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I am asking the current Uber drivers, but anyone's welcome.
If anyone read the recent article in the April 9, 2018 issue of the New Yorker magazine that focused on Dara Khosrowshahi, the new CEO of Uber, you might have noticed that one thing stood out, He admitted that the cost of a ride is too low. The cost of a ride is significantly higher than what the public is paying for it. He also admitted that he didn't know how to deal with it because as soon as they raise the price the customers will go to Lyft, or another source.
The problem needs to be taken head on with the public being educated that the drivers are being cheated by not being paid an appropriate fee for the cost to run the vehicle as well as to eat, pay rent and live in the real world.
People complained about the cost of taxi service, but I will tell you from ten years of driving a taxi (and another six and a half with Uber) that there are very good reasons for the price of a taxi ride and that they should not be the focus of complaints, rather, the service they were giving was the real culptit and Uber seized on any chance to malign the taxi services in order to gain market share.
In San Francisco, the citly I know best, the cost of a taxi ride is set by the Publiv Utilities Commission and it breaks down roughly this way: The ride must cover the cost of gasoline to the driver, the drivers rental of the car from the taxi company (assuming he does not own the medallion as most do not), the cost of liability insurance, the cost of maintaining the car (all the brake jobs, oil changes, transmission flushes, tires and the original acquisition of the vehicle) as well as the office overhead of the taxi company which includes office rental and salaries of employees, such as the dispatchers, as well as a reasonable profit. Thus the company sets the rate of the "gate" fee the drivers pay to take out a car and in exchange they are only responsible for paying for gas while they use the car.
No one gets rich in the taxi business, least of all any drivers, even those who own medallions which allow them to rent their car to another driver and for them to drive without paying the full "gate", the price to take out a car. Those drivers still pay a modest fee to the company for the use of the company color scheme painted on the car as well as access to the dispatcher.
An Uber driver, by comparison is responsible for all costs and pays Uber a commission for access to the "dispatch" system, which is fully automated by computer and accessed only through a smart phone.
If I had absolute power I would merge all the taxi companies into Uber, deal with the city authorities in a non adversarial manner and provide a service that was superior to the original taxi cab services and paid the drivers better than the current Uber model does.
However, in order to do that, they would have to create a better incentive for drivers to stay out all night long, perhaps by accepting a much lower commission from drivers between the hours of 3AM and 6AM in order to keep cars on the road.
The prices as they are today should probably rise by 50%-75% in order to be fair to the drivers as well as all the investors waiting to recoup the money they gave Uber to start up.
That is a pretty comprehensive plan to fix the current system. I'd vote for you as a CEO if this were a democracy.
There are multiple components here:
- "If Uber raises its rates, all the consumers will go to Lyft" - I feel like this is a problem with the leveraged economy. These start-ups are so used to working at a loss, that they don't even try to make profits or keep loses minimized. I feel like there is a slightly breakdown of capitalism here. Success company should be the company with good business and revenue model. However, every company seems to only be fighting for marketshare, and that's it. Is the system broken or is this just good firece competition? I don't know.
- "Very good reasons for the price of a taxi ride." - I can't agree more with this. Taxis rates were set very carefully through a democratic process and collaboration between government officials, economists, taxi companies and drivers. I was involved in when Pittsburgh was setting its rates several years ago, and i was impressed as to how much thought and discussion occured to justify the rates.
- Merging the taxi companies into Uber. I am surprised that Uber never took this approach to begin with. They had an opportunity to take over the entire industy with their technology. All they had to do was to share their technology and become the platform to which every taxi company would operate under. They instead took the selfish take-over route, where they went head-on, and tried to own the industry.
Some people argue that taxi companies wouldn't have played the game and that they would have slow down the growth of Uber. However, Grab, Ola, Didi, 99 and Meru are all doing great jobs at merging with local taxi companies. Sure, there are hiccups, disputes, and people clashing, but as a result, they have grown quickly and established roots in massive markets. Uber? not so much.
So what's next? Will there be an implosion with where the fare stands today? Will there be a reckoning day? ...or will Autonomous Vehicles save the day by eliminating the driver pay? Will the consumers take the blunt by paying more tips? Will Didi and Ola take over the North American market by merging taxi companies (including Flywheel and Cubr) and bring down Uber/Lyft?
