I wonder what happens when his Tesla gets t-boned by a pickup truck, they guy speeds off and he has to claim it on his insurance. His insurance finds out he's driving for Uber and then...
I'd hardly call Uber immoral for this. It's up to each person to square up with their insurance company.
When an Uber driver has an accident, the next thing that will happen is that their insurance denies the claim, and you have to claim against your uninsured motorist policy. Good luck to anyone who doesn't have such a policy because they don't own a car!
Hey, uninsured motorist rates just went up! I wish they didn't do that, and instead Uber fares and pizza prices went up because I don't use them. They have no business imposing externalities on me.
Indeed. If someone drives in such a way as to be uninsured, shame on them.
Still not the company's fault for the individual's lack of responsibility.
No. If they know, or more importantly from a legal liability standpoint SHOULD have known, then it's on them.
We haven't seen the test case that will decide the legal liability/insurability of P2P driver services, but it's clear that Uber and others are operating in a somewhat legal grey area and are not bothered by it. Indeed, you could argue that they are forcing the issue of regulation and insurability with their business model.
But I'd stop short of saying that they have NO responsibility. It's clear that Uber is hoping to delay any reckoning on that question until after their dominance is a fait accompli.
And take it with a grain of salt, since it's internal PR, but:
http://blog.lyft.com/post/75739276230/introducing-the-p2p-ri...
You could very easily argue that not requiring drivers to prove they've got commercial vehicle insurance is a lack of responsibility on Uber's part.
Uber's business is connecting drivers to passengers, and it takes a commission for doing so that is in some cases equal to or greater than what taxi companies collect for roughly the same service. The difference is that taxi companies are required to have insurance, and Uber arbitrages insurance costs and books it as "revenue."
The insurance companies already spend a lot of effort trying to quantify those risks.
According to Consumer Reports (see linked article), the median car costs about $9k per year for the first 5 years (including the sticker price). That comes out to $0.75 per mile--not an insignificant amount. Driving 30 miles per hour, that's $22.50 in costs.
This sounds like a poor deal to me.
To actually calculate the costs of driving for Uber, we should only be looking at the variable, or the per-mile cost, which as far as I can tell should be:
- Gas - Maintenance - Loss in resale value
Automobile reliability has, generally, advanced worlds from where it was in the 1970s. It used to be that getting 100,000 miles was a significant accomplishment, now it's pretty much expected, and having a car run 200,000 miles isn't uncommon. I'd had a vehicle I ended up selling to a friend which went 280k before it was finally cash-for-clunkered. In that time, it went through a couple of radiators, a couple of exhaust manifold repairs, and a transmission (protip: keep 'em lubed and watch for oil leaks). And a few sets of brake pads, possibly a clutch. But all told, pretty remarkable.
In the 2000s you saw some significant improvements in safety (ubiquitous airbags, ABS, and traction control), but not a whole lot else.
That said: doing a lot of city driving in traffic is fairly high-risk and high-wear on a car.
1) Assumes that you only use your car for Uber/Lyft driving and that it is entirely valueless otherwise. If you were going to own a car anyway, you were going to eat a bunch of that cost to begin with. The extra costs are in the incremental mileage that you drive.
2) Assumes you are buying a brand new car, and uses averages for first 5 years. If you just start with a 1-year old car, that drops your average around 25% (from ~$9K to ~$7K).
3) Averages across a number of makes and models, including a number of luxury cars (pretty sure most people looking to earn $35/hour aren't in the market for Porches, Land Rovers and Mercedes Benz', all of which top out the scale being used in the consumer reports article). For example, a Toyota Camry would cost about $5,700/year to own for years 2-5 (http://autos.yahoo.com/toyota/camry/2013/l/cost.html), and around $7K/year for all first 5 years.
4) As stated earlier, assumes that a Lyft driver is just going 12,000 miles/year and that the rate $0.75/hour stays constant regardless of how many hours you drive in a year.
5) As far as I can tell, you can write off your expenses on your taxes, recouping part of the value as well (standard cost at 56 1/3 miles per gallon: http://www.irs.gov/publications/p463/ch04.html#en_US_2013_pu...).
Not quite sure how to evaluate, and it's very possible that I may have estimated on the lower end. But, the methodology used in that blog post linked is pretty visibly flawed in a number of ways. Now I've already given this more thought than I initially planned to, but you're right that I shouldn't have off-handedly thrown out $5/hour without investigation. That said, it bothers me that the blogger you referenced put out an entire article (that was referenced on HN) that used such poor reasoning and assumptions using misleading data. All of which to come up with a bolded "$3.45/hour!!!" conclusion. /rant
Worst part is regulators seem to be letting them get away with it in many states, Not all.