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Why can’t uber just position itself as a lead generation service for drivers?

kingnothing 6y ago
Uber positions itself that way all over the place: Uber is a tech company that connects riders and drivers. It is not a taxi service.
- raducu 6y ago
  To some extent, they are right. To their customers, they pretty much are a (more convenient) taxi company. To their drivers? They are a shittier taxi company that doesn't provide cars, yet still charges drivers 25% of fares in exchange for legal protection against taxi laws and customers/brand.
- s1artibartfast 6y ago
  The absurd part is that this is exactly what a taxi service does as well. Most Taxi drivers are 1099 contracts that are connected with rides by dispatch. Taxi driving contractors have less autonomy than uber drivers, but you don't see Cali prosecutors going after taxi companies.
jasode 6y ago
>Why can’t uber just position itself as a lead generation service for drivers? A rideshare company could theoretically be just a pure lead generation platform but the economic forces preventing that is the nature of multi-sided platforms: The drivers don't hold all the leverage. The other actor in the multi-sided platform are passengers/customers who _pay the money_. If Uber was only lead gen, they would be outcompeted by another company that offered all the following conveniences: + predictable fixed price to prevent customer anxiety of overcharging + integrated payment processing so no worry of drivers playing games such as, "my Square credit card processor doesn't work so you need to pay cash" + driver ratings for reputation ... because customers/passengers value those features. If you create a rideshare platform that's too advantageous to the drivers (e.g. no ratings, can charge variable fare per mile, etc), it would end up being hostile to potential customers and it won't attract enough paying fares to be financially sustainable.
- AnthonyMouse 6y ago
  That's assuming the economic cost of not having those things exceeds the economic cost of classifying drivers as employees. Or that those services couldn't still be offered by independent companies, so the customer still has them but the drivers are still contractors because they're not employees of the lead gen company nor the driver ratings company nor the payment app company. It merely so happens that the lead gen company shows the customer whether the driver accepts that payment app and is listed with that rating service.
- SilasX 6y ago
  What you've described is exactly what happened when Sidecar (the totally hands-off drivers-set-prices-and-riders-choose option) tried to compete; they lost against Uber/Lyft and shut down EOY 2014.
microcolonel 6y ago
This is literally their positioning, California's lawmakers just hate them. What these changes amount to is removing qualification from the leads, which to me seems like the sort of anti-consumer outcome the law should not produce.
SilasX 6y ago
That's what Sidecar was! Drivers set prices, and riders chose between drivers' offers. It failed against competition from Uber/Lyft and shut down EOY 2014. But arguably, that was because Uber/Lyft had an unfair advantage from being able to exercise tight control over drivers while not having to obey regulations for employees, while Sidecar had more limited control over drivers. If everyone had to use the Sidecar model, it might work out, but you need equitable laws (that apply to everyone) to make that work.

Uber positions itself that way all over the place: Uber is a tech company that connects riders and drivers. It is not a taxi service.

raducu 6y ago
To some extent, they are right. To their customers, they pretty much are a (more convenient) taxi company. To their drivers? They are a shittier taxi company that doesn't provide cars, yet still charges drivers 25% of fares in exchange for legal protection against taxi laws and customers/brand.
s1artibartfast 6y ago
The absurd part is that this is exactly what a taxi service does as well. Most Taxi drivers are 1099 contracts that are connected with rides by dispatch. Taxi driving contractors have less autonomy than uber drivers, but you don't see Cali prosecutors going after taxi companies.

jasode 6y ago

>Why can’t uber just position itself as a lead generation service for drivers? A rideshare company could theoretically be just a pure lead generation platform but the economic forces preventing that is the nature of multi-sided platforms: The drivers don't hold all the leverage. The other actor in the multi-sided platform are passengers/customers who _pay the money_. If Uber was only lead gen, they would be outcompeted by another company that offered all the following conveniences: + predictable fixed price to prevent customer anxiety of overcharging + integrated payment processing so no worry of drivers playing games such as, "my Square credit card processor doesn't work so you need to pay cash" + driver ratings for reputation ... because customers/passengers value those features. If you create a rideshare platform that's too advantageous to the drivers (e.g. no ratings, can charge variable fare per mile, etc), it would end up being hostile to potential customers and it won't attract enough paying fares to be financially sustainable.

AnthonyMouse 6y ago
That's assuming the economic cost of not having those things exceeds the economic cost of classifying drivers as employees. Or that those services couldn't still be offered by independent companies, so the customer still has them but the drivers are still contractors because they're not employees of the lead gen company nor the driver ratings company nor the payment app company. It merely so happens that the lead gen company shows the customer whether the driver accepts that payment app and is listed with that rating service.
SilasX 6y ago
What you've described is exactly what happened when Sidecar (the totally hands-off drivers-set-prices-and-riders-choose option) tried to compete; they lost against Uber/Lyft and shut down EOY 2014.

microcolonel 6y ago

This is literally their positioning, California's lawmakers just hate them. What these changes amount to is removing qualification from the leads, which to me seems like the sort of anti-consumer outcome the law should not produce.

SilasX 6y ago

That's what Sidecar was! Drivers set prices, and riders chose between drivers' offers. It failed against competition from Uber/Lyft and shut down EOY 2014. But arguably, that was because Uber/Lyft had an unfair advantage from being able to exercise tight control over drivers while not having to obey regulations for employees, while Sidecar had more limited control over drivers. If everyone had to use the Sidecar model, it might work out, but you need equitable laws (that apply to everyone) to make that work.