Uber Challenges Study Suggesting Its Drivers Earn $3.37 Per Hour (reuters.com)

An MIT study using data from more than 1,100 Uber and Lyft drivers concluded they're earning a median pretax profit of just $3.37 per hour. But now Reuters reports: Uber Chief Executive Dara Khosrowshahi criticized the MIT study in a tweet on Friday as "Mathematically Incompetent Theories (at least as it pertains to ride-sharing)," and linked to a response by Uber chief economist Jonathan Hall that challenged the study's methodology. Hall's rebuttal to the study said the likely misinterpretation of a survey question and the study's "inconsistent logic" produced a wage result that was below similar studies elsewhere. He said the study used a "flawed methodology" compared with a survey that found drivers' average hour earnings were $15.68. "The earnings figures suggested in the paper are less than half the hourly earnings numbers reported in the very survey the paper derives its data from," wrote Hall.

The MIT study's lead author, Stephen Zoepf, told Reuters in an email on Saturday, "I can see how the question on revenue might have been interpreted differently by respondents" and called Hall's rebuttal thoughtful. "I'm re-running the analysis this weekend using Uber's more optimistic assumptions and should have new results and a public response acknowledging the discrepancy by Monday," he wrote.
Saturday Uber's CEO tweeted a thank-you to MIT, "for listening and revisiting this study and its findings. Right thing to do."

Comments

This is the way it's supposed to work

[Solandri]

Nice, calm discussion about the merits of an argument. Listening to and understanding the points made by those with an opposing viewpoint. Assessing the points they make in an unbiased manner. And acknowledging when they may have a legitimate point, and re-doing your work to adjust for it.

Instead we mostly have people shouting at each other, refusing to listen to or even to interact with each other simply because they have different viewpoints. Because both sides "know" that their side is right and the other is wrong.

Re:This is the way it's supposed to work

[Maxo-Texas]

To be honest, at this point I wouldn't give Uber the benefit of the doubt in any discussion.

And I still want to know the truth of the matter. What do uber drivers make?

My impression has been that many are 'very bad at math' and are burning their long term asset (remaining mileage on their car) for dollars.

However-- I have frequent discussions about various things with an uber driver and while he has lots of anecdotes about his rides, he's never complained about his pay (he lives in Utah).

Re:This is the way it's supposed to work

[Maxo-Texas]

Some videos on pay as an uber driver

https://www.youtube.com/watch?...
$11 to $19/hour

https://www.youtube.com/watch?...
A year as an uber/lift driver. "It's a great part time job or second source of income but definitely not a good career choice."

https://www.youtube.com/watch?...
California uber driver. 6 hours a day. Facts to help you make a decision. Upselling you to his "how to become an uber driver" video on his private site.

Keep in mind that the rules are always changing so something profitable may be taken away at any time.

Re:This is the way it's supposed to work

[Anonymous Coward]

How about adding margin for failures, accidents and sickness, etc? No businesses can survive without proper risk mitigation, so why should human beings?

Re:This is the way it's supposed to work

[jonsmirl]

A common issue with these wage calculations is - what happens when you are logged into the app but there are no fares? If you count that time as working, then your hourly rate will be quite low. But are you really working if the app is on and you are just waiting for a fare to show up?

This is part of the argument the employee rights people try to make, they want people to be paid minimum wage just for turning the app on. But that immediately falls apart because drivers often log into Uber and Lyft simultaneously. Should they get double minimum wage for logging in twice? And what about bad actors taking advantage of this? Doing the minimum of number of runs need to stay on as a driver and then collecting most of their income simply from having the app on all of the time.

So two people can look at the same data and come up with widely different views of what the hourly wage is.

Re:This is the way it's supposed to work

[Anonymous Coward]

TL;DR.

Re: This is the way it's supposed to work

[Anonymous Coward]

So the way it's supposed to work is a CEO insults an entire institution on Twitter, links to a rebuttal from a payed lackey, and then the author of the paper from said institution caves and changes their model to spit out what the CEO of the company wants it to spit out.

Yeah, exactly how it's supposed to work.

Re:This is the way it's supposed to work

[ma1wrbu5tr]

Civil discussion aside, as someone who drove for Uber for a while, I can say without a doubt that MIT's numbers are FAR closer to the truth than Uber's. MIT said their hourly pre-tax PROFIT was $3.37/hr. Uber says EARNINGS are $15.68/hr and I wouldn't be surprised if that is what UBER makes per hour from my gas, my car, my wear and tear. Uber takes more than half of the fare that the rider pays. Once I'd figured that out, it was "buh-bye" to Uber. In my opinion, Uber is just a wage slave operation with dubious ethics in almost all management roles.

Re:This is the way it's supposed to work

[q_e_t]

My impression has been that many are 'very bad at math' and are burning their long term asset (remaining mileage on their car) for dollars.

If you don't have other assets, and few other sources of income, and you have bills you must pay, it can be perfectly good math.

I met one person working in this area who was doing it because they liked to drive, and it subsidised their passion.

Re:This is the way it's supposed to work

[q_e_t]

The critical factor would be whether you are a legally contractor or an employee. The definition varies between countries.

Re:This is the way it's supposed to work

[Wrath0fb0b]

To be honest, at this point I wouldn't give Uber the benefit of the doubt in any discussion.

How is that relevant? They are disputing statistical methods -- there's no benefit of the doubt like it's some subjective argument.

Re:This is the way it's supposed to work

[sphealey]

- - - - - And acknowledging when they may have a legitimate point, and re-doing your work to adjust for it.

Instead we mostly have people shouting at each other, refusing to listen to or even to interact with each other simply because they have different viewpoints. - - - - -

Uber's entire business model is based on (a) outright breaking laws duly passed by democratically elected legislatures (b) violating regulations enacted by regulatory agencies duly constituted by legislators and put in place by elected executive branches. Uber supporters can go on all they like about "disruption" and "breaking old tired monopolies" but they did not have the legal right to do what they did. That's not a different viewpoint, that'ls lawbreaking. Unless your viewpoint is anarchy but very few organized societies allow true anarchists to exist in their midst because when they do there is very shortly no organized society followed by a brutal dictatorship.

And hey, guess what! Maybe those crusty hidebound taxi regulators weren't quite a stupid as the tech world (or the tech world's boosters) like to think. Because another key to Uber's business model was convincing its drivers to ignore how freaking expensive it is to operate a vehicle as a taxi for any length of time, and to accept remuneration below the (total depreciation of the vehicle + hourly wage). But never fear: I just saw an ad for a service that lets you put your personal car out on the daily and weekly rental market. Like Airbnb except for mobile assets like to experience instant destruction and/or be used in a bank robbery. That'll work well.

Re:This is the way it's supposed to work

[sphealey]

- - - - - If you don't have other assets, and few other sources of income, and you have bills you must pay, it can be perfectly good math. - - - - -

For a few months I could see that working. Over the last 20 years there has been at least a 2 order of magnitude improvement in the reliability of automobiles. I suspect the vast majority of Uber drivers are not doing the math or even driving out of desperation but are simply burning up that reliability in search of cash with no understanding of what the true total cost of operating a taxicab is and why.

Re: This is the way it's supposed to work

[Anonymous Coward]

So, pointing out an error is an insult? You believe institutions are sacrosanct?

No. No institution is too important to question. Be it the Church, the Press, the Government or the Ivy League. If something appears off, especially if it impacts you, you are free to speak up.

Re:This is the way it's supposed to work

[Stan92057]

I'm betting the drivers don't take into account the full cost of using their own cars. First its not ride sharing that would mean the cost are shared by all that's false. Gas,car insurance,wear and tear licenses,inspections..tickets all have to be factored into the real cost of being a driver.Uber doesn't want people to look at those real costs or the rides prices would be in line with taxis WHO DO know the reals costs of business that's why the price difference are so different..only winners here are the people using uber..And uber laughing all the way to the bank....Losers.. driver, people who live in their jurisdiction as that's less business fees and taxs not being collected...that's MY take on it all.

Re:This is the way it's supposed to work

[Applehu Akbar]

Instead we mostly have people shouting at each other, refusing to listen to or even to interact with each other simply because they have different viewpoints. Because both sides "know" that their side is right and the other is wrong.

The Godwin online meme used to reference a twentieth-century dictator. Now it's any reference to Uber.

Re: This is the way it's supposed to work

[Anonymous Coward]

Actually (at least in the USA) nobody can tell you that you cannot use your car to pick up a friend, family member or stranger at the airport and take them home. UBER and LYFT used this fact to expand this and put some money in everyone's pocket.

Laws that limit our freedom of association are unconstitutional in the USA. Probably why every place that tries to block ridesharing ends up backing down in the end.

How dare anyone suggest that you cannot pick someone up and drop them off with your own car.

Re:This is the way it's supposed to work

[Kjella]

A common issue with these wage calculations is - what happens when you are logged into the app but there are no fares? If you count that time as working, then your hourly rate will be quite low. But are you really working if the app is on and you are just waiting for a fare to show up?

Well how practical is it to be doing anything else, accept the fare, drop whatever you're doing, get in your car and make the pickup? And when that fare brings you to the other side of town you can either pick up a new fare or drive home on your own dime, not much choice then. I don't think a retail clerk has time off even if the store is empty for a few minutes, I don't think a taxi driver has time off if he's idling in his car waiting for the next fare. That said, if Uber were forced to introduce a "shift" model with guaranteed minimum wage it'd be an exclusive deal and they'd be in charge of when they offer you work and what you do on their dime, you couldn't simply demand to log in and collect pay when you want and they'd probably assign you rides. It wouldn't be like now, except with more pay.

Re: This is the way it's supposed to work

[Anonymous Coward]

Turns out you can't do that without being outcompete by taxis. Whoda thunk that adding "except you hail them on the internet" didn't totally change the economics of taxi driving.

Re:This is the way it's supposed to work

[Anonymous Coward]

My instinct was to respond by typing in all caps how wrong you are. For humorous effect.

But I immediately suppressed it. I am unsure if I did so because that bit has been (and continues to be) so horribly overdone that it has lost every ounce of surprise....or if I am just old now.

Either way, I am going to have to calmly acknowledge that all of your points are good ones, and leave it at that.

Re:This is the way it's supposed to work

[JMJimmy]

This. Hourly wage is meaningless without knowing how much is going to vehicle maintenance, operation, and capital replacement. A Prius will cost about $0.30/km to operate lets say a conservative 30km/h driven (based on sample examples given by Uber drivers) which means $9 in operating costs and $1.49 in capital costs ($31,000 vehicle over 10 years). That would make their income $5.19/h for a 40h week (based on the $15.68 number), assuming a constant driving rate for 8 hours a day. Reduce that for driving back from drop offs, extra hours sitting around waiting for customers, and reduced further if they're driving around trying to get to places with customers.

All the sudden the $3.37 isn't that far off. If they're making $25/h average as Uber claims, that's much better at $12.69. However, this example is also assuming the cheapest to operate vehicle at the lowest insurance rates. An accident increases the insurance rates (and is especially bad if it's improper coverage) and anything but a Prius increases the operating costs. Both of these would reduce the hourly wage.

Re:This is the way it's supposed to work

[Anonymous Coward]

To be honest, at this point I wouldn't give Uber the benefit of the doubt in any discussion.

How is that relevant? They are disputing statistical methods -- there's no benefit of the doubt like it's some subjective argument.

He's saying that he has his mind made up ahead of time and will automatically believe the worst about Uber because he doesn't care about facts.
It's the most common way of looking at things.

Re:This is the way it's supposed to work

[jonsmirl]

For sure we can legally classify gig workers as employees, downside to doing that is that there will be a whole lot fewer gig jobs available. So that may end up being good for 10% of the current workers and really bad for the other 90%. My two cents is that a third legal classification is needed. Gig workers don't cleanly fit into either of the two existing classifications.

Re:This is the way it's supposed to work

[CrimsonAvenger]

Well how practical is it to be doing anything else, accept the fare, drop whatever you're doing, get in your car and make the pickup?

Well, if I were mowing the grass, pretty easy. Or watching TV, for that matter. Or even driving home from my day-job.

Re: This is the way it's supposed to work

[Megol]

An inane "argument".
Picking up people and dropping them off where they want to for monetary gain isn't the same as you giving someone a ride because you are a very kind person.

If you start cooking food at your home and serving that food to people for money you have a restaurant and have to follow a certain set of regulations. That doesn't mean you can't invite homeless people to eat at your house for free if you so desire.

The laws and regulation are there to protect the public.

Re: This is the way it's supposed to work

[spatley]

Mathematically Incompetent Theories

That sounds pretty insulting to me. Pointing out a error is not an insult. The word "incompetent" is an insult.

Re:This is the way it's supposed to work

[jonsmirl]

Taxi drivers pay the taxi cab company to rent the taxi in 24hr blocks. What they do with it during the 24 hrs is their own business. Taxi drivers are independent contractors not employees. If a taxi driver is idling for a fare, that's because he chose to not because his employer made him do it.

Retail clerks have assigned tasks to do when no customers are present. How do you think the stores get restocked and who refolds everything when someone messes it all up? Who does inventory, who cleans the restroom, etc....

Re:This is the way it's supposed to work

[ShanghaiBill]

A Prius will cost about $0.30/km to operate

Not really. Most of the cost is not fuel, but depreciation of the vehicle. That is partly connected to distance driven, but also depends on the age of the vehicle. A vehicle is depreciating even if it is just sitting in the garage. The $/mile comes from averaging that aging cost over typical miles driven, but if you drive more the cost doesn't go up linearly. Also both aging and milage based depreciation are front-loaded, so the value drops quickly for the first few years, and the first 10k-20k miles. After than, the real depreciation per mile driven is much less.

It is likely that Uber drivers aren't as dumb as you think they are.

Re: This is the way it's supposed to work

[Anonymous Coward]

All your comments are super insightful. Curious if you have an alternative account if you are feeling trolling?

Re:This is the way it's supposed to work

[Anonymous Coward]

They were basically like, "Uh no dude that's not true we pay our drivers lots of money."

Which is of course what they're going to say. And then they slip the lead researcher some large amount of money to find an error in his findings and that's that.

Re: This is the way it's supposed to work

[BronsCon]

If the theory it wrong, it is incompetent. That doesn't say anything about the person who applied the theory, of course.

Re: This is the way it's supposed to work

[Anonymous Coward]

Yea they want the the stats to work in THEIR favor, and since they don't, they are calling out the method.

The OP meant tha uber has garnered so much hate because of their shady business practices, that they don't deserve the benefit of the doubt anymore, they gotta prove themselves.

Uber is a shady company, and if you take anything they say at face value, well then you are the sucker. You've been warned.

Re:This is the way it's supposed to work

[Maxo-Texas]

A companies credibility and honesty has bearing on anything they say after they lost their credibility by being caught lying repeatedly.

The same is true for people.

Since they've lied before, it's more likely they are lying now when disputing the method used.

So yea... it's relevant. And it's why you don't want to ruin your reputation.

It still matters to some of us out here.

Re:This is the way it's supposed to work

[Anonymous Coward]

Who can drive a taxi for 24 hours straight? There's something wrong with that model.

