Democracy In The Workplace
March 2, 2018 9:38 AM   Subscribe

Uber and Lyft drivers in the US make a median profit of $3.37 per hour before taxes, according to a new report that suggests a majority of ride-share workers make below minimum wage and that many actually lose money. (The Guardian) “The companies are losing money. The businesses are being subsidized by [venture capital] money … And the drivers are essentially subsidizing it by working for very low wages.” Maybe the real question is, why is Uber a for-profit company anyway? (Salon) What is a Worker Directed Enterprise?
posted by The Whelk (87 comments total) 45 users marked this as a favorite
 
Well known leftist rag the Financial Times: On the rise of unproductive entrepreneurs like Travis Kalanick

(I would love to see a version of Jacobin headed by Kaminska. I find her really insightful on structural issues.)
posted by PMdixon at 9:44 AM on March 2 [5 favorites]


What does "profit" mean when it comes to wages? And since all the expenses can be written off, doesn't that leave a gaping hole in the report?
posted by Brocktoon at 9:44 AM on March 2


So, if both workers and the company are losing money, does this mean that the ones who profit the most from Uber/Lyft are actually the consumers?
posted by FJT at 9:47 AM on March 2 [15 favorites]


yes, more or less. it's a wealth transfer from investors to yuppies.
posted by vogon_poet at 9:49 AM on March 2 [25 favorites]


Currently yes, although undoubtedly the long-term strategy is to drive traditional taxis out of business and then soak everybody who's not capital.
posted by Holy Zarquon's Singing Fish at 9:51 AM on March 2 [37 favorites]


Wealth transfer to anybody who uses Uber, I think you mean. Which is fine, I guess. I mean, if I can get a $15 ride for $10, that's good for me. It's not good for somebody who can't even afford $10 to get a $15 ride, and it's not good for whoever is getting soaked for the $5.

HZSF has it right, though: it's more likely a ploy to drive the $15 drivers out of business, so then Uber can charge $20 (and keep $10, leaving both the drivers and riders worse off.)
posted by spacewrench at 9:55 AM on March 2 [21 favorites]


as with all overheated tech companies, another group that profits from Uber's business activities is San Francisco landlords.
posted by vogon_poet at 9:56 AM on March 2 [10 favorites]


And since all the expenses can be written off, doesn't that leave a gaping hole in the report?

How does the govt consider the vehicle expenses Uber/Lyft drivers incur? Since it's also the drivers' personal transportation, do they treat the car similarly to a home office, in that you can only claim a certain percentage of your home, and not the whole thing? Or, is the car considered a tool, the cost of which can be completely written off?
posted by Thorzdad at 10:00 AM on March 2 [1 favorite]


yes, more or less. it's a wealth transfer from investors to yuppies.

Currently yes, although undoubtedly the long-term strategy is to drive traditional taxis out of business and then soak everybody who's not capital.


The actual strategy is just a pyramid scheme. Pump these things up enough that they look like The Next Big Thing that's Not Too Late To Get In On Early until the stock price goes up enough that the initial investors can cash out with a profit. After that, who cares if it is ever profitable? And of course the salaries are plenty real enough that the management at these companies have been paying themselves with investor dollars.
posted by straight at 10:07 AM on March 2 [18 favorites]


How does the govt consider the vehicle expenses Uber/Lyft drivers incur?

The driver can take the IRS standard mileage allowance for every mile driven while working for Lyft/Uber.
posted by JimInLoganSquare at 10:11 AM on March 2 [2 favorites]


I would argue that this is a wealth transfer to the people that are running Uber, not the consumer. Uber employees are earning very high wages and are being issued a lot of stock options, said stock which is rising because... reasons? They are making enough money to become wealthy off of the process of burning much, much more money by channel investment into subsidy.

Feels like this is the case all around. People making $100-250k are running a system that systematically underpays workers (via disruption,) bankrupts small business owners, consumes vast investment that only pays via stock that is a total abstraction. Sounds like a bubble to me, but I'm always wrong about everything. But the motivations in the Valley at the moment are totally wacko... people seem to be supporting the models that support their RSU grants continuing to come because they are aspiring to me wealthy themselves. The incentive structure gets very fuzzy when trying to figure out why anyone is doing anything.

A friend told me once that what is happening is the subversion not of the market and of industry but of nation-sponsored currency. This is what it looks like when value exits our normal way of thinking about value (money.) I'm not smart enough to really know what that means, but... it feels like I am slowly putting it together.
posted by n9 at 10:17 AM on March 2 [10 favorites]


The article says "Drivers earn a median of 59 cents per mile while incurring a median cost of 30 cents per mile", but AAA has been publishing authorative "how much it costs to drive a car" figures for many years, never that low - typically over 50 cents/mile.
For 2017 here for example.
I have long thought - and I was an owner/operator trucker for a decade - that ride share drivers and pizza delivery drivers et al are borrowing money from their cars and, particularly if they are not long experienced with vehicle ownership and maintenance (and financing and insurance) mostly don't realize it until they need a transmission or tires or a brake job or a new car.
posted by Alter Cocker at 10:18 AM on March 2 [41 favorites]


Sorry; looked again and the figures I linked were for 2014 not 2017, but I doubt they have changed for the better.
posted by Alter Cocker at 10:21 AM on March 2


1) prehistoric times: every tribe equal, oppression is individual to individual
2) babylonian/harappan/qin dynasty times: got yrself a godking with all the power
3) slightly later: power cedes to imperial scholars / king's court / etc
4) slightly laterer: power cedes to superrich landowners/slavers, sometimes guillotines are involved
5) slightly even laterer: power goes to rich industrialist types, old timey rich keep power. godkings take a new form in distributed state control and dictators
6) just a tick later: the dudes who manage old timey money and rich industrialist money and dictator money are like, hey I wanna munch and so the financial world gets a share too
7) like just a tiny tick later: upper middle class wants to munch too and figure they can do this because of the internet. financial money types rule the day. one of em's even the President of the US and a lot of em run the US govt via the exec branch. nice

the future: ?? guillotines again ??
posted by runt at 10:31 AM on March 2 [8 favorites]


but AAA has been publishing authorative "how much it costs to drive a car" figures for many years, never that low - typically over 50 cents/mile.

