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Comment by chvid | Hacker News Reader

The article talks about subsidies. Does anyone know how much Uber and friends are subsidising their rides?

As in if I pay on average 10 USD to Uber, then the driver gets what? 5 USD, 10 USD, 15 USD?

Uber drivers get paid an amount based on a subsidy multiplier of the ride value, and they are highly sensitive to these multipliers. According to a driver I talked with recently, Uber takes 20% of the fare, but is currently giving drivers a bonus of about 2.5x. So if a fare is 10 rmb, Uber takes 2 rmb, then pays out 8 * 2.5 = 20rmb. Driving costs these drivers roughly 1-2 rmb/km, and if the subsidy ever fell below 1.3x, the drivers would lose money (these are for People's Uber level of cars, which is the lowest level). Unless the subsidy can ever drop below 1.25x, Uber will be paying for every ride. And if it does, drivers will be parking their cars or switching to another service.

Uber also lost a lot of money through a couple of vulnerabilities that have since been, I believe, patched. Some people were able to figure a way to create fake rides through the app, allowing drivers to get paid without ever driving anyone. They previously also allowed riders to link up Alipay accounts to their Uber accounts, but Uber had no way to ensure the Alipay accounts had funds. So people would take Uber with an empty account, and Uber would have to pay drivers without receiving any money from the riders.

Another side note: there was recently a publicity campaign with some well-known celebrities that had very explicit nationalistic messages encouraging Chinese citizens to use their local service and not the services of an outsider.

Uber will be burning a lot of money in China.

The hack needed an extra rooted android phone and a special 'helper' app. It also took advantage of the subsidy they give new users and the driver for new users. (I have no idea if this has been patched)

Another subsidy I heard about gave about $1000 per week if you had over 80 rides. $4000 dollar subsidy a month goes a long way in China.

It really blows my mind that people think this is a sustainable business. Even after you out-spend the competition, who's stopping someone from downloading a new app from a new service? I've seen users in China blast all ride apps at once and just take the first one to arrive. Subsidies won't buy loyalty.

I have old information, hopefully you still find it relevant.

Around April in Beijing, for 10rmb paid by us Uber driver was paid 40rmb - at least that's what he told us.

We asked only one though.

Wow - that is a lot.

Also I noticed a lot of 200 HKD vouchers being handed out when I was in Hong Kong recently.

I have no clear gage of the subsidies but my feeling is that they are very big.

In Bangalore, the driver seems to be making $3 for every $1 spent by the passenger.

For Uber, this translates to about $7.5m/month of subsidy in Bangalore alone.

Source: http://capitalmind.in/2015/10/the-economics-of-using-uber-in...

The brokers (Uber and friends) are clearly fighting over what they believe will become a future monopoly. Subsidies are going to leave the impression of higher demand to the drivers and ultimately you will have too many drivers in the market and only one broker (the other will be out of money). This is where the price paid to the driver will drop and the broker can yank up their fees.

When Didi kuaiche does a subsidy for a taxi ride (never use zhuanche, which is non-taxi), they send a message to your phone telling you that they added a bonus to help you get a taxi. It is usually 5 kuai, which is just less than a dollar.

My wife uses zhuanche, and they don't necessarily subsidize rides, but they give riders coupons to "try" the service (say 15 kuai or so). It is a bit more expensive than a taxi, so in a way this is a subsidy also.

Have no idea about Uber specifically.

I asked a Beijing-based Uber driver why there is so much more availability now than there was a month ago. He said that there are currently some special incentives, one of which is a 1000RMB 金牌 (gold medal) for any driver who exceeds a certain # rides in a week, with an average rating of 4.8 or more.

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