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Uber's long term business model...is to add MANYmore drivers...until

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9K views 71 replies 28 participants last post by  20yearsdriving 
#1 ·
It occurs to me that the individual administrative costs to UBER of on-boarding a driver is minimal. It is basically done exclusively via email. Sure, you have some administrative staff, office rental & related expenses, lawyers, IT geeks and marketing types. However, the more drivers that are "on-boarded", the cheaper the cost to UBER on an incremental per driver basis. Therefore, the more drivers that are on-boarded...the cheaper the associated costs are for UBER per driver. Even the background checks are bulk-rate contracts. As far as "HARD" costs per driver goes, there is only the cost of the phone, which is passed on to the driver (I will bet that Uber is actually making money on the phone as well, on a per unit bulk cost basis). Insurance is no longer a serious cost factor because of the $1 "safe rider" fee, which is a pass-through revenue source (per ride) to UBER.

All that said, it is in UBER's interest to hire as many drivers as possible....1 on every street corner, if possible. THINK ABOUT IT.....driver over-saturation BENEFITS UBER's top-line revenue growth (without adding any significant associate -per driver- expense). Driver over-saturation ALSO BENEFITS the RIDER for obvious reasons. Driver income plays NO PART in this equation and is IN FACT, the expendable component in UBER's "end game".

Soon, there will come a point where so many individuals will have either an UBER phone or a driver app installed on their own phone, that the UBER concept really WILL be a ride share. Anyone headed to the local mall to go shopping will simply turn on their app to see if they can "get a ping" to "share the gas cost.

The days are fast approaching where UBER will no longer be marketed as a full-time/part-time way to make "$40hr or $1500wk"....but as a convenient method to defray travel expenses.

So....go ahead....by a car for your full-time $70,000 a year UBER driver gig. Better yet.....lease one through UBER's accomplice (sorry) "partner" Santander.

It does not take an MBA to see that more drivers ='s more net profit for Uber. As a matter of fact, Uber OWES IT to their future shareholders to aggressively push hard to increase the driver pool in ALL markets.
 
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#4 ·
Thanks. My analysis is a bit "inside baseball", but there are a lot of folks that are expecting to make a full time living (indefinitely) off this gig. Some of them are going into debt by buying/leasing new cars specifically for UBERing. I hope that they will adjust their expectations in order to fit the reality of the situation.
 
#11 ·
Your analysis is spot on. What everyone needs to realize this model is designed as a "ride share" and not a chauffer or even taxi service. Like you said their goal is to have as many "on-line" vehicles on the road to keep the system moving.
LOL ... I can see it now.

I step out of my front door and have to push through 3 or 4 uber drivers, each trying to be the one standing closest to me, just in case I order an uber.

All this just in an attempt to walk to my own car and work.

I think this is the point at which Uber will be happy!
 
#12 ·
Uber Lux Bod,

You must be one of the few people to have missed UBER's grand income promises to X drivers.

Perhaps I missed the small print somewhere, and Uber DID warn X drivers that the promised amounts were temporary and simply not sustainable as they continued to double fleet sizes without requisite market growth.

Could you please show me these Uber caveats?
Caveat Subscriptor (let the signer beware). You knew coming in you were an independent contractor. Were any of those things guaranteed to you in contract?

Yeah, I didn't think so. You are free to leave at any time.

And I'm not saying they aren't treating us like crap, they most definitely are, but that is how employment works. Stop working for them, that's the only way to have any effect.
 
#16 ·
hi Farlance

Thanks for your input. I stopped sending in Reports to my local office where I witnessed drivers with Uber Black phones driving unlicensed vehicles. I've been right beside questionable drivers holding a Uber iPhone (no tie, no Chauffeur's uniform) a disgrace to the industry and pinged them as a rider. And guess what? The little picture wasn't him, and license plate didn't correlate.