What an exciting time to be alive.
On your point about merging taxi companies with Uber... I keep hearing that that'll naturally happen anyways after taxi companies have all failed in the United States. There's an office pool going here whether ten years from now where there is no distinction between taxis and ubers, we'd still be calling it "Ubers" or if we'd be calling them al "ubers."
I said U ber but majority said the word "taxis" would go away. see, I don't believe that.
I would change the business model to be sustainable WITHOUT waiting for driverless cars - and I would do it ASAP.The current model for both Lyft and Uber depends on drivers who place a low value on their time and underestimate their costs, while placing a high value on the their independence and control.
Most drivers lose more on their car costs than they calculate. For example, the excess miles alone on my 2014 Acura MDX (which qualified for Uber SELECT, Uber SUV, Lyft Lux, and Lyft Lux SUV) lowered the value of the vehicle by over $3,500 in only 15 months according to NADA. And that's on top of the $11,000 normal depreciation. That's $233 / month for the excess mileage and $733 / month for the normal depreciation. Those costs were invisible to me the entire time I was driving that car.
Commercial insurance (required back then to do the $3.75 / mile SUV rides for Uber) was also $400 / month, and insurance on the car loan added another $88 / month, so fixed costs alone were well over $1,400. The variable costs I tracked, like gas, tires, oil, etc. added even more, so even getting rides that paid well, it was tough to even break even doing Uber or Lyft rides alone. And in the nicer car, I was losing money on every ride less than $10 if I did UberX or Lyft rides. I quickly quit doing that unless there was a surge.Similar analysis of driving my Prius revealed that the grand total of my net, after-cost earnings over 4 months to be about $6 / hour even though I had originally thought I was making almost $14 / hour after incentives. Yes - factoring in costs, I made less than minimum wage.So in essence, Uber and Lyft were exploiting my ignorance of what my true costs were going to be. That's why I say that the business models of both companies are unsustainable. Both companies are betting on driverless vehicles rescuing them from the low fare prices they're charging riders - but I don't think they can keep finding new drivers to replace their former drivers (like me) forever.
There will be a day of reckoning, and if I were CEO, I'd be worried that it might come sooner than later and before autonomous vehicles arrive. So that would be my top priority.
Uber has a very selective mouth for sharing info.
So are you proposing changing the business model as you say or are you basically saying raise the price so drivers start making some money?
There's that mention of minimum wage again. I'm too afraid to do the math. I think I'm doing ok so far but then again I use a new car which makes me wonder I will get dinged on th depreciation the hardest.
I think this is a thought provoking question, and I could write a whole article on it. As drivers, we like to talk about how much we would change at Uber. However, that perspective would probably shift considerably once we were in the CEO’s shoes and facing an IPO for a company like Uber (with $220 million + on the table for myself).
If I had absolute power as Uber’s CEO I would immediately increase prices and rate cards between 33% – 50% and limit the number of drivers entering the platform. I would focus on making the service better by having drivers who are better trained, know the streets, with nicer cars, and stronger background checks. I’d also consider pushing or requiring new drivers (for POOL and UberX) to have hybrid/electric cars so their operations costs are realistic enough to make a living on the platform.
A lot of this would be tackling the ops costs of our drivers. No longer accepting idiots who try to do UberX or UberPOOL with a Mercedes C300 and then complain about the costs to drive! Higher pay and lower costs result in an actual profitable business. From there, I work to expand the business from a healthier footing.
This would probably be very unpopular with investors and affect the valuation of the company in a negative way, since this strategy ultimately pulls back from the goal of making transportation “flow like water” to everybody and it hurts the network effects of having an almost unlimited supply of cars and drivers on the platform.
I would combat that though with a heavy focus on Jump, a dockless pedal-assisted bikeshare company that Uber recently acquired. These bikes (and similar products) would be a the future in making transportation and mobility accessible to everyone. In the long term, the bikes would likely be a lot cheaper than drivers and offer a higher profit margin by taking the driver and their expensive car out of the equation. As a driver myself, I would be glad to pass off these short-distance, minimum fare rides to the bikes. I would also continue investing heavily in autonomous vehicles because that’s just the future.