Re:This is the way it's supposed to work

[Maxo-Texas]

Not at all.

I'm saying they've lied and been a bad actor multiple times in multiple areas.

They've proven they are untrustworthy. They *earned* my distrust.

So while I want to know the truth (as I said) and I'm open to the facts, Uber starts with a presumption that this time (like all the other times) they are lying again.

I'm going to presume in your real life, that once someone lies to you several time that you finally get wary of them. That's what most people do. For some people, one serious lie is enough.

Once you violate trust, you can't unviolate it. Just like you can't be a virgin again after having intercourse.

Re:This is the way it's supposed to work

[Anonymous Coward]

On top of that, most middle class Uber drivers already have the car anyways, and it's going to depreciate whether it's sitting at home or out making money. I don't see how you can include that in the discussion other than the added mileage.

Re:This is the way it's supposed to work

[Anonymous Coward]

There are lots of things wrong with that model. Do you think the taxi drivers are paying for 24hour rentals because they don't want to own or lease a car? That's not what they're renting.

They're really renting the medallion. The token provided by the city that gives drivers the license to drive for fares. Those aren't are thing the driver qualifies for by meeting certain requirements, they're an artificially scarce commodity that speculators trade for hundreds of thousands of dollars and rent out at exorbitant prices to people who are often desperate for anything they can do for income.

Everything about the taxi industry is scumbaggery. Uber gets away with its bullshit in part because the cab companies are just as shitty to their drivers.

Re: This is the way it's supposed to work

[llZENll]

I think Uberâ(TM)s business plan is to use people as a bridge to when Uber owns self driving cars, until then the whole ride âoesharingâ economy is total BS. At the current price level fares are simply not high enough to pay people well enough to support themselves and maintain their car.

Just look at traditional cab companies before uber, they were no âoegolden ticketâ to mass riches, most were barely scraping by, that was the minimum fare to pay people and maintain the vehicles.

No one driving for uber is making money when all costs are factored in. Either they are simply cashing out maintenance on their car or sucking down shareholder losses.

After they eliminate the driver cost and maintenance cost of gas vehicles uber will transition to even lower fares displacing many markets. Vehicle ownership will change, drivers will be for the rich, mechanics will close in mass, dealers will fail, auto parts stores will merge.

Re: This is the way it's supposed to work

[geoskd]

If the theory it wrong, it is incompetent.

No, its just plain wrong. Science is accomplished by presenting a theory and testing it. The vast majority of the time, the original theory is at least incomplete. Very often the original theory is outright wrong.

A scientist that always presents theories that turn out to be right is almost certainly either corrupt or incompetent.

Re: This is the way it's supposed to work

[BronsCon]

My typo aside, we both agree on this point. A competent theory would be correct.

Re: This is the way it's supposed to work

[Anonymous Coward]

I don't see a problem with that. The reason that these companies want the employees classified as contractors is so that they're not subject to minimum wage laws and other regulations that apply to employees, but not owners.

If they can't offer a job that pays at least minimum wage, they shouldn't be offering it.

Plus, as independent contractors, the drivers would be stuck paying both sides of both social security and Medicare coming out to about 30% of their proceeds.

Re: This is the way it's supposed to work

[Anonymous Coward]

Theories aren't incompetent. People are.

Transferred epithets aside, of course.

Re:This is the way it's supposed to work

[Kjella]

Also both aging and milage based depreciation are front-loaded, so the value drops quickly for the first few years, and the first 10k-20k miles. After than, the real depreciation per mile driven is much less.

True, but that's offset by relatively low maintenance costs and warranty coverage. The costly replacements, big repairs, downtime and hassle tends to be towards the end. There's obviously a premium paid for driving around in new cars but there's also good reasons why the drop is biggest early on. That said, not everybody drive their cars to their "potential" so you can get old cars with low mileage and put lots of miles on them quite cheaply. But if you're going to own the car from new to wreck then deprecation is just a theoretical distribution, you paid the car in full at the beginning and is left with nothing in the end.

If you're not trying to make Uber a career choice but something you do a few months between jobs and you need the car anyway I'd probably look more at what sunk costs you already have and the delta-value. Like okay this is my car with 40k miles on it, this is my car with 50k miles on it. Those 10k miles will cost me A in value (based on second hand car market), B in gas (bad MPG = bad idea) and C in extra consumables/maintenance. Driving 10k miles for Uber will give me D in income, net profit D-(A+B+C).

Re: This is the way it's supposed to work

[Anonymous Coward]

From the retard who defends "trade wars are easy!", "Shanghai" faggot "Bill" is just another obese Trumptard waiting to die in prison, he has no insights about deprecation and knows nothing about economics, tapdancing around the actual issue again because that's all the Trumptard faggots can do. Have another cheeseburger you obese pseudo-economist, you sure earned this one with that steaming pile of theory, fucking idiot lol.

Re:This is the way it's supposed to work

[angel'o'sphere]

they want people to be paid minimum wage just for turning the app on.
That is just silly sorry.

On the other hand: if the people are "full time working" and not just ride sharing and sitting with a magazine or espresso in a caffee, then yes: they should earn minimum wage during the time they have the app on.

What else would you suggest?

Re:This is the way it's supposed to work

[angel'o'sphere]

Why would a taxi driver rent a taxi for 24h when he legally only can drive it 8h a day?
Most taxi drivers in my country are employees of the taxi company.

If a taxi driver is idling for a fare, that's because he chose to not because his employer made him do it.
No, he is idling because he has no customer, you moron. And as you said above: he has no employer anyway in your county ... how fucked up is that?

Re:This is the way it's supposed to work

[Khyber]

"It is likely that Uber drivers aren't as dumb as you think they are."

Given what I've seen of them on the roads, both Uber and Lyft drivers should all have their licenses revoked and their vehicles impounded. Only one person in the car, that being the driver? STILL IN THE FUCKING HOV LANE. Can't use a turn signal to change lanes. Changing lanes by using the safety gap obviously left between a big fucking semi and a smaller vehicle in front, and then hitting the brakes. USING THE SHOULDER AS A DRIVING LANE.

No, Uber and Lyft drivers are dumb as shit.

Re:This is the way it's supposed to work

[jonsmirl]

The compensation paid by Uber/Lyft for doing a ride should include enough profit to cover some down-time and deadheading to the next pick up. So if you stay busy you will get enough padding to cover reasonable gap between your rides. But if you just turn the app on and don't pay attention to it, you won't be getting anything to cover down-time.

That is how existing taxis work. The drivers pays a flat fee for the 24hr rental. If he does one fare in 24hrs he won't make anything, if he does 30 fares he makes a lot. If the cabby has too much downtime he does get enough excess profit to pay him for his down time.that

If Uber paid to simply have the app on, they would end up with way too many drivers active relative to demand. What's to stop a thousand drivers from leaving the app on while they sleep for eight hours. There will be a few drivers awake that service that demand, the rest will be able to earn minimum wage while they sleep. They might even sort themselves into groups to support this scam.

Re:This is the way it's supposed to work

[iamhassi]

Hard to argue with your reasoning. Uber has been caught numerous times being dishonest and shady, going so far as having 177 employees place 5,500 orders with Lyft and cancelling them so drivers waste their time driving to a pick-up for nothing http://money.cnn.com/2014/08/1...

I'm surprised Uber actually pays their drivers they're so corrupt.

Re:This is the way it's supposed to work

[rtb61]

It is easy. One side takes the view, you are only an uber drive, when you have uber passengers in the car, whether or not they include travel from the time you picked up the request to reach the passenger. The other view is, you are an Uber driver the second you step into your vehicle looking for pickups to the time you step out of your vehicle, no longer trying to pick up passengers and of course the time you spend servicing your vehicle and the cost of that service, as well as cleaning your vehicle, your car is your profession everything associated with it, it a cost to your profession.

So which is more realistic, well, if you are running a business in reality, obviously the low on that includes all costs. If you are scamming people into doing it upon a poverty wage base and keeping the lion share of the profits (whilst still losing money to bloated executive salaries), the gullible model, yep, you are only an uber driver when you have an uber passenger in the vehicle and apparently you are running the most economical, fuel efficient vehicle on the market, that never needs to be serviced, ever.

Re:This is the way it's supposed to work

[Srin Tuar]

All that given - they seem remarkably better at driving, amiability, and showing up on time than regular liveried taxis.

Re: This is the way it's supposed to work

[Srin Tuar]

So you know better than the uber drivers, and you are a better human being than they are, so you should be able to tell them what they can and cannot do with their time?

If someone wants to drive for uber or lyft, that is their choice, and who are you to step in the middle and tell them its for their own good? What gives you the gall to do that?

What other relationships do you think you should get involved in? Perhaps people eating habits, you can go around to restaurants and tell people what they are allow to eat? Maybe you can interfere in dating next, and tell people what type of sex they can have ?

Re:This is the way it's supposed to work

[Beeftopia]

The problem is that most people are not very good at negotiating. Especially if they're negotiating with professionals.

If you have a central, highly capitalized entity with professional negotiators dealing with Joe Sixpack, he's probably going to settle for what his costs are and maybe a tiny bit more (and he might have underestimated his costs).

This is why sports talent retains agents. In the era before agents, 1970s and earlier, the players were getting a much, much smaller slice of the pie, i.e. the income being generated with their efforts and the efforts of the highly capitalized owners with professional negotiators.

Now, Uber/Lyft drivers are not as rare as top sports talent. So with the professional negotiating with each individual one by one, the drivers are gonna get a very small slice of the pie.

Re: This is the way it's supposed to work

[Beeftopia]

There's little need to debate the meaning of words nowadays. We have long-established, centralized dictionaries which all can instantaneously access via the Internet:

1) Definition of "incompetent": Not having or showing the necessary skills to do something successfully.

2) Definition of "wrong": Not correct or true; incorrect.

Re:This is the way it's supposed to work

[Aighearach]

Yeah, I would be very wary about jumping straight from "MIT agreed to double-check their methods" to "MIT duffuses don't know the maths."

If the numbers change after review, it is likely to be very very small adjustments. We won't know until they finish checking. But it seems highly unlikely that $3.37 will turn into $15.68. Between the two, "highly regarded institution" or "unethical company that violated my local community's laws in an unethical way and lied to the public about it in statements to the media," I'm just going to tend to lean rather heavily towards believing MIT right up until MIT tells me they were wrong.

Re: This is the way it's supposed to work

[Aighearach]

You're not agreeing, you just haven't begun to consider attempting an understanding yet.

Some Blargs are Blue. Some Blorgs are also Blargs. All Blargs are Blue. T/F

Re:This is the way it's supposed to work

[Aighearach]

You should actually be able to predict that already by the fact that driving a taxi is a very low wage job, and Uber claims to both be cheaper, and also to use more technology. But it still involves a driver. So. Obviously.

Re: This is the way it's supposed to work

[Aighearach]

Actually (at least in the USA) nobody can tell you that you cannot use your car to

Driving is a privilege, not a right. In the USA, nobody can tell you that you can't carry your friend or family member to the airport, that much would be true. And you certainly have a right to push their personal mobility device there.

But you don't have a right to drive, or to operate a motor vehicle. And your State is permitted to regulate it in whatever ways they want, including defining the exact conditions when you're required to have some sort of extra license.

Waving your hands in the air doesn't create a legal principle, and simply accusing a law of limiting your "freedom of association" doesn't create any Constitutional crisis. And certainly, laws that require you to have a license in order to carry people to the airport, that is about driving a car, it has nothing to do with restricting who you associate with; that isn't even the correct type of situation to be raising that complaint. It is just cluelessly throwing legal jargon at a wall and calling it a Constitution.

Re: This is the way it's supposed to work

[Anonymous Coward]

Teach me your ways, daddy.

Re:This is the way it's supposed to work

[Anonymous Coward]

As a vehicle ages while the depreciation costs lower per mile the maintenance costs go up considerably as you are no longer under warranty and components wear very quickly when you are using your vehicle heavily. I am sure some Uber drivers are not as dumb as they appear, but many are dumber!

Re: This is the way it's supposed to work

[BronsCon]

I'm not the one who initially used that word, I was simply using it to avoid further confusing the issue by introducing yet more terminology. The reality is that none of that has anything at all to do with my point, which was that it was the theory that was being called incompetent, and not the person applying the theory; therefore, the person was not being insulted.

The phrase "incompetent theory" came from TFA, by the way.

And a theory that goes against what we already know does, in fact, lack the "skill" (neigh, property, but I digress) of even potentially being correct. Incompetent is actually a pretty decent word to use to describe that, IMO. Not what I would have chosen, personally, but clear enough in intent.

Re:This is the way it's supposed to work

[Anonymous Coward]

I have listened to Uber/Lyft drivers make moronic statements like. "I already have to own and maintain my car so I don't need to take into account things like depreciation and maintenance". I have never seen one that is actually realistic about how much they earn, I am sure their are some, but they seem awfully rare. incidentally depreciation is heavily front loaded, but maintenance is heavily tailend loaded. they average out if you are lucky or if you are unlucky the tailend costs you way more than depreciation ever could. Most taxi's and hire companies have used by dates on their vehicles because they understand that economics of this.

Re: This is the way it's supposed to work

[BronsCon]

My friend, you miss the point. First of all, the phrase "incompetent theory" is from TFA. Second, my point doesn't in any way hing on the definition of incompetent or whether it applies to the theory being called incompetent. Rather, my point was that the adjective was being applied to the theory, rather than the person applying the theory and, thus, was not an insult. It doesn't matter what the word means or how appropriate its use was, if it was not being applied to a person, it was not insulting a person. Period.

Now feel free to carry on with your pedantry.

Re:This is the way it's supposed to work

[Anonymous Coward]

On top of that, most middle class Uber drivers already have the car anyways, and it's going to depreciate whether it's sitting at home or out making money. I don't see how you can include that in the discussion other than the added mileage.

thank you for demonstrating the stupidity of many Uber drivers. That same mentality is why they unknowingly end up working for what is essentially slave labour. miles on your car increase maintenance costs, decrease the value of the asset and increase the likelihood of you being without your car for an extended period for a major breakdown. Only a moron would exclude those costs. The reality is driving your car you should at an absolute minimum be expecting around 50 cents a mile in costs, larger vehicles that can be closer to $1 a mile. Ignoring those costs is a major fail!

Re: This is the way it's supposed to work

[Anonymous Coward]

the problem is it ISN'T an incompetent theory, it is perhaps inaccurate or incomplete. But it certainly isn't incompetent, incompetent implies it is badly put together which appears NOT to be the case.

Re:This is the way it's supposed to work

[SNRatio]

It is likely that Uber drivers aren't as dumb as you think they are.

96% of Uber drivers quit during their first year. Are those the smart ones?

Re: This is the way it's supposed to work

[gravewax]

They can't tell you who you can pickup, they CAN TELL YOU whether you can charge money or have a license to do that. this has absolutely fucking nothing to do with laws of association, it is purely a licensing and business thing. You do not have a right to drive and the local laws get to dictate the conditions under which you are allowed to drive.

