[csomar]

Two things:

1. The cost is absorbed by another entity, usually the parents. It is the parents' car, or your parents bought you a car. You need some quick cash, so you basically "eat out" of that car to generate that "cash".

2. You are trapped in a situation where you need quick cash. So you "eat out" of your vehicle to generate that cash. This also happens when you have a low "realization" consciousness. (ie: You are bad at math and economics and you think you are making money while you are losing money).

By driving Uber you are exposing yourself to greater risks: Accidents, Lawsuits and Lost opportunities have you been doing something else. But most people either have low realizations or are trapped. Usually both of them.

I have seen countless of people getting into this kind of business. One of them and probably the biggest is real-estate renting when the economics says NO! The argument is usually: well, it is sitting there anyway so any cash is a profit. It is not and it usually led to worse financial situations and then worse decisions.

[bsenftner]

> a low "realization" consciousness. (ie: You are bad at math and economics and you think you are making money while you are losing money)

I've not heard that phrase before. It brilliantly captures exactly how such a clearly predatory business model was blindly accepted by drivers and passengers alike. My ethics won't let me use either as a passenger, regardless of the "good deal"; I never could, and this is an issue with my work as management insists any business travel uses Uber. I flat out refuse. Our CEO's mouth dropped when I explained why, replying in a tiny voice "I'd never considered it that way".

[kirkland]

Is "eat out" a real term, or just something you made up? The term I've heard for this sort of thing would be "capital consumption".

[csomar]

I just made it up as it is easier to understand than capital consumption.

[lev99]

I've heard it be used by people that are downsplaning basic accounting.

[antisthenes]

There was an interesting observation on the road a few years back.

I saw a Dominos delivery driver in a high end Jaguar. I can only presume it was a young person borrowing their parents' car to do deliveries as their summer job or whatnot. It was amusing to me (having an economics background), because I couldn't figure out what the lesson was being taught here.

Doing some back of napkin math, there was absolutely no way for this kid to generate enough money to make up for the cost of operating this car in a suburban neighborhood. Between the high maintenance cost and the low gas mileage of a luxury car, he was losing money every minute that the jag was being operated (barring, of course, some insane tips for big orders).

As far as real estate: yes, it doesn't take a financial genius to realize that renting income after all expenses is far lower than most people estimate and net profit hovers around $0-100 in vast majority of even profitable cases. Besides, you aren't the first person to think about investing in RE, so all the economic profit is generally already priced into the value of land, so you won't be able to get a bargain.

[sokoloff]

> I couldn't figure out what the lesson was being taught here.

I can easily see myself setting my kids up with something like that to teach them the value of time, structure, and work. It's no different to me than buying them a chemistry set, an Arduino, or making baking soda/vinegar volcanoes with them. I can even work through the math with them to show them that what they did was more expensive than me just handing them $5000 and telling them to watch TV all summer to save wear and tear on the car.

[antisthenes]

> I can even work through the math with them to show them that what they did was more expensive than me just handing them $5000 and telling them to watch TV all summer to save wear and tear on the car.

Who are you to say they wouldn't have found a better use of $5000 than blow it on video games and drugs during a summer? Presumably, if they already have good work ethic, they may come up with a business or a venture with that money that they wouldn't have otherwise, because they were delivering pizza for Dominos.

I would ask them to do the math of driving for Dominos BEFORE handing them a Jaguar, not after the summer has been spent.

[sokoloff]

> Who are you to say they wouldn't have found a better use of $5000

In this hypothetical future scenario: I am both a) the parent of a minor child and b) the guy with the $5000 and a Jaguar.

[mseebach]

Uber has deals with car rental agencies in several places that doesn't "allow" you to "eat out" your vehicle equity (I've seen Enterprise in CA and, I think, one other place, and Otto in London). The viability of such deals suggests that the numbers work out even without spending your equity.

[csomar]

Uber was more expensive than a Taxi for me in Paris. Uber gave me a 10-14 euros quote. And for the same distance the taxi took only 7 euros. I'm pretty sure the math might be working on some places. I'm only suggesting that it is possibly not working on other places and users are not aware of that.

[richardknop]

I've been using Uber and similar apps for years mostly in Europe and Asia and 80+% of the time the price would be substantially cheaper than taxis (often 50% cheaper in places like London). They use dynamic pricing though based on supply/demand so it is very possible to have higher price than taxi based on parameters (i.e. if you booked a ride in central Paris during rush hour the price would spike up). But from my experience you cannot use those anecdotes because if you use Uber a lot (like hundreds of rides) you will statistically see they they are cheaper in big majority of cases.

[mseebach]

Was this before UberX? Checking just now Uber quotes about the same as a taxi for UberX in Paris. The premium Uber (called "Berline" in Paris) is 60% more, so matches your experience.

The rentals I'm referring to are all UberX.

https://www.uber.com/fare-estimate/

https://www.taxifarefinder.com/main.php?city=Paris-France

[csomar]

yes it was for UberX

[TuringNYC]

Uber does minute-to-minute dynamic pricing, so any one ride isn't indicative of the actual cost. It may well be more expensive, but one or two ride anecdotes would not prove it.

[csomar]

Their lowest range was 40% higher than the Taxi. That's quite an amount.

[TuringNYC]

I've seen dynamic prices to be 200% base, I've heard it can be even higher, like 300%. With regular taxis during rush hour, or a concert, or during a snowstorm, or during drivers' dinnertime, the price stays the same but availability disappears. With Uber, availability stays but prices go up, manyfold sometimes.

[slededit]

There's been a few times where the yellow cab flat rate to JFK was cheaper than Uber in NYC as well.

[dionidium]

Yes, this happens. For example, it's raining in Manhattan right now and Uber to JFK is more than the flat-rate from where I'm sitting.

[spaceflunky]

Just curious, what do you mean by "renting"? Renting your car? Apartment? Rental property?

[csomar]

Was referring to real estate.

[spaceflunky]

as in renting your own apt? airbnb-ing? or renting out property that you own?