As Uber gears up for IPO, many Indian drivers talk of shattered dreams
reuters.com
reuters.com
No substantial article here folks. Just negative sounding clickbait because "Uber" is in the title.
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But as Uber slashed incentives, Raut’s earnings dwindled swiftly. His income dropped to about $540 a month this year and he defaulted on his taxi loan payments. Deciding after an accident that he couldn’t afford to fix the vehicle, he quit Uber and now his monthly income, from a new job driving a truck, has crashed to $200.
“There is no benefit in driving for Uber ... my life was much better just as a cook,” said 26-year-old Raut.
The real injustice is the financially binding contracts the drivers signed for their vehicles. I work at Fair Financial, and we are Uber's primary partner to get drivers into cars in the US. Our cars don't have any long-term commitment so drivers can return them whenever they want. Thus, if the pay isn't good enough from Uber, they don't feel trapped and simply can decide it isn't worth it and walk away.
If their advertising was not saying the exact opposite it'd be fine. That is not what they either said or implied. The pay cut alone is not what makes it immoral.
Flexible contract are great - why do so many drivers not have them though?
Plus, it should be noted that the market of riders and drivers is not causing the cuts. The fundamental flaw in Uber's business model is causing the problem as they push towards a very far off goal of profitability.
That's a ridiculous statement. `Uber's business model` is as a market connecting drivers and riders. If they need to be profitable, then they need to stop subsidizing rides. The result is that either prices for customers have to increase or drivers' wages decrease. Given that drivers are highly commoditized unskilled labor, they don't have any pricing power to maintain higher wages.
Uber and Lyft got popular because they made taxis artificially cheap as well as the convenience and efficiency. Take away the cheap aspect and the market will significantly shrink.
I don't think they can squeeze the drivers enough to be profitable because drivers will leave for other unskilled jobs if the wage drops below them. I don't know the internals of their business, but the strike today and the arbitration play seem to be showing that's fast approaching.
I think this is the aspect the article is trying to point out. The earnings have halved from what they used to be. The drivers went all in based their lives/future on sustainable earnings from Uber and then were all but abandoned by Uber.
It's also misinformation and deceptive advertising by Uber and others that don't educate drivers on the real costs of driving for them when it comes to gas, car wear and tear, surge pricing models and how it affects them, etc.
Uber seems to use "incentives" and some kind of quest system rather than just paying the drivers the full amount. It's similar to bonus systems on casinos, where the goal is to keep the player hooked.
The point of the article is that Uber enticed people into a new way of earning a living with higher pay rates, kept these up long enough to convince the workers to go into debt to purchase a vehicle, then slashed the pay rates so much (~58%) that they cannot even afford to keep paying for the vehicle.
This is not mere anti-Uber clickbait; it is a record of what Uber did.
While it is probably within the law, it is certainly unethical exploitation of a very unequal power relationship.
There is a reason behind the frequency of "negative sounding" headlines about Uber -- it is because they build a company on fundamentally unethical practices predicated on screwing the other guy first, whether it is the cities, the govt, the drivers, or their own employees -- whatever they can get away with.
Perhaps that is OK, with you, but it is not the way to build a sustainable business or society.
[*] This will be true year after year (and Waymo will beat them to it even if it happens soon)
It reminds of a friend who put together a few of the first Subway franchises here in NZ.
I suggested he consider selling.
He asked why.
I responded by sharing with him how Subway will not stop adding new franchises until there is one on every corner of every intersection.
Subway makes money on franchise fees and incremental sales,NOT average store sales(which plateau and sometimes collapse depending on cannibalisation).
Uber is not a franchise, but I think the gig economy might require some similar plain language disclosure on how launch market subsidies are temporary and ethereal, not sustainable.
Expecting launch market subsidies to remain indefinitely is dangerously naive and foolish.
But companies like Uber could probably do a better job of communicating that and managing driver expectations in the market they manage.
Trust comes in a lot of flavours.
Then, bait and switch, those same drivers struggle to earn $500-$1000. They can't leave their jobs because of their loans. They sleep in the cabs, shit in public toilets, eat in the roadside stalls, and go home about once a week.
I get reminded of all this every time I take a cab.
I realise I'm ready to pay a bit more for my convenience so that someone doesn't literally suffer despite working all day.
The examples in it are very selective.