[fishtoaster]

I wonder (and am too lazy too try to find out) what portion of sales and marketing is driver-focused. One could maybe argue (as the grandparent did) that they should be spending less on rider marketing, but marketing to get drivers in the door seems pretty important. Dunno what their driver churn rate is, but keeping the pool of drivers large is critical for their service.

[frankfrankfrank]

From what I’ve come to understand you are right on the money. All these “sharing economy” models rely heavily on churn and burn like many other less than solid business models like MLM.

I would love to see the breakdown of drivers and their immigration status, because from what I can gather, what is happening here is not any different than in the past of America’s history where the whole business model relies on the exploitation of “immigrant” labor that knows no better and is easily exploited, aka their unrealized labor value is converted into profit, or better states, benefits and riches for the executives.

[bushbaba]

I wouldn’t assume immigrants “knows no better”. More likely if they don’t have a better opportunity available. Especially if they are not on a visa.

[jelling]

Bingo. Andrew Chen, formerly of Uber, says exactly that in his excellent new book The Cold Start problem. The driver side is the hard side of the market and must be constantly tended.

[redisman]

Interesting because the taxi business had all that figured out already. It was a profitable business and drivers stuck around for decades. Does Uber have too much overhead to ever be profitable?

[ceras]

The taxi industry had it figured out only on a smaller scale. Rideshare reaches more people and rides than taxis did. In most of America, taxis were never a serious option outside of niche use cases like getting a ride from an airport. Even in NYC, where street hailing is possible, that only ever really worked in Manhattan (and not even all of Manhattan); and medallion caps meant driver supply could never fully meet rider demand, unlike for rideshare, so getting drivers wasn't a realistic problem.

Rideshare expanded the reach of taxi-like services to more regions, people, and use cases. It's now viable to travel without renting a car in many US cities - you can see this by how rideshare affected rental car companies. That's what makes the rideshare business hard: the places where they didn't have existing competition, because that's where the matching is harder and the economics not as easy.

It's a similar story for food delivery: GrubHub/Seamless operated in core areas of cities like NYC for many years (since the 90s in NYC, I think). Uber Eats brings that service to far more places, and that's where the challenge comes from in that business.

[DeathArrow]

>Rideshare expanded the reach of taxi-like services to more regions, people, and use cases.

You don't need rideshare for delivering service to large areas.

In my country we have a taxi app which can be used by any taxi driver. If you request a drive, your call can be seen by all drivers which are at a certain distance from you. That distance can be se by each driver.

One or more drivers will reply to your request and you get to pick the driver.

And you can either pay directly to the driver using cash or card or you can be charged through the app.

The fee for the drivers is very small so almost all drivers use it.

And the money are not subject to tax evasion, they stay in the local economy. Taxi drivers have wages, social insurance, health insurance and pension funds. They also have a valid license to transport people and are regularly checked to be able to hold that license.

No Uber needed.

[monocasa]

I mean, I used plenty of taxis in towns down to 90k population before Uber was a thing. Uber doesn't seem to drop much below that either.

[airstrike]

Didn't drive stick around because they dropped thousands on medallions?

[mattzito]

Depends on the city/locale. In NYC most drivers don’t own their medallions, they drive shifts for someone else’s medallion.

In fact I’ve had a lot of conversations with Uber and taxi drivers who started as taxi drivers, switched to Uber when the bonuses were lucrative, and then some of them switched back because they liked the predictability of a fixed shift and not being ordered around by a machine. Others felt exactly the opposite.