MIT study shows how much driving for Uber or Lyft sucks | Hacker News Reader

MIT study shows how much driving for Uber or Lyft sucks

techcrunch.com

33 pointsjcrabtr27 comments

Additional discussion of same report: https://news.ycombinator.com/item?id=16501017

The hegemony of car culture is so ingrained that people are not even aware of how much it personally costs them. These companies are taking advantage of this loophole. People notice gas prices go up and down with great interest, but that is just a small part of the total cost. Since you pretty much have to have a car to just exist in society, people don't count the capital expenses.

> Since you pretty much have to have a car to just exist in society

Perhaps in America, but you can certainly "exist" in virtually any European city without a car. Anecdotally, I have managed to "exist" for the past four years without owning a car. I know how to drive one and possess a driving license, but have chosen not too.

> Anecdotally, I have managed to "exist" for the past four years without owning a car

I've managed to do so my whole life ;)

But when someone says that a car is necessary I think it's always implied that they are talking about the US. I don't think most educated people think that you need one as much in every other country.

It even depends on where you live in the US. But mostly, a car is a virtual necessity.

You can exist in many American cities without a car. However, America is a gigantic land mass and we are spread over areas of very different population density.

You may not need a car in NYC, but you need one if you live in the middle of Iowa.

There are places where existing with a car is a giant pain in the ass. A motor scooter might be feasible and useful. I forwent automobiles entirely for ten years after moving to ${MAJOR_NORTHEASTERN_METROPOLIS} and now I don't know what I'd do with one of I had one: my driving skills are so rusty I'd be afraid to use it.

This paper:

http://www.nber.org/papers/w23296

Talks about how much of the value to Uber drivers is in that the work is flexible and can be done on their own schedule. More than 2x the producer surplus vs less flexible arraignments. Put another way: if drivers HAD to work at the prevailing wages and didn't have the flexibility, they'd reduce the hours they supply by 2/3.

Looked at the MIT study for a bit and they don't appear to mention this. Obv flexibility is a major component of the economics of driving for Uber and Lyft and the benefits thereto. If they're ignoring this they're missing a big part of the picture.

Could only read the abstract but how many drivers see that as a benefit? I've spoken with many drivers who drive because that's the only work they could get. Sure they are flexible, but only because driving is their only job. They would like to have a full time job but just can't get one.

Producer surplus by definition is benefit to the drivers. It's the amount actually make minus the minimum amount they'd be willing to take. This paper purports to show how the minimum drivers are willing to accept (their reservation price) changes by the hour. Flexibility -- fact they can choose to work when their reservation price is the lowest, or only lower than what they'd actually make -- is definitely a benefit.

Obviously a driver's alternatives are a big factor in whether/how much to drive, but flexibility might even MORE valuable to drivers who have other jobs, because they can work around it.

Being a driver is a short term strategy for the companies who plan on replacing all drivers with autonomous services. So this result is no surprize.

This is a popular current talking point but Uber is 9 years old and most people reckon autonomous services are at least another year or two out.

Having human drivers for over a decade is not a "short term strategy" for most reasonable definitions of short term.

I think we’re decades from real lvl 5 automation, not just a few years. Either way though, this study suggests that Uber stands to save relatively little per ride on automation. It would just appear that their business model is inherently unsustainable.

We are still nowhere near fully autonomous cars.

IIRC when Uber & Lyft were started, it was never supposed to be a full time job, or even a taxi service. You were supposed to make some easy money by offering a ride along a route you were already taking for your normal activities.

Any job that has no barriers (difficulty, education, licensing) to entry will be eventually driven to zero profit.

That's what they said, but I don't think it's ever been used that way.

All those "shareconomy" companies try to portrait themselves as organizing platforms for the average individual to earn a few bucks on the side.

But in reality most of the services are used by other highly professionalized companies that operate outside of any traditional legislation. AirBnB is being used by companies to full-time rent apartments in attractive metro areas while avoiding hotel taxes and Uber is being used by professional drivers that don't pay the usual taxi service fees and/or taxes. Because of that both AirBnB and Uber are cheaper than the traditional hotel/taxi service and take away revenue from the businesses that adhere to the law.

> it was never supposed to be a full time job

Im not sure if this is true, they offered a lot of bonuses if you completed 20 rides within a certain amount of time you get a bonus. They wanted people to drive a lot.

IIRC that was Lyft's positioning. Uber started out as Uber black, a black car / limousine service.

I think that was Lyft's model but Uber was "everybody's private driver" for their first product. They were black cars with professional drivers who did do it as a full time job.

Now, "everybody's private driver" was 2x the cost of a cab (at least) so I think it was a better deal for the drivers. But, to your point, the barriers to entry were owning a black car, being licensed, and Uber vetted their drivers very carefully.

Totally different from what they're doing now.

But, I've also never met an Uber driver -- who used to be a cabbie -- that didn't think Uber was a _better_ deal than driving a cab. If you're a cab driver, you also have to rent a cab with a medalion which was an astronomical cost compared to just buying and maintaining a car.

So, I think this study comes off as disingenuous for not comparing Uber and Lyft to the traditional job of driving a cab.

That's my problem - these studies all assume that Uber and Lyft are competing against real jobs. The reality is that they are competing with jobs that are far worse and winning as a result. The Uber drivers I've talked to are glad to not being working at CVS or Burger King.

The real question is how does the richest nation in history think it is OK to pay adults a sub-living wage to do degrading menial labor so that a small number of people can be incredibly wealthy.

As a socialist, I appreciate the desire to create sustainable living conditions for all people disconnected from the value the "free market" assigns them.

That said, I am a little baffled by the focus on gig-economy jobs. You want to know what really sucks? Try working at fucking Wal-Mart. All the same problems + zero respect for your time, no flexibility, etc.

Driving for Uber may suck, but the reason so many people do it is that working retail or fast food is much worse and they are desperate for money.

There are a lot of really nasty, shitty jobs in this world, apparently these are the only ones we can be bothered to care about.

I live in Portugal and Uber is sometimes more expensive then an ordinairy taxi. Talking to drivers they also seem very happy with their earnings. But minimum wages in Portugal are low.

Last year in Singapore I also noticed Uber was seriously more expensive then regular cabs. I understand there its public knowledge, you pay more for the more flexible service (taxi's in SIN are often limited in supply).

Just anecdotical. But it makes me wonder what regular taxi drivers make in those places.

I live in Singapore and I disagree. I take cabs everyday (atleast 2) and here's what I've found:

Regular cabs are often more expensive here (from personal experience) because they're metered (especially if you get stuck in a jam). Often, the drivers don't stop for you or reject your destination if it doesn't suit them. There is no standardization in payment either with some cabbies taking cards and some refusing to and only accepting cash.

Uber/Grab are usually cheaper than taxis in Singapore actually. But they use dynamic pricing based on supply/demand so if you try to get Uber on Friday at 6pm in downtown then price might spike a LOT. But 90% of the time they will be cheaper than taxis.

Agreed. If you have ever made up a spreadsheet to calculate car costs, it adds up very fast. Even a car purchased for $0 is expensive for insurance and taxes.

It seems lots of drivers consider that making a shitty 660$/month is better than making nothing.

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