
UberEats could be underpaying delivery drivers on 21% of trips - artoonie
https://www.businessinsider.com/uber-eats-driver-who-scraped-data-alleges-wage-theft-report-2020-8
======
supernova87a
Uber is making it harder and harder to get on board with the idea that it's
not an employer. Leveling out people's pay over multiple trips or
retroactively adjusting the reward per job sure sounds like an employer having
very strong control over the work conditions and compensation. And this almost
brings back echoes of Doordash (?) when it was caught taking drivers' tips so
that their pay was reduced to the minimum hourly promised "wage".

It's like Uber are trying to shoot themselves in the foot with all the cost
squeezing and profit seeking at the same time they're in a fundamental legal
fight defining what they are.

You would think they would go in the opposite direction and pay people such
good rates during this controversy, you could hold that up and say, "see?
People are clearly much better under this system". But I guess not.

On a separate note, I will say that this is pretty expected in terms of how
software errors go. Of course programmers at a company will be checking quite
diligently that they're not _over_ paying through their algorithms. But
underpaying? Only those who can't easily check your code are harmed by that
one. It is a rare company that spends money and resources on verifying from
their users' point of view that they're being delivered what was promised --
unless that company actively cares about the user.

~~~
AlexandrB
> It's like Uber are trying to shoot themselves in the foot with all the cost
> squeezing and profit seeking at the same time they're in a fundamental fight
> defining what they are.

I don't think they have a choice. UberEats is fundamentally unprofitable. If
it was run profitably, the high(er) prices would drive a large portion of
their customers away and into the arms of other "startups" willing to run at a
loss or towards picking up the food themselves. Plus Uber can't pretend to be
an early-stage startup anymore and their constant quarterly losses are
starting to add up.

I'm still not convinced this new food delivery industry is viable without
constant cash injections.

~~~
rrrrrrrrrrrryan
I wouldn't go so far as saying they're "fundamentally unprofitable". They have
a couple long-term options: the often-discussed one is autonomous driving
(though it's becoming increasingly obvious this is many years out), but the
less discussed one is vertical integration.

It's not hard to imagine them choosing to pursue Amazon-style vertical
integration where they own the "restaurants" themselves. I put "restaurants"
in quotes, because it'll almost certainly just be warehouse-style kitchens,
where drivers skid up out front and grab food from heated tables, and you
won't be able to dine-in at all. It would fill the same role for aspiring
restaurateurs as food trucks do today: a startup cost, low-barrier to entry
way to build out a brand, rapidly iterate menu-items, and begin building
revenue to eventually secure a business loan to open a proper restaurant.

If UberEats can really squeeze both the drivers AND the restaurants, there's
no fundamental reason that food delivery can't be done profitably - pizza
companies have been doing it in almost all markets for decades.

Brick and mortar retail stores got eaten by Amazon warehouses, and it seems
inevitable that many brick and mortar restaurants will eventually get eaten by
a massive tech company as well.

~~~
zepearl
> _It 's not hard to imagine them choosing to pursue Amazon-style vertical
> integration where they own the "restaurants" themselves._

I always wondered something about those meals that are available on airplanes:

in the past I liked quite a lot most of them (e.g. a small piece of
meat/fish/other, some vegetables and/or rice, a slice of bread, a small
dessert) => wouldn't it be quite profitable to have a similar delivery service
for "kits/menus" like those ones (just e.g. ~4 different "kits" available to
be ordered daily), cold (but pre-cooked if needed) that only need to be warmed
up at home? (if 3 stewards/esses, on a moving tube, managed to warm that up
for 300 people then I guess that I'll manage to do the same for myself at
home)?

I admit that on one hand the "delivery"-part of the service would be related
only to getting fresh (uncooked or "freshly pre-cooked") stuff (not ready for
consumption), but on the other hand that way the delivery could be spread over
a longer timespan (multiple deliveries per trip, better delivery organization,
therefore less costs) and could be left in the mailbox (assuming at least a
mediocre insulation of the package).

Here in Switzerland/Zurich I am aware of some similar services, but they
deliver only the ingredients (then I would still have to actively cook).
Supermarkets do have some similar pre-cooked stuff, but most (not all, but
most) is quite terrible (probably because there the stuff has to be able to
lie there for days/weeks - definitely not similar to what I used to eat on
airplanes) and especially it never changes.

(I used to fly only in Europe using "Swiss", "Air Berlin", "Lufthansa", maybe
as well "KLM"/"Air France", always to/from Zurich - your experience with other
airlines / in other location might be different)

Woudln't it be nice to get back home and find in the mailbox a ready-to-be-
warmed-up (maybe actually "cooked", but in an extremely simple way) menu?

The delivery, being all sourced from the same place and being spread over many
hours would not be as expensive as it is currently done for hot stuff coming
from multiple restaurants, and the small amount of different menus (4 as
mentioned above or slightly more) would allow to buy more source material for
less $.

EDIT: I admit of not having any clue how the companies that prepare
meals/menus for airlines operate => there might therefore be some important
details that make the whole concept crumble... :)

