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Quantifying the rate reductions in Perth since Uber startup

Goethite

Active Member
Just for your info guys, I was interested in quantifying how much our Uber incomes have been reduced in the period between Uber Perth startup in October 2014 and today. Apparently there's been two rate 'adjustments' during that time. Did some calcs on a typical morning FIFO run from Woodvale in the northern suburbs to T2 airport, and it works out (assuming my maths skills are on track) that I'd receive 28.5% LESS for the same trip (or about $16 less in cash terms). If I was a new driver post July2016 incurring the cruel 25% commission, it'd be even worse ... down by 33%. Not good ... fuel costs climbing up, but rates received going down, I wonder if and when Uber will address this. [Am grateful to UberDriverAU for posting the rates table.]
 

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UberDriverAU

Well-Known Member
Just for your info guys, I was interested in quantifying how much our Uber incomes have been reduced in the period between Uber Perth startup in October 2014 and today. Apparently there's been two rate 'adjustments' during that time. Did some calcs on a typical morning FIFO run from Woodvale in the northern suburbs to T2 airport, and it works out (assuming my maths skills are on track) that I'd receive 28.5% LESS for the same trip (or about $16 less in cash terms). If I was a new driver post July2016 incurring the cruel 25% commission, it'd be even worse ... down by 33%. Not good ... fuel costs climbing up, but rates received going down, I wonder if and when Uber will address this
When doing a comparison, there is a few things you need to consider:

(1) Headline rates only tell part of the story. Firstly, the inital rates were effectively GST free as the ATO has stated that they won't pursue GST for any trips that occurred prior to the 1st of August 2015. That means you need to covert what you'd earn today into an equivalent basis, ie. remove the Net GST first. If you had worked out that your average Net GST percentage is 6% of fares, then you'd also need to take $3.01 from a $50.13 fare to cover your GST liability. That would bring the amount you keep after Uber's cut and GST down to $37.10, which is 33.86% less compared to the same trip on the initial rates.

(2) In general, lower prices do lead to increased demand. For some products and services this isn't true, but it is true for point-to-point transport. Again, headline rates only tell part of the story here. You are earning less per trip, but your expenses haven't necessarily decreased at all. That means you need to work more to earn the same amount as before. I believe the best basis for comparison is an hourly rate for "Operating Income", which is: Revenue - Expenses - Depreciation - Net GST. Effective income tax rates can and do vary from year to year and between been people, so to fairly compare over time and between people, you need to ignore income tax.

(3) The final thing to consider is inflation. Over time the price of things tends to gradually increase. If you earned $30/hour in the year 2000 you'd be able to buy a lot more compared to what $30/hour would buy you today. So to do a fair comparison over time, you also need to adjust for inflation to take into account the reduced purchasing power of a dollar.

[Am grateful to UberDriverAU for posting the rates table.]
Cheers mate. :smiles:
 

HumungousDill

Well-Known Member
Hi Goethite, looking at it in gross cash terms is only half the story, especially in view of the fact that you probably had to return empty on this particular trip. Dead kms and running costs result in a disproportionately large reduction in net earnings for any given rate reduction. The extra time between trips due to having to run empty will also impact significantly on your net earnings/hour. Its more relevant to consider your net earnings since this is what you will get.

I'm sure you are already well aware of this. It's all part of the grand Uber scam.

They have cut rates in more than 80 cities world wide, as part of their predatory pricing tactics, supposedly as a 'trial', but then later they announce that trips per hour and earnings (gross) for drivers have increased, and rates then either stay the same or go lower again. The fact is the net income for the drivers decreases despite them having to work much harder.

I'll attach a couple of examples later when I get time. Some of the newbies may not be aware of how Uber screws the drivers.

