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My suspicion, which some drivers have anecdotally confirmed, is that the income is outpaced by the depreciation on the cars. Uber’s real business appears to be

My suspicion, which some drivers have anecdotally confirmed, is that the income is outpaced by the depreciation on the cars. Uber’s real business appears to be financing on the cars.

toomuchtodo 3y ago
Uber is a way for unsophisticated drivers to convert vehicle depreciation to immediate income at a poor conversion rate, under the guise of a sustainable taxi platform.
- throwaway2990 3y ago
  I just use Uber to order a taxi. Not randoms.
- moomoo11 3y ago
  I spoke to a driver and he said he leases car for $2xx a month. He drives 10+ hours a day and had like 60k trips completed. I'm sure he is doing okay.
  - 13of40 3y ago
    That's still just pushing the cost onto someone else, isn't it? City driving for 10 hours a day is going to put 3 or 4 times as many miles on the car as the leasing company estimates. Unless they've accommodated for that in the contract they're going to get a worn out piece of junk at the end that they can't resell.
    - bombcar 3y ago
      The trick is if you can do short trips, you can get in under the lease amount of miles even though the hours would be massively high. It's rare, but it can happen.
      - amdolan 3y ago
        What a world where we’re optimizing for to pass the fucking over to someone else, and the major benefactor is harvesting at scale.
        hedora 3y ago
        Remember Uber’s vehicle lease program? They brought the fucking over and being fucked over steps in-house, but outsourced the middlemen. Amazing!
      - alphabettsy 3y ago
        This isn’t happening for any rideshare driver. I can’t imagine a scenario where you drive 8 hours a day and don’t exceed the normal 10-15k mile/yr lease. The average person can barely stay under the 15k.
    - thfuran 3y ago
      That's not how leases work. There's a mileage limit in the lease and if it's exceeded, the lessee is the one who gets screwed with fees.
  - burkaman 3y ago
    If he's been working 10+ hours a day for years then I don't think he is doing ok. That is a difficult life.
- AnthonyMouse 3y ago
  I still don't get this argument. The amount of depreciation that comes from miles is quite small. Suppose you've driven your Prius for Uber for a few years. The bluebook on a 2010 Prius with 156,000 miles (the expected number for a 13 year old car) is ~$4000. If driving for Uber instead caused you to have 500,000 miles on it the bluebook value would be ~$2500, so the extra miles reduced the car's value by ~$1500. By contrast, at 50 MPG and $3/gallon the extra 344,000 miles would have cost you >$20,000 in gas. When you already have the car as a sunk cost because you need one for yourself, the depreciation is almost completely irrelevant unless you're doing something ridiculous like selling the car when it still has significant market value left.
  - BrentOzar 3y ago
    > If driving for Uber instead caused you to have 500,000 miles on it Try to find a 2010 Prius with over 300,000 miles. There are only a handful in the US because they fall apart long before 500,000 miles. Depreciation isn't just about the car's value - it's also about the amount of mechanical work you have to put in for the suspension, tires, brakes, etc during the time that it goes from 150,000 miles to 500,000 miles. My mom's 2010-era Prius is a good example. The dash displays failed at around 100,000 miles, and she bought a new car rather than pay $2,500 to have the dash pulled out and display replaced.
    - AnthonyMouse 3y ago
      > Try to find a 2010 Prius with over 300,000 miles. This isn't hard to find when they're used for car service. They're harder to find on the used market because the people who put >300,000 miles on a car don't generally sell them while they still run. > Depreciation isn't just about the car's value Depreciation is just about the car's value. Repairs aren't depreciation. And many of the people who drive as an occupation learn to repair their own vehicles, so they have lower repair costs than other people.
      - mlyle 3y ago
        The point that he's making is that your figure includes survival bias-- you're looking only at the cars that "make it" rather than are scrapped before this point. And you're also ignoring that upkeep and maintenance isn't linear with mileage. A big fraction of things that we consider depreciated to zero are still worth something. A big fraction fail before the point where we would do that. A big fraction incur larger operating costs later in their lifetime.
searealist 3y ago
This appears like a clever thing to say, but it just isn't true, and it's easy to verify.
- metabagel 3y ago
  How?
- Guvante 3y ago
  Assuming you buy a cheap Corolla that lasts 200k miles without major repairs you are looking at $0.125/mi, gas at $4/gal and 32mi/gal is the same putting you at $0.25/mi. Given Uber pays $0.63/mi you are giving up half of your income to your car. When people say that you are paying in depreciation they are talking about more expensive cars. A $60k car that can go 150k miles and a 24 mi/gal fuel economy turns it into a $0.56/mi cost.
  - thfuran 3y ago
    No major repairs and no routine maintenance?
    - Guvante 3y ago
      200k miles is what $1k in maintenance? I was listing it but it was a rounding error. I felt like 200k is also before major repairs for the types of vehicle you would want for this. If you had $9k repairs and $1k of maintenance it would be 0.05/mi of cost but the former seems padded for a $20k vehicle.
      - thfuran 3y ago
        1k for 200,00 miles? I think you'd probably spend more than that on just tires, and that's not counting the oil changes, probably multiple brake replacements, and likely a few belts and some struts.
- wayeq 3y ago
  in other words, it's a comment on the internet