Re: This is the way it's supposed to work

[gravewax]

personally I don't give a shit. But you live in a society with rules and laws that govern how business is conducted and the conditions under which a license is granted to operate a business. Who the fuck are you that you think societies laws and rules don't apply to you?

Re: This is the way it's supposed to work

[LifesABeach]

I believe there may be a somatic issue here. There is a difference between Profit and Revenue. Profit is Revenue - Costs.

Re:This is the way it's supposed to work

[Tablizer]

Calm discussion? The CEO called them "Mathematically Incompetent Theories". Calm would be, "We believe the study has significant flaws." The word "incompetent" attacks people, not ideas. Inanimate objects cannot be "incompetent".

Re:This is the way it's supposed to work

[q_e_t]

Underestimating costs if common, sometimes even by businesses.

When calculating the costs of home ownership relative to rent, I've known people forget to take into account maintenance, taxes, etc.

Re:This is the way it's supposed to work

[q_e_t]

- - - - - If you don't have other assets, and few other sources of income, and you have bills you must pay, it can be perfectly good math. - - - - -

For a few months I could see that working. Over the last 20 years there has been at least a 2 order of magnitude improvement in the reliability of automobiles. I suspect the vast majority of Uber drivers are not doing the math or even driving out of desperation but are simply burning up that reliability in search of cash with no understanding of what the true total cost of operating a taxicab is and why.

If your options are drive, or lose your home, then a few months may be what you need, and it could be a very good bargain.

Re:This is the way it's supposed to work

[q_e_t]

A Prius will cost about $0.30/km to operate

Not really. Most of the cost is not fuel, but depreciation of the vehicle. That is partly connected to distance driven, but also depends on the age of the vehicle. A vehicle is depreciating even if it is just sitting in the garage. The $/mile comes from averaging that aging cost over typical miles driven, but if you drive more the cost doesn't go up linearly. Also both aging and milage based depreciation are front-loaded, so the value drops quickly for the first few years, and the first 10k-20k miles. After than, the real depreciation per mile driven is much less.

It is likely that Uber drivers aren't as dumb as you think they are.

In the UK, the mileage (after the first year), seems to be more important than age, up to about 10 years. At ten years the features of the car may seem outdated. It does depend on car type - some still accrue significant rust after a decade.

Re: This is the way it's supposed to work

[Anonymous Coward]

So you know better than the uber drivers

Apparently uber drivers don't seem to realize that they're fucking taxi drivers.

Re:This is the way it's supposed to work

[drinkypoo]

Uber's entire business model is based on (a) outright breaking laws duly passed by democratically elected legislatures

You've heard of gerrymandering, right? The USA is an oligarchy, not a democracy. There is more democracy the further away you get from Washington, but that still doesn't mean that all of those legislatures were democratically elected. If the democratic process is subverted, which it totally has been, then you can't say you've got democracy.

Since the rest of your comment is based on the fallacious notion that we have democracy in America, it can be ignored. ERR_NO_DATA

And hey, guess what! Maybe those crusty hidebound taxi regulators weren't quite a stupid as the tech world (or the tech world's boosters) like to think.

The argument is not that they are stupid, it is that they are corrupt.

Because another key to Uber's business model was convincing its drivers to ignore how freaking expensive it is to operate a vehicle as a taxi for any length of time, and to accept remuneration below the (total depreciation of the vehicle + hourly wage).

That's not anything Uber's done, though. They're simply taking advantage of the fact that the American economy is in the toilet, and rapidly circling the bowl and heading for the drain. Actual unemployment is at levels not seen since the great depression. The numbers are a lie as usual, but the particular nature of the numbers make them a bigger lie now than that usual state of affairs; since people drop off the statistics when they are no longer eligible to collect unemployment benefits. When people are so unemployed that the state has given up on helping them, they are no longer counted as unemployed. In an environment like this, are you surprised that people are willing to work for less than minimum wage? When there are no minimum wage jobs left, they will go looking for something even lower.

And speaking of lower, Some of these people are actually sleeping in their Uber car. It's not just a car loan, and a car in which to do business. It's a home.

TL;DR: I do not think you have any notion of just how bad things are in the USA right now.

Re:This is the way it's supposed to work

[jabuzz]

Well in the EU that's quite clear. If you are sitting there logged into the app waiting for a fare that counts as working and counts towards minimum wage. There are plenty of precedents that cover this now and it has been appealed to the ECJ several times with several variants now and every time the result has been the same, it counts.

Basically if you are "on call" or similar those hours count as hours worked. Heck if you are based from home the time spent getting to your first job of the day counts as working hours too.

Re:This is the way it's supposed to work

[Impy the Impiuos Imp]

You don't work for the taxi company, and just rent the car for a fee and then have to drive like the dickens just to break even and earn a little bread for the day?

Re: This is the way it's supposed to work

[kenh]

If they can't offer a job that pays at least minimum wage, they shouldn't be offering it.

Wow, that's kind of an interesting position. That just about kills the so-called 'gig economy' in one fell swoop... There are lots of people feeding and housing their family on jobs that don't guarantee they '(pay) at least minimum wage', and not all are 'gig' jobs - think commission -based jobs, waitress/waiter jobs, etc.

Re: This is the way it's supposed to work

[kenh]

Why would a taxi driver rent a taxi for 24h when he legally only can drive it 8h a day?

Because no one rents out taxis by 8hour shifts (who'd choose to rent the third shift?),
having the cab 24 hours gives the worker the ability to schedule when they work during the 24 hour period,
and what law limits a driver to only 8 hours a day?

Re:This is the way it's supposed to work

[jbengt]

All that given - they seem remarkably better at driving, amiability, and showing up on time than regular liveried taxis.

I haven't had that many Lift/Uber rides, but they seemed about the same as the average taxi driver. I have had many more taxi rides over the years, so I have had a few bad experiences, but I've never had a taxi driver as clueless about where they were going as the Lyft/Uber (don't know which one my boss used, but the car had both stickers) driver who couldn't figure out he needed to turn around even while he was staring right at the GPS map showing him where to go. (And they were easy downtown starting and destination locations)

Re:This is the way it's supposed to work

[jbengt]

Uber doesn't want people to look at those real costs or the rides prices would be in line with taxis

Some ride prices already are starting to rise in line with taxis. And they're even higher during surge pricing.

Re:This is the way it's supposed to work

[jbengt]

Do you think the taxi drivers are paying for 24hour rentals because they don't want to own or lease a car?

Yes. At least that's why my wife's step-father sold his medallion.

Re:This is the way it's supposed to work

[jbengt]

Worse than that, if you get a flat or need a tow, the taxi-driver typically has to pay for it themself.

Re: This is the way it's supposed to work

[jbengt]

Also, many drivers share the 24 hrs with another driver, each taking 10 hour shifts.

Re:This is the way it's supposed to work

[azadrozny]

There must be plenty of examples/precedents from other industries. Plumbers and electricians come to mind. I could imagine many small contractors don't get paid if there are no jobs to work. The larger companies probably have enough work to put folks on a salary (or some other minimum pay) since they can guarantee enough work every day. Construction and landscaping companies use a lot of day labor because the amount of day-to-day work varies greatly.

Perhaps instead of trying to work out an hourly rate, a monthly or annual rate would be more helpful for comparison.

Re:This is the way it's supposed to work

[JMJimmy]

Depreciation factors in, however, not as significantly as you believe. The $0.30/km is based on a 10 year lifetime operation of the vehicle so while it may depreciate faster earlier on, the total depreciation of the vehicle occurs over a long period. Averaged out it's about $3100/year. If you're driving 124,800 km/year only about $0.025/km of the $0.30 is for depreciation. The bulk is the increase in maintenance, gas, and insurance.

I don't think Uber drivers are dumb, I just think fewer of them are making as much money as they think they are.

Re: This is the way it's supposed to work

[BronsCon]

Which still doesn't affect whether it was the theory or the person applying it that was being incompetent, but thanks for playing.

Re: This is the way it's supposed to work

[BronsCon]

being called incompetent... I really need to stop posting early in the morning... or at all, given how far average reading comprehension seems to have fallen around here.

Re:This is the way it's supposed to work

[Shotgun]

Related to this, I talked to one driver who would turn the app on whenever he was going someplace, but had no intention and would not pick up a fare. Turns out, Uber would send you a detailed report at the end of the year listing the number of miles you drove for them, which (at least in the US) can be used as a tax deduction to the order of something like 50 cent a mile.

Basically, the guy could use Uber to cheat the tax system.

Re:This is the way it's supposed to work

[Shotgun]

That is how existing taxis work.

Except Uber isn't advertised to work the way existing taxis work. They were never promoted as a way to make a living. They were promoted as a way to economize a trip by "sharing a ride" with someone that was going the same way. Uber was a way for someone taking a trip to match up with someone that needed a ride in the same direction. The fact that someone with little or no skills found a way to make easy money by picking up aluminum cans on the side of the road does not mean that they deserve guaranteed minimum wage for doing so.

Re:This is the way it's supposed to work

[Cute Fuzzy Bunny]

I think its a lot easier than that, and indeed impactful.

I drive fairly few miles. A car can literally last me 20 years or more. I have a 2005 Honda with 62,000 miles on it. Nowhere near needing to replace it, nor has it needed a thing other than scheduled maintenance.

Instead of trying to fiddle with depreciation, lets use consumption and replacement.

Were I to become an Uber driver and handle a modest number of fares, that 20+ year replacement cycle could be consumed in 4-5 years. I hardly bother to wash or vacuum the car, but would have to do so regularly so it would be presentable.

A 25-35 thousand dollar expense (forgetting about gas, insurance, wear and tear, maintenance) is a big nut to crack.

I'm watching a version of this happening right now. My ex-wife commutes 350 miles to an area that pays more than she can make around here, and stays in an AIRBNB while she's there for 4 days, then she commutes back. She's putting an additional 30,000 miles per year on a top of the line Lexus and intends to replace it with a similar car when its worn out. In four years she'll have to lay out another $70K+ for a car. If she worked locally, the car would last her 12-15 years.

I'm pretty sure that adding in AIRBNB costs and so forth neutralize her extra pay, but critical thinking isn't her strong suit.

This line of thinking, car as a capitalized asset with a specific cost and period of useful life seems more sensible than trying to bring it to a per mile depreciation calc. While a car depreciates when not in use, a seldom used car lasts a LONG time.

I've done the Uber/Lyft calcs on this basis, as I have free time and a clean, reliable car...but it still turns into my having to replace the car more often than I would otherwise, and those replacement cost figures swamping anything I'd make.

Re:This is the way it's supposed to work

[jbengt]

Actual unemployment is at levels not seen since the great depression.

On the contrary, employment as a percentage of adults is near an all-time high. When I was a kid, very few women had jobs but they were not counted as unemployed because most of them were not considered part of the work force. Now many if not most women are counted.

Re:This is the way it's supposed to work

[Quirkz]

I had a taxi driver try to take me to 94 instead of 90, because he didn't know which was which. Of course this was in Chicago, where they like to use names, like Eisenhower and Kennedy, for the expressways. I guess that's okay in general, but there's no excuse for a taxi driver not to know both.

Re:This is the way it's supposed to work

[Anonymous Coward]

This is part of the argument the employee rights people try to make, they want people to be paid minimum wage just for turning the app on. But that immediately falls apart because drivers often log into Uber and Lyft simultaneously. Should they get double minimum wage for logging in twice? And what about bad actors taking advantage of this? Doing the minimum of number of runs need to stay on as a driver and then collecting most of their income simply from having the app on all of the time.

You are off the point there. It doesn't matter whether a driver logs into both Uber and Lyft. The calculation is per hour regardless who the driver is driving for. The driver can't drive for both at the same time anyway. Besides, TFA is about "Uber" only. In your case, the driver wouldn't be driving for Uber while driving for Lyft; thus, the rate wouldn't show up.

You may argue that the rate may still count while the driver is on active on Uber. The argument may have some effect on MIT study because it was from surveying drivers (which could be inaccurate in counting wage per hour). But I bet that the so called "include the time while not driving for Uber but on Uber app" is would significantly change the result to be that close to what Uber is claiming ($15.68/hour) or even $8/hour. Furthermore, I am sure that most if not all drivers would show their earning on the driver app, and the has all times (not include time without passenger) and wage pay out.

I highly confident that Uber is using the data from their app and average them out. Of course, the wage should be higher because they only count hours with passengers. The higher earning with surcharges are included as well, and that push the wage per hour up to where they are claiming. Thus, I still have no doubt, unless Uber show the itemize of earning, that Uber data is way off the general earning. I am quite sure that the average earning for most people, who don't selectively work during surcharge, would earn below minimum wage.

Re: This is the way it's supposed to work

[Anonymous Coward]

Actually, the commission jobs are required to pay minimum wage if the commission/tips collected do not equal min wage (at least in the US)

Re: This is the way it's supposed to work

[Dragonslicer]

There are lots of people feeding and housing their family on jobs that don't guarantee they '(pay) at least minimum wage', and not all are 'gig' jobs - think commission -based jobs, waitress/waiter jobs, etc.

In at least some states (I can't remember offhand if it's at the federal level), if a server's wage plus tips doesn't add up to something over minimum wage, the restaurant has to pay them the difference.

Re: This is the way it's supposed to work

[Dragonslicer]

If the theory it wrong, it is incompetent.

Theories really hate it when you anthropomorphize them.

Re: This is the way it's supposed to work

[BronsCon]

I see what you did there.

Re: This is the way it's supposed to work

[Anonymous Coward]

and, thus, was not an insult

Are you seriously that dense? In what is Dara's comment NOT an insult?

Granted, the Uber economist was polite, and he was the one engaging academically. However, the only way to construe Dara's comment as anything other than an insult is to completely ignore the context.

Re:This is the way it's supposed to work

[Anonymous Coward]

Perhaps instead of trying to work out an hourly rate, a monthly or annual rate would be more helpful for comparison.

I don't see it useful though. The reason is that I expected that the data from MIT should have been collected from each driver in at least a monthly fashion. The wage per hour is simply a smaller unit and gives you more insight of a job. Monthly or yearly rate is much worse comparison because you are now attempting to conflate those who work part-time (less than 6 hours a day in 6 day) with full-time.

Re: This is the way it's supposed to work

[Anonymous Coward]

Which still doesn't affect whether it was the theory or the person applying it that was being incompetent, but thanks for playing.

You're either being overly pedantic in an attempt to sidestep criticism. Or you're too autistic to be aware of context.

Either way, you should not be the social frontman for bronstrup.com

Re:This is the way it's supposed to work

[Anonymous Coward]

The header of the summary is MISLEADING big time. The word "Earn $3.37 per hour" is not equivalent to "the median profit is $3.37 per hour" in TFA. If you are interest in the MIT paper, you can read it here.

In other words, the header makes people think that Uber drivers are earning only $3.37 per hour, but in fact they earn more. Also, the chief economist of Uber, Jonathan Hall, is stupid and completely misunderstood it wrong as well. His number is for "earning" and not "profit" which is similar to comparing an apple to an orange. The guy doesn't care for what expenses drivers have to put up anyway. Seriously, how could I trust Uber when their chief economist himself is like this (can't do reading and comprehension).