~~~
rrrrrrrrrrrryan
Switzerland is strange because restaurant food is so tremendously expensive
there compared to the rest of the world. In most cities in America, for $5 you
can get a half-decent meal that's quite a bit more palatable than airline
food, and for $10 you can get something from (mostly immigrant-run)
restaurants that's somewhat nutritious as well.

There are meal-delivery services here that are basically what you describe,
but they usually deliver food weekly and they're kind of pricey. They're
mainly targeting time-strapped single people who are trying to eat healthier
and don't want to do all the mental work that goes into grocery shopping, meal
prepping, cooking, etc.

~~~
zepearl
Thanks for the reply - I agree & disagree with you.

On one hand you are absolutely correct stating that swiss restaurants are in
general more expensive than anywhere (subjective - e.g. a 30$ small menu might
be ok here, but we do have as well a higher income and going to the restaurant
is not something that people do often), but on the other hand I did like
airline food (which you basically describe as being "the worst" while for me
was on par with one offered by restaurants), therefore we have a mismatch of
our experiences.

(talking about restaurants, I must mention that Stockholm was for me a lot
more expensive than Zurich)

Personally, I would have all kind of doubts about a $5 meal (in most parts of
the world, if it's not something extremely simple).

> _There are meal-delivery services here that are basically what you describe,
> but they usually deliver food weekly and they 're kind of pricey. They're
> mainly targeting time-strapped single people who are trying to eat healthier
> and don't want to do all the mental work that goes into grocery shopping,
> meal prepping, cooking, etc. _

I'm not currently aware of something like that in my area , but my profile is
very similar (and I did try to cook different stuff, but the failure rate is
quite high and the overall quality quite low). Still, I think that the concept
that I described was a bit different than that?

~~~
rrrrrrrrrrrryan
I can expand upon the $5 - $10 meal by example.

I'm from southern California. I worked in Wellington, New Zealand for a stint,
and I found that restaurants were priced about the same as back home. That is
to say, an average sit-down restaurant meal of equivalent quality was roughly
the same price in USD.

However, in America, there's an entirely different class of _much_ cheaper
food (takeout food), and younger people in metropolitan areas eat this food
very often. These were usually powered by cheap immigrant labor, often paid
under the table to skirt taxes and mandatory benefits.

Labor protections in New Zealand are much higher, of course, and without an
easily exploitable underclass, this food simply can't exist there. There
weren't really regular kiwis who ate out 1 - 2x per day - virtually all of
them cooked most of their meals at home themselves.

This is the environment in which these food delivery companies are operating.
These restaurants already have extremely thin margins, consumers are price-
sensitive, and as long as the delivery company is just a middle-man, they'll
struggle to do this thing profitably. If they lose access to their cheap labor
by having to re-classify drivers as actual employees, it might be impossible.

~~~
zepearl
Interesting! Thank you :)

------
tossaway842
What matters is the aggregate amount over multiple trips. If you underpay on
some trips and overpay on others and it is a net wash, then it doesn't really
matter for the couriers if the payment algorithm is on the low side on some
trips so long as it is on the high side on other trips.

Under or overpaying on trips is more of an interest to those engineers trying
to optimize marketplace efficiency. Meal delivery businesses have as much of
an interest in not underpaying as doing so reduces supply availability and
therefore reliability and they have also an interest in not overpaying as that
reduces profitability. The ultimate goal is optimal pricing in a three sided
market to maximize liquidity as the business model does best when you optimize
for volume of transactions. Maximizing liquidity amortizes fixed costs over
more transactions. This applies as much to the meal delivery companies as to
the restaurants involved.

At the end of the day, distance driven is very imperfect as you have issues
like poor GPS signal and in cities you have the dilemma of urban canyons and
tunnels. Also, drivers don't always take the suggested route. At vehicle
speeds, it's hard problem to solve due to time between GPS pings. Another
issue besides GPS inaccuracy is clock inaccuracy, especially with round-trip
times between server and client and client and server aren't always
symmetrical, especially on cellular networks, and this messes up all sorts of
clock synchronization strategies. The peanut gallery on HN is seriously
underestimating the complexity of measuring distance using GPS. It's pretty
darn good when conditions are ideal, but when they aren't, good luck.

Another question is the magnitude of the underpayment in the 21% of trips. Are
we talking about 1-2%, 5-10%, some other deviation? If it was something like
1-2%, we should all be amazed. Gage repeatability and reproducibility matters.