That is the napkin math I use when deciding whether to rent a car or drive my own. If I can rent a car for a week for $200, and then drive it round trip from Houston-Dallas on a couple of gas tanks, it's a wash. And at that point I'll probably rent just to have a much nicer car than my own since my credit card insures against damage on the rental.
posted by parliboy at 10:32 AM on March 2 [1 favorite]


They're also incurring costs to everyone else with increased congestion, generating health problems and lost time.

Plus driving for them requires that you use a mobile phone while driving, so everything about it just jacks up the death toll for the rest of us. Transportation network company services aren't safe.
posted by asperity at 10:41 AM on March 2 [9 favorites]


that ride share drivers and pizza delivery drivers et al are borrowing money from their cars and,

When I bought my first car (early 1980s), my dad broke it down for me. Calculate gas, insurance, new tires every few years, new brakes etc ... Then add at least $1000 Per Year for unexpected stuff, plus overall depreciation etc. He was right. Which made it very easy for me to sell my last car in 1993 and never look back*. It's amazing how much one can afford every year in cab fares, occasional rentals etc when they're not paying for all of the above.

* this speaks to living in an urban location -- rural living is a different dynamic altogether.
posted by philip-random at 10:41 AM on March 2 [5 favorites]


I keep wondering how many of those drivers are on leases - with mileage penalties at the end - and will one day be in for a very rude surprise, particularly since the companies require late model vehicles.
posted by Alter Cocker at 10:47 AM on March 2 [5 favorites]


Like a lot of VC-burning businesses, there's actually a temporary benefit to consumers, at least those who are in a position to take advantage of the artificially-low-priced stuff on offer. The canonical example is always dot-bomb fan favorite Kozmo.com. It was an unsustainable financial disaster, but if you were one of the few people who got a candy bar or whatever delivered in an hour, well, some VC investor paid to bring you a snack.

However, as far as I know, Kozmo was paying its delivery people a reasonable wage. Uber isn't, so there's arguably an ugly moral hazard in what would normally be a pretty nice downward wealth transfer.

Plus, obviously there's an endgame if things go according to Uber's plan—what we're getting now is the dealer's proverbial first-one's-always-free. Once they have us all hooked, that's when their investors expect them—or else they wouldn't be investing at the rates they are—to start turning the screws and really extracting rents.

Since it's also the drivers' personal transportation, do they treat the car similarly to a home office, in that you can only claim a certain percentage of your home, and not the whole thing?

I think it would be the same as any other business mileage, such as (in the classic example) a traveling salesman would incur. The driver gets to claim 54.5 cents for every mile in 2018, presumably for all the miles driven with a customer in back. Whether they could also deduct mileage driving to and from their first stop of the day strikes me as a more complicated question (is that basically commuting mileage, and thus not deductible? or is that like a salesman driving to his first sales call of the day?). But in general, someone with a cheap-to-operate car who uses it mostly for Uber/Lyft would do pretty well in terms of deducting its cost of operation.

What is sorta weird, according to this post is that Uber's 1099-MISC forms provided to drivers don't have any of Uber's fees, commissions, etc. subtracted out from the amounts listed. So if a driver wasn't savvy enough to realize this and do the deductions correctly themselves, they could end up paying way more tax than they owe, since Uber's fees and commissions are substantial. Maybe that's just the way the 1099-MISC has to work, but it seems like Uber could throw in some sort of extra sheet for its drivers to explain how to net out their income after fees for tax purposes.
posted by Kadin2048 at 11:00 AM on March 2 [6 favorites]


I would guess all but the earliest Uber employees aren't doing great on stock options. The standard vesting schedule is 4 years with a 1 year cliff, and the shares they get (or would get upon exercising their options) will be constantly diluted every time Uber raises more money, and the least preferred class, in case of a sale of the company. There's no liquid market in Uber shares, it's probably hard for single employees to sell on private markets, etc. At the same time they still have to pay capital gains in almost any arrangement I can think of.

I don't want to be like "oh no poor Uber engineers" because they're mostly all fine, on top of an incredible hierarchy of privilege, but if it's like any other tech company, they aren't making out like bandits the way you might expect from the numbers in the compensation package.

I think this is important, that they are just employees, same as the drivers. They are massively better treated but it's the same relationship in an important way.
posted by vogon_poet at 11:00 AM on March 2 [3 favorites]


Also note that after their $3.30 per hour in the gig economy, they get no health insurance, no vacation pay, no sick pay, no retirement, no unemployment insurance, no disability insurance -- all things people take for granted in real jobs.
posted by JackFlash at 11:02 AM on March 2 [25 favorites]


The Ride-Hailing Business Is Now Way Bigger Than Uber and Lyft (Aarian Marshall for Wired, Feb. 28, 2018)
The ranks of those offering ride-sharing services have swelled far beyond the likes of Uber and Lyft, past the self-driving gurus like Google sister company Waymo, past even the established automakers.

Now they include companies like Bosch, the German company best known as an automotive parts supplier, which last week acquired American ride-sharing startup SPLT. And Sony, which just announced it will partner with Tokyo taxi companies, lending its artificial intelligence tech to the tricky business of dispatch. And even rental company Avis, which purchased car-sharing company ZipCar and is working with Waymo to support a self-driving taxi rollout in Arizona.

Welcome, passengers, to the confused and confusing age of mobility. The central quandary, the reason for these new sorts of businesses and brainwaves about revenue streams, is pretty simple. The automotive industry thinks personal car ownership will plummet in the coming decades. It has already dipped, especially among young people: The share of Americans aged 16 to 24 who held a driver's license dropped from 76 percent in 2000 to 71 percent in 2013, while car-sharing memberships grew. The supposition (and it is still a supposition) is that the decline will continue, especially in big cities where parking is dear. For the companies in an industry that has spent more than a century selling cars to individuals, this presents a problem.

