Posted on 03/19/2017 4:28:15 PM PDT by dynachrome
“able to transfer their risk to third parties’
Yup. Insurance is big deal. Business insurance is very different than individual auto insurance.
Dave Ramsey says Uber is a good part time deal.
It's the Bonus baby...
Make 50 rides in 4 days and get an additional $195 bonus.
We’ve had a few animated threads on Uber in recent years. I never computed the numbers myself, but when you factor in the fuel costs and vehicle mantenance, I wouldn’t be surprised if the average Uber driver barely makes minimum wage.
I took Uber today to get home from the airport. It was great. Within 3 minutes the car was there. No need to tip the driver, it’s automatically deducted from my PayPal.
Ditto. Uber is great. Clean cars and drivers who are rated by their riders.
Great for getting a ride from out of the way places.
“the business model is flawed (in that it fails to take into full consideration the risk profiles involved and the legal and political environment)”
If someone had asked me if this was a good business model before Uber came out, I would have said it will never work.
But it has worked.
There is always a balance between costs versus safety when it comes to consumer protection.
Uber does a background check on its drivers. It does not do so on the passengers. Just credit card and address information.
They raised a lot of private equity money so far. Those guys tend to have a pretty good idea of whether a business model makes sense or not.
Except on ‘flexible pricing’ days (driving drunks home on St. Patricks or New Years days, etc.), I’d be surprised if a lot of them are making more that gas and wear and tear on their cars.
Yeah, like Mr. Chelsea Clinton's fund? Here's some other success stories for you: http://www.investopedia.com/articles/mutualfund/05/hedgefundfailure.asp
Uber does a background check on its drivers.
It refuses to do an *effective* background check on its drivers.
“It refuses to do an *effective* background check on its drivers.”
Same could be said about its passengers. This weekend a drunk guy hit an Uber driver in the face with a flashlight several times, knocking him unconscious.
There have been some crimes committed by drivers AND by passengers. But not an excessively high number when compared to the millions of rides.
I don’t know if they restrict driving to citizens or, presumably, those with a legal right to work. I think that might play a bigger factor in screening potential criminals, imo.
By the way, in Houston, where I live, Uber drivers have to do an FBI fingerprint background check. This was forced on them by the liberal city council.
I think a better approach would be to provide optional vetting and allow consumers to select how strict they want the vetting to be. Match riders and drivers based on their preferences. Free market solution.
Any time we interact with people in public, there is a risk of crime.
With Uber, such criminals are VERY likely to be caught and brought to justice.
And, more significantly, no one is forcing anyone to use their service, say, like health insurance.
“Yeah, like Mr. Chelsea Clinton’s fund? Here’s some other success stories for you”
Private equity is not as strictly regulated as publicly traded companies or hedge funds.
If Uber ever goes public, it will have to follow more stringent measures.
(But even the regulated side of things has lots of fraud and politicization problems.)
took it today to get out to Naval Base Kitsap. No bus or taxis out there.
Again, Uber's fault.
Uber Firearms Prohibition Policy
Our goal is to ensure that everyone has a safe and reliable ride. That's why Uber prohibits riders and drivers from carrying firearms of any kind in a vehicle while using our app.*
Anyone who violates this policy may lose access to Uber.
https://www.uber.com/legal/policies/firearms-prohibition-policy/en/
It refuses to do an *effective* background check on its drivers.
Very true. Case in point. I thought about using a fairly new SUV I had to drive for Uber for a while to make some extra cash so I applied and they did a background check but the company they used did a crappy job which returned a fallacious criminal record on me. I went to the local Sheriffs office to find out what the problem was and the Sheriff I sat down with said they didn't use my middle initial to do the criminal background check or even my SS number so it returned some douchebag in FL with my same name and birth date with a mile long rap sheet.
Needless to say that experience changed my mind about working as a contractor for Uber. I sold the car and never looked back. There's simply no way I would consider working for Uber or Lyft using my own vehicle. There are simply too many downsides. Once wear, tear, and maintenance costs are figured into the equation it's not even worth it.
Still, if someone wanted to make a few extra bucks here and there on weekends and holidays, it might still be worth doing on a temporary basis. It looks like it's going to fail anyway so it's probably all a moot point.
Knowing it's owned by Progressives is just another good reason to not work for them.
“I am confused as to how Uber is still losing so much money. They have dominated the space, do not need to advertise to get customers and have a favorable revenue share off the labor of contractors. Seems like they should be a cash generating machine.”
They do not charge enough for rides.
here in San Francisco they are offering $4 rides practically everywhere.
It absolutely costs more than that for all costs associated with someone come in from somewhere, using their designed and supported technology, in a clean, well-maintained car, and dealing with you and driving you safely to your location.
Taxies are NOT overpriced. Taxi drivers are NOT overpaid.
Ubers and the like are 2-300% subsidized by venture capital. They are working on using that advantage - and the fact that they are almost totally unregulated - to unfairly destroy the heavily regulated, unsubsidized taxi industry.
Once taxis are out uber can charge what they want.
It’s like a bunch of restaurants suddenly entereing your downtown that have little to no regulations and can offer $1 lunches because the cost of the lunches are heavily subsidized. Of course they are losing money.
“But what is a ‘gypsy’ cab? A ride is a ride is a ride.”