~~~
Razele
Yeah, and also if Uber was doing this intentionally, they could’ve just as
well lowered their $/mile rate if that’s what maximizes profit.

~~~
matthewdgreen
Lowering the "front page" $/mile rate could make the service immediately less
attractive to workers, who can select between multiple services based on the
apps on their phone. Lowering mileage paid is much harder for workers to
detect, since it requires carefully checking each trip and measuring what's
actually paid.

This could also be an "unintentional-intentional" bug, meaning its presence
was just an accident -- but that the company has chosen to prioritize its
engineering resources addressing issues that improve its revenue, rather than
decreasing it.

------
dheera
On a related note, I don't understand the point of tips on UberEats.

(a) I thought the whole point of these apps was to simplify things for the
user. I just want to know how much I pay in total, upfront, as I'm selecting
food. Include taxes and delivery fees in a big fat "this is what you will pay"
display on the screen and I'll be a 10X happier user. Delivery apps were a
great opportunity to axe the complexities of tipping culture and they screwed
it up IMO.

(b) They ask you for tips _before_ they even dispatch your food, which makes
zero sense to me. Tips are supposed to be "extra" based on the quality of
service, so how are you supposed to blindly give 10% or 15% without even
having received service? (I always put 0% when ordering and up it to 10-15% on
delivery OR give cash tips, which is how things have always worked before the
age of apps, but it's cumbersome to do that.)

~~~
artoonie
(b) you can change your tip afterward if your service was not as expected.

Just like in a restaurant: maybe your default tip is 25%, but great service
bumps that up, and bad service bumps it down. You go in expecting to pay 25%.

~~~
iso1631
We bought a second car at the weekend, I phoned up my insurance company and
asked them to put it on. They did so, and it was cheaper than the quote I'd
got online - £180 for 9 months vs £290 for 12 months.

So I immediately tipped the person on the phone £45

How ridiculous does that seem?

~~~
lotsofpulp
I’ve even started asking my friends and family for tips anytime I do anything
for them.

US culture of tipping is so ridiculous that I think people actually derive
enjoyment from tipping by giving themselves an ego boost when they do, as some
sort of charity or having role played as an extremely rich person being
benevolent with their wealth.

~~~
iso1631
That's the point. There's a friend episode where Rachel and Ross go out for
dinner with her Dad. He pays the bill ($200 or so - fancy resturant) and goes
to the bathroom. Ross comments he'd 'only' tipped 4%, and leaves some cash.

Great putdown when the father comes back, sees the tip, rips up the credit
card receipt and tells Ross to pay the whole bill if he wants to be the 'big
man'

------
ruined
The salon source linked in the article has a bit more (and slightly
different?) detailed information, including a link to the tool developed to
track mileage

[https://www.salon.com/2020/08/20/programmers-say-uber-
eats-i...](https://www.salon.com/2020/08/20/programmers-say-uber-eats-is-
systematically-underpaying-their-workers/)

[https://chrome.google.com/webstore/detail/ubercheats/pkdblhe...](https://chrome.google.com/webstore/detail/ubercheats/pkdblheaeakedkbkfhoeepgmfiajjdgn)

~~~
ruined
also, the extension author is on twitter if you have questions

[https://nitter.net/ArminSamii/status/1295857106080456706](https://nitter.net/ArminSamii/status/1295857106080456706)

------
bagacrap
Hard to know what to make of this without seeing the full data. On 21% of
trips, Uber undercounts the miles. What about the other 79%? Spot on, or is
there over counting?

~~~
artoonie
Most spot on (within 0.5 mi), some overpayments.

Overpayments are much less frequent than underpayments, and regardless: when
someone accepts a trip, who knows if they did it because they thought "that
amount sounds fair" or thought "that amount given the distance shown sounds
fair." The only fair thing for Uber to do here is to rectify all
underpayments, and let the overpayments stand.

Further: just because Uber couldn't find a route as efficiently as the
extension could doesn't mean it was an overpayment. The extension uses Google
Maps. If the driver used Uber Navigation to navigate, and Uber navigation was
twice as long as Google's - is that really an overpayment?

~~~
bluesign
Can you share one route uber underpaid by big margin?

For the second part I agree, but without seeing outlier, maybe in some cases
google couldn’t find the best route, compared to the app.