“At the end of the day, this will lead to consumer choice, and consumers will look for the most economically efficient, and time-wise most efficient, way to get from A to B,” says Rene Schlegel, the president of Bosch Mexico, which used SPLT's app to organize employee carpools. “The most efficient players will get the best chair.”
People are just short-term stand-ins for automation in what used to be the automotive industry, and is quickly becoming the automated ride hailing industry.
posted by filthy light thief at 11:10 AM on March 2 [4 favorites]


People are just short-term stand-ins for automation in what used to be the automotive industry, and is quickly becoming the automated ride hailing industry.

...and, for Uber, when you have multiple well-funded car companies full of smart, capable people rushing headlong into your space to avoid their upcoming irrelevancy, your odds of being able to monopolize the space to raise prices, recoup your costs, and justify your stock price are asymptotically approaching zero.
posted by leotrotsky at 11:20 AM on March 2 [2 favorites]


[Uber's] odds of being able to monopolize the space to raise prices, recoup [its] costs, and justify [its] stock price are asymptotically approaching zero.

I hope you're right, leotrotsky! Not that I especially want to see Uber fail, but rather I don't want to see another single company grab Amazon-level control over another commercial sector.
posted by spacewrench at 11:29 AM on March 2 [2 favorites]


I use Lyft instead of Uber, but I know it's not that much better. I do feel that it's the sort of thing where people in the US are terrible at anything that's tip-dependent, and I think most people don't realize that tipping for Uber/Lyft is as required as tipping for restaurant delivery if not more so. I really appreciate that they exist. I had dental work done yesterday and my Lyft drivers both ways let that happen--I have to take anxiety meds to manage the dentist and it's not safe for me to drive at those times and you have no idea how much of a life improvement it is to be able to schedule appointments when I want and not have to humiliate myself by asking every friend I know if they're free to take me. But I tip pretty aggressively now that I know how bad the money is. It's honestly the sort of thing where I'm not that price sensitive--is that different for others? They could increase prices by 50% and it wouldn't change how much I use the service, because when I need a Lyft, I need a Lyft.
posted by Sequence at 11:30 AM on March 2 [7 favorites]


The bet with Uber and its ilk has always been "Can we set an enormous pile of money on fire fast enough to get more people to throw money our way and not be the one left standing when the music stops?"

Though I'm not sure how "being sexist fucks with a huge penchant for breaking the law" fits into this core mission. Somehow they've made it work for them.
posted by fifteen schnitzengruben is my limit at 11:47 AM on March 2 [5 favorites]


This is why I want to throw things at the TV when the "Drive for Uber" ad comes on. No lady, you are not bringing home $250 to spend on luggage, you are bringing home 250 minus taxes minus mileage minus insurance, which probably only covers YOUR uber to the airport!
posted by Hermeowne Grangepurr at 11:50 AM on March 2 [3 favorites]


the sort of thing where people in the US are terrible at anything that's tip-dependent

I always think of this as "Employees in the US are not paid a living wage and the people using their services are supposed to guess the difference between the price we see and a reasonable price for the service and tip that much and it's hard to do."
posted by Emmy Rae at 12:02 PM on March 2 [25 favorites]


I do feel that it's the sort of thing where people in the US are terrible at anything that's tip-dependent, and I think most people don't realize that tipping for Uber/Lyft is as required as tipping for restaurant delivery if not more so.

This is putting the burden in entirely the wrong place. If something is part of the cost of providing the service, it should be part of the quoted cost of that service. Hence, lyfts and ubers should be far more expensive. But making that contingent on tips - a mechanism where POC and older people make less, a mechanism where tipped staff are under pressure to look the other way on abuse from the consumer, a mechanism where it is possible for the consumer to pay less than the cost of their service, a mechanism where some consumers are expected to make up for others' stinginess, a mechanism where some consumers feels especially empowered to manipulate the staff in unacceptable ways - nope.

Also, people may be "bad" at tips for ubers in particular because, for a long time, uber specifically told people that there was no need to tip/discouraged tips. And because, the way the app is set up, there isn't the same social pressure to tip that there is at a restaurant or, idk, a valet. While you may expect that it's as mandatory as tipping elsewhere, I don't know how widespread that perspective is.

[but yes, as long as the rates are what they are, I personally will tip very generously.]
posted by mosst at 12:20 PM on March 2 [16 favorites]


I mean, it is hard, Emmy Rae. But I have good friends who are currently or have recently been in tip-dependent work, and there are entirely too many people who just flat out don't tip delivery drivers or who give insultingly small tips, like $1 kind of things, to cover "people just don't know how much they're supposed to tip". Like even if it's hard to guess, you should probably with Uber and Lyft be guessing that if they're asking for a tip at the end of the ride that the correct answer is more than $0, but I bet there are a fair number of people who don't tip at all.

Not that the model itself isn't also a problem, but I think that it does dismiss that there are a lot of people in the US who do *understand* that their driver or their server or whoever is underpaid, and still stiff that person to keep a few dollars in their own pockets. Which is not to say that we should just sit by and say "isn't that too bad"--it's just basically the reason I feel that higher wages are important, because nobody's wages should be determined by customers who can decide just not to pay them.
posted by Sequence at 12:29 PM on March 2 [3 favorites]


For what it's worth, I posted this to an Uber-related subreddit yesterday. Interesting to see Uber apologists there.
posted by koavf at 12:31 PM on March 2


Venture Capital. All this money has to go SOMEWHERE! Why not slick snakepillers who preach a gospel of capitalist organization of the public goods. We certainly couldn't... "disrupt" the chains of distribution of venture capital in favor of the workers who actually do the work, nah, better to waste it all on sexist playboy scum.
posted by symbioid at 12:31 PM on March 2 [1 favorite]


The article says "Drivers earn a median of 59 cents per mile while incurring a median cost of 30 cents per mile", but AAA has been publishing authorative "how much it costs to drive a car" figures for many years, never that low - typically over 50 cents/mile.
For 2017 here for example.


