Uber Economics


Posted On: Wednesday - October 25th 2023 7:34PM MST
In Topics: 
  Cars  Economics

This post is not about "Super" economics - when did Americans start knowing this German prefix "Uber" anyway, after that Dead Kennedies' song? It's about the contract pseudo taxi service Uber, same deal as Lyft and the Uber-Uber system in China.



Interestingly, when I searched for photos, the one above turned out to have come from an article about using rental cars to do Ubering. Whoaa, I just wouldn't think Hertz, Avis and them* would appreciate this sort of thing! I can't find that article now, but it turns out that there are some partnerships.

For many years, taxi companies had near monopolies in the business of driving people around town. It took money, time, and maybe knowing the right people to get these certificates, or medallions in NY City (makes you feel like a winner). I remember getting a ride in some beater driven by some old black man who said it was a taxi, and we were none the worse for it. We received words later of amazement that we'd have done such a thing. "Illegal Taxi!" OMG! You can't just illegally give somebody a ride and have him illegally give you money in return!

Well, years passed. If you are some new "TECH" company using software and existing new gadgetry to overturn the system, that's fine. The elites who start up these firms must know elites in governments and such that decide, hey, anyone can drive a taxi. We don't neeed no steeenkng medallions, Senor! All those years of thinking there was no other way - what a brilliant idea to have what used to be an illegal taxi service now.

Of course, Uber and Lyft, and then those guys that work out other "sharing economy" ideas, could only have done these things in the age of hand computers, aka smart phones along with cheap GPS systems. Perhaps having a monopoly or the 2 of them is the only way this kind of business can thrive, but it means these companies can squeeze down the contractor drivers. From what I gather from a friend who used to do this (got "fired", aka non renewed, for a few fenderbenders) and others I've ridden with, they have to virtually hand over 25% of the fare to Uber or Lyft.

Anyway, as I've ridden around with these contract drivers, along with other interesting conversation with those who are actually American, I try to get a feel for the economics of this "gig economy" well, gig. Many seem to be enamored with the economics of it. "Oh, yeah, it's good money, and I'm doing a lot of it - just put 45,000 miles on the car this year." I think about the $20 payment, for example, for what had to be 1/2 hour - 15 min for the ride, he had to come from somewhere empty, and then his trolling around (no offense intended) beforehand. After Uber takes its cut, that's $15, so maybe he's getting $30/hr for 8 hours a day, let's say. $240 daily minus maybe $25 in gas is not terrible if you don't have other skills, but then there's no getting out of taxes on this deal, as it's computerized by nature. That 8 hours may entail 150, maybe 250 miles of driving, hence 30-60 thousand miles on the car, if it's done as a full-time job.

The thing is, these people are usually not professionals in business. Now, I don't claim an MBA is necessary, or any college degree. These drivers don't usually seem to have worked it all out long-term. "How much does it cost to run this car per mile?" She doesn't know that. "How often do you wear out a set of tires?" "Yeah, pretty soon, I'll need tires..." "What are you going to do when this car gets old and starts breaking down a lot?" " " [/silence] Lots of this is city driving too.

I think they are fooling themselves that Uber/Lyft driving is a good gig. I haven't talked to any drivers who have already ran through a car and are on their 2nd or 3rd. That's probably because they gave up doing it when the car broke. I doubt it's any different in China. The margins seem much lower there, but I couldn't talk to these drivers about it.



What can I do to help? I have exchanged phone numbers at the end of a ride when I thought I'd be going the same way again - keeps Uber out of the loop. (My friend did some of this, and he also would sometimes limit himself to driving during "surge" times - 3 x the money, or something like that). I tip in cash because:

1) I don't have the Uber app, so it's always on someone else's.

2) Uber doesn't get its cut on a cash tip.

3) (2) means that the driver might come around a bit on that Kash is King idea.

Are Uber and Lyft just churning through suckers who can't do the math?


* I wonder how many companies there are - it may be only 3 or so, as many of these brands are combined into the same companies.

Comments:
M
Friday - October 27th 2023 3:09AM MST
PS
Good points on the economics of Uber/Lyft.

And yet taxi service pays well enough for medallions to cost up to a million dollars a year in some cities. That's city revenue that's a straight cost for the medallion owners. Most drivers can't come up with the cash, so they work as subcontractors to the medallion owners (I suppose I should say renters, as you don't own a medallion - although there's a limited number of them and I guess it's first come?).

