4 ms·

I feel like this race to the bottom is going to be a real issue for drivers at one point. What signals are the market going to send that drivers aren't earning

by rtpg 12y ago

I feel like this race to the bottom is going to be a real issue for drivers at one point. What signals are the market going to send that drivers aren't earning enough? Or is cab driving going to become a "part-time job " for everyone?

dclusin 12y ago
When the fares do not support car upkeep + owners time value they will stop getting lower. Assuming all uber drivers are behaving rationally (not a dig at uber, just that people do irrational stuff all the time).
jmckib 12y ago
Supply and demand: http://www.investopedia.com/university/economics/economics3.asp http://www.investopedia.com/university/economics/economics3....
- rtpg 12y ago
  Except here the drivers are not setting the price, Uber is. This is effectively a monopoly of two markets (both between the drivers and Uber, and Uber and the customers). Supply and demand don't magically make things better if there's no, or limited choice. I'm not aware of the capital costs of entering a market like Uber, but I feel like it's probably pretty high (esp. considering their rollout techniques like '2 free weeks of rides'). This is basically exactly what happened to telecom service: There might be a bunch of services but locally drivers will only have the choice between one or two. "They could get other jobs" you might say, but people tend to overestimate the amount of jobs available (or rather, the variety of the skillsets these drivers might have).
  - jmckib 12y ago
    Uber already has a few competitors; traditional taxis, limo services, blackcarssf.com, Lyft and Sidecar come to mind. > people tend to overestimate the amount of jobs available (or rather, the variety of the skillsets these drivers might have). If this is true, it's a good example of supply and demand telling these drivers that they need new skills. It certainly will be more true in the future when self-driving cars become the norm.
UK-Al05 12y ago
In theory low income would force drivers out of the market, thus stopping it getting lower. That is actually the "correct" price.

by rtpg 12y ago

dclusin 12y ago

When the fares do not support car upkeep + owners time value they will stop getting lower. Assuming all uber drivers are behaving rationally (not a dig at uber, just that people do irrational stuff all the time).

jmckib 12y ago

Supply and demand: http://www.investopedia.com/university/economics/economics3.asp http://www.investopedia.com/university/economics/economics3....

rtpg 12y ago
Except here the drivers are not setting the price, Uber is. This is effectively a monopoly of two markets (both between the drivers and Uber, and Uber and the customers). Supply and demand don't magically make things better if there's no, or limited choice. I'm not aware of the capital costs of entering a market like Uber, but I feel like it's probably pretty high (esp. considering their rollout techniques like '2 free weeks of rides'). This is basically exactly what happened to telecom service: There might be a bunch of services but locally drivers will only have the choice between one or two. "They could get other jobs" you might say, but people tend to overestimate the amount of jobs available (or rather, the variety of the skillsets these drivers might have).
- jmckib 12y ago
  Uber already has a few competitors; traditional taxis, limo services, blackcarssf.com, Lyft and Sidecar come to mind. > people tend to overestimate the amount of jobs available (or rather, the variety of the skillsets these drivers might have). If this is true, it's a good example of supply and demand telling these drivers that they need new skills. It certainly will be more true in the future when self-driving cars become the norm.

UK-Al05 12y ago

In theory low income would force drivers out of the market, thus stopping it getting lower. That is actually the "correct" price.