At least in Western cities with high nominal minimum labor rates, TNCs like Uber/Lyft appear to be in retreat and may be signaling their permanent withdrawal from this marketplace. Indeed there are many signs this will be the case and that the real big idea will be fully automated Uber taxis, at least in the vision of the tech and financial industries such that this is already within their grasp.
The push back against employment or recognition of drivers as being a part of Uber appear fundamental and baked in the cake. Generally Uber keeps drivers at arm's length, with little contact except for as app and form feedback users. No phone contact with driver's was generally conducted at Uber. A lot makes very clear sense when taken from the perspective that driver's are a nuisance and an avoidable piece of the service supply chain, in the long term thinking of these transportation industry titans.
And yet, even though the TNC model relies on exploiting the unlimited and uncompensated use of driver's private capital assets including all unlimited operational costs, they can't sustain the market volume because of driver attrition at their market price points. All the signs point to TNCs giving up on the driver/rider model at some point in time. But they have validated the operation of a fantastic software experiment that is unparalleled in human history, and can use that knowledge and the data models for 1/2 of the Uber Robo-taxi technology, the selling and dispatching of vehicles for rides.
I started driving UberSelect beginning Sep. 2015 in Austin, TX and believe there are many fundamental aspects of the Uber system and network that all drivers experience, but that have not been publicly discussed or presented to my knowledge. My goal here is to start a discussion and bring to light The Uber System and how it really affects drivers in particular. Since my only driving experience is in Austin, some of these points might be different in different cities. Your feedback and thoughts to my analysis are appreciated!
Here I am assuming that the basic motivation for drivers is to earn money, or actually, make a profit as an 'independent contractor'. Therefore, I will be focused on how those aims are enabled and thwarted by Uber and how driver's income is in fundamental tension with the Uber model, which can only succeed above a minimum density of drivers in each market and whose aim is to service all riders and rides at the lowest cost to riders.
Thus, Uber is interested in having lots of drivers and having drivers take every single ride and Uber controls information on its system *very* carefully to train drivers along these aims. In that sense, Uber has created a closed market for rides that limits drivers' ability to choose and decide in a very purposeful manner. As a result, IMHO, drivers have very limited ability to exert their discretion as 'independent contractors', and do not receive many of the perks of full-time employees (this is currently being litigated), leaving drivers in a new kind of indentured arrangement bound to Uber technology that appears to pose some seriously interesting questions.
The Uber pricing model is stratified and diverse, and depends on location. What appears to be a global fact is that the ride distance is the most determinative factor for what a driver earns per ride. In fact, the average earning per ride will be the key metric in determining driver's income, driven primarily by the length of each ride. Note that Uber never provides metrics related to driver mileage, but instead, they reduce all data into hours (FARES/HOUR). The corollary of this is that SHORT RIDES ARE ALMOST ALWAYS MONEY LOSERS FOR DRIVERS, BUT NOT FOR UBER! At UberX rates in Austin, IMHO, if you are taking rides less than 1 mile, then you will be losing money because there is simply no way to recover your fuel and vehicle costs, which include maintenance and depreciation that all depend on your total mileage driven to the ride and the ride itself, not just time. In other words, the UberX rate for short trips traps drivers into high overhead and limits the number of fares possible, which also limits your overall earnings potential.
As noted, Uber only refers to income in terms of what a driver can earn per hour and does not support drivers collecting operational information to determine cost and earnings per mile driven (see Transparency below). While hourly billing and income is a metric that is readily understandable and fits in with labor market expectations, driver's main expenses are not based on the amount of time they are online, but are based primarily on mileage driven.
Specifically, driver's earnings get diluted per ride because Uber does not charge (for either time or mileage) for driving to pick up a rider, which is inherent to each ride. Also note that the time spent waiting on driver's is compensated at a relatively low hourly time rate and only if you start the ride as soon as you arrive.
Therefore, for riders, UberX is generally a fantastic deal because you are typically buying transportation below it's actual cost, and this is even more true for short rides 1 mile or less. For drivers, UberX will only make economic sense if drivers have very low opportunity cost (unemployed or underemployed) as well as those with limited ability or interest in doing the actual cost accounting for vehicle use.
As noted, the information provided to drivers in the Uber app is *purposefully* limited and controlled by Uber, but it is imperative that drivers understand what functionality and information is being made available to them, and what is not, and why that affects them and their ability to earn money driving Uber.