I doubt it's all that good a gig for the taxi drivers. I've yet to be in a taxi that's completely repaired. Or maybe they don't prioritize that.
Mike Tre
Thursday - October 26th 2023 3:32PM MST
PS: Thanks for the kind words AE and AG - my intention was just to document the comment just in case it eventually got flushed. When I actually take time to make an "effort" comment, it's more annoying when Sailer dumps it as opposed to a flippant one liner.

Anyway, thanks and great discussions here as always.
Moderator
Thursday - October 26th 2023 2:06PM MST
PS: Actually my previous post was a reply to both Mike and Anti-Gnostic, of course.

Yes, Mr. Sailer does what he does, make NOTICE and inform normies and those on the fence how stupid things are and how much lying is going on. He's not there to fight it all. He's, as I've said before a few times, a peacetime consigliere, not a wartime consigliere, in Godfather terms, and he sure does love the movies.
Moderator
Thursday - October 26th 2023 2:02PM MST
PS: Mike, I agree mostly with your comment, and either way it was pretty worthwhile. I only saw it an hour or so ago, and I thought about pasting in "Mike Tre says..."

See, on this computer and other random ones (hotel lobby or something) my comments don't wait for moderation, but on my main one they do. I think I have an idea why, and it doesn't directly have to do with iSteve. Someone or a piece of software off that device, as in Unz/Unz.com servers, I don't know, got it fixed for a week or so, and then it reverted. It's because I have so many tabs open (need to go through them) that it is hurting badly and can't store the "cookie" file that's got the flag about moderation.

Come to think of it, were we to know where/what that flag is... the sky's the limit.

That was way O/T when it comes to your O/T, Mike. I can see Steve's side (as taken from some article) to some degree, but I agree the people of Germany were desperate to be rid of their version of Wokeness and the Communists that were ready to turn the place into USSR 2.0. Yes, those got taken care of, and, yeah, Hitler would have been a well-known elder statesman by 1961, oh, and there would have been no need for that Berlin Wall 13 years earlier, and the Iron Curtain would have been hundreds of miles to the east.
Moderator
Thursday - October 26th 2023 1:55PM MST
PS: Thank you so much for the link to that Lionel Shriver talk-transcript, Alarmist! I spent about 1/2 hour enjoying it on the porch in the nice weather just a while back. This is one case in which I might search up the video, just because I want to know what she sounds like.

She even picked up a Peakerism, "yeowoman" (OK, it's been a while...), and I really like that bit about "what's so insulting about comparing a woman in a burka to a post box?" Haha, well, you don't see those big blue mailboxes around here so much, so the joke might not now work here on this side of the pond, but, actually, it IS pretty insulting, which is just A-OK, because it's A JOKE and well, cause it's true!

Not only that, but she may have already gotten wiser on the Climate Calamity™ stuff, per her talk. From her columns in that Spectator (I think) mag, from links kindly provided by Adam Smith, I noted 2 or 3 areas of politics that I don't agree with her on, surprisingly. I'll go check out those tabs - still on another device and see if she's come around on the Climate stupidity.

Anyway, I enjoyed that read of Mrs. Shriver's talk very much - the 33 comments as of now are sympathetic, civil, well-written, with some humor: In response to the title about breaking the rules, one Jon Mors wrote "I thought the author's response to rules she doesn't like is to move to Portugal." Hahahaaa! True, dat!
Anti-Gnostic
Thursday - October 26th 2023 1:07PM MST
PS @Adam, Azerbaijani waifu looks fun.
Anti-Gnostic
Thursday - October 26th 2023 12:58PM MST
PS Mike that is a good comment. I don't think 80 years later people can appreciate the deep humiliation and anger of the Germans over the Versailles treaty and the arrogance of the French. The supine Weimar government went along to get along and then one unfortunately monomaniacal guy said, "Wait a minute, we don't have to live like this. We can live like THIS." And he and the Germans made it so.

Same with the stupid refugee/asylum conventions. We're a sovereign fucking country. Tear them up. Tell Mexico it's their problem not our problem.

And if Hitler had stopped with Alsace and Danzig and Sudetenland, then he would have retired as Chancellor in 1961, and Life Magazine would have done a photo shoot on his retirement chalet.

Steve's a good guy but yes like you say he's still there with Charles Murray hoping we can vote our way out of this.
Mike Tre
Thursday - October 26th 2023 10:55AM MST
PS:

Sorry to go OT, but the following is a comment that I wrote 18 hours ago on Sailer's blog that still sits in moderation within the Wokeness as a heresy of the neo-nazi religion. It is most likely because it give Stevo the sads:

The whole premise here is not only false, it doesn’t even exist.