The 2014 AAA numbers have medium sedans at 57 cents per mile, but that assumes 15K miles. Of that 57 cent breakdown, 14% is insurance, 44% is depreciation, and registration and financing costs are each 8%, with the remaining 26% for gas, maintenance and tires. Only this last 26% scales completely to the amount driven; depreciation and insurance vary a little based on mileage and license/registration is fixed.

The more you drive, the more the (relatively) fixed costs like depreciation are shared out across the miles, so TNC drivers are going to have a much lower cost per mile just because of this. The other thing is that presumably TNC drivers would own a car even if they weren't driving for the TNC; you could reasonably say that the license/registration would be paid anyway and so shouldn't be counted towards TNC mileage.

Similarly, you could potentially allocate some of the insurance, finance and depreciation -- even if you drove 99% of the time for the TNC, a lot of a car's depreciation is just the vehicle getting older and if you would have owned it to drive that 1% then it's an expense aside from the cost of TNC driving. I'm not sure how much the authors are making this argument -- I can only see the brief -- but they don't count finance and registration costs at all, and they count depreciation as only 20% of the cost (AAA has it at 44%) and fuel at 40% (AAA has it at 14%).

But fundamentally your conclusion is correct, that this is a way to suck up money that was previously locked away in private cars and transfer it to yuppies and vested tech workers.
posted by Homeboy Trouble at 12:34 PM on March 2 [4 favorites]


I invoke reverse recursive Betteridge and restate the title of this post as:

Democracy? In The Workplace?

posted by signal at 12:35 PM on March 2 [4 favorites]


So far, "stock options" at Uber (and other company with options that isn't yet public) are worth - nothing. You can't sell them, so it's all funny money until/unless they go public. And they could do some fun stuff that devalues the common stock value, and pumps up value of founders/execs prior to going public. So no, employees are not getting rich (yet) on stock options.
posted by dbmcd at 12:36 PM on March 2 [1 favorite]


Sequence, I don't disagree. Just saying that there is a framework in which I think about tips. A lot of people are "bad" at them simply because we don't know what constitutes an appropriate tip in each of the separate industries in which they're an important part of pay. I also try to tip very generously. It just makes me mad that it is part of the equation at all.
posted by Emmy Rae at 12:37 PM on March 2


The Uber drivers of my acquaintance are all young adults who are still, to some extent, getting parental subsidies. The parents don't give their kid cash, instead they give them a car. Usually not new cars, more like practical family hand-me-down cars. Uber is a tool for those young adults to make their subsidized cars fungible.

When the car is "free" apart from having to maybe buy some gas, the Uber paycheck is terrific. It lets these young adults imagine they are independent. But it's running on borrowed time. When the car is used up, they will have to get a new one on their own, or get a different job, or come back to the parental units for another handout (and listen to our lectures about their failures at math).

I'm glad the car we have given to the kid, is too old to meet Uber's requirements, because it's not the path to independence that the kid's peers think it is. Nowhere near.
posted by elizilla at 12:51 PM on March 2 [7 favorites]


Also, people may be "bad" at tips for ubers in particular because, for a long time, uber specifically told people that there was no need to tip/discouraged tips

This. I always, always tip cabbies, but I think in part because Uber spent so long saying “the tip is included in the price” that I don’t even think to tip Uber drivers. And it’s not even front and center on the app - you do it after the ride, when you don’t even have the app out anymore.
posted by corb at 1:18 PM on March 2


I drove for Lyft for about a year, in 2013-14. It was not enough to keep me from running out of money, but it was enough to dramatically slow the decline for a long time.

It was not enough to be a fulltime gig, even if I shifted my life schedule around College Kids in Cambridge and Boston, and dot-com people flying in on Monday morning.

I don't see a way for Lyft to work as a full time thing. But right person, right work ethic? Sure, an extra $400-$600 a week in gross revenue. If you get health insurance from a partner or from the state, and you have low rent due to housemates or partner, and you have a relatively-recent car that isn't likely to break down, Lyft can get you some extra money.

But, there are a LOT of ifs. AFAIK if you aren't in one of the prime markets for Lyft/Uber, you cannot make it a fulltime gig and financially survive. Can't even come close.

Literally better than nothing, though. It was a fine thing to do while on unemployment while also looking for work (because there is a functional limit of time to spend on job searches).
posted by andreaazure at 1:34 PM on March 2 [4 favorites]


Uber has a scheme (scam?) to buy back stock options.
posted by onya at 1:44 PM on March 2


I don't understand the appeal of these services to the customer. They're exorbitantly expensive IMO and aren't much faster or more convenient that public transit in most metro areas I've lived.

Also, what percentage of the ride cost does Uber or Lyft typically take?
posted by runcibleshaw at 1:56 PM on March 2


you know, there's also that invisible cost to driving in the gig economy known as traffic-related mortalities that applies to everything from food delivery people to Lyft drivers. the more there are non-professional drivers on the road, both by driving experience and sheer numbers, the higher the chance of crashes in the traffic system. the more you drive as an individual, especially during rush hours when these services are most used, the higher your chances of having an accident

also something something increased car use = more pollution? maybe?
posted by runt at 2:03 PM on March 2 [3 favorites]


It was not enough to be a fulltime gig, even if I shifted my life schedule around College Kid...

