
MIT Study:Median Uber and Lyft Profits Less Than Half Minimum Wage; 30% Lose Money - Cbasedlifeform
https://www.nakedcapitalism.com/2018/03/mit-study-median-uber-lyft-profits-less-half-minimum-wage-30-drivers-lose-money.html
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mrits
It would be interesting to know if a lot of people are just doing things wrong
that they can correct. The price of the car seems like a critical decision
based on insurance and depreciation.

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elmar
a business model based on the lack of mathematical and financial skills of the
participants.

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elmar
"If you are using either Uber or Lyft, stop. Now. You are contributing
directly to the growth of the precariat and the debasement of work. The fact
that you use an app to distance yourself from the exploitation of desperate
and not very savvy drivers doesn’t change the nature of what you are doing."
Yves Smith @yvessmith

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alexandercrohde
Who are you quoting?

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smcl
This is a direct quote from the linked article

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sp332
This is a lot worse than I thought. Last I heard Uber was subsidizing fares,
and they're losing tons of money. If it's still not enough for drivers not to
lose money, then the difference between what riders are paying and what the
service actually costs must be immense.

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crack-the-code
It's worth noting that insurance companies require a relatively substantial
fee for Uber drivers yet most of the people driving don't report being drivers
to insurance companies. I am not sure if this study accounts for this.

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frgtpsswrdlame
Yes but if you're in an accident and the insurance company finds out you were
Uber driving they will deny your claim. In that scenario you're out the cost
of the accident _and_ all the insurance payments you made. Spread that
concentrated risk across the whole population of Uber drivers and you'll get
the same result.

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mwnivek
Previous discussion:
[https://news.ycombinator.com/item?id=16501017](https://news.ycombinator.com/item?id=16501017)

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andrewla
And also
[https://news.ycombinator.com/item?id=16498551](https://news.ycombinator.com/item?id=16498551)

Also worth highlighting from that discussion is a link to the actual paper, as
found in
[https://news.ycombinator.com/item?id=16499850](https://news.ycombinator.com/item?id=16499850)

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rossdavidh
The most interesting tidbit to me: only about 4% of the drivers keep doing it
(for Uber anyway) for more than a year. Does this mean Uber requires an ever-
replenished supply of fresh drivers? If so, then they might have a not-very-
sunny future once there aren't as many left. Like a virus that has infected
too many members of the population, who now have an immunity; not enough fresh
births to keep it going.

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CoryG89
Interesting. I've discussed this with others on HN previously. Seems this one
goes toward confirming my suspicions.

[https://news.ycombinator.com/item?id=14605111](https://news.ycombinator.com/item?id=14605111)

Now the moral dillema of whether or not to continue to use these services or
revert back to terribly inconvenient taxi services is really going to nag at
me.

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verelo
Id like to see the same study done to taxi drivers. I suspect the situation is
no better if you look at their return on invested time and money.

The concern you suspected is the same one I suspected too. In 2015 i did some
uber driving for "fun". I quickly realized that it was just a way to extract
the net worth of a car, from the car, without selling it. When you think of it
that way, i see some significant utility...however Uber doesn't position it to
drivers as "get the money stuck in your car, out of your car!" instead they
say "earn cash" and stuff like that.

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CoryG89
It would be interesting to see it done with taxi drivers, but they don't
typically own the cars they drive, do they? I would have imagined they were
all at least making minimum wage after all is said and done.

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verelo
They’re a super exploited group, often new immigrants too.

Many times they “rent” the car, paying a daily fee for the seat, and then get
to collect all the income for the day. Many times it means working 7-8 hours
before making any returns of their own. It’s your typical “work for yourself”
type scam, when really you’re an employee with no acknowledged rights.

I have no love of uber or the taxi industry, i guess i just don’t see one as
better than the other, and it’s hard to say either is worse. I suspect it is
the way it is because consumers don’t want to pay what it would take to really
give the drivers minimum wage. I dare say this is an indication that it’s a
realistic primary target for early AI automation.

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crsv
I would be interest in a deep understanding of the top performers in this
system and if there was a way to optimize this. I feel like even with a median
number in this study, with such a wide distribution of education,
technological and business savvy, how much of the poor performance here is
related to the "freedom" in the system and the lack of structure that might
move the profitability needle for the drivers.

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dmartinez
Here you go:

[https://blog.acolyer.org/2018/02/20/putting-data-in-the-
driv...](https://blog.acolyer.org/2018/02/20/putting-data-in-the-drivers-seat-
optimising-earnings-for-on-demand-ride-hailing/)

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sol_remmy
Duplicate. Previously:
[https://news.ycombinator.com/item?id=16498551](https://news.ycombinator.com/item?id=16498551)