That’s pretty simple to say online. I guess that’s why I’m not the CEO of anything
I will do anything for $200M
The pay....it seems people at the top get all the benefits while the company's driving force get the worst treatment and the worse pay. You can't have a transportation company without drivers. So I would reverse the pay or even out the playing field so everyone can be happy. Give drivers benefits like free rides one free tank of gas a month, create an uber shop that performs maintenance to all drivers for bottom dollar prices. Have them easily earn vacation with pay time. Make it worth their while. Fulltime drivers can't take a vacation because we are worki ng to pay bills. Do you know how stressfull that is. I would make it worth a drivers while...while being a driver.
Top gets the pay. Isn't that how every company pretty much works? People who are cooking the food, making the cars, coding the software all get paid very little, while the CEOs of the world get a lot of money. We also have to remember that Uber isn't making any money, as they operate at a loss. So the company isn't even making the money, and that's probably why they feel justified to pay the drivers too little.
but I agree with you. Rideshares is just a commodity. It's the drivers and their cars are the ASSET and create REVENUE. (This reminds me of a consulting company where the company is nothing but a shell.) So without drivers there'd be nothing. Again, it's a commodity. If all drivers got up and decided to move over to another company with a separate software, they can. In a single day. Leaving Uber in the dust.
Uber should just be a software platform that connects people P2P-style. Just let it be a software that people can download for a few bucks. Like Napster and Torrents. True Peer-to-Peer. Is that too much to ask?
Well, these software and apps already exist. Local markets and neighborhoods are starting to embrace them. Like parents with kids, etc. I think that's a great idea, but they don't seen to be taking traction quickly, without the national backbone and issue solving.
There are bigger things at works here, things that are critical. There has to be insurance, logistics, liability, marketing, recruiting, etc.
Don't get me wrong. I want this to work. and eventually, perhaps we will go in that direction.
Think Napster or Torrents.
Easy. Raise the rates! Back to the levels of regular taxis.
There is no way in hell Lyft would raise their rates to match. They would destroy Uber.
Lyft too is hemorrhaging money right now. The current price is not sustainable and it'll never make these companies profitable.
They'd us be happy to raise the price to ease the strain on their checkbook and extend their runway
But they are both just waiting for the other to crack. Once they do, they just have to hold on a little longer to drive the sword all the way in... If Uber caves first, Lyft will keep their prices low until Uber is out of business.
Of course, Uber wouldn't let that happen. Thus they will not raise their rates. Sorry y'all.
That, or Didi or Ola would make their move. Uber would die.
Brilliant. It will fix so many problems it isn't even funny.
Allow specific driver requests. If I feel safe with a certain driver, why cant I request them? There are too many creepy drivers out there!
Yeah, they do a variation of this, sort of, where if you give a driver 1 or 2 stars, that driver will be blocked.
I can't see why they can't just make the opposite functionality. Specifying for those 5-star drivers you've been with before.
Then again, you could simply just get the # of the driver you liked.
This is a cool idea. They could show a list of drivers that you've used (and rated highly) in the past that are nearby and available. You could just choose whichever one you want. Maybe you could mark favorites too.
Stop trying to build a self driving car! They need to get over this one...
Yes. As a CEO, I will stop being what we are not. Stop being a technology company.
In fact, do you know what we are? A big ass taxi company.
Getting whipped by Google anyways. Why bother. They should be spending their funds on something useful like fending off Ola and Didi. No play time left against Lyft. the reality will come crashing down.
Run a training program for new drivers and show compels and offer retraining
Yeah, I appreciate Uber's attempt to make it easier and lowering the bar of entry into driving, but the complete lack of training is a bit freaky. Sure, their claim is that "it's so easy anyone can do it" but I remember when I got my Uber approval, I felt very lost. ...like, "wha... that's it? Should I get some kind of training? reading material? I just go out there? I got a million questions."
I have to admit. The first ride I gave was to my wife. Dead serious. I made her get the phone out, I got online, and had her request one, which I quickly accepted. The funny thing? She was busy with the kids, so she didn't even come on the ride. I just drove "her" (or her cell phone to be more precise) to a nearby convenience store. LOL
Stop being a bunch of douchebags. Diversify, hire women, start letting creative juices flying through the workforce, create a sense of community, etc. etc.
Stop with the old boy's club. Stop with the shady practices.
Increase mileage rates. It'll serve everyone good and it'll end up saving the industry.
