Will Uber Go Under?

Another Uber Driver

Well-Known Member
Moderator
Uber, the huge taxi service, is undoubtedly still reeling from its defeat in China. After investing $2 billion to get a foothold in the Chinese market, Uber sold out to its competitor, Didi Chuxing, and agreed to be a junior partner in China.

While this is a dramatic story that made headlines across the country, a less covered story could have far more impact on Uber’s future. This is the story of Uber’s departure from Austin, Texas.

Uber, along with Lyft, stopped operating in Austin in early May after the city’s voters endorsed a requirement that drivers for these services had to be fingerprinted and undergo background checks. The companies complained that the requirement placed an onerous burden on them and instead said that they would just stop operating in the city.


Uber, the huge taxi service, is undoubtedly still reeling from its defeat in China. After investing $2 billion to get a foothold in the Chinese market, Uber sold out to its competitor, Didi Chuxing, and agreed to be a junior partner in China.

While this is a dramatic story that made headlines across the country, a less covered story could have far more impact on Uber’s future. This is the story of Uber’s departure from Austin, Texas.

Uber, along with Lyft, stopped operating in Austin in early May after the city’s voters endorsed a requirement that drivers for these services had to be fingerprinted and undergo background checks. The companies complained that the requirement placed an onerous burden on them and instead said that they would just stop operating in the city.

Advertisement

As a practical matter, the real issue almost certainly was not the difficulty of fingerprinting. After all, taxi companies across the country have complied with similar requirements for decades and it is unlikely that the management of these old-styled cab companies are much more competent than Uber’s management.

Rather, the issue was likely that Uber is worried about its drivers being labeled as employees. Uber claims that its drivers are independent contractors, not employees. As independent contractors, Uber is not responsible for paying Social Security taxes, nor is it liable for workers’ compensation for drivers who get hurt in traffic accidents. It also doesn’t have to withhold income taxes. And, independent contractors don’t have the right to unionize.

Uber has been involved in several lawsuits over the classification of drivers as independent contractors. It is worried that background checks and fingerprinting will be factors that could tip the balance from independent contractor to employee. Therefore Uber decided it was best just to leave Austin.

The immediate impact of Uber’s departure was to take away jobs from thousands of drivers. It also left Austin without a transportation service that many residents had come to depend upon. However this situation did not last long. Within a month six new services were filling the void, apparently they have the ability to fingerprint drivers.

This raises the issue of whether Uber will really be able to monopolize the taxi industry, or at least capture a very large share. The experience in Austin indicates that it may be very difficult to maintain a monopoly or near monopoly in the taxi industry. What Uber seems to be counting on is a mix of regulatory uncertainty and political power to give it an advantage over competitors. (It hired on David Plouffe, President Obama’s top political strategist, as an adviser.)

The belief that Uber will be able to obtain a near monopoly explains it $66 billion market capitalization. Such a price would not make sense for even a very large actor in the traditional taxi industry.

While Uber’s political connections probably protect it from any anti-trust actions coming out of the Obama administration, Austin’s experience suggests a very simple way to rein in the company. Other cities could impose the same reasonable requirement as Austin; they could require that Uber and other taxi companies do background checks and fingerprint their drivers. If Uber follows the Austin precedent, then it may have to shut down in many other cities in the not too distant future. This would open up these markets to new competition, just as was the case in Austin.

This will likely be a very good economic development strategy for cities that go this route. Uber has been willing to lower fares to drive out competition, even if this has meant losing money. However the end goal has been to secure a monopoly or near monopoly in the market, which clearly is the basis of its enormous market value. No one pays a huge price for stock in a company that they expect to keep losing money.

By driving Uber out of the market, cities can help to keep their taxi industry competitive. They are also likely to be opening up opportunities for locally based taxi services. This will mean that instead of sending profits out to the billionaires of Silicon Valley, they are more likely to be generating income for local entrepreneurs. And, they are more likely to have taxi companies that will seek to work with regulators rather than fighting and/or ignoring them.

Who knows, if this trend catches on it may deflate Uber’s market cap, helping to rebuild the middle class in the Bay area. And if a deflated Uber brings the stock price of some other high-flying tech companies down to earth, it could even help the cause of affordable housing in San Francisco. This is clearly a win-win all around.

www.huffingtonpost.com/dean-baker/will-uber-go-unter_b_11396046.html
 
Last edited by a moderator:

drexl_s

Well-Known Member
How many quarters did amazon have a profit? One? I'm not worried about uber, and from reading all the posts on how much uber is making a killing off the drivers without doing anything...they are secretly rolling in it..
 