Lot said even there I mean, to digress I'm old enough to say I drive in the 1970s; collect gas money and party supplies were free but this was before cheap cell phones and I could get 20 people to a camp site in an hour, age 12 with a walkie and using a payphone. So my contrast really only serves as something I like to remember from the 20th century but I agree, a good driver and with even like basic delivery jobs, you get knowledge of terrain even fuel sources, i.e.the old Checker cabs that ran on natural as a historical example, it gives one an advantage not to mention knowledge of human activity which means strategically placing the ride were folks need them quick. Ya, what ever can get you through.
posted by clavdivs at 2:18 PM on March 2


Jebus, you know your old when minimum was 3.35$ an hour.
posted by clavdivs at 2:19 PM on March 2 [1 favorite]


Is it hard to understand? From Union Station to The Getty, a bus ride could take two hours. A taxi would take 20 minutes. And I don't know how long your lunch break is, but most people don't have enough time to go to the doctor and back on a bus. $4 bus fare minus lost wages is probably not more appealing than a taxi. Not sober at 2AM in downtown Long Beach? Walk or taxi or get in your car and kill someone, because the bus doesn't show up for another 3 hours.
posted by Brocktoon at 2:34 PM on March 2 [4 favorites]


1) Good pay & benefits 2) Flexibility and autonomy 3) Low barrier to entry

Pick, at most, two.
posted by kickingtheground at 2:41 PM on March 2 [7 favorites]


Honestly I had no clue that I was supposed to be tipping on uber and lyft. I always tip at least 20% in restaurants, give generously to pizza deliveries and do at least a “keep the change” in NYC cabs but I thought that part of the attraction of uber was that the prices were already determined and it was factored in. IIRC tipping wasn’t even an option when it first came out.

I think tipping economies are largely stupid and people should be paid living wages but I didn’t mean to stiff all the drivers. When you create a new (form) of a service like uber or lyft I don’t know why it would be obvious to tip.
posted by raccoon409 at 2:50 PM on March 2 [3 favorites]


Because the goal is to kill off taxis and then exploit the monopoly status, they're not subsidizing current riders, they're loaning money to current riders. Should they accomplish monopoly, they'll get that money back.

If you live in an urban area, by using ride sharing services you're borrowing from future you.
posted by straw at 3:03 PM on March 2 [10 favorites]


I haven't used Uber, but in Lyft I get a prompt for a tip in the app when the ride is over, with recommended amounts around 18-20%ish, and I also get a text notification reminding me to tip.
posted by churl at 3:05 PM on March 2 [1 favorite]


Because the goal is to kill off taxis and then exploit the monopoly status

How do you think they envision developing monopoly status when there are so many potential competitors in an industry with few barriers to entry and a commodity product? The potential for monopoly, or even near monopoly doesn't really seem plausible. It's not like Facebook, nobody is gonna stick with Uber just because that's what everyone else does. If there are cheaper competitors, people will use them. It's not like Amazon, they're not going to be able to control the transportation industry so effectively that only a few other companies can manage to buy cars and put mobile phones in them.

There are other reasons besides the potential for monopolizing an industry to distrust tech companies in general, and even more for companies like Uber with records of very bad behavior. I don't understand the worry about monopolies here.
posted by skewed at 3:25 PM on March 2 [4 favorites]


There are other reasons besides the potential for monopolizing an industry to distrust tech companies in general, and even more for companies like Uber with records of very bad behavior. I don't understand the worry about monopolies here.

Taxis are regulated, albeit sometimes haphazardly. Uber is not, with very few exceptions. The only real exception in the US is NYC, I think. Austin has regulation (after Uber and Lyft tried to buy a referendum), but Austin is hardly a significant market. The disproportionate reaction Uber and Lyft had in Austin is telling, I think.
posted by hoyland at 3:38 PM on March 2 [2 favorites]


skewed, I think we've given up fearing that Uber will become a monopoly and are now caught between horror and schadenfreude at what it is becoming, but that's very clearly been their business model from the start. They'll fail, and take a lot of people down with them when they do, but it's been the plan.
posted by straw at 3:51 PM on March 2


The trick is getting the app onto phones. My Galaxy S7 came with Uber already installed. How many taxi apps are people going to download and set-up? Do people use multiple apps that all perform the same function? Not really.
posted by Brocktoon at 4:03 PM on March 2 [1 favorite]


fifteen schnitzengruben is my limit: Though I'm not sure how "being sexist fucks with a huge penchant for breaking the law" fits into this core mission. Somehow they've made it work for them.

Being sexist, aggressive assholes is how you convince VCs to throw money at you. It's an essential part of the mission. If you're a kind, gentle company, VCs will be convinced that whatever you're trying to do will fail. There was a story on Metafilter not long ago about the transformation of Etsy's internal culture by investors who were convinced that it couldn't possibly succeed if it kept being such a nice place. To get VCs to dump more and more billions into a failing business, you have to make them feel like they're sharks with big shark teeth who are all chomp chomp and grrrrrr and I'M A SHARK!!!
posted by clawsoon at 4:10 PM on March 2 [19 favorites]


I've completed the tax returns for dozens, possibly nearly a hundred, Uber/Lyft drivers over the past few years as a volunteer with the IRS VITA campaign. The article backs up what I have seen - most drivers are just not making a decent hourly wage once you take into account the mileage, fees, insurance, car cleaning expenses, etc. Of course Uber and Lyft do not give their drivers any kind of tax guidance. When Uber/Lyft issues the 1099-MISC to their drivers, they also include a report that shows how much they pay in fees to the company and how many miles they drove with passengers in the car. As noted by other commenters above, those miles are not the only deductible miles for the drivers, and those extra miles make a big impact on the profitability (to the drivers). It would be trivially easy for Lyft or Uber to track and calculate the other deductible mileage for the drivers. It is my (strongly-held) belief that Uber and Lyft do this to keep the IRS off their backs - if the drivers started deducting all their miles, there would be a dramatic drop in the amount of self-employment taxes that the drivers owe. And that might cause the IRS to look more carefully at the employment status of these so-called "self-employed" drivers. It's a massive tax avoidance scheme by Uber (and all other gig economy jobs.)