Improve GPS quality, please. Why not make it work as well as Google Maps or Wave and consdider traffic.
Yes, why does their GPS suck so much?
Great question, and there are great answers out there. here's mine:
Change surge pricing so it is based on where the rider is going (i.e destinatino) rather than where the rider already is. The passenger should be responsible for taking drivers out to remote areas far away from the actions.
This solves the dead leg problem. Drivers shouldn't have to driver super far away. If he is taken to a remote area, why should they be punished.
WOAH WOAH WOAH. Hells no. This will single out people who live far away or in remote areas. Why should they be penalized? If I live in the suburbs, I will constantly be hit with this crappy surge pricing of yours. I am already paying higher fees for the distance driven. Why should I pay even more?
What did it cost you before ride share was available? Did you use a taxi, public transportation or drive yourself?
@FitBit, yeah, it isn't about fair, right? It costs drivers to provide service to those who are in remote areas, so they should be paid more. I mean AT LEAST even to cover for expenses, like driving to pick them up.
People choose to live in remote locations. That's their choice and that's the cost they decide to incur. Simple.
I mean, they already drive themselves home and use more gas.
Fit wants the subsidized government-depending left communist approach.
Are you saying the passenger pays more (i.e. surge) when they are going to busier areas? or when they are going to remote areas?
I assume you mean to remote areas. so if you live outside of town, they'd have to pay more. Umm, not sure if that works.
Create dress code for the drivers. It doesn't have to be overly nice, but maybe maintain a certain level of standards?
and maybe hygiene
I think they have enough to worry about; let's just let them be. They also drive ~10 hours straight. Perhaps we want them to be comfortable.
Everyone here is saying "raise the rates. pay drivers more". Ignoring the fact that Lyft would swoop in and eat Uber's lunch.
Guys there is a price war going on. And drivers are the casualties.
The problem is that drivers pay is based on the fare. It should just be an hourly rate. What would happen if they did that?
* No one would drive for Lyft anymore -- or else Lyft would have to follow suit
* Uber and Lyft would have to raise prices to stay afloat
* Service would be better. Happier drivers with better maintained cars. More competition for driving jobs means more qualified drivers.
* Riders would ride less, the huge traffic problem rideshares are creating would get better
* Uber and Lyft would make less money. <---- oh dam, there's the problem.
Bottom line is Uber and Lyft are greedy and are making their money off of the backs of the drivers. Seeing as they are not even profitable, I can't see who is winning right now.
Stop with the games. Just pay the drivers for all miles and minutes driven. Long pickup fees? Why so many rules?
Let's be real here. The moment a person requests for a driver, the car goes on a clock. It's been "hired." The users can figure out whether they want to pay or not.
Drivers should be paid for the time they are hired. They do this with limousines and stuff. and it will simplify so much from the rivers' perspective. and they wouldn't have to take risks on how much they drive for pickups, and cancellations, etc
you sound like a crazy person.
Woah. but this gives drivers the incentive to go slow at picking people up. Maybe take some wrong turns, attempt to have trouble finding the passenger, etc.
I'd start communicating better about what kind of rules are in place.
For example, I have no idea how the long pickup fees work yet. Do I get paid or not? How long do I have to drive for that to kick in? It seems awfully random, and I don't even know if I am entitled to them or not. (until I actually got paid on it)
Also, the clean up fees, the handling of disputes and clean-up fees... Aren't the rules set in place? Why so hard?
Uber rolls out rules and new fees in the most random way. They do a slow phased release, where they target and roll out features to specific cities, certain slice of drivers, demographics, etc. This is why they can't really communicate effectively.
Yep, this is why you find out about it on blog sites and randomly seeing something new on your statements. LOL.
Yeah, they are absolutely awful. Do they make rules differently from city to city? Why are they so unsure about what they do? I appreciate the recenet attempt for 180 days to goodness (orwhatever), but I feel like I still learn everything from sites like these.
Give more incentives to higher rated and experienced drivers more. and by incentive, a higher rate.
This will keep the verteran and quality drivers engaged and working harder. There'd be more incentive to have higher ratings as well.
This will also increase retention and not let drivers keep going to new rideshare companies. I think it's a no brainer.
