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In a recession they provide a luxury good that might be down prioritized by customers to save money.

PeterisP 4y ago
In a recession some people suddenly are eager for any job, no matter how bad, driving down Uber's "cost of goods sold" i.e. driver fees.. But in general economic downturns are tricky, as they affect different groups differently - are the people who would suffer in a recession the same people who are currently using Uber?
- vkou 4y ago
  Driver fees are already so low that between depreciation, gas, and your time, you're barely making ends meet driving. They can't squeeze the drivers any further, unless they only want people to be driving 15-year-old beaters.
  - missedthecue 4y ago
    Boy, this is an evergreen narrative on HN, but I don't really think it's true. The total all-in cost of a Prius (depreciation, maintenance, gasoline, etc...) is about 30 cents per mile. Uber drivers make about $1-$2 per mile which is a pretty big margin. Uber has been around for over 10 years now. Sure, not everyone is an accountant, but if Uber drained every driver's wallet, they'd have noticed by now. Interesting that it's usually only people who have never driven for Uber that claim it's completely unprofitable.
    - vkou 4y ago
      How many uber drivers are in Priuses? I haven't ridden in a single one... How many people do you personally know that make their living as an Uber driver? I don't mean pensioners making beer money, or people doing it as a side job, here. I know one. He's been doing it for a year and half, or so. He doesn't own his car. he has to lease it on a weekly basis, and he's paying through the nose for the privilege. He's doing it because his credit is shit, and he has no savings to buy a car outright. He's getting ahead, but if driver rates get cut, he'll be going right back to being a line cook.
      - missedthecue 4y ago
        Almost every Uber I've ever taken has been a Prius, save for the few occasions I've been in an Uber black. Still, the math isn't much different for a Corolla or Civic. And the more you drive, the cheaper the cost per mile is. Personally, I don't know anyone driving full time, but still know several driving 10 or so hours per week and they make about $300 for it.
      - Jommi 4y ago
        the first sentence is a terrible take unfortunately, prius one of the most popular taxi and ridehailing cars ever, it's sully arund >50% of car supply in most western cities. As usual, you are conflsting your singular consumer experience of Uber with the global business giant Uber.
        vkou 4y ago
        Oh, I don't disagree about taxis. Priuses are everywhere in that space, and for good reason. If you are going to make a living driving, you should probably drive one. I do disagree on Ubers. I see very few Priuses, but there's a different explanation to that, that I missed. Casual drivers, people doing it as a side thing, or for beer money didn't optimize their car purchase for the purpose of driving a taxi. I suppose full-time drivers are more likely to drive one.
        cu6LANde9fbnSgw 4y ago
        I have literally never once seen a Prius as a taxi in the US.
      - mdorazio 4y ago
        PSA: Data on these kinds of questions is available. Here's the data for Chicago on Uber/Lyft vehicle type: https://data.cityofchicago.org/d/bc6b-sq4u/visualization https://data.cityofchicago.org/d/bc6b-sq4u/visualization It will vary by year and city, but generally speaking Toyotas tend to dominate ride share with Camry usually #1, then Prius, Corolla, and RAV4. However, the long tail is very long and you're about as likely to get a ride in a less cost effective vehicle.
    - disgruntledphd2 4y ago
      Back when I used to work for a FAANG in advertising I looked at how much money Uber was spending on driver advertising. At that point, I became convinced that Uber were doomed.
    - roughly 4y ago
      > The total all-in cost of a Prius (depreciation, maintenance, gasoline, etc...) is about 30 cents per mile One thing to note about Uber drivers is they’re typically putting 50-75k+ miles per year on their cars. I’m curious what that does to those depreciation/etc figures.