SEAL Team 5

Well-Known Member
The beginning of the story almost doesn't make sense. It talks about about fingerprinting and background checks that taxi companies have been performing for decades and how Uber thinks that will help classify their partners as employees. I don't know of one taxi driver/operator that is an employee. And most taxi drivers are driving a company vehicle. If you compare a taxi driver to an Uber driver it seems the taxi driver is much more of an employee then an Uber driver.
 

drexl_s

Well-Known Member
How many $100 million plus lawsuits has Amazon had to deal with?

How many cities/countries banned Amazon from operating?
Doesn't matter as it is part of doing business, question/comment was how long can they operate with a loss, and I said amazon had only one quarter that was not negative. And they are still in business...
 

Taxi Driver in Arizona

Well-Known Member
The beginning of the story almost doesn't make sense. It talks about about fingerprinting and background checks that taxi companies have been performing for decades and how Uber thinks that will help classify their partners as employees. I don't know of one taxi driver/operator that is an employee. And most taxi drivers are driving a company vehicle. If you compare a taxi driver to an Uber driver it seems the taxi driver is much more of an employee then an Uber driver.
Perhaps we have all been misclassified for decades.
 

yojimboguy

Well-Known Member
The beginning of the story almost doesn't make sense. It talks about about fingerprinting and background checks that taxi companies have been performing for decades and how Uber thinks that will help classify their partners as employees. I don't know of one taxi driver/operator that is an employee. And most taxi drivers are driving a company vehicle. If you compare a taxi driver to an Uber driver it seems the taxi driver is much more of an employee then an Uber driver.
I agree with this. I can't imagine how fingerprinting drivers will somehow inevitably force Uber to classify them as employees rather than contractors. They already do background checks, the fingerprints are just more facts to check.

But I agree that if Uber is eventually forced to treat drivers as employees for whatever reason, THAT could kill Uber.
 

SEAL Team 5

Well-Known Member
But I agree that if Uber is eventually forced to treat drivers as employees for whatever reason, THAT could kill Uber.
Can you imagine the HR dept at Uber? It would be like the phrase "a monkey f*%#ing a football". And besides abiding by Federal Employment guidelines, each state has additional guidelines. But the cost for Uber to operate like an employer would force Uber to most likely charge more then the traditional cab companies.
 

BurgerTiime

Well-Known Member
Uber doenst play nice to its drivers or users. Passengers don't play nice to drivers and drivers continue to rape passengers. This company will face endless lawsuits that potentially could bring it to its knees.
Add countries and cities continuing to regulate it, or outright ban them further degrades its value.
Then there'a competition. Limo services and taxis have thier own apps that cater to personal needs and wants. Elon Musk, General Motors, Lyft all want market share.
Also the dreaded 1099 employment that Hilary Clinton wants to close; it's a loophole. Uber wants Trump to take presidency no doubt.
 

Ca$h4

Well-Known Member
By not giving proper background checks Uber hires more Drivers who have "sexual assault" and "violent felony" backgrounds who shouldn't be dealing with the public in such close quarters as a car. Uber doesn't care because it would cut down on its potential Driver pool which would negatively impact its bottom line profit, and also, as article states Uber would be vulnerable to be judged a "employer" by the courts, which would destroy Uber's model altogether. More and more cities are realizing the risks to the public of not giving proper background checks to Drivers, so Uber is slowly losing on the Driver background issue. Too bad some people will suffer violent Drivers because Uber don't care.
 

drexl_s

Well-Known Member
I can't believe you can say with a straight face that uber does not care. They do, and by the way, you think your kids are safe because you submit to local police for background check as field trip driver? A friend that works for my local PD has to approve checks with DUIs to allow them to drive as the school set request for only sex offenders. So she drives all field trips. Anyhow, off topic, just that background checks are not perfect, and depending on how deep it goes who knows what they find on anyone, including me.
 

drexl_s

Well-Known Member
Uber doenst play nice to its drivers or users. Passengers don't play nice to drivers and drivers continue to rape passengers. This company will face endless lawsuits that potentially could bring it to its knees.
Add countries and cities continuing to regulate it, or outright ban them further degrades its value.
Then there'a competition. Limo services and taxis have thier own apps that cater to personal needs and wants. Elon Musk, General Motors, Lyft all want market share.
Also the dreaded 1099 employment that Hilary Clinton wants to close; it's a loophole. Uber wants Trump to take presidency no doubt.
Dreaded 1099, what the hell? 1099 is one of the greatest opportunities for people to go and be their own boss. More and more I read on here, it is the drivers here that are screwing up uber, not uber screwing us. Hate uber, freaking delete the app and go on with your life, stop @@@@@ing and trolling around here.
 

