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Uber's defense is that it is licensing lead generation software to drivers, and that it just takes a commission from each trip as payment for use of its softwar

Uber's defense is that it is licensing lead generation software to drivers, and that it just takes a commission from each trip as payment for use of its software. In many ways, I can see it. I think the issue lies in a lot of Uber's current policies around drivers e.g. very strict rules around cancellations. If Uber was just a lead generation provider then it shouldn't care or intervene if a driver decides they don't want a job, but depending on the scenario you can be punished if you don't want to take a job. Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders.

SilasX 7y ago
Yeah, even being charitable, I don't see how Uber's model[1] is remotely reasonable. They pretty clearly take direct control over the relationship. The rider deals with Uber, and the driver deals with Uber. Nothing at all like the ebay/fiverr "hey find someone to link up with" model. [1] Edit: To clarify, I mean "the model they're promoting of what their core business is", i.e. the claim that "they're a lead-gen platform they license out"; I'm not saying they're business model is financially non-viable.
- 8ytecoder 7y ago
  In fact, I'd argue that's the primary reason why Uber/Lyft got popular in the first place. At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service. If Uber can't enforce something similar, why should I use Uber?
  - deleted 7y ago
    [deleted]
  - seanmcdirmid 7y ago
    > At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service. Most of us don’t have such great experiences with taxis as you do. “Legally bound” still leaves a lot of wiggle room for really crappy experiences.
    - xmprt 7y ago
      Not to mention that it's much harder to enforce something that's legally bound. If they give you a crappy experience, the only way you can do anything about it is by reporting it to the government (suing them?) which is usually a painful process. And if your case is even heard, you'll need evidence proving it.
      - JetSpiegel 7y ago
        As opposed to the unregulated jungle of Uber, where you can legally pound sand. How is the unregulated market better?
    - SomeOldThrow 7y ago
      > Most of us don’t have such great experiences with taxis as you do. What kind of negative experiences did you have with taxis that you didn’t get with the ride hailing apps?
      - seanmcdirmid 7y ago
        The usual: being taken for a ride (literally), not showing up for a pickup, broken credit card readers. American taxis are just horrid. Not as bad as SE Asia, but nowhere near Europe or other developed country standards.
  - pishpash 7y ago
    Because rideshare carefully uses economic incentives to generate outcomes by market means, not by "enforcing" through the heavy hand that only the government understands.
    - deleted 7y ago
      [deleted]
    - SomeOldThrow 7y ago
      A) it’s not clear the outcomes are desirable in the first place and b) why are market means better? The market is good at deriving efficient prices in certain circumstances but it really depends on whether the desired outcome aligns with efficient pricing. Personally the problem Uber solves is a nice app to hail the taxi with, which doesn’t appear to have anything to do with market effects, whereas the material effects of Uber mostly seem to be exploitation of employees.
deleted 7y ago
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hguant 7y ago
>Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders. Honestly, just keep the 'we don't show drivers with a less than X star rating' in place, and allow the rider to give the driver a low rating for cancelling. Self correcting problem - drivers that routinely cancel will be pushed out, and the (potential) one bad rating shouldn't hurt routinely good drivers.
- basch 7y ago
  The user experience is much better not dealing with that shit. Reordering rides when you have somewhere to be is not a good time.
mmatants 7y ago
The fact that choosing to use Uber represents a certain amount of trust in the driver (basic background check, identity information, etc), makes it more than lead generator or transparent broker.
FireBeyond 7y ago
> and that it just takes a commission from each trip as payment They don't just take a commission, they set the entire price. They set the rules, about the types of vehicles, about cleanliness, about myriad other things. The route. "Lead generation" is obtuse.
- pishpash 7y ago
  Setting the "entire price" just means being a marketmaker. I'm sure you are familiar with the concept. The "commission" would therefore refer to the spread or the take. There is real risk in this and competition, and anyone can feel free to get in there making a market with a tighter spread if they feel they can do so. Bet they can't. Lead generation is not a phrase used by anyone but the idiotic press, so that part is a strawman.
bscphil 7y ago
> Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders. I'm going to go with yes. The only times I use ride sharing services (Lyft, not Uber) are in high-density situations like getting to and from the airport. Depending on the hour there will be dozens to hundreds of drivers hovering in the area trying to get rides. As soon as "rider available" appears on screen a dozen different drivers are mashing the accept button. Up until a year or two ago, the drivers would then see where I want to go and then call me on the phone to say they didn't want to go there, telling me to cancel the ride they had accepted. I systematically refused every time so that (usually after a few minutes) they would give up and cancel it themselves. This would usually happen for 2 or 3 drivers in a row, making ride-sharing a miserable experience for me. I assume the cancellation penalties have been made much more serious, because this hasn't happened to me in a while now.
- amyjess 7y ago
  > Up until a year or two ago, the drivers would then see where I want to go and then call me on the phone to say they didn't want to go there, telling me to cancel the ride they had accepted. I systematically refused every time so that (usually after a few minutes) they would give up and cancel it themselves. This would usually happen for 2 or 3 drivers in a row, making ride-sharing a miserable experience for me. I've only had that happen a couple of times for me, but that's because I'm mostly a Lyft user. What was more common on Lyft was drivers calling me to ask "Where are you going?", and when I'd respond with "I already put my destination into the app", they'd hang up and cancel on me. Edit: About the cancellation penalties. I don't know about Uber, but on Lyft when I as a rider have to cancel on somebody, I sometimes see options pop up saying "driver asked me to cancel" or "driver is not moving". They know when drivers are using trickery to get out of dinging their cancellation rate. And when I have to cancel for "driver is not moving", I also get a message saying they'll waive the cancellation fee because there was an issue with my ride (note: I get this message before I see the list of cancellation reasons to pick from, not after).
  - 7y ago
amyjess 7y ago
> The issue is whether doing so would drastically deteriorate the quality of the service for riders. This is the exact reason I want Uber to lose this. Anything that would keep drivers classified as contractors is harmful to the actual customers, because the drivers being employees mean that they have to actually follow policies set by Uber.
ape4 7y ago
Maybe relaxing the rules will be an unintended consequence of the law.
paxys 7y ago
Considering drivers can't even set their own prices, this fails that test from the get go.
- solidasparagus 7y ago
  In practice drivers do set their prices by only driving when the price is what they're willing to pay (e.g. only during surge pricing). In contrast to an employee that works specific hours and has to take every ride while on the clock.
  - evil-olive 7y ago
    > In practice drivers do set their prices by only driving when the price is what they're willing to pay So your argument is that drivers really set the price... > (e.g. only during surge pricing) And your example of drivers setting the price is...algorithms running at Uber and Lyft that set prices. Algorithms which Uber and Lyft would surely regard as proprietary trade secrets and resist disclosing to drivers, passengers, or government regulators. How is that drivers setting prices, exactly? If an Uber driver wants to give me a ride to the airport, the Uber app decides that it costs $X. If that Uber driver believes that Uber's surge pricing model is inaccurate and thinks the real price should be $Y, there is no facility for me and the driver to negotiate on a different price.
    - pishpash 7y ago
      What are you saying? Uber matches you to a willing driver to pick you up for $X, it's a competitive market so whatever "algorithm" you think they use it's the market that decides the price, but the driver "should" get $Y? Well you are free to tip $Y-$X to the driver then. Why don't you try that next time?
      - paxys 7y ago
        What competitive market? There is no spread, no bidding. Buyers and sellers cannot negotiate. Uber decides prices based on some proprietary, secret algorithm. "We are going to pay you $X, if you don't like it you can leave" is called a salary, not a marketplace.

