Only 4% of Uber drivers remain on the platform a year later, says report | Hacker News Reader

Only 4% of Uber drivers remain on the platform a year later, says report

cnbc.com

70 pointsrock5737 comments

Where I live Uber drivers often use it as a loss leader. They chat people up, and if they strike up a rapport they suggest customers contact them directly, cutting out the middle man. They can even undercut Uber, and still make more money than they do with Uber.

This especially makes sense for people who have a regular commute to the airport etc. I've experienced the same thing with Airbnb: first stay via the platform, and further stays booked directly. With Airbnb you miss out on the platform's protections. But with Uber, as the drivers are getting paid less and less, it seems easier to slide into direct contact.

It can be useful to have a private car driver you know and trust, without the anxiety of the wait, or of drivers calling you to ask where you're going, only to cancel the ride. (This happens to me regularly at the airport).

This is interesting to me because it suggests that the future of work is in the hands of those who can hustle, rather than in sharing-economy fiefdoms like Airbnb and Uber.

I've been adamant for a long time that the best path to a growing economy is lowering the barriers to entrepreneurship through education, less onerous regulations for small businesses, tax incentives to start a small business, and, probably more important than any piece of legislation, a change in the culture.

Entrepreneurship should be the first choice for everyone, not just folks that read HN.

> the future of work is in the hands of those who can hustle

Instead of the Gig Economy, the Hustle Economy?

Hustling is not a desirable state of employment. I don't want scrambling for money here and there to replace steady, productive jobs. Right now hustlers are glamorized, but it used to be an insult.

EDIT: It's useful to employers who don't want the responsibilities of actual employees.

> Entrepreneurship should be the first choice for everyone

Why? How will this produce better results than full-time jobs? How about people with obligations such as children and mortgages?

> less onerous regulations for small businesses

I keep hearing this, but after cutting regulations for 30 years eventually we must arrive at the right amount. After a certain point, losing weight is bad for your health; you might even need to gain some. What particular regulations in particular is everyone complaining about?

> Entrepreneurship should be the first choice for everyone

That's just a sugar-coated way of saying: "We, the capital owners want to externalize the risk to everyone else"

I briefly lived in Mexico last summer and this was my experience. Drivers would give out their personal number. This was also a more tourist-y area and they would try to pitch me on local spots that I should visit.

That used to be the common case (side deals with drivers) with Taxis on the Peninsula, but only because taxi dispatch was so horrible. - The value of Uber (at least for me) when you are in a Major metropolitan area is that it requires precisely zero advance preparation. Hit a button, walk out - and your Uber arrives precisely according to it's geo-tracking information.

While I'm sure there are people who strike side deals with drivers, I'd be surprised if that rose to anywhere near 5% of total volume.

Now - if you are having drivers calling you, or cancelling you (in 500+ Uber Rides, I've only had four cancellations after 60 seconds, and no driver has ever called to ask where I'm going) - it sounds like you live in a really crappy Uber dispatch area, so perhaps reverting back to side deals makes sense...

Recently learned that there are Chinese drivers who have been in this business for decades in the peninsula, catering to Chinese families. Especially useful if you have an older relative who's not comfortable with English. It really does make sense for both sides.

If you read the original article in the Information, 20% of people who sign up to drive Uber are approved to do so, and 20% of those are still driving after a year. Still bad, but very different from a 4% retention rate.

https://www.theinformation.com/how-uber-will-combat-rising-d...

Good link, just flagged the article

To me it's good news that Uber is selective

Edit: (the link provided is subscription only)

This is not a reason for flagging the article, as it's interesting either way - it's potentially a reason to ask the admins to change the link.

I would be happy to ask the admins to change the link to the Information page, although point is that this link is locked for me! Assuming that quote from The Information (re: 20% accepted and and 20% stay) is true, I agree that CNBC phrase "Only 4 percent of people who sign up to drive for the ride-hailing service are still driving a year later" while being factually correct sounds misleading, even though they directly link to the riginal content!

I'd say that's just flat out dishonest reporting on CNBC's part.

> 20% of people who sign up to drive Uber are approved to do so

That's bizarre since the only qualifications are that you have a car, have insurance, and don't have a terrible driving record. A bad driving record is OK, they'll rent you a car with insurance, and they'll even take the rental cost out of the paycheck. (Not saying it's a good deal, but the fact that they have an 80% rejection rate is crazy considering)

I guess there's some adverse selection since what percentage of the people with good standing in the above categories have better options than Uber? Probably a decent amount.

Uber rejects 80% of its applicants? That seems hard to believe. Could you post an short excerpt from the paywalled article?

If you kindly find a way to post the (paywalled!) original article in the Information it would be much easier to continue the discussion! Thanks!

Hard to say if this is good or bad, for Uber or anyone else. Anecdotally, the majority of Lyft/Uber drivers I talk to have a day job and use it to pick up some extra money or for something to do. So if their personal situation improves they could drop it.

After all the same headline could be written about MacDonalds stores and nobody considers them to be augering.

> After all the same headline could be written about MacDonalds stores and nobody considers them to be augering.

I don't think this is true. It's just that Uber generates more clicks right now. When the $15 minimum wage becomes a hot topic again McDonald's will be vilified by the media (again).

Uber was recently launched in my city after the usual municipal hurdles (Calgary). I've taken it 10-20 times and have had a different driver each time.

