4 ms·

You are 100% correct. This is the magic There are people who want to make a positive return on their time + vehicle depreciation. But they are on the open mark

by acchow 5y ago

You are 100% correct. This is the magic There are people who want to make a positive return on their time + vehicle depreciation. But they are on the open market competing against people who are in a cash crunch and happy to have a net negative return on the same, as long as it temporarily allows them to convert depreciation into cash. This is why drivers will always lose in the long term. They are racing against each other to the bottom. I've also had Uber drivers who don't need the money at all - they just like talking to new people and are bored on a Saturday night. This of course drives the price down further. These are often the ones with a very nice car. As other sibling comments have mentioned, many Uber drivers have no idea that this is what their gig is doing - converting depreciation into cash flow in a net-negative way. Maybe Uber's marketing style to drivers needs to be amended by law?

bombcar 5y ago
I suspect that few Uber drivers have the time or ability to fully plot out depreciation costs, and instead do a simple “tank of gas + X hours = cash”. After all you end up with the same car afterwards, right? Taking advantage of people who don’t work it out for themselves is despicable at best, highly immoral at worst.
hackernewds 5y ago
The missing part of this jigsaw is that not everyone is _simultaneously_ seeking to _temporarily_ convert depreciation into cash. with enough market players, such a microsystem can sustain itself
- acchow 5y ago
  There could be an equilibrium where players are net positive. But given the housing shortage, how expensive everything is, and how many people are raising children paycheck to paycheck, I just don't see how we'd be arriving at such an equilibrium in the US. Maybe in some rich Northern European country.
ceeplusplus 5y ago
That's because depreciation is a paper loss. If you're an average person you're not selling your car for a new one for at least 7-8 years after you buy it. By that time it's worth very little of its original cost anyways. The only actual cost incurred by the driver is repairs and maintenance, which is nowhere near the cost of depreciation on the car. In effect, the depreciation schedule changes, but on the time scales of your average person the net result after 7-8 years of ownership is the same total depreciation. For corporate owners who have to report depreciation as a loss this schedule is not great, but for individuals it's not a real loss.
- john_moscow 5y ago
  Except for having to change tires, oil and brake pads earlier, and also having to deal with more mechanical issues due to sheer mileage.
  - AussieWog93 5y ago
    Those are all maintenance and repair expenses, which GP mentioned.
- nullc 5y ago
  Mileage driven depreciation is a real loss until the car is fairly old: More miles directly reduces the price you can get selling the used car. Uber won't accept drivers driving old beaters where that curve has flatted out.
  - ceeplusplus 5y ago
    According to KBB a 2010 Toyota Prius (just selected as an example) only has a price estimate differential of $3000 between 100k miles and 400k miles. Even if you bump that up to 5k for a newer car, it's still insubstantial compared to the overall depreciation on the car from its new value of ~$25k to a 8-year used value of 3-6k. That 20k extra depreciation is not recognized by individuals but is by corporate owners.
LudwigNagasena 5y ago
Perhaps the society just should make it easier for the destitute to find appropriate means to support themselves? People act as if the fact that some people who are bored on a Saturday night are ready to give a cheap ride is a problem. It seems like it an absolute good and totally not a problem and should not be “fixed”.
- kwhitefoot 5y ago
  But while there are poorer people driving for Uber, etc., the existence of dilettante drivers is very much a problem for those poorer drivers. It's like special offers in shops; for someone like me who has spare money and plenty of storage space they are great, but for someone genuinely poor they are often unusable either because they don't have the cash at that moment or because they have nowhere to store it. It's expensive to be poor. See https://wiki.lspace.org/Vimes_Boots_Index https://wiki.lspace.org/Vimes_Boots_Index You are right of course that fixing the poverty is the right thing to do.
- Jochim 5y ago
  This line of argument reminds me of the news stories encouraging retirees to come back to work during the "labour shortage". The problem isn't that bored people are helping out, it's that by doing so they negatively affect the people that are reliant on carrying out that labour to keep themselves fed and sheltered. For perspective, try imagining that some well off retired ex-$your_job walks up to your boss and offers to replace you for free, working the same hours because they're bored.
- acchow 5y ago
  I’m not at all saying bored people should not be allowed to drive for Uber for fun. I’m saying the marketing to drivers needs to change. Uber pretend it’s some great paying gig and markets hard like this. It deceives people who have no idea how to do depreciation calculations
FabHK 5y ago
Maybe Uber could be forced to display Total Cost of Ownership numbers for the car (per mile driven), and contrast with the revenue the drivers obtain. Make it fancy and throw in average and marginal cost. The data should be readily available for most cars, from sites such as Edmunds etc.