1. Example below is taken from RSDAA site. It shows that despite the driver working 50% harder, his net earnings are lower while Ubers earning increase 22%
 

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whocareaboutPAX

Well-Known Member
I think the most drastic effect on earnings is in the mornings doing airport runs. I use to love waking up at 3AM when I did Uber full time for 3 months because you would pocket so much, even with the dead driving on freeways until you get another ping. The fact is at those times, people need to get to the airport regardless and given Uber v Taxi inconvenience - people caught Uber.

I think you will find, it is too much of a variable to compare $$$ you may have lost due to rate cuts outside of the early mornings because Uber has brought literally thousands of people onto using the platform that would never have caught a taxi. There are so many people now, which use Uber as a subsidy for public transport or as a quick fix if running late to meetings, to the shops, to the train station etc.

Your earnings per $$ may have been larger, but I suspect wait times would also have been longer. Funny enough, wait times is one of the key measures Uber uses in determining when to cut rates.

I'll attach a couple of examples later when I get time. Some of the newbies may not be aware of how Uber screws the drivers.
It isn't of me to encourage people to make a small micro business of Uber, but if drivers do not have the ability to calculate simple math after 2 weeks of driving (no accounting is even necessary) to see what they could or could not potentially earn, then dare I say they deserve to be screwed and should run their small business at very minimal profits. I've lost track of how many Ubers' I've caught where the drivers openly admit they know they earn little, however back home they would earn even less. Heck, I've got a driver now that is only driving so he can send money back to India. The flexibility it gives people, is why people welcome being "screwed". Those who know they get screwed and want to run at minimal margins/profits, find an alternative rather than winging about a model, that works for others.

Overall and if you look at Ubers' long term goal of ridesharing and driverless cars (not that I could ever endorse such automation) it is actually quite a ingenious model. It has diversified the economy, people now have assets they can use on a small time basis to potentially negatively gear, produce small quantities of supplementary income, purchase more expensive cars – dependent on tax, have a car they can convert to cash if they lose a job whilst still providing a very small income.

For those who do Uber full time and feel as if they are being screwed over, I have no sympathy for. Nobody forced anybody to driver Uber. If you want to be a taxi driver, be a taxi driver. If you want to use Uber for its intended purpose, use it for the intended purpose. Those full time drivers who are not feeling as if they are being screwed over – good on them, if $8 an hour satisfies them (like my drivers), good on them.

The only people anybody can legitimately have any sympathy for is taxi drivers. They were screwed by the government but under a promise that a taxi was a taxi. Unfortunately – even then my sympathy doesn’t go very far – because the abundance of drivers where immigrants with little or no respect to their passengers, couldn’t speak English and provided an atrocious service. And before somebody mentions they are becoming Uber drivers, I fully acknowledge that.
 

HumungousDill

Well-Known Member
I think the most drastic effect on earnings is in the mornings doing airport runs. I use to love waking up at 3AM when I did Uber full time for 3 months because you would pocket so much, even with the dead driving on freeways until you get another ping. The fact is at those times, people need to get to the airport regardless and given Uber v Taxi inconvenience - people caught Uber.

I think you will find, it is too much of a variable to compare $$$ you may have lost due to rate cuts outside of the early mornings because Uber has brought literally thousands of people onto using the platform that would never have caught a taxi. There are so many people now, which use Uber as a subsidy for public transport or as a quick fix if running late to meetings, to the shops, to the train station etc.

Your earnings per $$ may have been larger, but I suspect wait times would also have been longer. Funny enough, wait times is one of the key measures Uber uses in determining when to cut rates.



It isn't of me to encourage people to make a small micro business of Uber, but if drivers do not have the ability to calculate simple math after 2 weeks of driving (no accounting is even necessary) to see what they could or could not potentially earn, then dare I say they deserve to be screwed and should run their small business at very minimal profits. I've lost track of how many Ubers' I've caught where the drivers openly admit they know they earn little, however back home they would earn even less. Heck, I've got a driver now that is only driving so he can send money back to India. The flexibility it gives people, is why people welcome being "screwed". Those who know they get screwed and want to run at minimal margins/profits, find an alternative rather than winging about a model, that works for others.

