2 ms·

In the long term, one or both of the following is going to happen: 1. Delivery fees will go up. 2. Delivery companies will put strict limits on how many drive

In the long term, one or both of the following is going to happen: 1. Delivery fees will go up. 2. Delivery companies will put strict limits on how many drivers can be online at once, crippling the narrative in their marketing that drivers can choose their own hours. The latter is especially likely if companies are required to pay drivers when they're just sitting around and waiting for an order.

omegaworks 3y ago
3. Delivery companies are forced to extract less value from the people actually doing the work. A driver recently shared with me that he made $5 on a $23 ride I booked recently. Uber's margins are absolutely mad.
- 908B64B197 3y ago
  It's much better than what he would have made under the old medallion system Uber disrupted. Pre-Uber/Lyft, either the driver rented the car from a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid). Sure back then the dispatch only took a 15-20% cut, but medallion payments took at least a 50% cut on every ride. That money didn't get re-invested or re-distributed as incentives to drivers, no. It went straight to the pockets of the local rent-seeker. The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber/Lyft brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it. And I'm not even touching the usual pain points and often discriminatory practices of medallion drivers (refusing card payments, refusing rides to non-white passengers and to non-white neighborhoods...).
- PreachSoup 3y ago
  And this is how Uber somehow is taking the upper hand while Lyft is in a downward trend. Nobody was expecting this a few years ago during the boycott Uber scandal. Food delivery is way more lucrative than taxi business
- Sohcahtoa82 3y ago
  > A driver recently shared with me that he made $5 on a $23 ride I booked recently. Unless the driver went over a toll bridge, that payout rate should be downright criminal.
jackson1442 3y ago
> Delivery companies will put strict limits on how many drivers can be online at once, crippling the narrative in their marketing that drivers can choose their own hours. They already do this, if there are too many people online in an area the app will tell you to move to a different region before it will let you go online.

omegaworks 3y ago

3. Delivery companies are forced to extract less value from the people actually doing the work. A driver recently shared with me that he made $5 on a $23 ride I booked recently. Uber's margins are absolutely mad.

908B64B197 3y ago
It's much better than what he would have made under the old medallion system Uber disrupted. Pre-Uber/Lyft, either the driver rented the car from a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid). Sure back then the dispatch only took a 15-20% cut, but medallion payments took at least a 50% cut on every ride. That money didn't get re-invested or re-distributed as incentives to drivers, no. It went straight to the pockets of the local rent-seeker. The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber/Lyft brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it. And I'm not even touching the usual pain points and often discriminatory practices of medallion drivers (refusing card payments, refusing rides to non-white passengers and to non-white neighborhoods...).
PreachSoup 3y ago
And this is how Uber somehow is taking the upper hand while Lyft is in a downward trend. Nobody was expecting this a few years ago during the boycott Uber scandal. Food delivery is way more lucrative than taxi business
Sohcahtoa82 3y ago
> A driver recently shared with me that he made $5 on a $23 ride I booked recently. Unless the driver went over a toll bridge, that payout rate should be downright criminal.

jackson1442 3y ago

> Delivery companies will put strict limits on how many drivers can be online at once, crippling the narrative in their marketing that drivers can choose their own hours. They already do this, if there are too many people online in an area the app will tell you to move to a different region before it will let you go online.