Another Uber Driver

Well-Known Member
Moderator
  • Thread Starter Thread Starter
  • #17
you think your kids are safe because you submit to local police for background check as field trip driver? A friend that works for my local PD has to approve checks with DUIs to allow them to drive as the school set request for only sex offenders.


background checks are not perfect, and depending on how deep it goes who knows what they find on anyone, including me.

If the School Board is allowing people with recent DWIs to drive a school bus, that is a matter to be discussed with the School Board. There is little, if any, connexion between TNC and School Board policies. If your argument, here, does anything, it bolsters the arguments of those who do not consider a private background check sufficient.

In the District of Columbia, any applicant for a hack or limousine licence must submit to an FBI fingerprint and background check.



1099 is one of the greatest opportunities for people to go and be their own boss.

More and more I read on here, it is the drivers here that are screwing up uber, not uber screwing us.
You can add to that the 1099's making sure that people do pay taxes. While I am no fan of taxes, if I must pay them, so must everyone else. I own my home, so I must pay my taxes, or the Internal Revenue will take it away from me. I do not have to like paying them, Y-E-T, at least, although depending on who wins in November and what anyone wins, liking it might become a requirement. If I must pay, I fail to understand how anyone who is trying to duck paying expects any sympathy from me.

The drivers do have their part to play in "screwing up uber", to use your words. Those of us who point out that receive all sorts of name-calling, abuse and trolling in response. I will read one driver's posting all of the horrible things that cab drivers allegedly do and criticise them harshly for supposedly doing it. On another topic, I will read the same driver's bragging about doing all of those same things to a passenger who rubbed him the wrong way. The drivers do have their part to play in this, which is something that goes far too unacknowledged on these Boards.

Still, the TNC s are not without their well deserved blame for how they treat the drivers. Add to that some of the other TNC policies and it is obvious that more than a few of the laments that you read on these Boards are not illegitimate.
 

ChortlingCrison

Well-Known Member
If the School Board is allowing people with recent DWIs to drive a school bus, that is a matter to be discussed with the School Board. There is little, if any, connexion between TNC and School Board policies. If your argument, here, does anything, it bolsters the arguments of those who do not consider a private background check sufficient.

In the District of Columbia, any applicant for a hack or limousine licence must submit to an FBI fingerprint and background check.





You can add to that the 1099's making sure that people do pay taxes. While I am no fan of taxes, if I must pay them, so must everyone else. I own my home, so I must pay my taxes, or the Internal Revenue will take it away from me. I do not have to like paying them, Y-E-T, at least, although depending on who wins in November and what anyone wins, liking it might become a requirement. If I must pay, I fail to understand how anyone who is trying to duck paying expects any sympathy from me.

The drivers do have their part to play in "screwing up uber", to use your words. Those of us who point out that receive all sorts of name-calling, abuse and trolling in response. I will read one driver's posting all of the horrible things that cab drivers allegedly do and criticise them harshly for supposedly doing it. On another topic, I will read the same driver's bragging about doing all of those same things to a passenger who rubbed him the wrong way. The drivers do have their part to play in this, which is something that goes far too unacknowledged on these Boards.

Still, the TNC s are not without their well deserved blame for how they treat the drivers. Add to that some of the other TNC policies and it is obvious that more than a few of the laments that you read on these Boards are not illegitimate.
I think "the uber school bus" has a nice ring to it.
 

BurgerTiime

Well-Known Member
I can't believe you can say with a straight face that uber does not care. They do, and by the way, you think your kids are safe because you submit to local police for background check as field trip driver? A friend that works for my local PD has to approve checks with DUIs to allow them to drive as the school set request for only sex offenders. So she drives all field trips. Anyhow, off topic, just that background checks are not perfect, and depending on how deep it goes who knows what they find on anyone, including me.
Yeah they care sooooo much they want to "get rid of the dude in the car". Uber's long term goal is to entirely get rid of you! Thats how much they care about you, replace you with with a car that has no driver. Get a clue.
 

drexl_s

Well-Known Member
Yeah they care sooooo much they want to "get rid of the dude in the car". Uber's long term goal is to entirely get rid of you! Thats how much they care about you, replace you with with a car that has no driver. Get a clue.
You are so funny, you think that investing in driverless cars will take the driver out of the equation. I think you need a reality check. Not in our lifetime. Look at solar, everyone was hyped about solar in 1980s, and just recently, and even now, still super low acceptence. And here, you are talking about computers driving passengers around? And out of nowhere, these cars will appear, no, you will be buying the car and leasing it back to uber when you are not using it. So we got a very long ways to go. Uber will always need drivers, why do trains need engineers?
 
Top