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Uber is making it harder and harder to get on board with the idea that it's not an employer. Leveling out people's pay over multiple trips or retroactively ad
by supernova87a 6y ago
Uber is making it harder and harder to get on board with the idea that it's not an employer. Leveling out people's pay over multiple trips or retroactively adjusting the reward per job sure sounds like an employer having very strong control over the work conditions and compensation. And this almost brings back echoes of Doordash (?) when it was caught taking drivers' tips so that their pay was reduced to the minimum hourly promised "wage".
It's like Uber are trying to shoot themselves in the foot with all the cost squeezing and profit seeking at the same time they're in a fundamental legal fight defining what they are.
You would think they would go in the opposite direction and pay people such good rates during this controversy, you could hold that up and say, "see? People are clearly much better under this system". But I guess not.
On a separate note, I will say that this is pretty expected in terms of how software errors go. Of course programmers at a company will be checking quite diligently that they're not overpaying through their algorithms. But underpaying? Only those who can't easily check your code are harmed by that one. It is a rare company that spends money and resources on verifying from their users' point of view that they're being delivered what was promised -- unless that company actively cares about the user.
- AlexandrB 6y ago> It's like Uber are trying to shoot themselves in the foot with all the cost squeezing and profit seeking at the same time they're in a fundamental fight defining what they are. I don't think they have a choice. UberEats is fundamentally unprofitable. If it was run profitably, the high(er) prices would drive a large portion of their customers away and into the arms of other "startups" willing to run at a loss or towards picking up the food themselves. Plus Uber can't pretend to be an early-stage startup anymore and their constant quarterly losses are starting to add up. I'm still not convinced this new food delivery industry is viable without constant cash injections.
- lumost 6y agoI don't understand why an investor would fund unprofitable Uber 2.0. Without a massive differentiator there is no reason to believe their trajectory would be any different from Uber's - except with increased capital requirements from being the third(fourth?) mover. Uber's burned 10s of billions in the hopes of becoming a few hundred billion dollar company. Would Uber 2.0 need to burn hundreds of billions in the hope of becoming a hundred billion dollar company?
- mikepurvis 6y agoUber 2.0 would probably make the same pitch Uber did— that all of this is temporary moat-building as we prepare for a glorious self driving future. So I think the difficulty is less around investors being more savvy to the economics of ride sharing and delivery services, but that they're more savvy to the realities of how far off those technologies are. And that the entrenched firms like Waymo will be far, far better positioned to offer an autonomous taxi service on day 1 than some plucky startup will be.
- mrweasel 6y agoIt would be interesting to hear why investors keep throwing money at Uber. Does anyone honestly believe that they will ever be profitable? You would have to throw billions at them to keep them alive long enough for autonomous vehicles to be a possible rescue.
- barkingcat 6y agoI can imagine a UberChef where an Uber driver gets an order, and drives a freelance Chef to a freelance kitchen where the chef cooks the food (groceries provided by an uber shopper who can also get one-off ingredients from specialty stores), the chef cooks the food to order (steak, medium rare, or seafood boil for a party of 2, etc) - and then uber driver delivers the food.
- lotsofpulp 6y agoIf you’ve ever managed a food business, this is unimaginable.
- selestify 6y agoWhy?
- vkou 6y agoBecause any food business already has insanely tight margins, and operates incredibly efficiently. The scenario proposed by the grandparent poster adds so much waste and slack and overhead in the system that the family-owned-and-operated Thai kitchen on Main St. will eat Uber's lunch, and the Dominos franchise two doors down from it will pick through its bones.
- barkingcat 6y agothe family operated kitchen on Main St. has rent, fire codes, safety equipment needs, some form of sanitation code/inspection to pass with the city. Uber Chef ignores all of that and bypasses all overhead - you don't need a restaurant or even the physical location of a building to employ chefs to cook food. No need for health inspections or expensive fire suppression equipment. (you use people who want to rent their home kitchens out for cooking) That's Uber's raison-d'etre - to bypass all legal restrictions and externalize all overhead in the way of getting the items to you. This isn't a joke, this is what Uber did with their taxi service at the beginning as MVP so why not do it to food services as well?
- rrrrrrrrrrrryan 6y agoI wouldn't go so far as saying they're "fundamentally unprofitable". They have a couple long-term options: the often-discussed one is autonomous driving (though it's becoming increasingly obvious this is many years out), but the less discussed one is vertical integration. It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants" in quotes, because it'll almost certainly just be warehouse-style kitchens, where drivers skid up out front and grab food from heated tables, and you won't be able to dine-in at all. It would fill the same role for aspiring restaurateurs as food trucks do today: a startup cost, low-barrier to entry way to build out a brand, rapidly iterate menu-items, and begin building revenue to eventually secure a business loan to open a proper restaurant. If UberEats can really squeeze both the drivers AND the restaurants, there's no fundamental reason that food delivery can't be done profitably - pizza companies have been doing it in almost all markets for decades. Brick and mortar retail stores got eaten by Amazon warehouses, and it seems inevitable that many brick and mortar restaurants will eventually get eaten by a massive tech company as well.
