How does Uber even lose that much money while paying their drivers on average $3.5 per hour and offering no benefits or safety nets?
I wonder if a downturn will be what it takes for Uber to finally die.
I wonder if a downturn will be what it takes for Uber to finally die.
Uber and other ride sharing services are so much better than taxis, why would you want them to die? Uber's international support is amazing and has made international travel far more safe and convenient.
What Uber and others do is an unlicensed/subcontracted taxi service.
Private car hire where you book someone to drive from x to y location at z time has been a thing for a lot longer than these apps. That's what Uber and others do.
Taxi's can pick up people who hail them at the curb. That's their differentiator from private cars and uber. That's what they have paid licencing fees and bought medallions (depending on area) to be able to do.
Your wish for Uber to die is elitist and comes from a place of misunderstanding why Uber is a good thing to many, many people, startups and workers alike. Just because you dread the idea of being driven by a taxi driver without a permit doesn't mean I have to as well.
Why on earth do you need a $60k vehicle? That’s exorbitant if you’re just trying to “get to work”. 60k is a luxury joy ride, not a commuter beater.
Also, in my opinion, they pretty much have to go all-in investing in self driving cars because any market waymo launches in can easily outprice uber/lyft especially considering that while uber has a lot of cash, google literally has an order of magnitude more on hand + they still rake in gobs full of profits from search.
And for the eventual "waymo cannot handle rain or snow and probably won't be able to handle it for years" argument: almost all of the taxi driving market is under normal conditions. It will almost certainly be profitable to just service customers when weather conditions are fine and then park their cars in bad weather.
Rain and snow are normal conditions in most of the U.S. Here in NYC (one of Uber's largest markets) it's been raining a lot lately. I don't think a taxi service that doesn't operate in the rain would get much business here. The demand for taxis actually goes up here when it rains.
Also, it can start raining quite suddenly. What do you do if someone is on their way to somewhere in a self-driving car and it starts to rain?
> It will almost certainly be profitable to just service customers when weather conditions are fine and then park their cars in bad weather.
You'd need somewhere with enough space to park your entire fleet when it's raining or snowing. That would be rather expensive.
Researching it some more led me to an article from October 2017: "Waymo says its cars can handle nighttime driving and light rain, but its cars will be geofenced" [0]. That should handle a decent amount of it but I definitely agree that the whole "what to do mid taxi service if conditions become terrible or where to park the fleet" will still be a thorny problems for some time.
That being said, unless you think self driving cars will never be able to handle 99% of situations, those problems will just cause the self driving car revolution to happen more gradually as they slowly adopt more and more unique situations (which seems to be their current strategy starting with phoenix). During that gradual progression, I just see them slowly eating away at ubers/lyfts market as more markets become locally profitable when they can adapt to the local conditions/economics (and it is not like some other companies self driving tech will be instantly be able to handle more complex situations in a local market that the leader of the market cannot handle)
[0]: https://arstechnica.com/cars/2017/10/5-things-we-learned-fro...
I think Uber and similar have a valuable role in matching a latent supply of labor, an unmet demand for transportation, and wasted resources in the form of cars sitting parked 95% of the time.
It’s not like we were going around paying people $20/hr to drive us home from the bar ten years ago and those jobs went away - that activity simply wasn’t happening (excluding some very rare areas where taxis exist). It would be nice if we could cause Uber drivers to get paid $20/hr with benefits now, but if we passed laws requiring that, the economic activity would probably just go away because most people wouldn’t be willing to pay high enough fares. The driver would be sitting at home on Friday night instead of getting paid to drive the drunk kids around.
Link to the PDF of the revision comment: http://ceepr.mit.edu/files/papers/2018-005%20Authors%20State...
> Using Method 1, and following Hall’s advice not to adjust income, Median profit rises to $8.55/hour from the $3.37 initially reported. For 54% of drivers, profit per hour is less than 2016 minimum wage in their state. 8% of drivers lose money.
> Using Method 2, median profit rises to $10/hour. For 41% of drivers, profit per hour is less than 2016 minimum wage in their state. 4% of drivers lose money.
I find it odd that the median is reported so prominently. I'd be far more interested in the mean (though I realize that could be misleading if not weighted by total hours and/or income).
It's also unclear if the minimum wage threshold was naive and equated dollars per hour in profit with the hourly wage number or accounted for things like employer-paid payroll taxes and mandatory insurance (e.g. unemployment, workers comp).