Re: This is the way it's supposed to work

[Anonymous Coward]

Oh look, the neighborhood libertarian has arrived. Watch as he sobs all over your argument.

Life is hard. People often cannot do the things that they want. Laws try to tweak things so that more people are able to do more of what they want.

It's a simple principle here: Everyone is not an expect in every field, so laws protect us from harm and abuse. This includes harms and abuses that others may see when we do not.

Re: This is the way it's supposed to work

[BronsCon]

Uh... the context here is that spatley said:

That sounds pretty insulting to me. Pointing out a error is not an insult. The word "incompetent" is an insult.

and I replied:

If the theory it wrong, it is incompetent. That doesn't say anything about the person who applied the theory, of course.

I left the typo because it's a quote (since I know you'll pick at that next), but that's the context (from about 8 comments up, now) here. The definition of incompetent was never relevant to the point I was making when I posted that yesterday, and I'm pretty sure I understand the point being made since I was the one making it.

Re: This is the way it's supposed to work

[Anonymous Coward]

Had good experiences catching a ride with Lyft. San Antonio Tx
Theyâ(TM)ve been courteous and quick. You know you can write a review if youâ(TM)re not happy, right?

Re: This is the way it's supposed to work

[Khyber]

"You know you can write a review if youâ(TM)re not happy, right?"

That doesn't work when both companies actively engage in hiding reviews that detail law-breaking on the part of their drivers.

Re:This is the way it's supposed to work

[lsatenstein]

Why not ask the drivers if they are netting $3.99 per hour?

Re:This is the way it's supposed to work

[Anonymous Coward]

Of course. Most people cannot calculate the depreciation on their car. You only find out what Uber has really cost you when you come to trade it in. You'll get nothing for it, and you'll be upside down on the loan if you were foolish enough to finance it. The IRS allows 53 cents per mile for vehicle operating costs. You don't make that gross with Uber. It should not be legal to rip people off like this.

Re:This is the way it's supposed to work

[drinkypoo]

Uh no. The labor participation rate disagrees with you. Try statistics, they work.

The $3.37/hr wasn't what caught my eye

[rsilvergun]

it was the part where 30% of the drivers made nothing when maintenance was factored in. I've heard Uber called a payday loan on the maintenance of your car.

I'll say this, I've taken 5 Ubers in my life and 3 of them were recently laid off folks trying to make rent with cars bought from when they were employed.

Re:The $3.37/hr wasn't what caught my eye

[Ecuador]

Exactly this caught my attention too.
And if 30% of drivers are losing money, even if they are really bad on personal finances on average, wouldn't, say, half of them eventually realize it and the first time we'd be hearing about it would not be from a study?
Don't get me wrong, I've talked to a few drivers and I'd say most are not that happy with Uber, but the complaint is that they have to work more to make a proper income after their expenses - which means at least they are not on the red as in that case working more would not help...

Re:The $3.37/hr wasn't what caught my eye

[drinkypoo]

I'll say this, I've taken 5 Ubers in my life and 3 of them were recently laid off folks trying to make rent with cars bought from when they were employed.

It's also a way for someone to get a way nicer car than they could otherwise afford, or get financing for. It's predatory, like most types of non-traditional lending (and plenty of traditional types, too) but it's conceivably a viable route for someone with a part-time job to get the kind of car they would get if they had a full-time job... by spending the time they're not spending working at their normal job helping Uber to put humans out of the business of driving cars. It's not a good career plan, but it seems like it's got its place.

The real problem is that employment is low enough right now that Uber can find drivers...

Re:The $3.37/hr wasn't what caught my eye

[ravenshrike]

If you maintain your car properly in the first place that's bullshit. However if you're the sort of person who only does maintenance in an emergency or when a warning light pops on, that's probably true. Also, 4 cylinder cars are an inherently better choice for this sort of thing since the maintenance/repair costs for engine issues are significantly cheaper.

Re:The $3.37/hr wasn't what caught my eye

[Anonymous Coward]

A really nice car that they quickly depreciate with additional wear and tear.

IOW, another âoefree lunchâ for idiots.

Re:The $3.37/hr wasn't what caught my eye

[drinkypoo]

A really nice car that they quickly depreciate with additional wear and tear.

If they get something good that can handle a lot of miles, then it's not a big problem, especially if they plan to keep it for a long time. These are not people who can afford to replace their car frequently. Most cars will do a lot of miles if you actually keep up on maintenance, especially these days.

Re:The $3.37/hr wasn't what caught my eye

[SNRatio]

And if 30% of drivers are losing money, even if they are really bad on personal finances on average, wouldn't, say, half of them eventually realize it and the first time we'd be hearing about it would not be from a study?

Yes? Only 4% of Uber drivers stick with it for over 1 year, and the number one reason for leaving is the pay. So yes, it seems like well over half eventually realize it and leave.

Don't get me wrong, I've talked to a few drivers and I'd say most are not that happy with Uber, but the complaint is that they have to work more to make a proper income after their expenses - which means at least they are not on the red as in that case working more would not help...

Well, the median driver is in the black, just not very far in the black. And if, as another study said the drivers that do earn reasonable wages tend to be the ones that have been on the platform long enough to know where and when to be driving, it could be the vast majority of Uber drivers either don't stick around long enough to learn the ropes, aren't available at the right times, or aren't in a profitable area.

So if turnover is this high ... what happens to Uber when the majority of the people likely to drive for Uber have already driven for Uber - and given up?

Re:The $3.37/hr wasn't what caught my eye

[SNRatio]

>It's also a way for someone to get a way nicer car than they could otherwise afford, or get financing for. Can they still afford it after they purchase ridesharing insurance on top of their normal insurance policy?

Re:The $3.37/hr wasn't what caught my eye

[drinkypoo]

Can they still afford it after they purchase ridesharing insurance on top of their normal insurance policy?

Is this an attempt to claim that Uber drivers don't have sufficient insurance? This is a very old myth. Uber has been insuring drivers all along.

Re:The $3.37/hr wasn't what caught my eye

[bingoUV]

but the complaint is that they have to work more to make a proper income after their expenses

Sometimes it is more complicated. Uber's rules are different in every country - with tweaks for every city. But in multiple countries, I hear they make the drivers work hard even to earn their first penny.

Modus Operandi : Initially, the drivers lose money on every trip. After they have done the equivalent of about 8 hours work, they get a nice bonus, making a net profit for the day. The "equivalent" of 8 hours does not sound too onerous to the driver - e.g. 20 trips in a market where Uber expect 2 trips per hour on an average. Uber has better data than the drivers - so the drivers are kept on the edge of their nerves for the whole workday. The drivers think it is their own fault for not getting 20 trips in 8 hours, which should be easy, so let us work 11 hours.

This helps Uber in 2 ways :
1. Drivers cannot work partly in 2 systems : Uber and Lyft (or the other app-driven call taxi solution in the country)
2. The drivers in the Uber system are desperate to serve a lot of customers.

Are you sure the drivers are not complaining about this ? That they need to work too hard to even earn the first penny ?

Re:The $3.37/hr wasn't what caught my eye

[luis_a_espinal]

And if 30% of drivers are losing money, even if they are really bad on personal finances on average, wouldn't, say, half of them eventually realize it and the first time we'd be hearing about it would not be from a study?

Yes? Only 4% of Uber drivers stick with it for over 1 year, and the number one reason for leaving is the pay. So yes, it seems like well over half eventually realize it and leave.

Don't get me wrong, I've talked to a few drivers and I'd say most are not that happy with Uber, but the complaint is that they have to work more to make a proper income after their expenses - which means at least they are not on the red as in that case working more would not help...

Well, the median driver is in the black, just not very far in the black. And if, as another study said the drivers that do earn reasonable wages tend to be the ones that have been on the platform long enough to know where and when to be driving, it could be the vast majority of Uber drivers either don't stick around long enough to learn the ropes, aren't available at the right times, or aren't in a profitable area.

So if turnover is this high ... what happens to Uber when the majority of the people likely to drive for Uber have already driven for Uber - and given up?

People are going to come and go, just the same way people do with other types of jobs (fast food come to mind). I would also suspect some of the people who left will come back.

It seems to me the biggest point of dissatisfaction is the expectation an Uber gig is enough to make a decent living. It isn't for most people

An Uber gig is good to stop bleeding money when you get laid off, or to use it as a source of supplementary income. I know of one senior level software engineer (who makes a very good salary) driving for Uber on his spare time, a trip here and there, just for the money.

Not because he truly needs it, but because if you have a few hours to spare on your free time, it won't kill you to drive around and make some extra cash.

I sincerely doubt the actual wage is $3-something as the author put it., even if mileage and maintenance is taken into account.

Re:The $3.37/hr wasn't what caught my eye

[djinn6]

If they start making money after 1 or 2 days of work, they're already much better off than most other jobs. Those don't pay you until 2 weeks after you start.

Re:The $3.37/hr wasn't what caught my eye

[bingoUV]

Not sure about "most" other jobs. Most other that they qualify for, maybe.

But anyway, the point is not whether or not they are "better off" with an Uber job. It is that just because they make profit on working a lot, does not mean they make somewhat smaller but positive profit on working reasonable hours. Non-linear compensation FTW.

The examples I gave for 8 hours, or 20 trips are for per day driving. So 20 trips in 2 days might easily give negative or negligible profits for the drivers.

Uber doesn't settle driver income daily either. It is weekly, or fortnightly.

Taxes

[Anonymous Coward]

Does this study take in to account that uber drivers can deduct mileage or maintenance costs, and other costs related to using their car as a business?

https://ttlc.intuit.com/questions/2722277-what-can-an-uber-driver-deduct

Re: Taxes

[Anonymous Coward]

Doesn't that require them to pay taxes in the first place?

Re:Taxes

[MightyMartian]

Which would translate into the taxpayer basically supporting Uber's business model by reducing drivers' overall taxes owing.

That's not even counting the underlying problem that at least some jurisdictions don't even buy the claim that Uber drivers are private contractors, meaning Uber is stiffing those jurisdictions in payroll taxes.

Re:Taxes

[Lordpidey]

>Which would translate into the taxpayer basically supporting Uber's business model by reducing drivers' overall taxes owing.

Being able to deduct income used as part of employment isn't unique to Uber. The same thing would be true for an independent taxi driver.

Re:Taxes

[guruevi]

Depends on the way you interpret the data, the $3.37 figure comes in from the worst case scenario of figuring in mileage and maintenance costs, sales taxes and "no-work hours" etc as a direct cost to the Uber driver. Eg. if one Uber driver does 2 rides in a day before and after their 'day job', the $3.37 number would have that as "10 hours worked, 2 rides".

Re:Taxes

[Anonymous Coward]

Which would translate into the taxpayer basically supporting Uber's business model by reducing drivers' overall taxes owing.

That's not even counting the underlying problem that at least some jurisdictions don't even buy the claim that Uber drivers are private contractors, meaning Uber is stiffing those jurisdictions in payroll taxes.

WUT?!?!

So businesses can't deduct expenses from income?

They're supposed to pay taxes on every penny that flows through?

That's got me wondering where your paycheck comes from. Maybe that company shouldn't be allowed to expense your salary and benefits....

Or, you know, you could move to Venezuela. I'd bet quite a sum a few years back you were touting Venezuela as a "socialist paradise". You know, before it fell into late-stage socialism.

Re:Taxes

[MightyMartian]

Of course businesses can. But there are two questions to ask:

1. Is an Uber driver really a private contractor? That's an open question in a number of jurisdictions.
2. If the pay is as low as is stated, then in effect allowing Uber drivers to deduct vehicle maintenance amounts to an effective subsidy to Uber (much as Walmart keeping a lot of employees on low hour part time schedules while those employees continue to access some degree of the social safety net amounts to a subsidy for Walmart).

Re:Taxes

[JBMcB]

1. Is an Uber driver really a private contractor? That's an open question in a number of jurisdictions.

In general, you are a private/independent contractor if:

1. You are under no obligation to work a specific time or place
2. Your employer doesn't tell you how to do your job

The first requirement is usually the primary delineation. If you can show up whenever you want and work as much as you want, you are clearly not a traditional employee.

Re:Taxes

[ma1wrbu5tr]

Worst case scenario is making nothing after fuel and maintenance.

Re:Taxes

[q_e_t]

Eg. if one Uber driver does 2 rides in a day before and after their 'day job', the $3.37 number would have that as "10 hours worked, 2 rides".

I highly doubt that is the calculation used. Especially as even gross, then assuming that those two trips total an hour, that would be a net hourly rate of $33.70, which is very unlikely to be the case. If that really is the net rate, then I am in the wrong business.

Re: Taxes

[Anonymous Coward]

Deductions are not credits.

If your deductions are less than the standard then it does you no good to itemize.

It's still not ride sharing

[Anonymous Coward]

Wake up! Anyone calling it "sharing" is trying to trick you.

Re:It's still not ride sharing

[Anonymous Coward]

File "sharing". Various things being called "smart". Bend over. We're going to do some smart sharing on your ass.

So who's coordinating the assault on Uber?

[Anonymous Coward]

I'm sure all this is nothing but a coincidence:

Chicago 2/28 – Are Rideshares Increasing Traffic Congestion?
Denver 2/25 – Studies suggest Uber, Lyft cause traffic congestion
Boston 2/25 – Uber, Lyft drivers are making city traffic worse
Seattle 2/12 – Do Uber, Lyft worsen Seattle’s traffic congestion?
Manhattan 2/26 – Your Uber Car Creates Congestion. Should You Pay a Fee to Ride?
Washington, DC 2/28 – Ride sharing services such as Uber are causing causes of traffic congestion

Re:So who's coordinating the assault on Uber?

[Applehu Akbar]

The scientific term you're looking for is not 'coincidence' but 'bullshit'. Every Uber ride carrying a passenger is a car drive not taken by that passenger. Because rideshare drivers do not have to loiter or deadhead like cabdrivers, there is no net contribution to traffic.

Re: So who's coordinating the assault on Uber?

[Anonymous Coward]

Clicked a couple. They're based on surveys, not data.

"With that said, there have been no in-depth studies performed in Chicago."

Should I click the rest? Are they all just reposts from the same survey?

Re:So who's coordinating the assault on Uber?

[imnotanumber]

... Every Uber ride carrying a passenger is a car drive not taken by that passenger. Because rideshare drivers do not have to loiter or deadhead like cabdrivers, there is no net contribution to traffic.

That would be true only if you assume the passenger would drive if did not have the Uber ride. If someone instead of using an Uber car takes the metro, a bus, a train or uses a bicycle or walks then it is the case where Uber increases traffic.

Re:So who's coordinating the assault on Uber?

[Cederic]

. Because rideshare drivers do not have to loiter or deadhead like cabdrivers, there is no net contribution to traffic.

So if I use Uber to get to the train station, I teleport there and the road isn't used by a car taking me?

The car that doesn't exist doesn't also then have to use a road to get back to my village as that's where the driver lives and you've said he can't loiter by the station?