Overall and if you look at Ubers' long term goal of ridesharing and driverless cars (not that I could ever endorse such automation) it is actually quite a ingenious model. It has diversified the economy, people now have assets they can use on a small time basis to potentially negatively gear, produce small quantities of supplementary income, purchase more expensive cars – dependent on tax, have a car they can convert to cash if they lose a job whilst still providing a very small income.

For those who do Uber full time and feel as if they are being screwed over, I have no sympathy for. Nobody forced anybody to driver Uber. If you want to be a taxi driver, be a taxi driver. If you want to use Uber for its intended purpose, use it for the intended purpose. Those full time drivers who are not feeling as if they are being screwed over – good on them, if $8 an hour satisfies them (like my drivers), good on them.

The only people anybody can legitimately have any sympathy for is taxi drivers. They were screwed by the government but under a promise that a taxi was a taxi. Unfortunately – even then my sympathy doesn’t go very far – because the abundance of drivers where immigrants with little or no respect to their passengers, couldn’t speak English and provided an atrocious service. And before somebody mentions they are becoming Uber drivers, I fully acknowledge that.
Being screwed is not about the small amount we earn. Its about Uber pretending and lying. Using gross earnings figures to suck people in, about pretending that our earnings are increasing due to their rate cuts, about making the drivers pay their GST etc etc; but knowing your character you would no doubt consider this to be normal business ethics.
 

whocareaboutPAX

Well-Known Member
Being screwed is not about the small amount we earn. Its about Uber pretending and lying. Using gross earnings figures to suck people in, about pretending that our earnings are increasing due to their rate cuts, about making the drivers pay their GST etc etc; but given own your character you would no doubt consider this to be normal business ethics.
“small amount we earn” – it was NEVER designed to be something to do full time, if you treat Uber as a job – you are a fool, if you treat Uber as a small-business or contract work and fail to do your due diligence prior to driving you are also a fool, notwithstanding a failed entrepreneur.

Everything is about what you earn. Your comments about Ubers’ deception is in regards to earnings.

From a point of view – whilst yes Uber is deceptive, there is equally a strong argument against the contrary. As an entrepreneur, you are expected to complete your due diligence. It isn’t even difficult to find out that earnings of up to $30 an hour can be interpreted in many ways.

In regards to earnings increasing due to rate cuts, there is no definitive answer. Slashing rates allowed Uber to bring into their model thousands of new riders, therefore the immediate effect was less waiting time. Studies like the one you have referenced, show only one model of calculations.

Making drivers pay their GST: I see absolutely nothing unethical about this and as yet have not found any evidence to the contrary. If you purchase a product on Ebay and have it imported, you don’t pay GST (they are looking at reviewing this), if you purchase IT software for your small business online, you will not get an input credit. When you agree to the terms and conditions – it is very clear that the fee you pay Uber is paid to the Netherlands, and last I checked the Netherlands is not Australia.

As for my character, I’ve been in a professional environment for 3 years, I have an obligation to uphold professional ethics and by years’ end I will be bound by accreditation which I could lose if I fail to uphold professional ethics. “Normal business ethics” – just because you add in the words, normal and business, does not mean it makes any sense. I avoid paying tax, like any intelligent person does. Does avoiding tax make me unethical? Nope, it makes me smart because I use the full law to exploit the tax system. If the government didn’t want this, they would remove the red tape and simplify the tax system. I have never evaded paying tax, I have never created artificial transactions, I have never shifted profits to other countries.

Chin up.
 
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HumungousDill

Well-Known Member
As for my character, I’ve been in a professional environment for 3 years, I have an obligation to uphold professional ethics and by years’ end I will be bound by accreditation which I could lose if I fail to uphold professional ethics.
And yet by your own admission you hide in the bushes to collect cancellation fees. Very professional and ethical indeed :rolleyes:. I could cite many other examples but I cant be bothered. I'll leave it to Lui.
 