Most of the drivers I helped told me that they wouldn't drive anymore as a second job because they just didn't make enough money.
posted by stowaway at 4:20 PM on March 2 [18 favorites]


I can only speak for my experience out here in Honolulu, but Lyft and Uber and regular $5-$10 more than our Yellow Cabs. Maybe its just because I need them in the morning to get to work, but I've yet to encounter a situation where I'd save money with Uber or Lyft. Obviously, it must be the case that in other places (and during other times in the day) that those services are cheaper, I've just not experienced that here.
posted by Joey Michaels at 4:24 PM on March 2


One thing to keep in mind when you use Uber is that the fee you see is not the same fee the driver sees.

Let's say you have a $15 ride. Uber takes about $5 off the top for "service and booking fees" sort of like Ticketmaster. The driver never sees that. The driver sees a $10 charge. Uber then takes 25% out of the driver's fee as a commission, another $2.50.

So for your $15 ride, Uber, doing nothing, gets $7.50 and the driver gets $7.50. The driver is usually getting less than half of your charged fare.
posted by JackFlash at 4:43 PM on March 2 [2 favorites]


There should be a legal cap on the size of a privately owned or publicly traded company. Once it grows beyond a certain size, its owners should be required to sell it to the employees. Large, privately-held or publicly-traded companies are fundamentally undemocratic, and undermine a free society.
posted by biogeo at 5:30 PM on March 2 [1 favorite]


One thing to keep in mind when you use Uber is that the fee you see is not the same fee the driver sees...
This BS also applies to Lyft, the "slightly less exploitive" alternative.
posted by mrgoldenbrown at 6:08 PM on March 2


I don't understand the appeal of these services to the customer. They're exorbitantly expensive IMO and aren't much faster or more convenient that public transit in most metro areas I've lived.


Worked for a company in DC where we were under crunch for a bit and yes Metro was still running when I got to go home but the Pentagon buses were all at every 60-90 minutes by then. Or I could have gone to Crystal City and waited 45 minutes for a bus. Or I got a Lyft right out the door, got thru the city and home in 23 minutes. Sometimes if I timed it right I'd catch a train to outside the city proper and get a Lyft, much cheaper and about the same time.
posted by 922257033c4a0f3cecdbd819a46d626999d1af4a at 7:02 PM on March 2 [1 favorite]


IME, ride share services usually arrive to pick you up significantly faster than calling a cab. The best I've ever got from a taxi dispatcher was a 15 minute wait. Lyft routinely will have a driver at my door in less than five minutes.

Now, is this a feat that could have been achievable under the medallion system by simply allowing more cabs on the road rather than flaunting all laws and regulations around livery services? Absolutely. But that's not what happened.
posted by tobascodagama at 7:17 PM on March 2 [5 favorites]


♩ We're on a road to nowhere ♩

race you to the bottom!
posted by aspersioncast at 7:20 PM on March 2 [1 favorite]


I do Uber, Lyft, a local taxi co. that has an app (and had one before Uber), a local food delivery service, Grubhub and organ harvests. I read every bit of local media and somehow that turns into intuition about where I should be. If a place comes to mind I go there and usually get something.

I don't like picking up men from the strip club but one day the passenger had a female name and I called to make sure she was not an employee trying to get rid of the two guys who had wanted to put an unconscious third guy in my trunk. Called first and yes she did work there but no designs on my trunk and it was her first day and she was a mess.

Apologized for the pre-pickup interrogation and it was a 35 minute ride and I told her about being the designated driver for a really messed up kid who used to work there and lived in a cheap motel and her SO took all her money and blew it up his nose and don't let this place fuck you up. So now I drive all of them home and that's off the books.

I don't get upset about traffic. I can usually get people talking about something other than the weather or help them with something unrelated to the service I am providing. My tip percentage increases with the length of the trip. The comments on my profiles have accumulated to the point that complete strangers hop in expecting to unload.

You don't just turn on the app and manna falls from the sky. You need to study and have multiple options and a strategy to make this work. Mine is kinda zen but it brings home the bacon and after 9 months of doing this I know more people's intimate stuff than I ever have.

Eating out with the kids and somebody walks up and tells them "Your dad got me to the methadone clinic in an ice storm" is just the price I have to pay but I'm pretty sure the kids won't do heroin after the conversation we had.

Remember day trading and house flipping? This is the new that. You can make money but it is not easy.

I would prefer you use Lyft. The pay is transparent. With Uber it is not and depends on the date of your contract.
posted by Mr. Yuck at 3:19 AM on March 3 [15 favorites]



IME, ride share services usually arrive to pick you up significantly faster than calling a cab. The best I've ever got from a taxi dispatcher was a 15 minute wait. Lyft routinely will have a driver at my door in less than five minutes.

Yes, this. I remember the Bad Old Days of taxis in the Bay Area and it was hit or miss whether you'd even get a taxi in the first place - hell, it was hit or miss if the dispatcher ever took you off hold after 15 minutes! Taxi companies seemed to work on the "if and when we damn well please" timetable, which won't get you to appointments on time. You shouldn't need to call the cab company at 7:30 for a 9 AM doctor's appointment.

And even in cities with great public transit, it's not always feasible to take it when you're really sick or the appointment is out of the way or you're going to be under sedation.

I use Lyft, and I am glad the app gives the tip option in a straightforward manner. I always tip the maximum the app allows.

Let's face it, Lyft and Uber wouldn't have gotten the hold they have if traditional taxi companies worked well. Maybe the best option would be a regulated and salaried Lyft type of transport? I don't think the options should be either "screw over the drivers" or "leave passengers stranded."
posted by Rosie M. Banks at 5:59 AM on March 3 [7 favorites]


Let's face it, Lyft and Uber wouldn't have gotten the hold they have if traditional taxi companies worked well. Maybe the best option would be a regulated and salaried Lyft type of transport? I don't think the options should be either "screw over the drivers" or "leave passengers stranded."
Here in DC the main thing would have been avoiding regulatory capture. The existing taxi companies were horrible, violating existing rules left and right and failing every service metric imaginable — everything from ditching black riders to illegally refusing to stop before crossing zone boundaries which triggered extra charges — but they had the political ties to avoid any actual enforcement. If the city had actually cut down on that routine corruption Uber would have had a much smaller advantage entering the market.
posted by adamsc at 7:31 AM on March 3 [3 favorites]


And even in cities with great public transit, it's not always feasible to take it when you're really sick or the appointment is out of the way or you're going to be under sedation.