You're a fucking genius and no mistake. How could I have failed to spot the total absence of traffic in this. To think I might have done something stupid like catch the fucking bus instead.

Re:So who's coordinating the assault on Uber?

[Applehu Akbar]

The Uber car does not magically come into existence when a transit rider uses it. It already exists.

The edge case: A transit rider takes an Uber instead of taking a train he normally walks to. Because an Uber costs more on the average than a transit ride, people will do this only if they have a toothache or an urgent appointment. Net change in traffic, zero cars, because he is taking an Uber instead of his own ride.

The common case: A transit rider normally drives to the train station, but takes an Uber instead. Zero net change in traffic that day, but a parking place at the station is saved. People living in East Coast cities with on-street parking in the snow where you have to get up at 2 am to move your car because it better not be found in the morning in the same spot where you parked it last night are going to ditch the car and always Uber to the station. Net change: minus one car and plus one parking place at the station.

Re:So who's coordinating the assault on Uber?

[Applehu Akbar]

When to Uber to the station, your own car is still parked at home, rather than being in traffic. Two people in one car, instead of two people in two cars. But best of all, an increasing number of big-city drivers will decide they no longer need a car at all. In fact, this encourages more people to ride transit if a train would save money and/or time on your regular route. In fact, I predict that rideshare apps will make arrangements with transit operators to include a transit option in ride route displays so riders have the opportunity to save by taking the train over part of their route, rather than Uber the whole way. People will be apt to do this for their regular commute.

Re:So who's coordinating the assault on Uber?

[Cederic]

When to Uber to the station, your own car is still parked at home, rather than being in traffic.

So fucking what? I'm still in a car that's in traffic, and wouldn't otherwise be.

Two people in one car, instead of two people in two cars.

No. Two people in one car, instead of one person in one car and one person doing a job that pays well instead.

In fact, this encourages more people to ride transit if a train would save money and/or time on your regular route.

Wait? Access to Uber encourages people to use the train? Is it really that shit?

In fact, I predict

Predict what you like, based on your demonstrated logic and analysis thus far I'm going to disregard you anyway. In fact, I didn't even bother reading the end of your post. You make that little sense.

Re:So who's coordinating the assault on Uber?

[q_e_t]

The scientific term you're looking for is not 'coincidence' but 'bullshit'. Every Uber ride carrying a passenger is a car drive not taken by that passenger. Because rideshare drivers do not have to loiter or deadhead like cabdrivers, there is no net contribution to traffic.

Not true. If a taxi is not available sometimes I might suck it up and walk, take a bus. cycle, a train, or not travel. Or I might drive.

Re:So who's coordinating the assault on Uber?

[q_e_t]

The Uber car does not magically come into existence when a transit rider uses it. It already exists.

The edge case: A transit rider takes an Uber instead of taking a train he normally walks to. Because an Uber costs more on the average than a transit ride, people will do this only if they have a toothache or an urgent appointment. Net change in traffic, zero cars, because he is taking an Uber instead of his own ride.

The common case: A transit rider normally drives to the train station, but takes an Uber instead. Zero net change in traffic that day, but a parking place at the station is saved. People living in East Coast cities with on-street parking in the snow where you have to get up at 2 am to move your car because it better not be found in the morning in the same spot where you parked it last night are going to ditch the car and always Uber to the station. Net change: minus one car and plus one parking place at the station.

Again, not true. Standard economic theory contends that this demand for Uber cars will create supply. Initially this may be via drivers using existing cars, but if the money is good enough then it will encourage those who do not have cars to purchase cars to use to pick up passengers.

Re:So who's coordinating the assault on Uber?

[q_e_t]

When to Uber to the station, your own car is still parked at home, rather than being in traffic.

The Uber car is in traffic. In fact it has to get to where you want to be picked up first, then take you to the station, so the amount of traffic is greater.

two people in one car, instead of two people in two cars.

One of those people is only in the car to transport the other, so your point is absurd

But best of all, an increasing number of big-city drivers will decide they no longer need a car at all.

This could be a positive factor.

In fact, this encourages more people to ride transit if a train would save money and/or time on your regular route.

Again, this could be positive

In fact, I predict that rideshare apps will make arrangements with transit operators to include a transit option in ride route displays so riders have the opportunity to save by taking the train over part of their route, rather than Uber the whole way. People will be apt to do this for their regular commute.

You are behind the times. Google maps allows you to hail taxis when journeying.

Re: So who's coordinating the assault on Uber?

[Anonymous Coward]

Clicked a couple. They're based on surveys, not data.

"With that said, there have been no in-depth studies performed in Chicago."

Should I click the rest? Are they all just reposts from the same survey?

That's the entire point.

A bunch of anti-Uber bullshit appeared all across the country within the span of just a few days?

That looks highly coordinated, doesn't it?

So who's behind it?

Re:So who's coordinating the assault on Uber?

[Applehu Akbar]

Standard economic theory contends that this demand for Uber cars will create supply. Initially this may be via drivers using existing cars, but if the money is good enough then it will encourage those who do not have cars to purchase cars to use to pick up passengers.

That's funny. I thought the whole point of this thread is that effective salaries for Uber drivers are so low that you would have to be crazy to go into the business? But yes, what standard econ theory is telling me when I talk to real Uber drivers, rather tah the medallion apologist who started this thread, is that Uber driving is lucrative enough that a certain fraction of the driver population will go into the business of giving rides to others, mostly on a part-time basis. Every Uber ride is a car not driven, replaced by a car containing two or more people. Net traffic saved.

Re:So who's coordinating the assault on Uber?

[drinkypoo]

Every Uber ride carrying a passenger is a car drive not taken by that passenger. Because rideshare drivers do not have to loiter or deadhead like cabdrivers, there is no net contribution to traffic.

False.

Re:So who's coordinating the assault on Uber?

[Applehu Akbar]

What the UC Davis study shows is that in this early phase of ridesharing adoption, when too few people are sure enough that ridesharing is here to stay to give up their own cars if they drive them, the significant effects so far are less bus use and more walking. City buses are the form of mass transit that people find most irksome because of their slowness and frequent stops. Now that Uber is subjecting them to competition, perhaps bus service will finally improve. I can see bus systems meeting the challenge by using smaller, demand-activated vehicles that pick up and drop in response to apps. And that's without even considering the advantage of having rideshare apps that display transit options where available.

The adoption side of the study shows that we are still at the stage when most Uber rides are used to avoid the DUI dragnet and urban parking. Freed-up parking spaces and less drunk driving benefit any city.

Re:So who's coordinating the assault on Uber?

[q_e_t]

By definition an Uber ride, which uses a car, is a car driven (carrying one person wanting to go to somewhere).

Re:So who's coordinating the assault on Uber?

[drinkypoo]

City buses are the form of mass transit that people find most irksome because of their slowness and frequent stops. Now that Uber is subjecting them to competition, perhaps bus service will finally improve. I can see bus systems meeting the challenge by using smaller, demand-activated vehicles that pick up and drop in response to apps.

I agree, and I've written about such repeatedly. But there will be lag time, because autonomous systems are currently expensive. This will lead at least some transit lines to employ full-size autonomous buses instead of shifting immediately to more van- or shuttle-sized vehicles which pose less obstacle to traffic.

I can't earn a living wage

[RightwingNutjob]

by selling copies of my poorly-xeroxed newsletter on the street corner. Should I be banned from doing so on the grounds that I can't feed a wife and two kids by doing that?

Re: I can't earn a living wage

[Anonymous Coward]

Actually, yes, you should be, because your irresponsible welfare scheme is a fraud.

Re:I can't earn a living wage

[Anonymous Coward]

by selling copies of my poorly-xeroxed newsletter on the street corner. Should I be banned from doing so on the grounds that I can't feed a wife and two kids by doing that?

Yes, you need to be banned from doing that.

Now, if you were paid even less, but worked for a local taxi company, errr, newspaper, to do the exact same job, that would be perfectly fine!

Because government rules always improve things!

Re:I can't earn a living wage

[PopeRatzo]

by selling copies of my poorly-xeroxed newsletter on the street corner. Should I be banned from doing so on the grounds that I can't feed a wife and two kids by doing that?

Only if the trucks delivering your poorly-xeroxed newsletter to the street corner are improperly licensed, insured and unregulated, and you try to define the drivers of those trucks as "independent contractors" in order to skip out on paying payroll taxes.

Other than that, your false equivalence is spot on.

Re:I can't earn a living wage

[RightwingNutjob]

Let's say a friend of mine with a van is willing to haul a load of papers for me on his way to work, which takes him an hour each way and happens to go by both the print shop and my street corner.

Is it OK if he does it for free out of the kindness of his heart?

Is it OK if I pay him $3 to reimburse him for the gas in his truck?

Is it OK if I pay him an extra dollar because I don't believe in accepting charity?

If it isn't, then why?

Re:I can't earn a living wage

[PopeRatzo]

I'm pretty sure your example would be more apt if you had 327,000 friends that you tried to pay $3 for hauling your papers.

Unless you believe that all Uber drivers are personal friends of the owners of Uber and are happy to help out by working for $3/hr.

Re:I can't earn a living wage

[RightwingNutjob]

So somewhere between one and several hundred thousand there's a magic number? What is it? How does one go about determining what it should be?

What if I'm particularly gregarious and have ten friends? A hundred? What if we entered into an LLP and our trucks and our time are the capital we invest in this operation? What if we plan to, but haven't yet filed the paperwork?

No one is forcing anyone to drive for Uber or Lyft or any of the dozen and a half local equivalents.

Re:I can't earn a living wage

[Maxo-Texas]

That's legal.

But you can't cut hair, give a massage, practice law, perform medical procedures, and many other activities which are licensed and regulated like taxi's are.

The regulations were started by the public due to problems with people offering rides.

They may be out-dated. Or they may still be needed.

To some extent taxi companies have captured their regulatory market and charge excessive rates (and their drivers don't do particularly well either unless you define living in your car to make a living wage as doing well).

Re:I can't earn a living wage

[Anonymous Coward]

First, your driver doesn't happen to go by your location. He needs to go out of his way to get there. With that then yes, yes, and no. You can't pay him extra because we have laws saying that turns it into a business. We have those laws because in the past when we didn't have them people caused all sorts of trouble and it was decided it was in the public's interest to solve those issues and the voting population agreed.

If you disagree with those laws which were originally formed in the public interest (you like your meat with bits of human? or taxi drivers engaging in drive by shootings when one company would pick someone up outside of its territory?) then feel free to lobby to change them. At the local level were these laws are you do have a voice and can get your community to change them. But you're not free to simply declare you don't like them and thus they don't apply to you.

Let me know where your house is so I bleed you dry. It isn't murder. It's not my fault if your body doesn't produce enough replacement blood fast enough to handle the blood loss. Most people cut themselves at some point. I won't be doing something that naturally doesn't happen on its own. No law specifically mentions draining all your blood as being illegal so I'm free to do so.

Laws are written for for-profit-activities just like laws are written for things-which-result-in-death. They don't have to explain every possible way to make a profit or to kill someone for them to apply.

In my town you would be fined because we'd deemed it unlawful to harass drivers when they should be focusing their attention on driving. Signs showing where things are are ok, ads are not.

Unlike what Pope Ratzo said, scale doesn't matter unless the laws mention it (many do). However police often don't go after single or small events. That's one reason you see all those illegal "We Buy Houses" signs. It's too trivial for the police to go after them, the Google Voice numbers are free, and a single-pay off nets you tens of thousands of dollars.

Re:I can't earn a living wage

[PopeRatzo]

So somewhere between one and several hundred thousand there's a magic number? What is it?

Three. The number is three.

How does one go about determining what it should be?

Fortunately, you don't have to go about determining what the number should be because I've just told you. You're welcome.

Re:I can't earn a living wage

[judoguy]

by selling copies of my poorly-xeroxed newsletter on the street corner. Should I be banned from doing so on the grounds that I can't feed a wife and two kids by doing that?

This is exactly the point. Is someone forcing the Uber driver to drive?

If not, what's the beef? We somehow want to make it illegal to make a bad business decision?

I assume that driving for a ride share service, unlike buying a storefront and inventory, etc., provides immediate feedback. Am I making any money? Am I making enough money? Seems to be one of the lowest risk things one could try.

Re:I can't earn a living wage

[RightwingNutjob]

Color me surprised.

Re:I can't earn a living wage

[Beeftopia]

You're free to be as innovative and entrepreneurial as you want, as long as you're not imposing negative externalities on others.

However, rideshare drivers are not entrepreneurs. They're signing up with a central entity that is using them to make money. The individual drivers are terrible negotiators and as a result, keep a small fraction of the income they generate. This is true in a lot of industries. For programmers working at government contractors, get a look at the rates you're billed out at, and the amount you actually receive. The difference is pretty astonishing. But even though the programmer's share is small, the billed rates are high enough so that the programmer typically makes an "adequate" income.

Re:I can't earn a living wage

[RightwingNutjob]

No one forces anyone to do anything. If a programmer wants to "negotiate" he can bill himself out and cut out the middle man. Many do. Many don't. I know a bunch from column A and a bunch from column B. The ones who don't don't because they don't want the hassle of running a business on top of doing the work they're paid to do and the difference in dollars isn't worth it.

Same thing with Uber. No one is making you drive for them. If you've got the entrepreneurial bent, you can start your own car service. You'll have to do a lot more leg work though, and that means giving up your day job if you've got one. That's not worth it for a lot of people. So they take the lower pay for the lower amount of things to have to worry about.

What is it in the water that's making people automatically assume that when money changes hands in exchange for services rendered that it means someone's doing something to someone?

If I buy a sandwich from a food truck, am I exploiting the guy making it for me?

When I pay my mechanic to change my oil and rotate my tires, am I exploiting him? Is he exploiting me? Or do I make the judgement that the thirty or forty bucks he charges me to do it is worth it if I don't have to jack up my car one tire at a time and mess around with recycling the used oil?

If several hundred thousand people drive for Uber, give them some credit that they know what they're doing and you don't know better than them what works for them. You do that and I'll refrain from telling you how you're making your bed wrong or how you're messing up your grocery shopping.

Re:I can't earn a living wage

[Beeftopia]

No one forces anyone to do anything. If a programmer wants to "negotiate" he can bill himself out and cut out the middle man. Many do. Many don't. I know a bunch from column A and a bunch from column B. The ones who don't don't because they don't want the hassle of running a business on top of doing the work they're paid to do and the difference in dollars isn't worth it.

I'm not saying they need to become a business, just that they're being taken advantage of because they're poor negotiators. I'm just saying it's not an equitable outcome.

Same thing with Uber. No one is making you drive for them. If you've got the entrepreneurial bent, you can start your own car service. You'll have to do a lot more leg work though, and that means giving up your day job if you've got one. That's not worth it for a lot of people. So they take the lower pay for the lower amount of things to have to worry about.

They can do what they want. I'm just saying it's not particularly fair that they're being taken advantage of. And they probably don't realize it either. They're just bad negotiators.

What is it in the water that's making people automatically assume that when money changes hands in exchange for services rendered that it means someone's doing something to someone?