Do you really think ALL drivers accepting jobs off the UBER phones are the same person as was onboarded? That would explain some "jaw-dropping" weekly returns. 2 or 3 individuals sharing one UBER account wouldn't be difficult. Does UBER track safe working hours? (Easy way to deduce super human driving hours)
No - because
a.) THEY DONT CARE
b.) LEARNING THE TRUTH AND IMPOSING RULES WOULD HURT THEIR BOTTOM LINE

How can UBER take any moral high ground when imposing rules?

Because UBER'S business model is predicated on breaking existing legislated laws, this gives the green light to anyone who has no real stake in the industry
 
#19 ·
Sorry.

But you only have yourself to blame if you thought $70k a year driving for a rideshare was going to be sustainable long term.
So you mean to say that Uber has no blame in this, while it was and still putting ads with $1200/wk even in marginal markets, statements like "fully utilised UberX car books $100000/yr", " SF UberX drivers make $74000/yr" and on and on
 
#23 ·
Uber Black is different then UberX. Being a newbie can sombody explain the difference? I can only assume Black means you have a Limo and not a regular car and I can see why if a rider asks for a Black they expect much higher service. Makes sense. One thing I do see is the website does not explain how Uber actually works for the different classes. That again might be my ignorance.
 
#31 ·
It is confusing as to the different classes of drivers and Uber does not make or take the time on the website to let all riders know what to expect with each class makes it even more a snafu! The phone app when installed give no information as to any classes you pick (if your in a city that has different classes). All I see on my phone app as a rider is the different prices, how many riders and how long each different class will take to give me a ride. As a rider looking to hook up a few friends to go Black one would think it is a Limo ride with all the benefits of the same. What is Uber Black?

Here is what the site says about the different classes!

X- Everyday cars for everyday use.
Better, faster, and cheaper than a taxi.

Taxi- No whistling, no waving, no cash needed.

Black- Your own private driver, on demand.
Expect pickup in a high-end sedan within minutes.

SUV- For those times when you need a bit more space.
Seats up to six people in style.

Lux- The finest cars with prices to match.

What does that really mean to a rider?

Sure leaves allot of space open to as what your ordering as a rider and also sets up drivers. It's not a good model.
 
#33 · (Edited)
Uber's long term plan is to have driver less cars.

Took this kid tonight from India, he says that in India, the cars are subsidized by Uber. Not sure how much of it was BS, as he also claims to have met Travis. He says everyone drives Rolls Royce and Bentley there and you pay .50 a mile. He says you can't buy gas for that price. Interesting since India is on the metric system. Oh well.

He also said Travis doesn't care about anyone, everyone is replaceable and if you don't like the way things are then leave.

Like I said not sure how much is true and how much is adolescence embelishment.

He asked about tipping. I said I normally get tipped on the short rides. The ones that are about .5 mile. The people know it's not allot of money and they feel bad when the driver has to wait and they know there isn't allot of money in it, so I normally get tipped a couple of bucks on a short ride. He says, he always takes Uber on short rides and he never tips. Probably explains his 4.2 rider rating, just saying.

I told him about the litigation in court how Uber misrepresented the tipping to the customers and he says, Uber doesn't care, they'll just buy there way out of it.

I think I hit a nerve on the tipping subject, oh well, that why he's a 4.2 and I'm a 4.92.

I should've known when it took him over 5 minutes to get to the car and then he says he's late for an appointment.

Well you would be 5 minutes closer had you been at the curb when I showed up.

So I put him in traffic on the 405.

Ain't Karma a *****!!
 
#34 ·
#35 · (Edited)
I don't think the guy really knew what he was talking about! Uber drivers in India are protesting about grievances that mirror drivers grievances over here!

http://m.economictimes.com/news/politics-and-nation/discontent-rises-amongst-uber-drivers-in-india-against-its-global-policies/articleshow/41595154.cms
I really didn't think so. He played himself as some big time internet entrepreneur. Said he had a really important meeting he was late for.

the meeting was at the veggie grill in Westwood. Its like a vegetarian McDonalds. The shit we put up with. Haha!!!