I think Uber entertained this idea in the past. However, they deemed it too difficult to implement. Imagine the complexity in the ordering process? How does a pax request a higher rated drivers and pay/offer more money? What if they aren't available? Do they have to specifically have to ask for cheaper and worse drivers if they wanted a barain?
would the higher cost be passed onto the passengers or does Uber pay the increased fare?
I would drop the star system and replace with acceptable and unacceptable. Then I will add a 15 % surcharge that goes directly to the driver which would be technically a tip . If a passenger rated said driver a unacceptable rating then they may explain why and then redeem their 15% bit also having the driver respond to the rating.The rates should in line with local yellow cab companies in which people can make their own choices on the type of car they perfer . Either you give value or you give quality because you cannot give both as you can see by all the problems that both sides of the fence has encounted.
Don't you think so many people would just click "unacceptable" because they are tight wads? I wouldn't want this to affect my ability to drive for Uber - people clicking unacceptable to save 15%.
I like simplifying the star system, I just wouldn't tie it to money.
If you give a driver a unacceptable rating you would have to explain why AND have the driver respond to the complaint. If the passenger lied then there should be a penalty in the form of money so that he or she will think twice .
No more douchebags. We'll do a Travis check at the door, every employee.
Impossible to do in tech, everyone is a douchebag.
Stop trying to expand everywhere!! Focus on fixing issues in the US first. Admit defeat in certain nations.
I think they are doing this to some extent. They are not trying to compete with Didi anymore.
Time for Uber to thinking about defending their own turf. USA.
They are coomiiiiiiiing.
The stupid gimmicks. Just give me a higher commission and stop trying to play game with my money.
Stop investing in weird technologies like UberAirplanes and Auto Cars, etc. That is OUR money that you are using. Why not go use some bay area billionaire's money to do that? You are stealing money out of our pockets, and building out these crappy tehnologies that cannot even be trusted. (and have no way of knowing if they will work.)
Well, they are using investor money right now. heavily leveraged. Remembe the $70B valuation bit?
but I do see your point. I guess taht is our money if they are super underpaying us.
Easy. LOWER THE RATES. Lyft would not be able to keep up. Put the final nail in the Lyft coffin. Game, set match. Buh bye.
If I was the CEO of either Uber or Lyft or any other ride share company the 1st thing I would do is increase the rates for every car level in the company's menu. I would also focus in on better customer service for the passengers as well as drivers.
The price war game between the 2 major companies should be over. Neither one of them will be able to realize their dreams by participating in bottom fishing. The mindset is fairly typical of most technology companies make a lot of noise lose money for 6 to 10 years go public Game over. Lower rates is a badd idea. Competition should breed better outcome for everyone drivers and passengers problem is both companies are chickenshit and trying to force each other out of the business. They can CO exist like taxi companies have CO existed forever in cities all over the world. But these guys don't get it yet. The root of the problem is simple they are truly technology companies they're not in the transportation business with the right spirit of providing good point to point transportation for the passengers and the ability for the drivers to make a decent living. They see it as how to make a better app and more money for themselves and to the soon to be pubic stockholders. What should happen and I hope that it's in the very near future is both of these companies would have the balls to raise the dam rates. Stop being concern about the bottom feeders the cheapskates is looking for a free ride. Provide a system that gives safe rides at a fair price should be the focus. However they don't see that as an option right now they are trying to tread water to get to the point when they can eliminate drivers altogether. Keep in mind they see themselves as a technology company 1st period. Developing new technology to eliminate the way the transportation system works to get people from point A to point B. The ripple from this affects a lot of other companies and industries in a negative way. I recently read an article about how the parking lot company's are losing money because people are not driving to go to bars and restaurants and entertainment events the way they used to. Valet parking has also been impacted. I would guess the alcohol Industry is doing quite well. The taxi cab companies are feeling the impact but at the same time ride share companies have picked up the low life scum bag bottom fishers as customers because of cheap rates.
I'm a driver based out of Los Angeles I drive a 2018 luxury SUV. I never do pools I will only do an UberX or Lyft If there is a 2.0 Surge for higher in that location. The rates for Uber XL and Lyft XL are also too low.
Stop subsidizing every ride and actually charge money that it costs to provide the service. In other words, raise the price. What are you thinking? Is this some predatory approach to squeeze the other rideshares and those poor taxi companies?