The economy is a competition for resources. Sometimes the exchange is win-win: vendor makes a profit, and customer pays less than the benefit he's getting from the transaction. Sometimes one side is victimized: vendor taking a loss and customer getting a big win, or vendor making a big win and customer taking a loss. If that's continuously happening, either due to monopoly, fraud or asymmetric information, that doesn't lead to good social outcomes. I'm not looking for authoritarian or micromanaged solutions, but at least identifying the problem can lead to ideas on how to create more fair and just outcomes.

If I buy a sandwich from a food truck, am I exploiting the guy making it for me?

When I pay my mechanic to change my oil and rotate my tires, am I exploiting him? Is he exploiting me? Or do I make the judgement that the thirty or forty bucks he charges me to do it is worth it if I don't have to jack up my car one tire at a time and mess around with recycling the used oil?

These are almost certainly win-win transactions. The time and effort and skill of the mechanic, along with his plant investment, allows him to make a profit on the transaction, and you obtain benefit from it as well, by not having to spend 3 hours doing something that you'd productively spend doing something more to your liking/profit.

If several hundred thousand people drive for Uber, give them some credit that they know what they're doing and you don't know better than them what works for them. You do that and I'll refrain from telling you how you're making your bed wrong or how you're messing up your grocery shopping.

We're not engaging in any sort of transaction with my making my bed or my grocery list.

If Uber is exploiting asymmetric information and driver desperation and known negotiating weaknesses, that leads to lowered social welfare. One side is consistently winning and one side is consistently losing. The economy is a competition for resources. I think we can agree that Uber is keeping a large portion of the incoming cash flow. If drivers had some kind of collective negotiation, they could likely get a lot better deal for their effort.

Uber is a large, well capitalized entity. The labor is dispersed, unorganized and has little bargaining power. They're generating a lot of income but not keeping much of it. Like small farmers or like college basketball players as an extreme example. IMO it's not a fair transaction between Uber and its drivers. Like I said in another post, it currently is like pre-1970s sports negot

Re:I can't earn a living wage

[Anonymous Coward]

We can't. You're the color of fraud. Orange with a side of burnt toast.

Re:I can't earn a living wage

[jeff4747]

If you're just handing out a newsletter, go for it.

If you're punching people in the face and then handing them a newsletter, there's a problem. Because you're breaking the law while handing out your newsletters.

The problem with Uber is in most cities it is breaking the law. Calling it a "ride share" doesn't suddenly make it not a taxi, nor does it make you suddenly immune to all taxi regulations.

(The taxi regulations on the books need to be changed too, but you still have to obey them)

Re:I can't earn a living wage

[jeff4747]

Is it OK if he does it for free out of the kindness of his heart?

Yes. You are not paying, so the regulations about commercial delivery service do not apply.

Is it OK if I pay him $3 to reimburse him for the gas in his truck?

No. You've entered the world of commercial service and regulations apply. Doesn't matter if you say "this is for gas!". It's not like a regular delivery truck driver is not charging you for gas.

Is it OK if I pay him an extra dollar because I don't believe in accepting charity?

No, still commercial service.

If you want to be 100% legal with this, you'd need to disconnect your "gift" from the service your friend provided.
You're also not likely to be caught unless this is a regular thing.

Re:I can't earn a living wage

[RightwingNutjob]

If Uber is exploiting asymmetric information and driver desperation and known negotiating weaknesses, that leads to lowered social welfare. One side is consistently winning and one side is consistently losing. The economy is a competition for resources. I think we can agree that Uber is keeping a large portion of the incoming cash flow. If drivers had some kind of collective negotiation, they could likely get a lot better deal for their effort.

Life is asymetric. The only way information or capital can be at parity is if you've got two equal spherical cows. Heterogeneity will imply asymmetric exchanges, but guess what: that's good because there's no one number you can put on the value of goods being exchanged that's guaranteed to hold for everyone.

In the case of Uber drivers, the extra dollar you pick up on the way to or from work is worth more to you than the extra minimum wage you could make if you held down a full-blown second job that had time commitments and additional travel. The money is worth more to Uber, the flexibility is worth more to the driver. That's win-win if you don't restrict your analysis to just the things that are easy to quantify like dollars.

In any economy with even half an ounce of freedom, it is not possible for one side to be "consistently winning and one side consistently losing." The free flow of information and the freedom of individual actors to make self-interested choices precludes that from happening. You're operating under the Marxist delusion that everything is about power and oppression. It isn't.

The economy is not a competition for resources. That would only be true if there were a finite amount of resources that could only be used by one party and then vanish off into the void. Win-win transactions would be impossible if that were literally true. Free markets enable resources to be developed, harvested, used, reused and to have value added to them with each transaction. In the most simplistic example, if I make a killing in the stock market, I get to buy a new house, but someone else gets to sell it to me.

If drivers had "collective negotiation" then the following three things could happen:
1. Ride prices would go up if the minimum fee per ride were to go up. This would discourage some fraction of the user base from using Uber at all, thereby lowering the overall size of the pie available to the drivers.
2. Guaranteed minimum work hours could be implemented, meaning small-timers and casual drivers would get booted. That wouldn't be fair to them.
3. They'd all have to pay union dues. Despite many of them being fine with the arrangement now. So how is it fair for them to have to pay to fix a problem that isn't a problem for many of them?

Editorializations on my part aside, these things invariably happen when a place unionizes. And while it may be considered "good" for the small portion of people who benefit monetarily from the arrangement (at the expense of many who don't) and while it may be good for others who politic their way to the top of the heap in these negotiations and outside consultants who end up pocketing the union dues, it's not good for many people for whom a way of earning a little extra money is now closed.

Repeat after me, comrade: people are individuals and they need to be treated as individuals; collective bargaining treats people as cogs in a machine, and that's inappropriate for a workforce composed of part-timers who work irregular hours to provide on-demand services at their own convenience.

Re:I can't earn a living wage

[Anonymous Coward]

The only way information or capital can be at parity is if you've got two equal spherical cows.

Cows are exploited. Heavily.

Re:I can't earn a living wage

[Beeftopia]

If Uber is exploiting asymmetric information and driver desperation and known negotiating weaknesses, that leads to lowered social welfare. One side is consistently winning and one side is consistently losing. The economy is a competition for resources. I think we can agree that Uber is keeping a large portion of the incoming cash flow. If drivers had some kind of collective negotiation, they could likely get a lot better deal for their effort.

Life is asymetric. The only way information or capital can be at parity is if you've got two equal spherical cows. Heterogeneity will imply asymmetric exchanges, but guess what: that's good because there's no one number you can put on the value of goods being exchanged that's guaranteed to hold for everyone.

Yes, but consistently asymmetric exchanges lead to consistently unfair outcomes. You can conceive of consistently unfair outcomes can you not? A prime reason being one side is using professionals to negotiate, and the other is not.

In the case of Uber drivers, the extra dollar you pick up on the way to or from work is worth more to you than the extra minimum wage you could make if you held down a full-blown second job that had time commitments and additional travel. The money is worth more to Uber, the flexibility is worth more to the driver. That's win-win if you don't restrict your analysis to just the things that are easy to quantify like dollars.

Dollars is why they're doing it. I'm confident the Uber drivers don't know they're being taken advantage of. Maybe they do, who knows. I'm not saying they shouldn't be free to do it, I'm only saying they're getting taken advantage of.

In any economy with even half an ounce of freedom, it is not possible for one side to be "consistently winning and one side consistently losing." The free flow of information and the freedom of individual actors to make self-interested choices precludes that from happening. You're operating under the Marxist delusion that everything is about power and oppression. It isn't.

Total nonsense. The "free flow of information" is heavily limited. Hell, it's typically against company policy to talk about your salary to other employees! That's an attempt to restrict vital information. In the financial sector, it's a big game of poker. Limiting information from your counterparty is a key part of doing business. Now for the financial sector, with "sophisticated investors" going against other "sophisticated investors", I've got no issue - everyone is aware of the parameters of the game. Sometimes they win, sometimes they lose. Google "The London Whale" and the guy who bet against him and beat him.

The economy is not a competition for resources.

The economy is an arena where people try to convince others to give them money, by however means they can. On my commute, I'll see panhandlers trying to prevail on the sympathies of passing motorists. Panhandlers get money, donators get a good feeling. A step up are the squeegee kids - aggressive, trying to invoice people for a service. In the business space, I try to sell a good or a service to a buyer, in order to get the most compensation I can. My employer wants to give me the least compensation that will keep me on board. A competition.

It is a competition for money, goods and services - resources.

That would only be true if there were a finite amount of resources that could only be used by one party and then vanish off into the void. Win-win transactions would be impossible if that were literally true. Free markets enable resources to be developed, harvested, used, reused and to have value added to them with each transaction. In the most simplistic example, if I make a killing in the stock market, I get to buy a new house, but someone else gets to sell it to me

Re:I can't earn a living wage

[Beeftopia]

Here's a book recommendation: Robert Akerlof and Robert Shiller's (both Nobel laureates) "Phishing For Phools". They talk about how suboptimal outcomes, which they label "Could not possibly want" outcomes, occur. The marketplace is not a magical place free of abuse. In theory, it should be perfect. In practice - in reality - it does not-infrequently fail, leading to "could not possibly want" outcomes.

It's blasphemy to the free market fundamentalists, to whom the marketplace is always perfect, and never suffers from inefficiencies, but it's worth a read, to challenge those perceptions. It deals with the reality of how markets work.

And I can assure you that not everyone who is not a free market fundamentalist, is an incorrigible communist.

Re:I can't earn a living wage

[RightwingNutjob]

You acknowledge the potential abuses of unionized labor and you accuse the government of being bought and paid for by large monopolists, and you even acknowledge a progression of government going from trust-busting to laissez-faire over time, yet you seem to believe there is such a thing as not totally unorganized that doesn't turn into the Teamsters over time. What exactly is this "a little organized" that you seem to be advocating for and what limiting principle that prevents it from turning into Teamsters, SEUI, AFT, and all the rest? Remember now...big labor has government bought and paid for just as much as the large corporations do.

Re:I can't earn a living wage

[RightwingNutjob]

It might find its way onto my list eventually. I'm not in a position to read anything that isn't for work right now.

1337 Uber drivers are...

[Anonymous Coward]

a single digit, and a couple bucks an hour short.

What will happen next.

[140Mandak262Jamuna]

Uber will authorize a multi million dollar study, headed by a professor with the creds and a history of being critical of Uber in the past.

Can you guess who is going to get that job?

The Takeaway: Pay is Crap

[seven of five]

Uber no longer needs to pay its drivers well to build its base; that's done, and the rates came tumbling down.

The pay is the smallest it can get away with before drivers leave in droves, in order to compete with cabs and other services. The only upside to Uber driving is the ability to set your own hours. Otherwise, there's no reason not to work at fast food.

Re:The Takeaway: Pay is Crap

[110010001000]

Oddly, the Uber payment rate is the same as it was ever been. Oddly, they have been doubling the number of drivers per year. That is really strange. Why would drivers be flocking to a company where the pay is crap? Why wouldn't they just go work for a taxi company or a fast food company where the pay is awesome? Very odd. Maybe the geniuses at MIT can figure it out.

Re:The Takeaway: Pay is Crap

[gravewax]

simple, most people are morons when it comes to maths. They might include fuel costs in calculations, might even add rego or insurance (they bet many don't) and fuck all will be including true costs like tires, maintenance and the depreciating asset of their car. When you exclude the very real costs of a business even one where you are losing money can look very attractive when you see just one side of the balance sheet.

Re:The Takeaway: Pay is Crap

[careysub]

Oddly, no links or actual numbers in your assertions. Almost as if you were just passing on Uber hype. That is really strange.

A little Googling, even filtering for recently dated reports, repeatedly lists Uber drivers in the U.S. doubling from 2014 to 2015 (which represents flattening percentage rate of growth year over year from its founding). No actual reports of U.S. drivers since that time (but lots of people trying to extrapolate from it, as if this was an established law of nature). So, maybe it has not been doubling over the last three years.

Also half of all Uber drivers quit within 12 months. Why would they do that if the pay isn't crap (to turn around your argument)?

Re:The Takeaway: Pay is Crap

[DogDude]

I agree. Uber gets people because people are inherently dumb and lazy. They get to get paid for driving around while staring at their phones, which is what most Americans do all day, anyway. There's no barrier to entry, so you're right, people don't even consider the costs. They see "Drive with phone = money". That's it.

Re:The Takeaway: Pay is Crap

[Srin Tuar]

Thats exactly how markets are supposed to work; and it is a good thing.

Re:The Takeaway: Pay is Crap

[ixidor]

i have no idea how you came to this conclusion. when i started driving, the rate was around $1.57 /mile, plus the hourly. when i left it was around $.75. thats a pretty big drop.

Re:The Takeaway: Pay is Crap

[cmaurand]

I have an IQ of 125. I'm over 50, so getting work is hard. I was unemployed for quite a while (sending resumes daily. actively hunting for a position.). In the meantime, I drove for Uber (survival). I wouldn't exactly call that lazy. It paid the bills, but I couldn't make enough to pay the rent. I finally found work before I was homeless and gave up running my car into the ground on poorly maintained city streets.

Re:The Takeaway: Pay is Crap

[djinn6]

Also half of all Uber drivers quit within 12 months. Why would they do that if the pay isn't crap (to turn around your argument)?

Because some of them started doing Uber when they got laid off, then found another job within a year? Gig work will always be more transient than regular work. About two thirds of the Uber drivers I spoke are either in-between jobs or are doing it in their off time. The rest are ex-taxi drivers, who I suspect are not driving for Uber out of the goodness of their hearts.

Do Uber drivers make as much as Cab drivers

[Anonymous Coward]

Driving people around doesn't pay well. No kidding. The only way to make a small amount of money while using a skill that almost everyone possesses is to settle for getting less pay and maybe working very long hours.

http://work.chron.com/much-fare-taxi-drivers-keep-22871.html

Why is that my fault when I just want to get to the airport or home from the pub.

Re:Do Uber drivers make as much as Cab drivers

[fluffernutter]

That's why there are FUCKING REGULATIONS IN THE FIRST PLACE. Everyone gets reasonable chunks. Uber is just indignantly starting a race to the bottom.

Slashdot told me not to yell but I man come on really you're supposed to be smart people. Don't give away a chance at a reasonably healthy society. The enemy is not the people who you think it is, and Uber is no white knight.

Re:Do Uber drivers make as much as Cab drivers

[RightwingNutjob]

Money doesn't grow on trees dude. The reason Uber took off is that their price point attracted more customers than the taxi companies could with their "reasonable chunks." If Uber and Lyft and the rest go away, that money ain't going to the taxi companies, it's staying in people's wallets and to get where they need to go they take public transit or walk if they're in city centers or drive their own cars if they aren't.

Re:Do Uber drivers make as much as Cab drivers

[fluffernutter]

Well as long as you don't feel guilty having a near slave driving you around.. I wouldn't do it.

Re:Do Uber drivers make as much as Cab drivers

[djinn6]

Well as long as you don't feel guilty having a near slave driving you around.. I wouldn't do it.