Cities regulate cabs for the following reasons:
1) safety of consumers. Entering a stranger’s car, which automatically locks, and when you might be at any number of vulnerabilities like drunk, new in town, female with a male driver, high, medically compromised - not the same as shopping at the store. Higher standards of safety are needed.
2) safety of drivers. Drivers are quite vulnerable to attack in these close, semi private quarters.
3) traffic and wear on the street issues - if we all can drive a car for hire whenever, it’s like allowing hot dog stands whenever and wherever. Some like the idea. But you end up with the sidewalk really clogged and hot dog vendors everywhere. In SF we are limited to 2,000 cabs. Uber says they have about 40,000 drivers here and I believe it. The congestion has become insane. I assume wear and tear of streets, similar.
4) liability issues - making sure anyone harmed by a driver is protected at least in terms of adequate insurance.
5) worker protections - monitoring of drivers to make sure they are not exploited (taking advantage of illegals a serious problem) and having them work, say, more than a 10 hour day (Uber drivers drive in to SF from as far away as LA, and work the whole weekend taking cat naps in their cars in the grocery parking lots. Cab drivers are flagged for such behavior).
Gypsy cabs are in third world countries and many people who want to be safe and not ripped off, don’t take them.
“But it has worked.”
How? it’s lost multiple millions every quarter according to internet articles.
“How? it’s lost multiple millions every quarter according to internet articles.”
First of all, Uber is owned by private equity investors. It’s not publicly traded. It’s valuation is based on internal, self-valuation. And the profitability of the company is not based on publicly disclosed p&l statements. That being said, they are not in the profit mode yet.
They are not a loss leader either though. They make a profit off of each transaction typically, because their overhead is very low, and they carry very little capital risk. Loss is mainly due to reinvesting the per-transaction profits back into the business for rapid growth.
They have spread to the entire planet in a few short years. Startups almost never make money in this short of time frame, especially with this kind of rapid growth and market share gain.
A good comparison is Federal Express. On paper, Uber’s valuation is bigger than FedEx. It took decades for FedEx to get to it’s level, size, and market share.
Millions of customers use Uber regularly. The majority of them prefer Uber over traditional taxi service. Uber is faster, more efficient, allows for cashless transactions, and is available in most major cities worldwide.
As Fred Smith, the founder of FedEx said, profit is not the purpose of a business. Profit is the life blood of business. It is necessary for a business to stay alive. But the purpose of a business is to provide a valuable service (or product). That philosophy made FedEx the multi-billion dollar leader of time-sensitive delivery.
Profit is something shareholders will demand long-term, but Uber has not had an IPO yet. It’s investors understand it is in the rapid growth phase of an international startup business. This requires a large capital infusion (usually multiple) in order to repeat scalable business processes.
The venture capitalists who have poured billions into Uber know a lot more than either of us. Uber does not have as much of a barrier of entry as companies like FedEx. But remember, FedEx started before UPS got into the overnight delivery market. And UPS had more cash on hand (zero debt) than FedEx had in total valuation back when UPS started to compete. Yet FedEx got the advantage to remain the industry leader for many years because of being first to market.
Uber has a similar lead. Ride sharing is a generally profitable business model by default. That’s why taxi service exists. Uber has very low overhead. They are preparing for a major shift that will occur when cars become self-driving. Of all ride sharing companies out there, they are the most prepared and have the most potential to become profitable.
Uber is NOT a transportation business though. It is, like FedEx, a logistics company. However, unlike FedEx, it does not have the business overhead of having to own aircraft, trucks, hangers, hubs, storefronts, and other facilities. It is lean.
Uber is very well positioned to become a very profitable and powerful business. There are many factors it can not control: regulation, public sentiment, the impact of closed markets like China, who wins the tech war when it comes to self-driving cars, etc. Is profitability guaranteed? Of course not. But that is the nature of free market capitalism.
Uber has received its fair share of negative publicity. Some may be due to competitors (especially traditional taxi services) trying to cast it in a negative light. Some may be due to its leaders working with Trump. Some may be due to unethical or even illegal acts. Some may due to bad business practices in which it has failed to listen to the concerns of consumers and / or employees and contractors. It has almost certainly treated a large number of drivers unfairly by recruiting drivers with claims of huge money-making potential that either did not exist or the leadership knew would not exist for very long. They have lowered fares in some markets where it is difficult, if not impossible, for drivers to earn a decent wage.
Startup competitors like Lyft have come into the market to take advantage of these weaknesses. I read that one startup in New York was offering its drivers some stock ownership. It is hard to predict how such things may impact the future profitability of Uber, but these are not anything out of the ordinary for a business of its size, especially in the disruptive market space of smart phone apps and a sharing economy.
“Uber prohibits riders and drivers from carrying firearms of any kind in a vehicle while using our app.”
Uber does not have the right to regulate this. They do not own the cars. They do not employee the drivers. So, for the record, I disagree with them for adding this to their corporate policy.
There really is nothing to stop drivers and passengers from carrying though. The only additional risk to those who concealed carry is being banned by Uber if they get caught. And how would someone get caught?
Yep, the good old legal requirements. Reminds me of Michigan's Republican Governor Snyder signing a bill to prevent independent real estate agents from having their picture on for sale signs placed in front of houses.
Just a "legal requirement".
Need I spell it out?
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