I always make small talk and usually ask how their experience has been. I always get a "meh" response. No driver has ever said it's awesome, and no one has said it's terrible (those drivers are likely not taking fares anymore). I can see why drivers don't remain on the platform. If you take a short break for whatever reason, you likely have very little motivation to pick up again. It doesn't seem like it's life changing for any driver in my city (one driver did say it was good for him, but he was a realtor who would hand out his business card).

I think this shows why Uber needs to subsidize so many rides when first starting out. They need to provide their drivers with tons of business, otherwise the two sided marketplace doesn't get solved.

Weird. I ask the same in London, and they all love it; working on their own time, no boss, secondary job et cetera. Not a shill.

Yep, every driver I've asked in London has positive feedback, but the ones I have spoken to had all been driving with them no longer than a year.

That echo's the sentiment of many drivers I've questioned in Seattle.

It likely depends on how busy you are. Calgary had a rough start. Uber came to Calgary but was then shut down for an extended period. It then started up again December 2016.

Most of the comments by drivers are that it's not busy enough. You get a trip to one side of town and then you are left sitting there without another fare. They then have to either go home or drive to another part of town to try and guess where more fares will come from. This will likely be solved with more customers, and that's where my comment about Uber subsidizing more rides came from.

EDIT - A lot of the drivers also appear to be out of work to decided to drive for Uber to make some spare cash (the drop in oil prices hurt Calgarians). So they didn't have a boss before Uber, they were unemployed. So I think they appreciate the extra income, but it's not as much as they hoped.

I spoke to a couple of drivers when I was visiting India in December (in Chennai), and I got nothing but praise.

In the bay area I've had mixed experiences. Drivers in the city seem to be interested in a chat. In the south bay I've taken to wearing earphones just before getting on so I don't have to hear how evil Uber is.

I know someone who said they wanted to pick it up as a second job on evenings/weekends but after doing it for a few weeks and crunching the numbers when all was said and done they only averaged $5 an hour -- just wasn't worth it.

I made the switch to exclusively using Lyft during the last few months of hoopla. Occasionally, I'll ask drivers their thoughts on Uber/Lyft - I haven't ridden with one who doesn't use both for work, but most have said they prefer Lyft (this is probably biased because I used Lyft to get a ride with them), but a few did comment they at least feel like Lyft has their backs/pays better, etc.

I'm not sure this is true and, even if it is, it may be completely missing the point.

A big benefit about Uber is it allows people to generate income from an asset many of them already have ie a car. What's more, they can do it in a flexible way.

I've spoken to a few Uber drivers and a common story has been that they started doing it between jobs. Some kept doing it. I'm sure others finally got jobs.

As far as Lyft goes, I just don't buy that Lyft has some moral high ground here. They're playing a desperate catch up game and playing the "good guy" card is cheap marketing.

I see a lot of their ads on TV actually. Some of them are done quite well but, for me, they can also miss the point. Like they tout the ability to tip as a plus. Lots of people hate tipping, myself included. It's a big reason why I use Uber rather than Lyft, possibly the only reason.

What's so wrong with transparency of pricing?

> Lots of people hate tipping

I wonder if that's true. The only place I've encountered that opinion is on HN. It's a practice used across nations and generations; it's not a problem at all for most.

I wonder how many of them sign up with Uber's suicide car loans?

I wouldn't be surprised if the majority of the ones who stay are the ones who can't leave without suffering financial destruction.

Assuming (can't check myself, content is locked for me!) that quote from The Information (re: 20% accepted and and 20% stay) mentioned in comments below is true, I agree that CNBC phrase "Only 4 percent of people who sign up to drive for the ride-hailing service are still driving a year later" while being factually correct sounds misleading, even though they directly link to the original content!

Therefore, I ask the admins to change the link to the Information page!

Also, it would be nice if anyone can (for people like me who are NOT subscribed to The Information) kindly copy and paste here the whole original Information article. Thanks!

Almost assuredly the 4% number is biased lower than the true population statistic (unless censoring was accounted for --- very likely not). If you don't include drivers having lived longer than a year the figure will be lower (same if you truncate their lifetime to be one year).

One solution would be to wait a year after the start date of all drivers as the censoring problem would go away (but of course your information is a year out of date!).

Which is it, biased lower than the true value or a year out of date?

How was the number arrived at, do you know? I don't see anything about it in the CNBC article, and the article in The Information is paywalled.

the drivers cite low compensation and low/no tipping as the reason for leaving. no surprise there.

an alternative to leaving would be for Uber drivers to commit profitable crimes. i've seen some news stories about burglaries by Uber drivers, but not as many as i would have expected.

does anyone have data on that? what exactly is the percentage of drivers who pursue crime as a means of extra income?

Probably the same as many other professions, why would working for Uber make you more likely to become a criminal over any other lower-end paying job? "What percentage of grocery checkers pursue crime as a means of extra income?" I fail to see how it's even a useful question, and implies there's a criminal element there.

Across pay levels and careers that information might be interesting, but specific to one position at a single company seems entirely too specific.

I think this is mostly supply and demand, but its not helped by Uber's lack of driver support. If the rates increase, the drivers will quickly return

Why would the net driver earnings ever be higher than, say, flipping burgers at McDonald's?

Driving an Uber is certainly easier and more fun.

Requires a new enough car, which prevents some people from doing it. They provide ways to rent, but I believe that requires a full time commitment.

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