PS: all this stats used Google Maps shortest path or best path?

~~~
artoonie
[https://imgur.com/v4bSD5S](https://imgur.com/v4bSD5S)

I was paid 1 mile, actual distance 3.5-4.0 miles.

Previous versions of the app would use the first result returned by Google
Directions API, which could have been best not shortest (I'm not sure, anyone
know?). Newer version (pending app store review) does shortest always.

~~~
WrtCdEvrydy
The problem is you used Uber Car, instead of Uber Airplane (please don't)

~~~
artoonie
I just got a lease on an UberCopter. Runways are too far from restaurants.
Hope it works out for me!

------
kaonashi
Always deplatform your tips.

~~~
kevingadd
Agreed, but keep in mind that the platforms have started making design changes
to discourage this. Some of them now surface the tip to the driver which can
lead to $0 in-app tips lowering the displayed value of your request so you end
up being passed over for other people. If you don't tip in the app you risk
waiting a lot longer for service.

------
wmab
Why would there be a buy in the Eats tracking but not in Rideshare? I'd
imagine it's the same underlying GPS tracking/routing software used in both
cases. Is it just that the rides are paid differently than Eats deliveries are
so they're noticing it differently?

~~~
artoonie
There are some anecdotes that it also happens on Rideshare, but I don't have a
car so I can't verify until Uber allows me to pick up passengers on the
handlebars of my bike

------
jacquesm
Middlemen are _always_ going to try to increase their take on both sides. It
is the only way they can grow the profitability of their business because they
can't add more value, they can only subtract.

~~~
danpalmer
Agree with the part about profitability, but middlemen can definitely add
value.

I’d say that Uber’s wide reach is valuable, the fact that they likely exist in
the city you’re visiting, the fact that they likely have enough cars to pick
you up in under 5 minutes. These are valuable things that don’t come from
individual drivers or small taxi companies, but rather from big aggregators.

~~~
jacquesm
Small taxi companies could still have general dispatchers.

~~~
danpalmer
Sure, but that dispatch is a "middleman" for the service provider. The bigger
that middleman becomes the more they may be able to offer. The dispatcher will
take a cut of the taxi fares.

------
paganel
Not sure about UberEats but just two days ago a I took an Uber ride that was
paying the driver about 5.50-6 euros instead of the usual 9-9.50 euros that
the ride was usually worth, I felt bad about the driver and so I helped make
up the difference in cash, directly to him. I know the sums and the difference
itself don't seem that big in nominal terms but I live in Eastern Europe where
the difference between 6 euros and 9 euros still counts for lots of people.

Anyway, interesting to see that that wasn't an isolated incident when it comes
to Uber the company.

------
_heimdall
Makes sense. Charging 30% off the top on orders wasn't enough, time to skim a
little off the drivers too.

------
mrweasel
Shouldn't the drivers be able to make a profit, without the tips?

------
tempsy
not sure why every driver isn't already using another mileage tracker app, at
least for occasional trips to keep Uber accountable. theres dozens of those in
the app store...

~~~
artoonie
Because Uber doesn't pretend to pay based on miles traveled for UberEats -
they pay on shortest distance. So a GPS tracker is insufficient.

------
Grustaf
This is good news, I thought the business model was to underpay drivers on
100% of trips.

------
nlosti
Why do these articles always reach the front page? Does hackernews hate Uber
that badly? Or perhaps its profitable for news articles to always rag on them?
Why is it profitable? Does everyone _want_ to see them fail?

They're no worse than your run of the mill tech company, so I suspect
something odd is going on. I dislike corporations in general and want to see
them play fair, but Uber changed the way I live life, and I'm constantly
worried bureaucrats and angry business/tech nerds are going to regress us back
to the taxi stone ages. We're just one law away from having to go back to
hailing a cab with our thumbs and trusting their internal GPS.

~~~
prh8
Uber has changed your life for the better, by taking advantage of thousands of
other people. Worrying about going back to the taxi Stone Age is actually
worry about making things fair for those people.

~~~
icebraining
Taxi drivers weren't treated fairly[1]. They were just abused by others
instead of by Big Tech, so nobody cared. The appearance of Uber has actually
allowed some progress in their labour rights[2].

[1] [https://www.nytimes.com/1995/04/09/nyregion/driving-a-
taxi-d...](https://www.nytimes.com/1995/04/09/nyregion/driving-a-taxi-
difficult-in-best-of-times-gets-tougher.html)

[2]
[https://www.washingtonpost.com/news/wonk/wp/2015/10/29/labor...](https://www.washingtonpost.com/news/wonk/wp/2015/10/29/labor-
boards-shift-in-legal-interpretation-could-allow-thousands-of-taxi-drivers-to-
unionize/)