SilasX 7y ago

Yeah, even being charitable, I don't see how Uber's model[1] is remotely reasonable. They pretty clearly take direct control over the relationship. The rider deals with Uber, and the driver deals with Uber. Nothing at all like the ebay/fiverr "hey find someone to link up with" model. [1] Edit: To clarify, I mean "the model they're promoting of what their core business is", i.e. the claim that "they're a lead-gen platform they license out"; I'm not saying they're business model is financially non-viable.

8ytecoder 7y ago
In fact, I'd argue that's the primary reason why Uber/Lyft got popular in the first place. At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service. If Uber can't enforce something similar, why should I use Uber?
- deleted 7y ago
  [deleted]
- seanmcdirmid 7y ago
  > At least for me that's the only reason I use Uber. If they are, as they claim, just a lead-gen platform, I'd rather call a taxi. At least taxis are legally bound to provide me a certain level of service. Most of us don’t have such great experiences with taxis as you do. “Legally bound” still leaves a lot of wiggle room for really crappy experiences.
  - xmprt 7y ago
    Not to mention that it's much harder to enforce something that's legally bound. If they give you a crappy experience, the only way you can do anything about it is by reporting it to the government (suing them?) which is usually a painful process. And if your case is even heard, you'll need evidence proving it.
    - JetSpiegel 7y ago
      As opposed to the unregulated jungle of Uber, where you can legally pound sand. How is the unregulated market better?
  - SomeOldThrow 7y ago
    > Most of us don’t have such great experiences with taxis as you do. What kind of negative experiences did you have with taxis that you didn’t get with the ride hailing apps?
    - seanmcdirmid 7y ago
      The usual: being taken for a ride (literally), not showing up for a pickup, broken credit card readers. American taxis are just horrid. Not as bad as SE Asia, but nowhere near Europe or other developed country standards.
- pishpash 7y ago
  Because rideshare carefully uses economic incentives to generate outcomes by market means, not by "enforcing" through the heavy hand that only the government understands.
  - deleted 7y ago
    [deleted]
  - SomeOldThrow 7y ago
    A) it’s not clear the outcomes are desirable in the first place and b) why are market means better? The market is good at deriving efficient prices in certain circumstances but it really depends on whether the desired outcome aligns with efficient pricing. Personally the problem Uber solves is a nice app to hail the taxi with, which doesn’t appear to have anything to do with market effects, whereas the material effects of Uber mostly seem to be exploitation of employees.

deleted 7y ago

[deleted]

hguant 7y ago

basch 7y ago
The user experience is much better not dealing with that shit. Reordering rides when you have somewhere to be is not a good time.

mmatants 7y ago

The fact that choosing to use Uber represents a certain amount of trust in the driver (basic background check, identity information, etc), makes it more than lead generator or transparent broker.