My suspicion, which some drivers have anecdotally confirmed, is that the income is outpaced by the depreciation on the cars. Uber’s real business appears to be financing on the cars.

toomuchtodo 3y ago

Uber is a way for unsophisticated drivers to convert vehicle depreciation to immediate income at a poor conversion rate, under the guise of a sustainable taxi platform.

throwaway2990 3y ago
I just use Uber to order a taxi. Not randoms.
moomoo11 3y ago
I spoke to a driver and he said he leases car for $2xx a month. He drives 10+ hours a day and had like 60k trips completed. I'm sure he is doing okay.
- 13of40 3y ago
  That's still just pushing the cost onto someone else, isn't it? City driving for 10 hours a day is going to put 3 or 4 times as many miles on the car as the leasing company estimates. Unless they've accommodated for that in the contract they're going to get a worn out piece of junk at the end that they can't resell.
  - bombcar 3y ago
    The trick is if you can do short trips, you can get in under the lease amount of miles even though the hours would be massively high. It's rare, but it can happen.
    - amdolan 3y ago
      What a world where we’re optimizing for to pass the fucking over to someone else, and the major benefactor is harvesting at scale.
      - hedora 3y ago
        Remember Uber’s vehicle lease program? They brought the fucking over and being fucked over steps in-house, but outsourced the middlemen. Amazing!
    - alphabettsy 3y ago
      This isn’t happening for any rideshare driver. I can’t imagine a scenario where you drive 8 hours a day and don’t exceed the normal 10-15k mile/yr lease. The average person can barely stay under the 15k.
  - thfuran 3y ago
    That's not how leases work. There's a mileage limit in the lease and if it's exceeded, the lessee is the one who gets screwed with fees.
- burkaman 3y ago
  If he's been working 10+ hours a day for years then I don't think he is doing ok. That is a difficult life.
AnthonyMouse 3y ago
I still don't get this argument. The amount of depreciation that comes from miles is quite small. Suppose you've driven your Prius for Uber for a few years. The bluebook on a 2010 Prius with 156,000 miles (the expected number for a 13 year old car) is ~$4000. If driving for Uber instead caused you to have 500,000 miles on it the bluebook value would be ~$2500, so the extra miles reduced the car's value by ~$1500. By contrast, at 50 MPG and $3/gallon the extra 344,000 miles would have cost you >$20,000 in gas. When you already have the car as a sunk cost because you need one for yourself, the depreciation is almost completely irrelevant unless you're doing something ridiculous like selling the car when it still has significant market value left.
- BrentOzar 3y ago
  > If driving for Uber instead caused you to have 500,000 miles on it Try to find a 2010 Prius with over 300,000 miles. There are only a handful in the US because they fall apart long before 500,000 miles. Depreciation isn't just about the car's value - it's also about the amount of mechanical work you have to put in for the suspension, tires, brakes, etc during the time that it goes from 150,000 miles to 500,000 miles. My mom's 2010-era Prius is a good example. The dash displays failed at around 100,000 miles, and she bought a new car rather than pay $2,500 to have the dash pulled out and display replaced.
  - AnthonyMouse 3y ago
    > Try to find a 2010 Prius with over 300,000 miles. This isn't hard to find when they're used for car service. They're harder to find on the used market because the people who put >300,000 miles on a car don't generally sell them while they still run. > Depreciation isn't just about the car's value Depreciation is just about the car's value. Repairs aren't depreciation. And many of the people who drive as an occupation learn to repair their own vehicles, so they have lower repair costs than other people.
    - mlyle 3y ago
      The point that he's making is that your figure includes survival bias-- you're looking only at the cars that "make it" rather than are scrapped before this point. And you're also ignoring that upkeep and maintenance isn't linear with mileage. A big fraction of things that we consider depreciated to zero are still worth something. A big fraction fail before the point where we would do that. A big fraction incur larger operating costs later in their lifetime.

searealist 3y ago

This appears like a clever thing to say, but it just isn't true, and it's easy to verify.

metabagel 3y ago
How?
Guvante 3y ago
Assuming you buy a cheap Corolla that lasts 200k miles without major repairs you are looking at $0.125/mi, gas at $4/gal and 32mi/gal is the same putting you at $0.25/mi. Given Uber pays $0.63/mi you are giving up half of your income to your car. When people say that you are paying in depreciation they are talking about more expensive cars. A $60k car that can go 150k miles and a 24 mi/gal fuel economy turns it into a $0.56/mi cost.
- thfuran 3y ago
  No major repairs and no routine maintenance?
  - Guvante 3y ago
    200k miles is what $1k in maintenance? I was listing it but it was a rounding error. I felt like 200k is also before major repairs for the types of vehicle you would want for this. If you had $9k repairs and $1k of maintenance it would be 0.05/mi of cost but the former seems padded for a $20k vehicle.
    - thfuran 3y ago
      1k for 200,00 miles? I think you'd probably spend more than that on just tires, and that's not counting the oil changes, probably multiple brake replacements, and likely a few belts and some struts.
wayeq 3y ago
in other words, it's a comment on the internet