Transportation for medical treatments is an area that concerns me, which is why I was intrigued to read recently about the launch of Uber Health:

Uber is driving patients to their doctors in a big grab for medical transit market
"Uber announced the launch of a new digital tool meant to book rides for patients who need assistance getting to and from their appointments. A health care provider can book a ride for patients and caregivers immediately, within a few hours, or with 30 days’ notice. The company is positioning itself as a cheaper and more reliable option than most non-emergency medical transportation.

Uber Health is available in two versions: as an online dashboard and as an API for software developers to integrate ride-hailing capabilities into their own health care tools. The service doesn’t require an Uber account; notifications can arrive via SMS text message. The company plans to expand the service so that people with landlines will be able to get trip details that way — or via a mobile phone that isn’t a smartphone. Uber says the billing is simple and easy to manage."

However, Uber being Uber, I'm concerned that somehow they will muck this up in the execution of the idea, and that there will be many more unintended consequences we haven't thought of yet.
posted by cynical pinnacle at 8:38 AM on March 3 [1 favorite]


Uber being Uber, I'm concerned that somehow they will muck this up in the execution of the idea

It doesn't matter to them, the important part is getting in on the insurance billing pipeline.
posted by rhizome at 1:24 PM on March 3 [2 favorites]


Has anyone posted this yet? An analysis of CEEPR’s Paper on “The Economics of Ride-Hailing” by Jonathan Hall, Chief Economist and Director of Public Policy at Uber.
posted by The Toad at 2:28 PM on March 3


I love that the Chief Economist at Uber is using freely available public data to make his case, when he doubtlessly has access to the entire set of real data.
posted by miyabo at 3:33 PM on March 3 [3 favorites]


Presumably that would be countered with the accusation that Uber's data is somehow manipulated?
posted by L0 at 10:55 PM on March 3 [1 favorite]


So for your $15 ride, Uber, doing nothing, gets $7.50 and the driver gets $7.50. The driver is usually getting less than half of your charged fare.
No, silly. Uber is not doing nothing, it is using that money to develop a technological innovation (in the form of a self-driving car) that will eventually capture the entire $15, putting the driver out of business.
posted by Maxwell_Smart at 7:10 PM on March 4 [1 favorite]


One of my friends drives for Uber. She said she tends to make around $500/week, if she drives 5 hours a day in the San Francisco Bay Area.

That's about $20/hr.

Obviously this is anecdata, but I suspect what's happening here is:

a) In some regions, people end up making quite a bit more
b) The study is dramatically overestimating the expenses incurred in driving. Cars are significantly more reliable now than they were in previous decades.

My understanding is that Uber acts as something of a shock absorber for the middle class -- a lot of people who actually have jobs, sometimes just need an extra few hundred dollars for some reason. You pretty much only get a raise when you get another job, even in tech, and there aren't really other jobs outside of tech.

The reality is that my friend wouldn't be driving that car for 25 hours if she only made $85, and I know just the bonus structure alone doesn't support a weekly sum that low, so something doesn't add up.
posted by effugas at 2:38 AM on March 5


Oh wow, I just read the analysis by Jonathan Hall.

This is actually incredible wordsmithing. I don't want to assume malice, but look at these rather cleverly designed questions. Remember, the author _knows_ people have other jobs (it's very, very common). He could just ask:

How much do you make from ride sharing every month?
How many hours do you drive?
How much money do you make from other sources?
How many hours do you work from other sources?

But instead, he asks:

How many hours do you work? (Add up from all driving sources.)
How much money do you make? (Add up from all driving sources.)
How much of your money comes from driving sources?

In theory, you get the same raw data from both. In practice, you won't. You are supposed to recognize, from the second sentence, that the first sentence means something completely different than you'd originally suspect. You've already come up with an answer, referenced from the wrong data source, and the clarification seems to apply to the "Uber vs Lyft" and not "Uber and Lyft vs Everybody".

I'm sure it's possible this is accidental, but it means the study is simply garbage and not worth further scientific consideration.
posted by effugas at 2:55 AM on March 5 [2 favorites]


Ehhh, couple things:

So for your $15 ride, Uber, doing nothing, gets $7.50 and the driver gets $7.50. The driver is usually getting less than half of your charged fare.

I'm happy to hate along with everyone else, but Uber isn't doing nothing. Connecting a rider who wants to pay for a ride and a driver who wants to be paid to drive isn't nothing, particularly when it happens within minutes. Particularly when they're both pretty well assured they're going to the same place, unlike most of my experiences with cabs lately.

And

One of my friends drives for Uber. She said she tends to make around $500/week, if she drives 5 hours a day in the San Francisco Bay Area.

That's about $20/hr.


Does making $500 a week mean grossing $500 a week or profiting $500 a week? Those can be very different things.
posted by craven_morhead at 11:02 AM on March 5 [1 favorite]


^^^ This. It's a hugely common mistake among people who aren't used to contracting work. When you work for a company, your internet/heat/phones - the general cost of doing business - are built in to the system. Your taxes are generally taken out of your check. There's someone to call if the pipes freeze.

If you're going to work any meaningful amount of your time as a contractor you quickly learn that you need to bill out for significantly more than your ostensible hourly rate would be at a company, because you're bearing all the overhead.
posted by aspersioncast at 12:23 PM on March 5 [1 favorite]


A paper by Hall (who works for Uber) indicates that the median pay across the 20 largest US markets is around $16/hr (although it gets as high as $30 for the most experienced drivers in NYC), after Uber's fees NOT including any expenses.