Like I said he was a 4.2 for a reason.

He said he always does short trips and his feedback shows it.

I really think he was put back when I was talking about tipping.

I still gave him a 5, but looking back on it now, and seeing the bull shit he was slinging at me, I should've gave him a 3.
 
#51 ·
This was my comment in the article:

Uber drivers have endured 3 Rate Cuts in less than a year. Their commission has gone up from the discounted 5% to 20%. Then Uber started charging the drivers $10/week for the locked down UberPhone, with the UberDriver App as its sole functionality! This despite that this charge was never was mentioned when these drivers signed up, and is not spelled out in the Partnership Agreement between Uber and the Drivers.
The first two rate cuts were intended to undercut taxis. The latest Rate Cut of upto 25% is intended to undercut Lyft. This rate cut, along with massive poaching of Lyft drivers, and forcing UberBLACK/SUV drivers to accept UberX fares at UberX prices is part of the Uber strategy to KILL LYFT!
It's perfectly okay for TravisK to want to eradicate any competition, but he Doesn't get to do it on the backs of hard-working and good Drivers who've invested their Time & Capital (cars) in this venture! These full-time drivers are now in fact making poverty level wages, while Uber continues to lure in new drivers with ads touting bloated and borderline fraudulent earnings claims!
https://uberpeople.net/threads/uber-vs-lyft-whats-really-going-on.2948/
https://uberpeople.net/threads/forced-to-accept-uberx-on-blackcar.2876/
https://uberpeople.net/threads/hey-uber-continue-to-closely-monitor-my-earnings.2345/
 
#52 ·
If you like driving, you like people, you wish to make money, it is a great life.

this was my normal taxi hours in the inland empire:

Fri, Sat (30 hours): Fri 4am to Sat 10am - with a few hours sleep when you can get it.
Sat, Sun (28 hours): Sat 6pm to sun 10am
Sun pm - Off
Mon, (14 hours): Mon 3am to 11am and Mon 6pm to Mon midnight.
Tue - Off (option to work if I had an account or LAX run 4am to noon)
Wed, Thu (22 hours): Wed 3am to 11am and Wed 8pm to Thu noon
Thu pm - Off

thats 96 hours with tue off, if i worked 8 hours on tue i would hit 100 hours easy, it's not hard to do.
You say this as if we should all accept 100 hrs./wk as both necessary and desirable. Sorry, but that's not the case. I'm striving to make the most money in the least amount of time. Isn't that the goal?
 
#55 · (Edited)
It's actually 90 hours, I edit my post.

60 to 72 hours is needed for a taxi driver to make money.
 
#56 ·
Point taken. You're right I think. But define "make money". $30k net? 50k? 70k? 72 hours a week x 50 weeks= 3600 hours/yr. Divide by 50k =$14/hr.(approximately)

I'm looking for more money for my time. But to each their own. There are ways to make 100k+ in the transportation business, but probably not sitting behind the wheel.

Though I do know a sedan owner/driver making $75k net. Private clients. Scheduled appointments. He has no set hours of course, but logs about 50-60 hours a week. That's more in line with my goals.
 
#58 ·
Gentlemen, I have enjoyed reading your dialogue. Have you stayed logged on for over 12 hours? If yes, did you get locked out?

Also if you know other ways to make more money in driving besides private clients, because I have none, please share. Thanks for your attention.
 
#59 ·
I know I'm a few weeks late to this rodeo, but just have to ask....

Farlance, always good seeing you post. This isn't against you but just a conversation. Don't take it personal but just coming from a skeptic who isn't great with numbers but has taken a few statistics classes.

There are always one or three cases for all extremes. Ever see a "Paid Advertisement" on TV showing the results of a Weight Loss, Acne Product, Real Estate with No Money Down, or Universal Health Product? Rarely if ever do you see references to hard data but only anecdotal references (and, "Your weigh loss may be significantly less").