by acchow 5y ago

bombcar 5y ago

I suspect that few Uber drivers have the time or ability to fully plot out depreciation costs, and instead do a simple “tank of gas + X hours = cash”. After all you end up with the same car afterwards, right? Taking advantage of people who don’t work it out for themselves is despicable at best, highly immoral at worst.

hackernewds 5y ago

The missing part of this jigsaw is that not everyone is _simultaneously_ seeking to _temporarily_ convert depreciation into cash. with enough market players, such a microsystem can sustain itself

acchow 5y ago
There could be an equilibrium where players are net positive. But given the housing shortage, how expensive everything is, and how many people are raising children paycheck to paycheck, I just don't see how we'd be arriving at such an equilibrium in the US. Maybe in some rich Northern European country.

ceeplusplus 5y ago

That's because depreciation is a paper loss. If you're an average person you're not selling your car for a new one for at least 7-8 years after you buy it. By that time it's worth very little of its original cost anyways. The only actual cost incurred by the driver is repairs and maintenance, which is nowhere near the cost of depreciation on the car. In effect, the depreciation schedule changes, but on the time scales of your average person the net result after 7-8 years of ownership is the same total depreciation. For corporate owners who have to report depreciation as a loss this schedule is not great, but for individuals it's not a real loss.

john_moscow 5y ago
Except for having to change tires, oil and brake pads earlier, and also having to deal with more mechanical issues due to sheer mileage.
- AussieWog93 5y ago
  Those are all maintenance and repair expenses, which GP mentioned.
nullc 5y ago
Mileage driven depreciation is a real loss until the car is fairly old: More miles directly reduces the price you can get selling the used car. Uber won't accept drivers driving old beaters where that curve has flatted out.
- ceeplusplus 5y ago
  According to KBB a 2010 Toyota Prius (just selected as an example) only has a price estimate differential of $3000 between 100k miles and 400k miles. Even if you bump that up to 5k for a newer car, it's still insubstantial compared to the overall depreciation on the car from its new value of ~$25k to a 8-year used value of 3-6k. That 20k extra depreciation is not recognized by individuals but is by corporate owners.

LudwigNagasena 5y ago

Perhaps the society just should make it easier for the destitute to find appropriate means to support themselves? People act as if the fact that some people who are bored on a Saturday night are ready to give a cheap ride is a problem. It seems like it an absolute good and totally not a problem and should not be “fixed”.

kwhitefoot 5y ago
But while there are poorer people driving for Uber, etc., the existence of dilettante drivers is very much a problem for those poorer drivers. It's like special offers in shops; for someone like me who has spare money and plenty of storage space they are great, but for someone genuinely poor they are often unusable either because they don't have the cash at that moment or because they have nowhere to store it. It's expensive to be poor. See https://wiki.lspace.org/Vimes_Boots_Index https://wiki.lspace.org/Vimes_Boots_Index You are right of course that fixing the poverty is the right thing to do.
Jochim 5y ago
This line of argument reminds me of the news stories encouraging retirees to come back to work during the "labour shortage". The problem isn't that bored people are helping out, it's that by doing so they negatively affect the people that are reliant on carrying out that labour to keep themselves fed and sheltered. For perspective, try imagining that some well off retired ex-$your_job walks up to your boss and offers to replace you for free, working the same hours because they're bored.
acchow 5y ago
I’m not at all saying bored people should not be allowed to drive for Uber for fun. I’m saying the marketing to drivers needs to change. Uber pretend it’s some great paying gig and markets hard like this. It deceives people who have no idea how to do depreciation calculations

FabHK 5y ago

Maybe Uber could be forced to display Total Cost of Ownership numbers for the car (per mile driven), and contrast with the revenue the drivers obtain. Make it fancy and throw in average and marginal cost. The data should be readily available for most cars, from sites such as Edmunds etc.