FireBeyond 7y ago

> and that it just takes a commission from each trip as payment They don't just take a commission, they set the entire price. They set the rules, about the types of vehicles, about cleanliness, about myriad other things. The route. "Lead generation" is obtuse.

pishpash 7y ago
Setting the "entire price" just means being a marketmaker. I'm sure you are familiar with the concept. The "commission" would therefore refer to the spread or the take. There is real risk in this and competition, and anyone can feel free to get in there making a market with a tighter spread if they feel they can do so. Bet they can't. Lead generation is not a phrase used by anyone but the idiotic press, so that part is a strawman.

bscphil 7y ago

> Part of me thinks Uber could get away with this if they just relaxed some of their current driver policies (e.g. more limited penalties for cancellations). The issue is whether doing so would drastically deteriorate the quality of the service for riders. I'm going to go with yes. The only times I use ride sharing services (Lyft, not Uber) are in high-density situations like getting to and from the airport. Depending on the hour there will be dozens to hundreds of drivers hovering in the area trying to get rides. As soon as "rider available" appears on screen a dozen different drivers are mashing the accept button. Up until a year or two ago, the drivers would then see where I want to go and then call me on the phone to say they didn't want to go there, telling me to cancel the ride they had accepted. I systematically refused every time so that (usually after a few minutes) they would give up and cancel it themselves. This would usually happen for 2 or 3 drivers in a row, making ride-sharing a miserable experience for me. I assume the cancellation penalties have been made much more serious, because this hasn't happened to me in a while now.

amyjess 7y ago
> Up until a year or two ago, the drivers would then see where I want to go and then call me on the phone to say they didn't want to go there, telling me to cancel the ride they had accepted. I systematically refused every time so that (usually after a few minutes) they would give up and cancel it themselves. This would usually happen for 2 or 3 drivers in a row, making ride-sharing a miserable experience for me. I've only had that happen a couple of times for me, but that's because I'm mostly a Lyft user. What was more common on Lyft was drivers calling me to ask "Where are you going?", and when I'd respond with "I already put my destination into the app", they'd hang up and cancel on me. Edit: About the cancellation penalties. I don't know about Uber, but on Lyft when I as a rider have to cancel on somebody, I sometimes see options pop up saying "driver asked me to cancel" or "driver is not moving". They know when drivers are using trickery to get out of dinging their cancellation rate. And when I have to cancel for "driver is not moving", I also get a message saying they'll waive the cancellation fee because there was an issue with my ride (note: I get this message before I see the list of cancellation reasons to pick from, not after).
- 7y ago

amyjess 7y ago

> The issue is whether doing so would drastically deteriorate the quality of the service for riders. This is the exact reason I want Uber to lose this. Anything that would keep drivers classified as contractors is harmful to the actual customers, because the drivers being employees mean that they have to actually follow policies set by Uber.

ape4 7y ago

Maybe relaxing the rules will be an unintended consequence of the law.

paxys 7y ago

Considering drivers can't even set their own prices, this fails that test from the get go.

solidasparagus 7y ago
In practice drivers do set their prices by only driving when the price is what they're willing to pay (e.g. only during surge pricing). In contrast to an employee that works specific hours and has to take every ride while on the clock.
- evil-olive 7y ago
  > In practice drivers do set their prices by only driving when the price is what they're willing to pay So your argument is that drivers really set the price... > (e.g. only during surge pricing) And your example of drivers setting the price is...algorithms running at Uber and Lyft that set prices. Algorithms which Uber and Lyft would surely regard as proprietary trade secrets and resist disclosing to drivers, passengers, or government regulators. How is that drivers setting prices, exactly? If an Uber driver wants to give me a ride to the airport, the Uber app decides that it costs $X. If that Uber driver believes that Uber's surge pricing model is inaccurate and thinks the real price should be $Y, there is no facility for me and the driver to negotiate on a different price.
  - pishpash 7y ago
    What are you saying? Uber matches you to a willing driver to pick you up for $X, it's a competitive market so whatever "algorithm" you think they use it's the market that decides the price, but the driver "should" get $Y? Well you are free to tip $Y-$X to the driver then. Why don't you try that next time?
    - paxys 7y ago
      What competitive market? There is no spread, no bidding. Buyers and sellers cannot negotiate. Uber decides prices based on some proprietary, secret algorithm. "We are going to pay you $X, if you don't like it you can leave" is called a salary, not a marketplace.