Naziizm isn’t a word, unless you can make an “ism” out of any slur, which is what the term Nazi was and is. Imagine N wordism, or K wordism, or whatever (Steve will certainly happily delete any comment that attempts to use another slur with ism, because it shows the absurdity of the premise)

National Socialism was the vehicle in which Germans rebuilt Germany. It was the success of the economic and social policy that led people to believe in it as much or more than Christianity, because in the late 19 teens and 20’s, when the Weimar were looting and perverting the place, God wasn’t answering the call. People put their beliefs in what gets results.

So calling “Naziism” a neo-religion is absurd. The current NFL is more of a neo-religion than National Socialism was. You know what else is more of a neo-religion? Civic Nationalism. Because the more it doesn’t work, the more the true believers believe in it.

The rest of the above is just more “look! Nazi squirrel!” nonsense. National Socialists in Germany rid their country of the woke equivalency of their day. Sorry Steve-O.

The Alarmist
Thursday - October 26th 2023 4:52AM MST
PS

ICYMI, Lionel Shriver’s recent Roger Scruton Memorial Lecture at Oxford ....

https://dailysceptic.org/2023/10/25/my-response-to-rules-i-dont-accept-is-to-break-them/
The Alarmist
Thursday - October 26th 2023 4:31AM MST
PS

ß is the Eszett and is uniquely German and not something I can handwrite well. Who am I kidding? All of my handwriting sucks.
Moderator
Thursday - October 26th 2023 4:09AM MST
PS: Alarmist, I've had an unwritten, usually followed policy of not including any dots or tick marks on the words, unless the spelling was so tough that I have to cut and paste. After all, this is America - omelauttes are for eating. (Of course, we still have our dots over the small "i"'s and "j"'s, I almost forgot.)

What's really different is that German character that looks like a capital Greek Beta, but stands in for 2 "s"'s.

Yes, as you wrote, it's just cash flow, as it is payments (on the house, cars, everything) that matter to most people, I would say at that income level, but it often goes up to middle Middle Class people too, unless they hire financial planners to help them get their financial shit together.
Moderator
Thursday - October 26th 2023 4:02AM MST
PS: Oh, yeah, Adam, I remember that info from you on the Uber corp. This stuff reminds me of the dot-com 1.0 era. There were huge capitalizations of companies that barely owned squat - all about having a web site that sold something, anything. OTOH, amazon was one that did the same - no profits for a couple of decades.

About the rides, it's usually when there's not another way and I'm with someone or some people who DO have the app. I'm just not putting the info out there, in "the cloud", Uber servers, wherever, for them. It holds me up from doing a lot of these types of things on a smart phone, which I avoided getting for a number of years. (I could go back, too.)

Yeah, it's beautiful there, but too cold for me, Adam.
The Alarmist
Thursday - October 26th 2023 12:50AM MST
PS

Most of these folks live by and think in cash flow. When you apply depreciation and amortizations per the accounting matching principle, the gig economy is largely a shitty deal for the front line workers who have to use their own tools.
The Alarmist
Thursday - October 26th 2023 12:44AM MST
PS

Morning, all.

Yeah, I've also never resorted to the tech versions of what we used to call Gypsy Cabs.

BTW, it should be spelled with an umlaut: Über, which anglicizes to Ueber ... but Gen Z and millennials never could master language, nicht wahr?
Adam Smith
Wednesday - October 25th 2023 10:52PM MST
PS: Tell me these two people don't live in a very beautiful place..

https://www.youtube.com/watch?v=yW_45YmXDOQ

Happy Thursday! ☮
Adam Smith
Wednesday - October 25th 2023 10:12PM MST
PS: One moar thing...
(And this is completely off topic...)

I have a new favorite youtube channel...

https://www.youtube.com/watch?v=DL42hN53Cws
https://www.youtube.com/watch?v=0TvKoajS8dc
https://www.youtube.com/watch?v=Bz8YxMcLyPE

https://www.youtube.com/@FarawayVillageFamilyLife

Cheers! ☮
Adam Smith
Wednesday - October 25th 2023 10:08PM MST
PS: Good evening, Mr. Moderator & Friends,

I've never taken an uber. Or a lyft. Or any other illegal taxi service like that.
(Not that I wouldn't. Just haven't.)

I did stay in an Airbnb a few times. Once in Apalachicola, which was fun.
I could 'a maybe worked that into a comment under the the oyster post.(?)
(I ate a short ton of oysters in Apalachicola. And loved every minute of it...)
(But I digress...)

I've already said everything I want to say about uber under this post...

https://peakstupidity.com/blogworks.php?action=viewbpost&id=2721

Yandex! For the win! (Again! Thanks, Mr. Hail!)

Cheers! ☮

PS... That's a lot of exclamation points...

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