      - ceeplusplus 4y ago
        If you assume 25k MSRP on a base model Prius, and that the car will sell for $5k after 150k miles (absolute garbage offer - an actual number would be something like $10k-12k in today's market), then you get a worst case depreciation of 13 cents/mile. Let's say a Prius gets 45 mpg, gas costs $5/gal which gives you 11 cents/mile. Factor in tires and oil/brake fluid changes and maybe you get another $2k all in costs over the 150k miles, which is 1.3 cents/mile. All in costs around 30 cents seems right. That assumes absolute worst case depreciation too. And don't forget, the government lets you deduct 58 cents/mile off your taxes, so you actually make a profit off every mile driven.
        rileymat2 4y ago
        You need to do the math on a deduction v credit. If you are spending .30 and deducting .58, you need to multiply the .58 by your tax rate. You can’t simply say .58 - .30 is .28 and that is a profit of .28. Deductions don’t work that way.
        ceeplusplus 4y ago
        Okay, that's my bad. But if you assume an effective tax rate of 15% (combined federal + state + SS + Medicare), which sounds about right for an Uber driver making 40k/year, 0.58 * 15% * 75k mi/year is an $6525 tax reduction. A quick look at an income tax calculator says someone in California making 40k pays about 6k in tax, so your credit per mile is 6k / 75k = 8 cents/mile. Depending on your costs that could put you under 20 cents/mile in cost. And you get paid over $1/mile in practice, even on delivery orders. Really the only party getting screwed by gig apps is the government, because they get 0 tax revenue from these guys.
    - rileymat2 4y ago
      From the Uber fare estimator for a trip in East Lansing Michigan. Per-minute $0.17 Per-mile $1.20 ---- What is the catch? Drivers do not make any money while driving to pick someone up or after dropping someone off. Often, when I tried out driving, about half the miles driven were without a fare. Subtract the service fees from those numbers and it gets less lucrative.
      - rileymat2 4y ago
        Often pickup traffic was very "directional" people going to the bar at one time, people leaving at another, so often you would have to drive back to where you started the last fare for the next one.
    - cu6LANde9fbnSgw 4y ago
      Uber drivers don't make anywhere near $1-$2 per mile. More like $0.50-$1 according to some Googling ($1 seems reasonable from conversations with friends who drive for them, here in Austin). 30 cents per mile costs is also extremely low, at least on average.
      - missedthecue 4y ago
        I don't think that's extremely low at all. Prius forums are full of users who share their mileage costs.
- KptMarchewa 4y ago
  Yeah - Uber both eats and taxi part was extremely cheap during any restrictions. Now it's easily 100-150% more expensive here.
- juve1996 4y ago
  That's not true, really, in this case with inflation. There will be no point in taking such low paying jobs. We're already seeing massive shortages at the low end of employment - working for that cheap simply doesn't make economic sense.

In a recession some people suddenly are eager for any job, no matter how bad, driving down Uber's "cost of goods sold" i.e. driver fees.. But in general economic downturns are tricky, as they affect different groups differently - are the people who would suffer in a recession the same people who are currently using Uber?

vkou 4y ago
Driver fees are already so low that between depreciation, gas, and your time, you're barely making ends meet driving. They can't squeeze the drivers any further, unless they only want people to be driving 15-year-old beaters.
- missedthecue 4y ago
  Boy, this is an evergreen narrative on HN, but I don't really think it's true. The total all-in cost of a Prius (depreciation, maintenance, gasoline, etc...) is about 30 cents per mile. Uber drivers make about $1-$2 per mile which is a pretty big margin. Uber has been around for over 10 years now. Sure, not everyone is an accountant, but if Uber drained every driver's wallet, they'd have noticed by now. Interesting that it's usually only people who have never driven for Uber that claim it's completely unprofitable.
  - vkou 4y ago
    How many uber drivers are in Priuses? I haven't ridden in a single one... How many people do you personally know that make their living as an Uber driver? I don't mean pensioners making beer money, or people doing it as a side job, here. I know one. He's been doing it for a year and half, or so. He doesn't own his car. he has to lease it on a weekly basis, and he's paying through the nose for the privilege. He's doing it because his credit is shit, and he has no savings to buy a car outright. He's getting ahead, but if driver rates get cut, he'll be going right back to being a line cook.
    - missedthecue 4y ago
      Almost every Uber I've ever taken has been a Prius, save for the few occasions I've been in an Uber black. Still, the math isn't much different for a Corolla or Civic. And the more you drive, the cheaper the cost per mile is. Personally, I don't know anyone driving full time, but still know several driving 10 or so hours per week and they make about $300 for it.
    - Jommi 4y ago
      the first sentence is a terrible take unfortunately, prius one of the most popular taxi and ridehailing cars ever, it's sully arund >50% of car supply in most western cities. As usual, you are conflsting your singular consumer experience of Uber with the global business giant Uber.
