one goes toward confirming my suspicions. https://news.ycombinator.com/item?id=14605111 https://news.ycombinator.com/item?id=14605111 Now the moral dillema of whether or not to continue to use these services or revert back to terribly inconvenient taxi services is really going to nag at me.
- verelo 9y agoId like to see the same study done to taxi drivers. I suspect the situation is no better if you look at their return on invested time and money. The concern you suspected is the same one I suspected too. In 2015 i did some uber driving for "fun". I quickly realized that it was just a way to extract the net worth of a car, from the car, without selling it. When you think of it that way, i see some significant utility...however Uber doesn't position it to drivers as "get the money stuck in your car, out of your car!" instead they say "earn cash" and stuff like that.
- CoryG89 9y agoIt would be interesting to see it done with taxi drivers, but they don't typically own the cars they drive, do they? I would have imagined they were all at least making minimum wage after all is said and done.
- verelo 9y agoThey’re a super exploited group, often new immigrants too. Many times they “rent” the car, paying a daily fee for the seat, and then get to collect all the income for the day. Many times it means working 7-8 hours before making any returns of their own. It’s your typical “work for yourself” type scam, when really you’re an employee with no acknowledged rights. I have no love of uber or the taxi industry, i guess i just don’t see one as better than the other, and it’s hard to say either is worse. I suspect it is the way it is because consumers don’t want to pay what it would take to really give the drivers minimum wage. I dare say this is an indication that it’s a realistic primary target for early AI automation.
- 9y ago
- mwnivek 9y agoPrevious discussion: https://news.ycombinator.com/item?id=16501017 https://news.ycombinator.com/item?id=16501017
- andrewla 9y agoAnd also https://news.ycombinator.com/item?id=16498551 https://news.ycombinator.com/item?id=16498551 Also worth highlighting from that discussion is a link to the actual paper, as found in https://news.ycombinator.com/item?id=16499850 https://news.ycombinator.com/item?id=16499850
- crack-the-code 9y agoIt's worth noting that insurance companies require a relatively substantial fee for Uber drivers yet most of the people driving don't report being drivers to insurance companies. I am not sure if this study accounts for this.
- frgtpsswrdlame 9y agoYes but if you're in an accident and the insurance company finds out you were Uber driving they will deny your claim. In that scenario you're out the cost of the accident and all the insurance payments you made. Spread that concentrated risk across the whole population of Uber drivers and you'll get the same result.
- deleted 9y ago[deleted]
- crsv 9y agoI would be interest in a deep understanding of the top performers in this system and if there was a way to optimize this. I feel like even with a median number in this study, with such a wide distribution of education, technological and business savvy, how much of the poor performance here is related to the "freedom" in the system and the lack of structure that might move the profitability needle for the drivers.
- dmartinez 9y agoHere you go: https://blog.acolyer.org/2018/02/20/putting-data-in-the-drivers-seat-optimising-earnings-for-on-demand-ride-hailing/ https://blog.acolyer.org/2018/02/20/putting-data-in-the-driv...
- rossdavidh 9y agoThe most interesting tidbit to me: only about 4% of the drivers keep doing it (for Uber anyway) for more than a year. Does this mean Uber requires an ever-replenished supply of fresh drivers? If so, then they might have a not-very-sunny future once there aren't as many left. Like a virus that has infected too many members of the population, who now have an immunity; not enough fresh births to keep it going.
- sol_remmy 9y agoDuplicate. Previously: https://news.ycombinator.com/item?id=16498551 https://news.ycombinator.com/item?id=16498551