I made $1000 gross in 4 days out at Coachella Music Festival this year (1st weekend). I therefore know this guy that made $1000 in 4 days driving uberX (week2 not that much and most likely won't do it in 2014). I also trashed my windshield in the Saturday sandstorm while driving Hwy 10 at 2am, but that's besides the point. So am I surprised that you saw a ticket for a driver pulling in $2.5K/week doing uberX in San Diego, not at all. Would I be surprised if the average uberX driver is making this, yes. Would I even be surprised if the Top 10-20% of uberX Drivers Nationwide are making this, yes. And especially if that average driver is in the LA/OC market after taking the 40% Fare cuts in 2014 (that's me).

To really use this $2.5K Gross example (just guessing Gross), was this before or after fare rate cuts? How many hours was this person working? Is this their average over the past 3, 6, 12 months or did it equate to long hours and great surges over a week or a few weeks? Was this for one driver or one car being driven by 2 or more people?

To really reference Income like $2.5K / week, you need to give us more support data. Using current Fares? How many hours driven to attain this total? Again, do I believe you? Absolutely. Am I still skeptical on the whole? Absolutely.

What does the Top 10-20% of uberX Drivers make and how many hours do they average to attain that amount. What does the average uberX driver gross by market (difference markets, different fare rates and # of rides averaged per hour). What % expenses from the Gross Fare should the average Driver expect to incur? I would be interested in more good hard data from Uber (or you). If am wrong, PLEASE PLEASE sit down with me and get into my thick head how to make $130,000 per year driving uberX. I'm serious. I'm always open to how I can improve and make some more money.

Again, references that are anecdotal are...well, just anecdotal.
Like this post SCDave.

Mark Twain says: "There's lies, there's damn lies, and then there's statistics"

In my experience, things that are actually a good deal rarely need much promotion. Word gets around without a lot of help. They are getting a bad reputation, and they don't seem to care about fixing that.

These days I view UBER as strictly second-rate jobs. Good as filler.
 
#60 ·
Man did you hit it right on the head! It took me a minute to figure it out, but I did. After I quit my other job. They'd like it fine if every passenger vehicle world-wide was an Uber car, and people were making $.78 for letting the stoner down the block ride to McDonald's w/ you.
 
#68 ·
This was my comment in the article:

Uber drivers have endured 3 Rate Cuts in less than a year. Their commission has gone up from the discounted 5% to 20%. Then Uber started charging the drivers $10/week for the locked down UberPhone, with the UberDriver App as its sole functionality! This despite that this charge was never was mentioned when these drivers signed up, and is not spelled out in the Partnership Agreement between Uber and the Drivers.
The first two rate cuts were intended to undercut taxis. The latest Rate Cut of upto 25% is intended to undercut Lyft. This rate cut, along with massive poaching of Lyft drivers, and forcing UberBLACK/SUV drivers to accept UberX fares at UberX prices is part of the Uber strategy to KILL LYFT!
It's perfectly okay for TravisK to want to eradicate any competition, but he Doesn't get to do it on the backs of hard-working and good Drivers who've invested their Time & Capital (cars) in this venture! These full-time drivers are now in fact making poverty level wages, while Uber continues to lure in new drivers with ads touting bloated and borderline fraudulent earnings claims!
https://uberpeople.net/threads/uber-vs-lyft-whats-really-going-on.2948/
https://uberpeople.net/threads/forced-to-accept-uberx-on-blackcar.2876/
https://uberpeople.net/threads/hey-uber-continue-to-closely-monitor-my-earnings.2345/
He actually does get to do it on the "backs of hard-working and good Drivers". That's how the world works.

If you don't like it, start your own business. Clean houses. You charge $30/hour, and your cleaning products only take about 5-10% of that.

Put up some flyers, bam, you have a business. Put up more flyers, hire employees, get a website.
 
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