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whocareaboutPAX

Well-Known Member
And yet by your own admission you hide in the bushes to collect cancellation fees. Very professional and ethical indeed :rolleyes:. I could cite many other examples but I cant be bothered. I'll leave it to Lui.
Nah I'll go with that as being unethical. But if anything, you should be supporting it. Given you think Uber is unethical - I'm treating Uber, the way they treat me? What is so wrong.. your logic, not mine
 
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ex-cabbie

Active Member
These analyses take no account of the fact that the Perth economy has declined precipitously over the past two years and is virtually unrecognizable to that of the boom period around five years ago. Do you really think Uber users would continue to patronize Uber to the same extent if it was still $1.45/Km? Those thirty minute waits between pings would widen to sixty or more and then we'd have the whingers complaining even more than they do now (assuming that's possible). If we had the Perth economy of 2011-12 right now Uber drivers would be making $30 or more per hour after subtracting the Uber fee. If, as many drivers are suggesting, that the rates are too low and riders are price-insensitive then why do they baulk so much at paying surge- prices? Of course, people will tell you that they aren't concerned about price - after all, nobody wants to be thought of as a "tightwad" - but their behaviour suggests otherwise.
 

UberDriverAU

Well-Known Member
As for my character, I’ve been in a professional environment for 3 years, I have an obligation to uphold professional ethics and by years’ end I will be bound by accreditation which I could lose if I fail to uphold professional ethics. “Normal business ethics” – just because you add in the words, normal and business, does not mean it makes any sense. I avoid paying tax, like any intelligent person does. Does avoiding tax make me unethical? Nope, it makes me smart because I use the full law to exploit the tax system. If the government didn’t want this, they would remove the red tape and simplify the tax system. I have never evaded paying tax, I have never created artificial transactions, I have never shifted profits to other countries.
You've stated that you have falsified documents to make it look like you paid more for a vehicle than you really did, so that you can claim a larger tax deduction than you're entitled to. Unless you lied about that, then by your own admission you have committed tax fraud.

These analyses take no account of the fact that the Perth economy has declined precipitously over the past two years and is virtually unrecognizable to that of the boom period around five years ago. Do you really think Uber users would continue to patronize Uber to the same extent if it was still $1.45/Km? Those thirty minute waits between pings would widen to sixty or more and then we'd have the whingers complaining even more than they do now (assuming that's possible). If we had the Perth economy of 2011-12 right now Uber drivers would be making $30 or more per hour after subtracting the Uber fee. If, as many drivers are suggesting, that the rates are too low and riders are price-insensitive then why do they baulk so much at paying surge- prices? Of course, people will tell you that they aren't concerned about price - after all, nobody wants to be thought of as a "tightwad" - but their behaviour suggests otherwise.
Most passengers are price sensitive. In economics lingo, there is elasticity of demand. If they wasn't, we'd get a lot more surge than we do. Some people don't care about surge and will happily pay extra, while others will avoid it like the plague and will wait a long time to avoid it if they have to.
 

Potsy

Well-Known Member
When uber first started here rates were higher but I was sitting around for 60 to 90 minutes between jobs as no one had heard of uber back then.
 

Goethite

Active Member
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These analyses take no account of the fact that the Perth economy has declined precipitously over the past two years and is virtually unrecognizable to that of the boom period around five years ago. Do you really think Uber users would continue to patronize Uber to the same extent if it was still $1.45/Km? Those thirty minute waits between pings would widen to sixty or more and then we'd have the whingers complaining even more than they do now (assuming that's possible). If we had the Perth economy of 2011-12 right now Uber drivers would be making $30 or more per hour after subtracting the Uber fee. If, as many drivers are suggesting, that the rates are too low and riders are price-insensitive then why do they baulk so much at paying surge- prices? Of course, people will tell you that they aren't concerned about price - after all, nobody wants to be thought of as a "tightwad" - but their behaviour suggests otherwise.
hi mate ... you could be right, but I suspect that they'd still be using Uber at $1.45 in ever-increasing measures because
1. it's still cheaper than the $1.75/km the cabbies charge
2. they still love the quickness of the service and the fact you can see the car coming towards you and especially the fact that there's no delay with cash or credit cards at the end of the trip
It's the Surges that would be the killers for customer patronage IMHO (as much as we luv 'em)
 

