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I've been riding Uber since October 2010, and I've chatted with plenty of drivers. Many of them used to be taxi drivers and have told me about how much they pr

I've been riding Uber since October 2010, and I've chatted with plenty of drivers. Many of them used to be taxi drivers and have told me about how much they prefer driving for Uber. They also tend to be very happy with their income. I remember in particular one recent driver's big grin as he raved about Uber and praised Travis the entire ride for letting him, his wife, and his two kids live such a great lifestyle. His wife would even take the car out and do some Uber driving once in a while while he spent time with the kids. The calculations in the article seem to be based on just a couple numbers -- such as the 40,000 miles per year that Uber gave for the purpose of cost of ownership calculation, which is used to try to calculate the hours drivers work and the fare they earn per hour. Some real numbers about fares earned would help here. The conclusion is not clearly stated in the "Conclusion" section, but here's my interpretation: If you make certain assumptions about an uberX driver, you find they make about as much as a typical taxi driver. This suggests that driving uberX instead of a taxi does not automatically put you in a completely different income bracket, but I think the devil is in the details. Obviously the spread between different drivers is much, much larger than the spread between taxis and uberXs. If we made a histogram of income for each and superimposed them, they would be two humps with a lot of overlap. It would be more interesting to know, for example, how the jobs of top-earning uberX drivers and top taxi drivers compare. Then there are implications that Uber is another Groupon, and its financial success is dependent on a steady stream of investment dollars. Well, Uber is making plenty of money. They write software and do operations and the money just pours in. Every user is a paying customer, and the vast majority of users come away satisfied and happy to have a better way to get from point A to point B. The drivers make money and are thrilled. Some people take Uber literally every day. Seems like a pretty good business to me.

jnks 12y ago
You're arguing strawman points the article doesn't make. The primary claims I see are 1. Uber drivers don't make as much as Uber PR claims (based on data Uber provided). 2. Uber the business doesn't seem to be wildly profitable, or at least not in a defendable way (based partly on data Uber provided). 3. The large amount of capital being injected into Uber are not indicators of growing real value, but instead indicators of a weaker-than-acknowledged business. It's possible for all of the above to be true but for drivers and riders to both be very happy with the service. Especially since UberX seems to be offering rides for below market prices but the drivers are getting switching bonuses and per-hour guarantees (see elsewhere in this thread).
- tkfu 12y ago
  Also, "I talked to somebody currently working for this company while they're at their job, and they told me it was great" is not exactly a very reliable way to get data.
  - mseebach 12y ago
    No, having them voluntarily start gushing about how great it is is better. Also, who is the boss/supervisor who would fire or penalise the driver for saying it's not great? More importantly, since there no strenuous and expensive licencing going on, it's simple to just stop being an Uber driver if it doesn't suit you.
    - bildung 12y ago
      > Also, who is the boss/supervisor who would fire or penalise the driver for saying it's not great? From the view of the driver it could be you: It's not that uncommon for corporations to test employees like that using HR people disguised as customers. I have no idea whether Uber does that, though.
  - dgreensp 12y ago
    If I talk to a hundred drivers and pretty much every one is happy, then I'm going to be skeptical of a rough spreadsheet that's supposed to say they're getting financially shafted and are going to quit.
- jessaustin 12y ago
  3. The large amount of capital being injected into Uber are not indicators of growing real value, but instead indicators of a weaker-than-acknowledged business. This is a common way for investors to get screwed, but in this case it may reflect their belief that Uber is well-placed to capitalize on the impending self-driving-car phenomenon. They could be wrong about that, of course, for any number of reasons, but at least it's not Groupon.
- dgreensp 12y ago
  1. This may be true, but the article doesn't offer a strong rebuttal, nor does it stop there before throwing around a bunch of other arguments against Uber as a business. 2. Uber is extremely profitable and growing a ton. The only argument here is about whether its profitability or growth is not sustainable because drivers are getting a bum deal, or merely a run-of-the-mill deal, while all appearances are to the contrary. It's pretty easy to tell when people are happy. Groupon was generally hated by small businesses, while Uber is loved by operators of limos and taxis. People aren't idiots; they know when a service is good for their bottom line and when it isn't. 3. Raising a big round doesn't in itself mean a company is a strong or weak business, though it will increase debate about it.
Shebanator 12y ago
Your point about the calculations being based on only a couple of Uber-supplied data points is spot on. There is an awful lot of assuming going on in that analysis. FWIW, I've also talked with a handful of uber drivers in SF and LA, and they have all said they are making more money now than they did driving cabs. The biggest difference was indeed utilization - the example given a couple of times was that as taxi drivers, they would drive someone to the airport and have to drive home empty, since they didn't have the necessary licenses to work inside the airport and it wasn't cost effective to hang around hoping for fares on city steets outside their own territory. On the other hand, with Uber they often would drop someone off at the airport and immediately pick up another fare back to their own area.
- bsder 12y ago
  Primarily because a lot of them are actually picking up airport fares illegally.
  - aianus 12y ago
    Why is that even a thing?
  - toomuchtodo 12y ago
    Fine, the ride from the airport to off airport grounds is free, and the meter can start there.
soup10 12y ago
Uber's revenues were leaked earlier this year(http://techcrunch.com/2013/12/04/leaked-uber-numbers-which-weve-confirmed-point-to-over-1b-gross-revenue-213m-revenue/ http://techcrunch.com/2013/12/04/leaked-uber-numbers-which-w...), they're earning buckets of money and would thrive without VC investment, assuming they can continue to shirk regulation. Long term if cities allow services like Uber and Lyft to exist the margins will likely decrease since drivers can switch to the company that pays the best, and consumers will use the service with the best rates.