So if you assume IRS or AAA mileage rate, and assume they drive 25 miles an hour while working, they're not breaking even. If they're buying a VERY cheap-to-operate car (like a brand new Prius C purchased at 0% interest), they could perhaps make $6-8/hr. Not including the 7% extra taxes that self-employed people pay, or commercial car insurance.

It makes more sense to drive for Uber in high cost-of-living areas, since car operating costs aren't really much higher, but Uber pays much more. Making $24/hr in NYC isn't great, but it's a lot better than making $0 in Philadelphia.
posted by miyabo at 1:19 PM on March 5 [1 favorite]


I love that the Chief Economist at Uber is using freely available public data to make his case, when he doubtlessly has access to the entire set of real data.

Maybe, but at least by using the freely-available data others can check his work. If he used internal Uber data, which they are very unlikely to release, we'd have no way of knowing if he has something up his statistical sleeve.

Here in DC the main thing would have been avoiding regulatory capture. The existing taxi companies were horrible, violating existing rules left and right and failing every service metric imaginable

I'd just second this, very strongly. Taxis in DC were absolute garbage for years, and had actively (and successfully) resisted almost every effort to make them less garbage. By the time Uber launched in DC, the real DC cabs had barely gotten meters. Yes, the ones invented in the late 1800s: they were over a century late to that particular party, and with much wailing and gnashing of teeth.

It's why I have such mixed feelings about Uber's beg-forgiveness-not-permission business model. On one hand, allowing companies to run roughshod over regulation probably isn't a great idea. But on the other hand, DC's taxi regulations had clearly sclerotized into a racket that wasn't benefiting most of its users. It comes down to whose ox is getting gored, I suppose; nobody likes the regulations that protect them getting ignored.
posted by Kadin2048 at 1:39 PM on March 5 [3 favorites]


It's why I have such mixed feelings about Uber's beg-forgiveness-not-permission business model. On one hand, allowing companies to run roughshod over regulation probably isn't a great idea

Uber's great contribution is in being first-mover on smartphone-ifying calling a taxi. That's pretty much it, everything else Uber does has been executed poorly. If they hadn't added techology to cabs, someone else would have. I was certainly itching for reliable hailing for years before Uber.
posted by rhizome at 2:10 PM on March 5 [1 favorite]


Here's a recent paper by CEEPR. Even if you don't trust their numbers on driver revenue (from survey data), they did a lot of work to quantify driver expenses (gas, depreciation, maintenance and insurance) to get a figure of $0.29/mile, with the absolute lowest at around $0.20/mile.

Then I looked at this other paper from Hall that (crunching some numbers) indicates the average trip is around 5.2 miles (with 0.5 miles driven to the start of the trip), with an average driver doing 1.7 trips per hour. So that's just 9.7 miles driven per hour, or roughly $2-3/hr in car operating expenses.

So I've changed my mind. The drivers are making much more than I initially thought. Assuming you get $16/hr in revenue and spend $3/hr operating your car and 7% on extra taxes, your "profit" is $12/hr, which seems basically acceptable.
posted by miyabo at 2:16 PM on March 5


Tangential gig economy info: if you've ever worked Postmates, there's finally a class action suit going on.
posted by loquacious at 3:41 PM on March 5 [1 favorite]


Another random Uber fact: One of the papers I linked to says they did 740 million rides in the US in 2015-2017, and by doing some algebra I was able to figure out they're averaging $3 in fees to Uber per ride. That means they're making (very roughly) $1.11 billion in fees per year from US rides. That's a big number, but when you're talking about operating a tech company with 10k employees and a mountain of debt, it's not nearly enough. They absolutely need to grow internationally to survive.
posted by miyabo at 9:14 PM on March 5


They have like $15billion in VC, they're going to need to grow interplanetarily to pay that marker.
posted by rhizome at 9:20 PM on March 5 [4 favorites]


I currently drive for Uber full-time (until the end of the month, when my car will have become too old. I worked 43 hours last week). Not factoring in any expenses, it is the most money I've ever made - by far, actually. That remains true factoring in expenses. Next year I'm beginning an MA where I will be earning about $1000 per month as a teaching assistant, and I plan to pursue academia as far down the hole as I can fit, so, just speaking from my own privileged and anomalous experience, Uber has been my only job that 1. wasn't demeaning, exhausting, painful, etc., and 2. has given me a sense (as a younger(?) millenial) of what being middle-class feels (or felt [lol]) like... Like, I bought a bedframe. I bought a smoothie today. Those are not things I remotely would have considered affordable in the past.
(None of this is to defend or praise Uber et al., just surprised by my own experience.)
posted by LeviQayin at 10:29 PM on March 5 [2 favorites]


I still remember Pittsburgh's mayor being told by Yellow Cab that he had to go harder on Uber and not let them operate... and the mayor pointing out to Yellow Cab that they'd repeatedly failed to send a car to his house as promised, which was why he was more than an hour late to said meeting.

Yellow Cab's corporate sucks. The drivers are human beings, though; any idea what they take home?
posted by talldean at 2:46 PM on March 6 [2 favorites]


On the subject of Uber, a problem I've noticed: you don't really have any recourse to report the current driver until the drive is over, and if the driver eventually cancels on you, you don't have a good way to report harassing conduct, even if he has called you and yelled at you.
posted by corb at 4:09 PM on March 6 [1 favorite]




On the subject of Uber, a problem I've noticed: you don't really have any recourse to report the current driver until the drive is over, and if the driver eventually cancels on you, you don't have a good way to report harassing conduct, even if he has called you and yelled at you.

Heh yeah, let me tell you about the time an Uber almost ran me over on my bike and I emailed Uber to complain. "What's their driver number?" Grmbl.
posted by rhizome at 10:06 PM on March 6 [2 favorites]


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