Potsy

Well-Known Member
hi mate ... you could be right, but I suspect that they'd still be using Uber at $1.45 in ever-increasing measures because
1. it's still cheaper than the $1.75/km the cabbies charge
2. they still love the quickness of the service and the fact you can see the car coming towards you and especially the fact that there's no delay with cash or credit cards at the end of the trip
It's the Surges that would be the killers for customer patronage IMHO (as much as we luv 'em)
What UberDriverAU describes as market elasticity means if Uber reduce the price the pie actually gets bigger as people use the service that would never have used taxis.
 

HumungousDill

Well-Known Member
Do you really think Uber users would continue to patronize Uber to the same extent if it was still $1.45/Km? Those thirty minute waits between pings would widen to sixty or more and then we'd have the whingers complaining even more than they do now (assuming that's possible).
I don't know about $1.45/km, but they were certainly quite happy paying $1.15 per/km, and $1.25 would probably have been quite acceptable to them.
And if they don't want to request me for a $8 minimum fare to take them 300m to the local IGA - great.
 
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ex-cabbie

Active Member
I don't know about $1.45/km, but they were certainly quite happy paying $1.15 per/km, and $1.25 would probably have been quite acceptable to them.
And if they don't want to request me for a $8 minimum fare to take them 300m to the local IGA - great.
So $1.25 would be acceptable but a 1.2 surge at current rates wouldn't? Also, they may have accepted $1.15 18 months ago when there was still a smidgen of life left in the Perth economy but now would they? Drivers are complaining of long waits even at $1.00/Km. But what I can't understand are the accusations that Uber doesn't care about how much we make. As they take a fixed percentage of our earnings then I would have thought they would've wanted us to earn as much as possible. If we all made double our present income from Uber then they would be making twice as much as well. So why would Uber deliberately try to reduce our earnings? What have they to gain from it?

What UberDriverAU describes as market elasticity means if Uber reduce the price the pie actually gets bigger as people use the service that would never have used taxis.
And this is happening regularly - especially as people realize that Über is .a substitute not only for taxis but for public transport and second cars. I really think Uber has only tapped a tiny percentage of its potential market. The number of first-time users I am getting is indicative of this.
 

HumungousDill

Well-Known Member
So $1.25 would be acceptable but a 1.2 surge at current rates wouldn't? Also, they may have accepted $1.15 18 months ago when there was still a smidgen of life left in the Perth economy but now would they? Drivers are complaining of long waits even at $1.00/Km. But what I can't understand are the accusations that Uber doesn't care about how much we make. As they take a fixed percentage of our earnings then I would have thought they would've wanted us to earn as much as possible. If we all made double our present income from Uber then they would be making twice as much as well. So why would Uber deliberately try to reduce our earnings? What have they to gain from it?
Why don't you look at the example I attached, it shows exactly why.
And yes I certainly would prefer $1.25/km or higher. Surge is rarely available, depending on demand outstripping supply, but I certainly wouldn't say no if it occurred on top of $1.25/km:biggrin:
 

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ex-cabbie

Active Member
Why don't you look at the example I attached, it shows exactly why.
And yes I certainly would prefer $1.25/km or higher. Surge is rarely available, depending on demand outstripping supply, but I certainly wouldn't say no if it occurred on top of $1.25/km:biggrin:
Sorry but I still can't comprehend why Uber should want us to earn less when they get a fixed percentage of what we earn. It doesn't make sense.
 
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