Most people don't. But you're just a hypocrite. Poorly paid "slaves" made the computer you're typing on, the food you're eating and the clothes you're wearing. Even if you only buy from hipster shops, those "ethical" businesses don't pay first-world rates for everything they use. Try asking whether the computer they use is made in China. At some point, your money is ending up as "slave" wages. And you know what? That's a good thing, because "slave" wages are better than nothing.

Re:Do Uber drivers make as much as Cab drivers

[fluffernutter]

I buy products from China because the economy doesn't allow for viable alternatives. The last time I shopped for a smartphone, there was no brand with same features but made in US for me to price compare. The consumer has no choice where the product comes from. In this you do have a choice, so I challenge you to make the right one.

Re:Do Uber drivers make as much as Cab drivers

[RightwingNutjob]

That word doesn't mean what you think it means. A slave is a person whose economic and political rights and personal freedoms are legally curtailed and who is forced to work for an owner under threat of corporal punishment. A person who chooses to drive me around in exchange for monetary compensation does not have his right curtailed, is not under threat of physical punishment if he declines to drive me around, and has one vote that he can cast as he choses, same as me.

The concept of "near-slave" does not exist in this country. It is an exercise in hyperbole meant to inflame emotions to cloud over rational thinking. It is a rhetorical trick without merit.

Re:Do Uber drivers make as much as Cab drivers

[fluffernutter]

1) Country doesn't do what it should and provide plentiful education and employment opportunities for citizens,
2) Person realizes this, and immediately starts a company that anyone can do (with a little 'good ol USA gumption') where they can get eager employees for $3.72 an hour,
3) Person profits.

People ARE to stupid to realize what is good for them. In the end, someone will work for anything. This does not count as a vote, nor should we allow it to validate the fact that these people are accepting ridiculously low pay because THE GOVERNMENT ISN"T DOING ITS JOB IN THE FIRST PLACE. That doesn't mean Uber gets off scott free. They are disgusting for taking advantage of the situation, not to mention the other things they have done.

Germans in Revolt

[Anonymous Coward]

Uber is not faithful. It must have, :umlaut: to be so. Germans are marching, in the Streets.

Is it just me

[quantaman]

Or is the Uber economist's more confusing than it looks at a glance?

At a high level his argument seems to be that MIT analyzed some data from this survey and came up with an inappropriately low number.

The error the MIT paper is being accused of making is the survey tries to get 3 numbers:
1) How many hours a week do you work on a ridesharing service?
2) How much money do you make in a week?
3) What percentage of your income comes from ridesharing?

So the $3.37 is basically (#2 / #3) / #1 (presumably minus expenses).

The Uber economist claims that respondents actually interpreted the first question as:
1) How many hours a week do you work total?

So if you worked 1 hour ridesharing and made $20, then you worked 40 hours at a regular job then the $20 you made ridesharing would be divided by 41 instead of 1 to give you earnings of ~$0.50/hour.

The problem is the survey questions look a bit odd and the Uber economist claims an even odder interpretation:

Q11: “How many hours per week do you work on average? Combine all of the on-demand services that you work for.”

Q14: “How much money do you make in the average month? Combine the income from all your on-demand activities.”

So the Uber economist claims that the MIT authors interpreted #11 to mean hours only from on-demand services and #14 to be money from all sources. Which is a bizarre interpretation of questions with almost identical questions wording, yet instead of pointing out how weird the interpretation is the Uber economist actually seems to imply that their interpretation is correct and it was the respondents who misunderstood. Which makes me wonder what the actual sequence and context of the questions looked like.

Unfortunately he doesn't link to the study and the survey questions seem to only be available if "If you’re a media member and would like a full question list and anonymized data/calculations used in this report, please make a request here.

The MIT authors seem to be taking the criticism seriously so maybe I just suck at reading, but given the nature of the claimed error it seems like he should be able to make a much clearer argument.

Re:Is it just me

[Anonymous Coward]

It's simpler than your analysis. You can make far more at minimum wage working elsewhere. Anybody with an IQ over 80 can figure that out. If they were really working at $3.37 an hour, they would have to be deranged if they stayed.

So clearly the MIT study is completely wrong and it doesn't pass a basic logic test. Minimum wage by the way is more than double the rate in the study and even higher in some places. Nobody sane would stay in a job making half what they could get elsewhere, unless they were totally unemployable, in which case Uber or Lyft should not be using them.

Re:Is it just me

[Cederic]

The MIT authors seem to be taking the criticism seriously so maybe I just suck at reading

Nah, they just may have academic integrity and want to look into it in detail in case they did somehow miss something.

Re:Is it just me

[dj245]

The MIT authors seem to be taking the criticism seriously so maybe I just suck at reading

Nah, they just may have academic integrity and want to look into it in detail in case they did somehow miss something.

Or somebody at Uber reminded the author that on a Friday night last September, they took a ride from a bar to a residential property that was not their home. And the next morning at 6:35AM they took another ride from that property back to their home. Perhaps they further suggested that the author must love his wife and kids, and it would be a shame if the author's ride information was made public.

Re:Is it just me

[Anonymous Coward]

It's simpler than your analysis. You can make far more at minimum wage working elsewhere. Anybody with an IQ over 80 can figure that out. If they were really working at $3.37 an hour, they would have to be deranged if they stayed.

So clearly the MIT study is completely wrong and it doesn't pass a basic logic test. Minimum wage by the way is more than double the rate in the study and even higher in some places. Nobody sane would stay in a job making half what they could get elsewhere, unless they were totally unemployable, in which case Uber or Lyft should not be using them.

Quite the contrary, the point is many Uber drivers simply aren't aware of how low there pay is as they are not adequately attributing costs and dollars per hour. Many say "Wow I made $100 extra this week" rather than thinking, "oh fuck I spent 30 hours in my car and only came out $100 ahead", or worse "Cool I made $300" but fail to take into account depreciation, maintainence etc.

Re:I can't make an analogy

[Uberbah]

by selling copies of my poorly-xeroxed newsletter on the street corner. Should I be banned from doing so on the grounds that I can't feed a wife and two kids by doing that?

Except you're working for yourself and not another company as an employee.

Re:I can't make an analogy

[RightwingNutjob]

What's the difference? No one is forcing me to do either.

At the risk of Hyperbole

[rsilvergun]

I'll point out that Uber and it's ilk are bypassing employee protection laws that folks literally died for. Tempers can get a little high as a result. It's easy to forget all that if you've worked in tech your whole life, have a college degree and avoided the worst of the layoffs; which to be blunt a lot of us /.ers have.

Let's look at their Schedule Cs

[Anonymous Coward]

See, a lot of Uber/Lyft drivers think the IRS mileage rate is some sort of gift Congress gave out of the goodness of their hearts.

So, these guys track their mileage and gas - only. Not their time or their maintenance.

All they see is the number on their 1099 and think they're "making" money.

Until their tires wear out, the water pump goes, the timing belt needs replacing, the insurance company finds out they are driving for Uber/Lyft .....

So, you get a fare to drive 40 miles to the airport. Then what? Wait around for another - unpaid? Drive back with no fare - unpaid?

Those were all the complaints of my neighbor - an ex-Uber and ex-Lyft driver and retired CPA.

Re:Let's look at their Schedule Cs

[Cederic]

So, you get a fare to drive 40 miles to the airport. Then what? Wait around for another - unpaid? Drive back with no fare - unpaid?

I haven't read the MIT study but unless they're including that waiting/empty driving time in the hourly calculations then they're overstating income.

Uber will quote pay per hour with a passenger in the car, but that's not the actual time worked.

Re:Let's look at their Schedule Cs

[swillden]

So, you get a fare to drive 40 miles to the airport. Then what? Wait around for another - unpaid? Drive back with no fare - unpaid?

I haven't read the MIT study but unless they're including that waiting/empty driving time in the hourly calculations then they're overstating income.

Uber will quote pay per hour with a passenger in the car, but that's not the actual time worked.

The Stanford gender pay gap study did this (and lots more) correctly. They were very careful, and used a very large amount of data. They found that average pay was about $18 per hour, less about $5 per hour in fuel and maintenance costs, for a net of about $13 per hour.

Total pay wasn't really their focus, though, they were looking to see if there was a gender gap -- and found there was. Women make about 7% less than men. They were able to identify the specific causes of this discrepancy, and how much each contributed, which is a first. FWIW, 50% of the difference was caused by the men driving faster, 20% by women choosing to avoid areas that might be dangerous and 30% caused by women having less experience as Uber drivers, because women tend to take fewer fares per week and to quit driving for Uber sooner. Experience turns out to have a pretty significant effect on driver income, because the experienced drivers learn when and where to work.

Re:Let's look at their Schedule Cs

[Aighearach]

and retired CPA.

I can't understand why he wouldn't see the problem when looking at the offer, why would a CPA have to actually do it to themselves to find the problem?

Re:Let's look at their Schedule Cs

[Anonymous Coward]

yeah I call bullshit on that, $5 an hour would be lucky to cover fuel costs let alone maintenance, depreciation, insurance etc. for their study they didn't need real numbers as they were interested in the gap and the reason not realistic costs.

Re:Let's look at their Schedule Cs

[G00F]

Do you have links to these studies and other released writings?

Re:Let's look at their Schedule Cs

[swillden]

https://web.stanford.edu/~diam...

They study didn't say worst case

[rsilvergun]

it said the median was $3.37/hr. Worst case is that you make nothing, and the study said 30% of the drivers were living that 'worst case'.

Re:They study didn't say worst case

[Anonymous Coward]

Worst case is you loose money if you spend more time driving around, or commuting to city centers with lots of demand and don't get enough riders to make up your losses while waiting for rides or computing to/from city centers.

There are lots of people who just don't think about things like that. Just like the people who move 30 miles out of a city center to save on housing costs, only to end up paying just as much or more in commuting costs as if they just bought that home closer to the city and only had to drive a fraction of the distance or even use public transport.

I have family that did the same thing, moved an hour outside of the city to get a house for half the cost as in the city. Now to get into the city to work they are paying $10 in tolls per day plus gas and wear and tear on their car, and the wasted personal time commuting. Rough estimate over 30 years $10 in tolls $5 in gas * 5 days a week * 52 week a year * 30 years = $117000 in just gas and tolls, that doesn't even take into account wear and tear or loss of your personal time. Likely when it's all taken into account over 30 years you could have paid for that house in the city in just your commute costs to the "cheaper" house alone.

Yes there are some people who prefer to live outside the city, but if you are doing it purely on the house being cheaper, it is not.

Re:They study didn't say worst case

[fluffernutter]

You are lacking an important factor. People who live outside of the city usually get a lot more space (ie. lot size) that they wouldn't be able to afford in the city.

Just you !

[gDLL]

We have to do our quota of 1 negative Uber-bashing story per day.... so don't u go and looking into any facts... Brought to you by our friendly Lyft sponsors :)....

Re: I can't make an analogy

[Anonymous Coward]

Wrong, you are defrauding people.

Release the numbers!

[Anonymous Coward]

if Uber wants to be taken seriously, they should just release the numbers. The are not disputing the gas and maintenance components just the payouts. Uber actually has those numbers and they could share them if they want to be believed.

Somewhere in the middle

[dave562]

I drive for Lyft sometimes, but the pay is similar. I earn anywhere between $8 and $20 an hour. Mostly it averages in the $10-12 range. (In the Portland, Oregon area.) I have only been doing it for a few months. I have talked to some guys who were doing it when ride sharing first came to the region, and they said that they were making around $800 a night on the weekends. I pull around $200 for ~6-8 hours on Saturday. Any other night I am lucky to get between $75-100.

I do not understand how people can try to make a living doing it.

I do it for a few reasons. I like to drive and talk to people. It gets me out into the real world and off of the computer. I also appreciate that I can write off car maintenance, tires and things like that. I would also be able to write off my cell phone, but my main job already pays for that.

Re:Somewhere in the middle

[Anonymous Coward]

How many miles do you drive? Do you generally turn off your car when you are not driving?

Just trying to get a sense of what your expenses are based on IRS rate of $0.545/mi.

Re:Somewhere in the middle

[gravewax]

so is that 75-100 before or after all your expenses, maintenance, depreciation etc or is just the raw income.

Re:Somewhere in the middle

[Anonymous Coward]

54.5 cents/mile is an awfully low rate. realistically unless you drive a super economical small car that is ultra reliable your real expenses per mile will be in the 75-100 cents a mile.

Re:Somewhere in the middle

[jeff4747]

Be sure to add to your write-offs "Commercial Car Insurance".

Re:Somewhere in the middle

[cmseagle]

I disagree. I took a look at the Kelley Blue Book numbers for a 2017 Honda Accord. (warning - site will require you to disable your ad blocker). At a purchase price of $27,500 I'd hardly consider it a "super economical" car

At 15,000 miles/year, the cost of ownership is $0.49 per mile over 5 years. The marginal cost of putting more miles on the car is cheap. Bump that up to 40,000 miles/year and the cost of ownership drops to $0.24 per mile over 5 years. Other cars in the class (Ford Fusion, Toyota Camry) come in at a similar price.

To get up to $0.75-$1 per mile, I had to look at a BMW 3 series at 15,000 miles/year. At 40,000 miles/year, it's down to $0.40 per mile.

Re:Somewhere in the middle

[Anonymous Coward]

" do it for a few reasons. I like to drive and talk to people."

Dude, you have issues....and with those numbers you probably don't even make 3.75$/h

Re:Somewhere in the middle

[dave562]

In the last two months I averaged about 675 miles per month. I usually only drive on Friday and Saturday nights. Of those miles, ~45% of them are 'work' miles with customers in the car. The rest are just me driving around.

I usually keep driving. I drive for fun, not because I am trying to optimize my payout. I will choose a destination, like a place to eat dinner. Then I will drive there and get whatever rides I can along the way.

My perception is that I get more passengers when I am driving. That is purely subjective though. I do not have any metrics. The perception of time is likely different when I am parked and reading a book, versus driving around.

Re:Somewhere in the middle

[dave562]

That $75-100 is raw income. They 1099 the drivers. I was setting aside 50% for taxes out of an abundance of caution. I got all of it back, but I am not certain on what the breakdown was. I have a regular job as well, and I have a CPA who does my taxes.

Re:Somewhere in the middle

[dave562]

I have issues. Says the guy posting as AC trolling people on the Internet.

Right back atcha buddy.

Re:Somewhere in the middle

[dave562]

Thanks for the tip. I will have to ask my CPA about that next year. I am with State Farm and they just had to attach a rider to my regular policy. As long as 50% of the miles that I put on my car are related to Lyft, I do not need a separate commercial policy. The rider was pretty inexpensive, ~$10-15 / mo IIRC.

Re:Somewhere in the middle

[gravewax]

So the reported figures in this report are actually pretty close to reality of profit per hour then?

Re:Somewhere in the middle

[Anonymous Coward]

actually most of the Japanese cars (the accord included) are definitely in the very economical category. also insurance and rates for those numbers are based on owner driver not as a commercial passenger vehicle.