In one aspect, when you get a new ride, for example, you don't immediately see the DESTINATION, ergo, you don't have the ability to see how far the ride is, which is the most important factor for the profitability of the ride for you as a driver. What you see is WHERE TO PICK UP THE RIDER and how many MINUTES away that is, but not MILES away, which determines your cost. Furthermore, the loud beeping and flashing of a new ride will actually train your brain to respond quickly without having all the information to decide, so that accepting a ride quickly becomes your default behavior. You can accept and try to contact the rider and ask the destination, but that is cumbersome and takes time and effort. And if you reject too many rides, your ACCEPTANCE RATE will go down, and Uber will thunk you for that in some way, even though it is against your interests as a driver. This is not an accident but a purposeful design of the app to get the response Uber wants from most people.
In another aspect, when you are online, you cannot see any other part of the Uber app, and you cannot see what is going on in terms of surge pricing. You can’t see your earnings when you are online.
In another aspect, when you are on a ride, you will not be considered to take a next ride, even when demand is very high. So drivers have no ability to plan the next couple of rides, for example, to optimize mileage and time based on drop-off and pick-up locations.
In another aspect, the surge pricing maps are highly misleading and primarily serve the purpose of enticing drivers with false promises of surge pricing. I love surge pricing as a driver, but have learned that the surge pricing maps on Uber are pure fantasy, mostly. For one, surge pricing comes and goes (at least in Austin) on a very very short time scale, sometimes a few seconds. Therefore, if you drive towards a surge area, the surge might be gone by the time you get there. Further, the surge only shows POTENTIAL SURGE PRICING, but has no bearing whatsoever on whether or not you will get a surge priced ride, or whether you will even get a ride when you are in a surging region. Again, this is not an accident of nature but a purposeful control of information by Uber that is adverse to drivers.
Also (at least in Austin) surge maps are shown with very little spatial granularity, and are divided into basic regions for the city. However, Uber inherently MUST keep track of a certain radius for each new ride from which a driver is offered (or vice versa), but such information, which constantly changes based on supply and demand, is never shown to drivers. Neither do drivers ever get to view actual supply and demand changing in real time in the Uber app, which is secret information kept internally by Uber, and which surge pricing maps only show in a global purposefully vague manner.
In another aspect, the Uber app does not provide riders with the ability to track data and information that is fundamentally relevant to driver income. For example, the only way to accurately make a cost accounting for each ride is to track the actual mileage and time spent on each ride, from the first moment the rider picks the driver to when the ride is completed, thus, including the mileage driven to pick up each rider. The Uber app could easily track this information and provide drivers with this data for analysis, but it purposefully does not do this, to the detriment of driver awareness of costs incurred. Therefore, to properly do mileage cost accounting, drivers have to independently track this information, which involves significant effort and delays. Conveniently, without such hard data, actual driver costs remain hidden, out of sight and out of mind, which is what Uber desperately wants.
In yet another aspect, Uber does not track the number of riders per ride or the number of seats in a vehicle. Different vehicles have different passenger capacities, some only have 4 seats. Uber only requires 4-door vehicles, but does not track the actual passenger capacity or number of riders. This is all left to drivers to manage without much involvement from Uber.
In a further aspect, drivers are essentially on their own in real time on any given ride, regardless of what goes wrong with the app, your phone, the cellular network, or with the rider. There is no real time phone support by Uber, but only email support, though voice calling is what you can easily do in the car while driving. I have not tried emailing while I am driving, but it is not something that is safe or easy or practical. I have had the app malfunction to where I have been unable to charge riders for rides, for example, because the Uber app races ahead and completes a ride on its own. I have had network issues where the fare comes back as “N/A” on the app. When demand is high in the city, the cellular networks are also overloaded and then Uber transactions do not complete properly on the phone. Uber support was able to recover some of these lost fares, but not all, which me carrying the entire risk as a driver. Also endlessly frustrating are the cookie-cutter options for contacting Uber -- to my knowledge there is no direct way to get in touch with Uber generically. What is provided are canned issues and support options in the website and app, but most issues are not that simple.
Finally, the Uber support email format appears designed to be as confusing as possible to track replies and messages. I use Gmail and it takes a long time to figure out on each mail thread which is the most recent reply, because of the way replies are formatted. On my phone it is impossible to use when driving (nice catch 22 to limit support effort!). This again appears to be a purposeful design to make email support as confusing and difficult to use as possible, which I am guessing is also not an accident.
Sorry out of time, but I hope this has given drivers some things to consider. Thanks for your feedback.
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