- darrenoc 6y agoIt's noteworthy that Deliveroo is already doing the kind of vertical integration you describe, it's called "Deliveroo Editions"
- s_dev 6y ago>It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants" in quotes, because it'll almost certainly just be warehouse-style kitchens, where drivers skid up out front and grab food from heated tables, and you won't be able to dine-in at all. The term for this is dark kitchens.
- et-al 6y ago> If UberEats can really squeeze both the drivers AND the restaurants, there's no fundamental reason that food delivery can't be done profitably - pizza companies have been doing it in almost all markets for decades. Pizza delivery is profitable because they sell cardboard and depend on teenager drivers relying on their parent's auto insurance. Anyone who's actually looked at the person delivering their food would have thought twice about the margins in food delivery. To spell it out: food delivery is often performed by immigrants with few choices for under-the-table work. The margins are thin-to-none. The current system has worked because no one's investigating the thousands of independent restaurants. Now tech companies are trying to do the same thing, but multimillion dollar corporations have a harder time hiding their labor exploitation from the public. Going back to ryan's point, I agree that with full vertical integration (dirt cheap ingredients and centralised factory kitchens), food delivery could be profitable, but at what point is one just selling frozen food from a microwave/oven in the back of a car?
- ab_testing 6y agoCOVID-19 is like the golden age of food delivery. If these food delivery apps are not profitable now, they will probably never be profitable. When the severity of COVID subsides in a few years, people will like to go out to eat again rather than have it delivered.
- iso1631 6y agoThe only reason I could think of to use something like ubereats, deliveroo, justeat, etc would be if I wanted a non-pizza delivered while I was staying in a hotel in a strange city somewhere. If I'm at home I'll look at the menu of my favourite indian/chineese/whatever place, phone them up, and they deliver it as they have done for decades. I've spent two nights in a hotel since March, normally it's 70 a year. One night I ordered a dominos as I got back to the hotel just before 2300. The other night I ate out with a supplier. Likewise with Uber, if I'm at home and not flying off somewhere, I'm not going to be ordering a taxi, either to get to the airport, or when I'm in a strange city on the other side of the planet. I can see this is the golden age of takeaways and home-delivery (which basically means amazon or groceries), but I don't see it for takeaways.
- cortesoft 6y agoI get so frustrated when people act like these food delivery services aren’t a WAY better user experience than the old version of having to call for delivery. So many times, I will be super busy with the kids, or work, or housework, and I will just pull up DoorDash with one hand (while the other is feeding a hangry 1 year old) and hit ‘reorder’ on one of my past meals. Literally 15 seconds and food is on the way. Compare this to having to call someone, wait on hold, give my phone number/address, tell them my order, correct the mistakes, find my wallet, get out my credit card, give them the number, confirm the number and expiration and security code, then sign a paper copy with the tip when the driver drops it off. Can I do the old style of delivery? Sure, but man it is a lot easier now.
- Balgair 6y agoNot to trivialize your experiences (toddlers are not easy), but for me, the list you give isn't all that much of a barrier. Yes, it is simpler to use the app, but not all that much more. Also, where I am, they take the credit card at the door, not over the phone. Most use a Square-style card reader attached to a work phone, even the mom-n-pop delivery, even now in the pandemic (they use gloves mostly).
- Shivetya 6y agoHas there been a delivery service that didn't have these issues? Raising the prices is effectively the only means, people don't seem to be put off by how much Instacart can jack prices; Costco even warns you the prices are much higher if you choose this as delivery. Pizza chains and others who own their delivery process can at least set where they will deliver and tend to encourage bigger purchases to avoid delivery charges and hopes of fresher food. I am going to assume the only type of agreement would be tighter integration with restaurants to the point the service name is hidden, as in contracting out drivers to particular restaurants but the difficulty there is guaranteeing a driver is always available. Basically an outsourcing for drivers. Restaurants get some filtering of drivers and drivers have a set number of stores with instant familiarity.
- treeman79 6y agoI once got paid 17 dollars to deliver a smoothie. Took me nearly an hour. I found most of clients fell into two categories. Poor and really should not be using the service. Rich areas where cost isn’t an issue. Middle of the day was to a lot of businesses/schools. Lunch tips were crap so I avoided that time frame.