      - vkou 4y ago
        Oh, I don't disagree about taxis. Priuses are everywhere in that space, and for good reason. If you are going to make a living driving, you should probably drive one. I do disagree on Ubers. I see very few Priuses, but there's a different explanation to that, that I missed. Casual drivers, people doing it as a side thing, or for beer money didn't optimize their car purchase for the purpose of driving a taxi. I suppose full-time drivers are more likely to drive one.
      - cu6LANde9fbnSgw 4y ago
        I have literally never once seen a Prius as a taxi in the US.
    - mdorazio 4y ago
      PSA: Data on these kinds of questions is available. Here's the data for Chicago on Uber/Lyft vehicle type: https://data.cityofchicago.org/d/bc6b-sq4u/visualization https://data.cityofchicago.org/d/bc6b-sq4u/visualization It will vary by year and city, but generally speaking Toyotas tend to dominate ride share with Camry usually #1, then Prius, Corolla, and RAV4. However, the long tail is very long and you're about as likely to get a ride in a less cost effective vehicle.
  - disgruntledphd2 4y ago
    Back when I used to work for a FAANG in advertising I looked at how much money Uber was spending on driver advertising. At that point, I became convinced that Uber were doomed.
  - roughly 4y ago
    > The total all-in cost of a Prius (depreciation, maintenance, gasoline, etc...) is about 30 cents per mile One thing to note about Uber drivers is they’re typically putting 50-75k+ miles per year on their cars. I’m curious what that does to those depreciation/etc figures.
    - ceeplusplus 4y ago
      If you assume 25k MSRP on a base model Prius, and that the car will sell for $5k after 150k miles (absolute garbage offer - an actual number would be something like $10k-12k in today's market), then you get a worst case depreciation of 13 cents/mile. Let's say a Prius gets 45 mpg, gas costs $5/gal which gives you 11 cents/mile. Factor in tires and oil/brake fluid changes and maybe you get another $2k all in costs over the 150k miles, which is 1.3 cents/mile. All in costs around 30 cents seems right. That assumes absolute worst case depreciation too. And don't forget, the government lets you deduct 58 cents/mile off your taxes, so you actually make a profit off every mile driven.
      - rileymat2 4y ago
        You need to do the math on a deduction v credit. If you are spending .30 and deducting .58, you need to multiply the .58 by your tax rate. You can’t simply say .58 - .30 is .28 and that is a profit of .28. Deductions don’t work that way.
        ceeplusplus 4y ago
        Okay, that's my bad. But if you assume an effective tax rate of 15% (combined federal + state + SS + Medicare), which sounds about right for an Uber driver making 40k/year, 0.58 * 15% * 75k mi/year is an $6525 tax reduction. A quick look at an income tax calculator says someone in California making 40k pays about 6k in tax, so your credit per mile is 6k / 75k = 8 cents/mile. Depending on your costs that could put you under 20 cents/mile in cost. And you get paid over $1/mile in practice, even on delivery orders. Really the only party getting screwed by gig apps is the government, because they get 0 tax revenue from these guys.
  - rileymat2 4y ago
    From the Uber fare estimator for a trip in East Lansing Michigan. Per-minute $0.17 Per-mile $1.20 ---- What is the catch? Drivers do not make any money while driving to pick someone up or after dropping someone off. Often, when I tried out driving, about half the miles driven were without a fare. Subtract the service fees from those numbers and it gets less lucrative.
    - rileymat2 4y ago
      Often pickup traffic was very "directional" people going to the bar at one time, people leaving at another, so often you would have to drive back to where you started the last fare for the next one.
  - cu6LANde9fbnSgw 4y ago
    Uber drivers don't make anywhere near $1-$2 per mile. More like $0.50-$1 according to some Googling ($1 seems reasonable from conversations with friends who drive for them, here in Austin). 30 cents per mile costs is also extremely low, at least on average.
    - missedthecue 4y ago
      I don't think that's extremely low at all. Prius forums are full of users who share their mileage costs.
KptMarchewa 4y ago
Yeah - Uber both eats and taxi part was extremely cheap during any restrictions. Now it's easily 100-150% more expensive here.
juve1996 4y ago
That's not true, really, in this case with inflation. There will be no point in taking such low paying jobs. We're already seeing massive shortages at the low end of employment - working for that cheap simply doesn't make economic sense.