jnks 12y ago

You're arguing strawman points the article doesn't make. The primary claims I see are 1. Uber drivers don't make as much as Uber PR claims (based on data Uber provided). 2. Uber the business doesn't seem to be wildly profitable, or at least not in a defendable way (based partly on data Uber provided). 3. The large amount of capital being injected into Uber are not indicators of growing real value, but instead indicators of a weaker-than-acknowledged business. It's possible for all of the above to be true but for drivers and riders to both be very happy with the service. Especially since UberX seems to be offering rides for below market prices but the drivers are getting switching bonuses and per-hour guarantees (see elsewhere in this thread).

tkfu 12y ago
Also, "I talked to somebody currently working for this company while they're at their job, and they told me it was great" is not exactly a very reliable way to get data.
- mseebach 12y ago
  No, having them voluntarily start gushing about how great it is is better. Also, who is the boss/supervisor who would fire or penalise the driver for saying it's not great? More importantly, since there no strenuous and expensive licencing going on, it's simple to just stop being an Uber driver if it doesn't suit you.
  - bildung 12y ago
    > Also, who is the boss/supervisor who would fire or penalise the driver for saying it's not great? From the view of the driver it could be you: It's not that uncommon for corporations to test employees like that using HR people disguised as customers. I have no idea whether Uber does that, though.
- dgreensp 12y ago
  If I talk to a hundred drivers and pretty much every one is happy, then I'm going to be skeptical of a rough spreadsheet that's supposed to say they're getting financially shafted and are going to quit.
jessaustin 12y ago
3. The large amount of capital being injected into Uber are not indicators of growing real value, but instead indicators of a weaker-than-acknowledged business. This is a common way for investors to get screwed, but in this case it may reflect their belief that Uber is well-placed to capitalize on the impending self-driving-car phenomenon. They could be wrong about that, of course, for any number of reasons, but at least it's not Groupon.
dgreensp 12y ago
1. This may be true, but the article doesn't offer a strong rebuttal, nor does it stop there before throwing around a bunch of other arguments against Uber as a business. 2. Uber is extremely profitable and growing a ton. The only argument here is about whether its profitability or growth is not sustainable because drivers are getting a bum deal, or merely a run-of-the-mill deal, while all appearances are to the contrary. It's pretty easy to tell when people are happy. Groupon was generally hated by small businesses, while Uber is loved by operators of limos and taxis. People aren't idiots; they know when a service is good for their bottom line and when it isn't. 3. Raising a big round doesn't in itself mean a company is a strong or weak business, though it will increase debate about it.

Shebanator 12y ago

Your point about the calculations being based on only a couple of Uber-supplied data points is spot on. There is an awful lot of assuming going on in that analysis. FWIW, I've also talked with a handful of uber drivers in SF and LA, and they have all said they are making more money now than they did driving cabs. The biggest difference was indeed utilization - the example given a couple of times was that as taxi drivers, they would drive someone to the airport and have to drive home empty, since they didn't have the necessary licenses to work inside the airport and it wasn't cost effective to hang around hoping for fares on city steets outside their own territory. On the other hand, with Uber they often would drop someone off at the airport and immediately pick up another fare back to their own area.

bsder 12y ago
Primarily because a lot of them are actually picking up airport fares illegally.
- aianus 12y ago
  Why is that even a thing?
- toomuchtodo 12y ago
  Fine, the ride from the airport to off airport grounds is free, and the meter can start there.

soup10 12y ago

Uber's revenues were leaked earlier this year(http://techcrunch.com/2013/12/04/leaked-uber-numbers-which-weve-confirmed-point-to-over-1b-gross-revenue-213m-revenue/ http://techcrunch.com/2013/12/04/leaked-uber-numbers-which-w...), they're earning buckets of money and would thrive without VC investment, assuming they can continue to shirk regulation. Long term if cities allow services like Uber and Lyft to exist the margins will likely decrease since drivers can switch to the company that pays the best, and consumers will use the service with the best rates.