- wmab 6y ago> It is a rare company that spends money and resources on verifying from their users' point of view that they're being delivered what was promised -- unless that company actively cares about the user. I wouldn't say it's rare. Companies that do this are very open to lawsuits but also bad press, and that's the thing all companies hate - having to make public statements and ultimately fix the issue, isn't worth it to any business at scale. The DoorDash tipgate was hugely embarrassing for them, and Uber has also been very publicly ridiculed in the past that the the last thing Dara wants is anymore bad press.
- karthikb 6y ago> It is a rare company that spends money and resources on verifying from their users' point of view that they're being delivered what was promised -- unless that company actively cares about the user. I have gotten a check from the CA Treasurer on a few occasions because I didn’t check some box and take a tax deduction that I was entitled to. Not a company, and certainly if I underpaid the state would come after me to be made whole. But some organizations do work both ways.
- zadkey 6y agoThe biggest reason I would say that the drivers are not independent contractors is that they are not allowed to set their own rates. Uber's argument that they are not employees is based on the concept that they only a platform facilitating a connection between drivers people who need rides or in this case deliveries. But if the contractors are truly separate entities, then Uber by controlling the cost of the ride/delivery, is fixing prices. https://www.huffpost.com/entry/legal-problem-could-crash-uber_n_5718d485e4b0479c59d714f6 https://www.huffpost.com/entry/legal-problem-could-crash-ube... I am not aware what the current status of legal rulings for or against Uber in this regard, but I believe my point still stands.
- supernova87a 6y agoWouldn't Uber's argument about this be that drivers do get to set their rates by the platform showing them and matching them with jobs that are at a rate they accept? Just because they can't put out a published $ figure on their desired per job rate, doesn't mean they're not setting their own rates that they accept?
- Jasper_ 6y agoUber Pool functions so that drivers automatically getting more and more riders added to their trip, without any way for them to reject passengers. I've been told stories of drivers getting 20+ pool rider chains in a row, without any option to take a break.
- cik2e 6y agoThis is false. It’s like 2 clicks to stop incoming requests, same with Lyft.
- enragedcacti 6y agoDriver's can get kicked off the platform if they reject too many rides, so I wouldn't necessarily call that setting your own rate. They can decide whether or not to be active based on surge rate which is something somewhat akin to setting a rate.
- cactus2093 6y agoJust 17% of Uber and Lyft drivers surveyed want to remain full-time employees [0]. How does this not stop this whole conversation in its tracks immediately? There's so much grandstanding about this, you and every other politician or upper middle class tech worker has their takes on how these poor drivers are being tricked into bad deals they can't understand and need the protection of full-time employment. But it's not a very good protection! There are a lot of downsides, and drivers simply don't want it, but for some reason a lot of people feel the need to force this change through anyway. Our current labor system, and its default assumption that tying yourself to a full-time job with a large company is the only way you deserve to have stability, is just very clearly showing its flaws here. It's not compatible with gig economy work, why can't we look for solutions that drivers would actually want, and that would help every other independent contractor? Things like improving overall safety nets, so that everyone has health coverage and is covered in the case of things like disabilities even if they don't work for a large company. Almost every take I read on the pro-AB5 side of this argument seems more focused on punishing Uber the corporation for some perceived moral failing, than on actually helping the drivers. It's quite bizarre. [0] https://www.forbes.com/sites/michaelgoldstein/2020/08/19/will-lyft-and-uber-bolt-california-over-states-anti-independent-contractor-law/#11aabac1103a https://www.forbes.com/sites/michaelgoldstein/2020/08/19/wil...
- AgloeDreams 6y agoWith extreme propaganda and marketing of anti-labor rights movements by the companies they work for, why would they?
- Analemma_ 6y agoIs there a more reliable source for that 17% number? The quoted figure comes from a poll by "TheRideshareGuy", which is apparently a magazine for rideshare drivers giving tips on maximizing earnings, and so whose entire existence is predicated on the rideshare business remaining as it is. So as a source for a question like this, it's basically worthless.
- cactus2093 6y agoThis is another survey with similar findings [0]. It was commissioned by Uber but conducted by an independent research firm, and the methodology is documented, so it's up to you how reliable of a source you find that. Since these are major lawsuits and it's also becoming a pretty big story in California, I imagine if there are significant flaws here or if there are other reputable surveys that have found the opposite, that those will start to surface. So far I haven't seen anything to that effect. [0] https://www.cadriversurvey.com/ https://www.cadriversurvey.com/ Edit: I missed in the irony in your comment as well on first read. There's an entire side industry devoted to helping workers maximize their profit, and many seem to have success doing so. That seems like a good thing, at least for those who want it? Compare that to other industries like Amazon warehouse workers, where many are full-time employees. It doesn't seem to have helped their working conditions much as there are a lot of complaints about the job, and if certain employees are more productive the company pockets the savings rather than the employees being able to make more money.