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Comment by cyphar | Hacker News Reader

> I'm left feeling like the fare - strictly from the perspective of a consumer - is actually too high.

Not to mention personal risk if you consider how dangerous some Uber drivers are.

However if you consider the cost of car maintenance, annual depreciation on a taxi-like vehicle, and petrol the fares are actually very low. I would be willing to bet that a lot of Uber drivers are wavering around breaking even on the long run. Maybe that's why a lot of drivers' cars aren't as well-groomed as they used to be.

Now, I get that "from a consumer perspective" this is irrelevant, but it does mean that a cheaper service is simply not possible without sacrificing something.

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The beauty of the uber model is that drivers don't even need to break even. Very few I speak to are doing it full time to make money.

Most are doing it as a side hustle for a little extra cash before or after work. Or they're using the money to justify spending more on their dream car.

They don't need to break even, they needed the car anyway, it would depreciate roughly the same amount anyway. Or at least the extra uber usage is going to be negligible compared to the time based depreciation.

> Very few I speak to are doing it full time to make money.

Interesting. Anecdotally, in Sydney it seems almost all Uber drivers I meet are doing it full-time now. A few years ago, it was just a side-gig for most but I think the demographics have shifted quite a lot.

> They don't need to break even, they needed the car anyway, it would depreciate roughly the same amount anyway.

Not if you're driving it 10x more than you normally would. Mileage affects the resale value and increases the likelihood of additional maintenance work (especially if you're doing city driving which is substantially more stressful on cars).

In LA, Uber drivers seem to be more like former shitty taxi drivers. Lyft drivers are for more likely to be part-time hoi polloi.

> Very few I speak to are doing it full time to make money.

Most of the guys make it to pick up girls. I know some girls that use to go by Uber and many guys would ask for their number.

For example they can't drive a Tesla for this cheap, makes no economic sense, except if it's another tinder for them.

A lot of drivers are acting irrationally (in the economic sense). The number of miles you put on driving for a car service will almost certainly be consequential to your car’s service life, if you are making any money at it. But, new drivers see cash in their bank account every week, and it’s hard to link that to having to splash out $25k for a new car down the road. I expect a lot of these drivers will bow out when their current cars become too old or damaged to keep driving for hire, since they won’t actually have saved enough money for a replacement.

Having people who don’t understand how to calculate their costs in the market drives down wages for everyone.

Not exactly. This theory applies steady state analysis to a transient problem. Those drivers need money now. And are willing to trade off miles for money, in some sense. They are able to leverage their time and mileage to get income, which they might not otherwise have. They may already have invested in buying the car so that is a sunk cost. In some sense they are just extracting the value of the car combined with their time and some minor profit which is their opportunity cost. The theory also fails to account for the extra utility they drive from earning the cash, which may offset any costs incurred by spiraling downwards mood from financial stress, unemployment, or even the regret of buying a car which they are having trouble paying off. Also they get to still use the car in the meantime, offsetting transportation costs and most importantly, saving them time and extending their ability to acquire other jobs or new opportunity such as education, driving to visit friends and family, etc.

What exactly are you disagreeing with? The comment you're replying to basically says: "it is unsustainable in the long term" and your response is basically: "it is sustainable in the short term" which is effectively equivalent.

I think my comment explains that. Think about it a little more

> Having people who don’t understand how to calculate their costs in the market drives down wages for everyone.

Yup, this was my point! :)

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