Re:Somewhere in the middle

[Anonymous Coward]

those numbers are for non commercial use. i.e. with standard insurance. you need to add another 10 cents+ per mile for your insurance at a minimum.

Re:Somewhere in the middle

[dave562]

You can run the numbers for yourself if you want. "Work Miles" are miles with passengers in the car. "Total Miles" are miles that I drove that day with the app turned on.

Here is the spreadsheet that I sent to my tax guy for 2017

https://www.dropbox.com/s/uhw8...

One thing worth noting is that I got all of my "Tax Set Aside" back. I had been setting aside 50% of what I earned for taxes because Lyft 1099s the drivers and does not take any taxes out.

YMMV - I'm at about a ~30% tax rate from my primary job (earning over $150K / year) so that likely played into how much of the Lyft earnings I got to keep.

Read the Uber driver forum

[Anonymous Coward]

All you have to do is read the Uber driver forum to realize these jobs are mostly slave labor for cheap. Many people are deep into dept, put loads of miles on their personal vehicle. Its a racket for Uber to make millions and most drivers make less then a livable wage. Anyone who uses Uber or Lyft are taking advantage of the driver and feeding into saving money at the expense of people providing the service.

Something that can't go on forever, won't

[SuperKendall]

I am pretty sure the ~$3 figure is wrong, from one simple fact - Uber and Lyft are still in business.

Because the truth is no-one could even afford gas for cars at that kind of wage. No drive would work for more than a few days for that kind of wage. And all of the Uber/Lyft drivers I have had have all been doing it for a while.

The fact is that serious drivers work for both companies, and know how to take advantage of surge pricing and location to make sure they earn a decent amount of money. The fact is those jobs do provide a huge degree of flexibility that is highly valued by all of the drivers I have spoken to, and I talk to all of them I'm riding with about how they like working for Uber or Lyft.

Re:Something that can't go on forever, won't

[Anonymous Coward]

The cited number is the median profit per hour, so the study already factored in gas and maintenance expenses.

Re:Something that can't go on forever, won't

[Anonymous Coward]

So you're blissfully ignoring that Uber sets rides below market rates and subsides them with VC money. Basically every Uber ride you take is partially paid for by investors. That's how these companies stay in business. They aren't profitable, but they have enough marketing buzz to keep investors pumping money into them, just like Bitcoin had money pumped into it. Unlike Bitcoin, investors expect Uber to raise prices after they drive the legal services out of business and become a monopoly.

Re:Something that can't go on forever, won't

[Average]

No drive would work for more than a few days for that kind of wage. And all of the Uber/Lyft drivers I have had have all been doing it for a while.

Irrationality can last a lot longer that an econ textbook says it will. I have relatives who have been hawking the same multi-level-marketing garbage for 4+ years and couldn't, at least honestly, show a penny of profit from it. And they'll defend their particular MLM religiously. Hell, I've known people who sent money to African e-mail scammers for multiple years. Didn't make them rational actors.

Re:Something that can't go on forever, won't

[jeff4747]

I am pretty sure the ~$3 figure is wrong, from one simple fact - Uber and Lyft are still in business.

Multi-level marketing still exists, despite the vast majority of the workers losing tons of money.

Re:Something that can't go on forever, won't

[SNRatio]

I am pretty sure the ~$3 figure is wrong, from one simple fact - Uber and Lyft are still in business.

Because the truth is no-one could even afford gas for cars at that kind of wage. No drive would work for more than a few days for that kind of wage. And all of the Uber/Lyft drivers I have had have all been doing it for a while.

96% of Uber drivers quit within one year. I think a median net profit (not wage, this is after gas and other expenses are factored in) of $3 per hour explains that pretty well. Some drivers do earn much more - the study points that out - but most either never learn how or aren't available at the right time or place.

Re:Something that can't go on forever, won't

[Anonymous Coward]

I would presume those figures are taken after expenses are taken account of. After gas, maintenance, etc, they are left with an average of $3 an hour. That definitely fits the experience I've heard from almost every Uber/Lyft driver I've rode with. They were quite pleased to see $20 tips because most people just DON'T tip. That's where most of their money comes from.

Shonky Study

[Anonymous Coward]

The study is an outrageous fraud. It's $3.41 per hour.

and with that Gig workers class cable guys and fed

[Joe_Dragon]

and with that Gig workers class cable guys and fedex do not fit in it or 1099er

Re: I can't make an analogy

[RightwingNutjob]

In what way? Am I stealing? Lying? Neglecting to be truthful?

As a rockstar programmer

[TeknoHog]

I earn $13.37 per hour.

Re:As a rockstar programmer

[Anonymous Coward]

You should stop programming rockstars. Make buzz-word-of-the-month websites instead. Tons of people who need websites but don't have any idea how they work pay crazy rates for someone to do it for them and to keep them following trends.

Re:As a rockstar programmer

[hcs_$reboot]

Time to get a raise!

Re:As a rockstar programmer

[Anonymous Coward]

I earn $13.37 per hour.

Yeah, got it. 1337 = "leet"

Yawn.

Re:As a rockstar programmer

[Anonymous Coward]

You mean "rockstar" the same way some people mean "special", right?

Re:As a rockstar programmer

[TeknoHog]

Yup, I mean special as in education or olympics.

Why wasn't the actual study linked?

[Anonymous Coward]

http://ceepr.mit.edu/files/pap...

Omg

[thewebsiteboy]

Img guys this is so so overwhelming $3.37

Re:Omg

[Anonymous Coward]

Go fuck yourself, you sound like you could use the practice.

Hey, that's the same amount...

[Anonymous Coward]

As the designation for (faux) Han Solo's (new&old) droid!

For anyone who has had the blessing of not paying attention:
Yes, the new Disney/LucasArts *IS* even more retarded than old Lucas at naming things.

Also the movie is obviously a bad ripoff of the Lando Calrissian/Han Solo Trilogies from the late 70s/Early 80s which started the Star Wars extended universe franchise, which they have now compeltely retconned with the prequels and sequels both.

It's TOS EU Trek vs post-TNG Trek all over again.

All irrelevant... the driver chose to accept

[Anonymous Coward]

All this is irrelevant. The driver chose and agreed with the terms and conditions for pay. Who cares what one gets paid, provided they agreed to it?

It seems we have a ton of Uber bashing. Uber is doing nothing wrong here. Should we toss the age-old field of contract law out the window, and have the government tell people what they can do for a vocation and what companies can pay for it?

Re:All irrelevant... the driver chose to accept

[Maxo-Texas]

Analysis of the facts isn't "uber bashing". That's just an analysis of the facts.

Identifying hidden costs, isn't "uber bashing." That just lets potential uber drivers make an informed decision.

Discussing previous times Uber broke the law, lied, or engaged in terrible behavior isn't "Uber bashing". They earned that by their actions.

Lyft may also have a terrible wage but they haven't been in the news as much for lying, cheating, and doing terrible things (not saying they don't do it- no clue- but they are not in the news for it constantly).

Uber has done wrong repeatedly- the researcher may have identified another area.

From looking at realistic videos on Youtube by several drivers- it looks like it is possible to make about $11 to $19 before taxes and before maintenance/replacement costs (but after insurance costs). But they may be 'best case' compared to the 'average uber driver experience'.

Likewise, I don't see a big difference if you are sitting reading a book at home, or in the car waiting for a fare *if* you are doing this part time for luxury cash. In that case, it's bonus cash.

On the other hand, if you are sitting in the car instead of working at a salary/hourly job, then sitting in the car without a fare counts. If you are sitting waiting for a fare as part of your job, it's part of the job (and closer to a traditional taxi driver).

Re: I can't make an analogy

[Anonymous Coward]

You should have known when you were convicted of it.

ROM Operating Cost

[Anonymous Coward]

The GSA Vehicle Reimbursement Rates are useful for this discussion.
If use of privately owned automobile is authorized or if no Government-furnished automobile is available = $0.584/mi (total operating cost)
If Government-furnished automobile is available = $0.18 (variable cost - mostly fuel)

So by this measure the premise that an occasional driver finds Uber Driving a good deal, and an every day driver could be loosing his shirt is not unreasonable. Their cost structure is completely different.

designed to make maximum use of crazy people

[k6mfw]

from a few years ago:
Re:Amazon's Self-Reinforcing Decline in Hires (Score:5, Insightful)
by Chris Johnson (580)
Sure, a bit. Uber's the same thing. It's designed to make maximum use of crazy people and force the others to live up to that standard or be fired.

I'll define 'crazy Uber people' not as 'danger to customers', but 'people who are bringing more value in terms of vehicle, skill and desire to please, than they are getting back in pay and benefits'. So the crazy Uber person is the one who keeps buying a new Lexus or whatever, vacuums their car three times a day and busts their ass to outperform all the other Uber drivers, so they can continue to win out over anybody else seeking to be a driver.

The key factor is that they are giving more than they get back, in the belief that they're cornering some kind of market or buying in to something important. If you make a business that relies on people like this, you can demolish anybody else because you've worked out how to get voluntary unpaid labor, like the Amazon exec who was said to use her own money to hire subcontractors to do more. As long as there are people who are willing to do that, the market breaks and Amazon/Uber get to do what Wal-Mart did in small towns, break the back of other market participants so they can't break even or continue.

Another way to be a crazy Uber person is to put more depreciation and wear and tear on your car than you can afford to repair (or replace). It's easy to be crazy in these ways. It's externalities which are easy to overlook. These Amazon/Uber business models are designed to leverage that kind of crazy as hard as possible, and kick out everybody who's not willing to lose (one way or another) on the deal. Psychology is useful in getting people to buy into this stuff.

As they say, a cult.

Re:designed to make maximum use of crazy people

[drinkypoo]

Another way to be a crazy Uber person is to put more depreciation and wear and tear on your car than you can afford to repair (or replace). It's easy to be crazy in these ways.

It's not crazy, it's either ignorance or desperation. If you're sinking, you keep swimming as hard as you can in the hope that someone comes and saves you before you drown, because you've got no other option. Bail faster, you might not die.

America sure is great! Wait, unemployment is high. That's not quite the same thing.

Still makes no sense

[SuperKendall]

The cited number is the median profit per hour, so the study already factored in gas and maintenance expenses.

Sorry, even factoring that in people would not work long for a mere $3/hour, because they could earn MUCH more doing other things. Sorry, but the numbers make no sense unless drivers are making significantly more.

Re:Still makes no sense

[gravewax]

you are making the assumption that they have done the maths to understand they are really working for $3 an hour.

Re: Still makes no sense

[Anonymous Coward]

Also, only 4% of Uber drivers do it for over 1 year. That means 96% of Uber drivers already come to the conclusion that they can't keep going with it after the one year mark. Just because "fools" (perhaps) keep trying out the Uber driver game and investors keep subsidizing the company doesn't mean it's sustainable in the long term.

Re:Still makes no sense

[edtice1559]

Since the depreciation of their vehicle is a non-cash expense, they are probably looking at cash flow and feel like they are making more than they are.

Never believe

[Grand Facade]

the numbers when the Fox counts the chickens....

I actually worked Uber/Lyft as a true ride share.

[Anonymous Coward]

I have a 30 minute commute so I would head out 10 minutes early and turn on the apps. I'd see if there were any fares who were close to my route and needed to be dropped off near my route without going past my destination. There would be like 4-6 fares a week, which worked out well for picking up some extra money for doing something I already was doing. I'd do the same for coming home. The days with no fares was no big deal, had to go to work anyway.

Eventually the fares started dwindling and the payout decreased, so it was something I just stopped doing.

UBER = $0.87/hr

[ElitistWhiner]

2014-2016 driving UBER full-time after accounting for expenses, maintenance, depreciation and costs for water, daily cleaning and washes actual cash-flow to the driver came to 87 cents per hour.
Exceptionally, an accident under dispatch which UBER reneged on its coverage which I was forced to pickup under my personal insurance tripled my premium. And the replacement vehicle could not be found for the coverage payout after the car was totaled.

UBER asserts a post-reality view of a world that drives its fleet into bankruptcy. Truth remains that as long as a new crop of drivers-for-hire signup to offset driver turnover losses UBER's view can be legitimate.

Slashdot readers aren't as dumb as you think

[Latent Heat]

To simplify things, consider a taxi company paying a driver an hourly wage but otherwise taking responsibility for all other expenses -- the taxi permit ("medallion"), fuel, insurance, car repairs, car replacement.

Compare that to an Uber driver being paid by the trip and otherwise responsible for whatever expenses of the vehicle they use. Are not pizza delivery drivers paid according to a similar model. My simplified taxi model is wage labor for the driver whereas the Uber of pizza driver is running a small business.

Businesses are notoriously difficult to determine the "actual" returns from their operations. Yes, there is GAAP (Generally Accepted Accounting Principles), but business "succeed" and "fail" all the time and accounting firms continue to collect their fees.

Suppose you are an Uber driver and you deduct only gas against your earnings and net $15/hour -- great deal, huh? Suppose you deduct gas and the full IRS formula for mileage expense (which is not really what it "costs" -- it is a rule that the IRS came up with for a "level playing field" in collecting taxes). You net only $3.50 an hour. Is this a bad decision? Suppose you were given the car by your parents and you want to "monetize" its value by driving for Uber to pay for living expenses until you can establish yourself in a higher paying career?

My point is that a lot of Slashdot commentators are quick to call people stupid about things that are intrinsically complicated. The scary thing is if the people saying "stupid, stupid stupid" are serious software developers. Given the complexity of software systems and the deep levels of design trades in almost every aspect of them, very, very scary.

Split the Difference?

[Anonymous Coward]

MIT says $3.37 per hour. Über claims $15.68 per hour.

Given Über’s reputation and the likelihood that their number is highly inflated, I’m betting the truth lies closer to the middle, which would be $9.53 per hour. But, for the sake of argument, let’s accept Über’s number. For a 40-hour workweek and 50 weeks (2 weeks off for vacation, illness, etc.), that’s $31,360 per year with ZERO benefits.

Yes, Dara, that is SOOOOOOO much better. Why, someone could almost afford to be homeless here in Seattle on that salary. Sorry, I meant income. Salary implies that the drivers are your employees and we all know they are self-employed, private, contractors.

Their misfortune is not your problem.

Are their not poor houses? Can they not just eat cake?

When I think back to what the tech industry was in the 90s and compare it to now, I am disgusted. The industry used to be driven vision, by the desire to use tech to make the world a better place. Now that the industry has matured and the greedy sociopaths have risen to the top, it’s just about taking advantage of desperate, naïve people.

Re:Split the Difference?

[Anonymous Coward]

You are forgetting factoring in the cost of maintenance / wear and tear of the vehicle (which according to AAA is on average 60.8 cents per mile, or $9,122 per year, based upon 15,000 miles of annual driving). So that $31K salary is really $22K and you have to paid taxes on the $9K spent on maintenance of the vehicle.

So now Uber thinks basic math is faulty?

[Anonymous Coward]

Calculating an average is actually BASIC math.

Avg, hourly salary = (Total salary earned) / (Total #hrs worked)

That equation is not that difficult to understand (or calculate). Even a 6th grader can compute the value.