Uber CEO Stunned When He Heard Cost of 3-Mile Uber Ride

Would you drive someone 4.5 hours from DC to NYC for $250? The drive back would be $0, so $250 / 9, minus gas and mileage. It's very little. Meanwhile Uber got $650. I wouldn't do it.

It’s a complete lie. On a $116 surge price trip, drivers get an extra $5.[0]

THIS is how Uber finally turned a profit. None of that Kalanick bullshit about how only self driving cars can make Uber profitable.[1][2] It’s jacking up prices and pocketing the difference.

Never trust a tech bro. They’re all grifters and liars.

[0] https://www.tiktok.com/t/ZT8LCks4j/

[1] https://www.usatoday.com/story/tech/news/2016/08/19/s-self-d...

[2] https://www.cnbc.com/2020/01/28/ubers-self-driving-cars-are-...

who knows? they have a ton of data that we don't have, and can infinitely tweak the pricing and the take-home based on their needs at the moment

If it had not been surged price, it would have been a hell of a deal.

Indeed, I'm not sure whether it was in an emergency situation (or if they're referring to NYC versus NY state when they talk about NY) but I regularly travel from DC to NYC and vice versa on Amtrak and it costs me around 100 bucks each way, even in the middle of the night which has some pretty good deals.

I would also like to know this. Even a flight would have been cheaper!

Is that really the cost or figurative? Because I would take the bus from NYC into PA and it was like $70 twenty years ago.

Because with those other services, you have to be around other people. Americans hate that.

My flight got diverted due to some issue in EWR and landed in DC around midnight. There were no other flights that night and no amtrak until the morning. I didn't even think to check Greyhound. I just wanted to go home to see my kids before they head to school.

I live in Japan but was thinking of taking a Greyhound for a 2-hour or so ride during a US trip but a friend strongly advised against, the presumably exaggerated analogy was getting herpes just riding it. Another friend more familiar than me with the recent US generally concurred.

So I assume that's one reason to take an Uber? I was going to look into a charter anyways based on that advice.

Amtrak I'm more familiar with but at least in California it's just incredibly slow.

I don't understand why people think this. Uber isn't a charity. Of course they are going to try to take advantage of demand shortages.

If drivers want to take in the profit from things like this, they should form a co-op, not be contractors.

Wouldn't that effectively be asking Lyft to jump on a grenade for the greater good?

Drastically undercutting the competition means you leave money on the table. Let's just assume a 5% discount isn't enough to win riders but 15% is, should the cut fares but anything over 15% just to screw Uber? And does this risk setting a low enough market cap on Lyft that they could be compelled to take an acquisition offer simply because they so drastically under cut their potential revenue?

Startups' job isn't to fix a broken market, it's to either become self sufficientquickly or to 10x investor capital depending on the funding model. The only business model that can really justify cutting fares drastically would be a non-profit, maybe some kind of collective run by the drivers themselves.

I’m sure it’s the software development cost that’s eating Lyft’s profit margins. Would love for someone on the inside to share insights on that.

Uber has never considered its drivers to be employees. I think it sees itself as a marketplace - selling driver time to riders. So it makes sense that the plan was always to take more of the pie for itself once it got enough power to do that. Like Amazon with Audible - if you're the only game in town then you can charge whatever you like, so they do.

but what are they supposed to do? there is no more evil tech-bro to blame even, they are now under public pressure to make money and if the current CEO fails to maximize the profits, he will get booted and replaced by the one who will.

> Driver pays for the car, gas and their time. And Uber pockets 50% of the fare? I’ve heard this from at least a few vocal drivers.

It is in Uber's interest to keep exactly as much of the fare as they can to the extent they still have riders and drivers. This was always the endgame.

Nah, they weren't. Their own leaked study (many years ago, I'll try and dig up a link) I recall showed at most a 5% improvement in their margins over time. This makes sense, as soon as one company has self-driving so will others. Any period where they are the exclusive self-driving ride hailing is fleeting at best. In time, it reverts to exactly the same as it's always been.

Of course they -should- get more. But the economics of uber aren't working for either uber or the drivers.

Uber is super convenient. And also (used to be) super cheap. Cheaper than taxis, because a) they used VC money to cover costs and b) because they moved vehicle costs to the driver.

Driving is fundamentally underpaid (it's basically unskilled labor) but if you ignore vehicle costs (which most drivers do) it looks OK. Factor In vehicle costs and it gets bad. Remove all job security and work-place benefits and it's, well, not good.

So uber loses money, the drivers lose money, (or, more charitably, are just badly paid) - the real winners were riders.

But the free money is over. So the prices are jacked - the first time to make Uber profitable, and likely the second time to keep drivers from abandoning the system.

Customers will bleat, but the -economics- don't lie. It costs a lot for the convenience of anywhere-to-anywhere-anytime-by-yourself transport. If it's not costing the rider a lot then someone us getting screwed.

Sure, removing labor will change thd equation (self driving cars), but I fear even then the ancillary effects of "riders with no adult supervision" will add a lot of overhead.

well when they started, the whole concept of ridesharing was unproven. They didn't just set out to replace taxis, the idea was to offer a service initially so cheap that people who otherwise wouldn't even think about getting a car, would start doing it on a regular basis (same with Eats). So yes, i'm pretty sure they have been subsidizing rides, and in certain markets probably still are. So now the question is: can this market - where some people even grew accustomed to commuting to work on Uber - sustain itself, or is it too expensive and people will just revert to the old mode where (outside of NY) getting a cab was a rare event.

tldr - i don't think it's the staff that's the expensive part. Also, they do a bunch of non-trivial things with maps, etc, so not quite a simple crud app.

It's a good question. There are enough local clones to suggest it's not the software that eats all the money.

Bandwidth plays a role. Updating driver positions constantly, at scale, chews bandwidth. As does broad-casting trips, acceptances, and so on.

I'm guessing Lawyers take a huge chunk. Uber is forever being sued especially in years past and they must have a pretty terrible legal bill. It was always part of the model to operate outside the law, so legal issues were inevitable.

Plus lobbying - at every level. Changing the model (which they have done) takes a lot of lobbying. More lawyers, at lawyer rates.

Marketing of course takes a chunk. That's to be expected, especially as competitors enter the market (riding on the back of their legal coat-tails).

By comparison WhatsApp has no legal bill, no marketing bill, no lobbying bill, and so on.

Ah yes that quadruple digit inflation rate we are experiencing /s