> The dilemma is laid bare in a recent study by Uber, conducted in cooperation with a New York University assistant professor, that found that no matter which direction fares go, drivers inevitably take home about the same earnings over time. That is because of how easy it is for drivers and riders to jump on and off the system, according to the study
> When there is a fare cut, drivers’ pay per trip falls but riders flood the service, offering more business. A price hike eventually lures more drivers than Uber needs and scares away riders. The changes are short-lived as an equilibrium is reached after about eight weeks, and drivers’ average pay comes out the same.
> All of this means Uber, and other ride-sharing services, must lean heavily on pricey incentive payments—cash for completing a certain number of rides a week, say—to bring driver earnings above what typically amounts to around minimum wage
This seems kind of obvious to me. Uber's main drawcard for drivers is that there's almost no barrier to entry. Most jobs earning more than minimum wage have some significant barrier to entry (required qualifications, experience, skills, knowing the right people etc.) and so if Uber pays more than minimum wage, anyone in a minimum wage job will switch to driving for Uber. This lowers individual earnings for drivers until other low-barrier-to-entry minimum-wage jobs become competitive again and drivers start switching back to those jobs.
Lion City Rental has grown so fast as to affect the price of the car ownership permit . Anecdotally, about 1 in 20 of my drivers in Singapore owned their cars.
...or they could raise driver's revshare, and have drivers compete based on quality metrics instead of only price.
This is a submarine article using handwavy logic to rationalize drivers' low pay due to Uber corp's market power.
I doubt that the care hire market coincidentally balances at almost exactly the legal minimum wage for employees.
The real problem though is not that the pay isn't very good.
The problem is that within a few years the pay will go away completely in many places due to self-driving cars.
If people are lucky then they will still be able to make a small amount of money by letting some self-driving service use their car and cleaning it out now and then. But eventually the fleets will be owned by the companies.
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Who knew sitting on your butt, listening to the radio and driving your car around the city were poor work conditions. They should try working in a coal mine for a living. Man some people don't know how good they have it..
The irony is that the WSJ is effectively (hopefully?) running this same experiment. I don't read non-paywalled WSJ (or Wired etc.) content, because I don't believe in that business model at their price point ($20 / month) but respect their choice to erect barriers to readership . So, the WSJ has effectively chosen to go with a high monthly price, which is the equivalent to Uber's higher per-trip fares. One wonders if the WSJ would make more money with a lower rate plan and a broader audience, either via lower monthly rates or free access for casual readers (with a presumption of later conversion).
 I do pay for a few other press subscriptions, but all of them allow some level of across-the-board read-as-you-go trials, which I wholeheartedly agree with, or have a lower absolute cost per month, which I can stomach.
For a lot of marketing companies, fee is based on a % of ad spend. So increased CPC does increase the overall fee.
Sure a % of media pricing model might net them more in the immediate term. But if it comes at the expense of reduced performance, that relationship won't last because at some point, the client will fire them.
Various fee models have their own strengths and weaknesses, and each has their own weighting of which party shoulders the bulk of the risk. % of media models shift that burden heavily to the client whereas rev-share models do the reverse.