You shouldn't, the end result is that drivers will end up with shitty salaries (and no, most drivers aren't going to be retrained as computer programmers when they realise Uber can't help them pay for their SF rent). Not to mention that these people are contractors (illegal) so have more personal taxes to pay.
In my eyes Uber and Lyft have lost all moral high ground. These companies are just not following regulations to make more money. This money was going towards drivers, but it's clear that that's no longer the case. If you have any moral qualms about Walmart's treatment of employees, I don't see how you cannot have issues with Uber.
It's not clear to me that the contracting model for drivers is illegal. Drivers choose their own hours, own their own cars, and don't have to be exclusive to either Uber or Lyft--many drivers drive for both more or less simultaneously. That's the most clear cut example of a valid, legal contractor model I've seen.
working almost 40 hours of week for only one company as a contractor _is_ illegal. In the eyes of the IRS you are an employee, not a contractor. But this is illegal for the employer rather than the employee in this case.
That's not true. Working 40 hours in a week is not a problem. A contractor can put in an unlimited number of hours if they wish. 20, 40, 80 - it doesn't matter.
The differentiator you're probably thinking of is whether the worker chooses which hours they work. If the worker decides independently how much they will work and at what times then the IRS doesn't tend to consider the relationship employment -- regardless of how much time is put in. This is precisely how these driving services operate.
If the employer is scheduling a fixed schedule, say 9-5 M-F, then the IRS considers it an employment arrangement. Regardless of the number of hours worked. But that is not at all how these services operate.
One of the defining features of Uber is that the drivers set their own hours, too. That's how surge pricing is supposed to work--it's supposed to incentivize part-time drivers to get off their butts and drive during peak times.
Sometimes it backfires; Uber sent warning emails about surge pricing New Years Eve to drivers and to riders, and the cumulative effect of the warnings resulted in a glut of drivers and relatively little surge pricing in Seattle, at least according to a driver I talked to. In this case, leaving it as a contract arrangement even works for Uber because it lets them leverage market forces where a traditional employment model would make it impossible.
Well I live a lot further away than Oakland. I commute from along the 680 corridor which is further than may are willing to endure, I think. Luckily there's still quite a lot of affordable housing in safe neighborhoods in San Leandro, Hayward and El Cerrito (to name a few), all of which are much shorter commutes than mine.
But the more general answer to your question: When supply outstrips demand the only reasonable response is to build more housing.
Complaining that driving jobs have low value isn't constructive. The value of those jobs will approach zero soon due to technology. Instead, address the economic imbalance and let supply meet the demand.
Most of the Lyft drivers I've spoken to recently lived in Walnut Creek or further out. I only occasionally seem to get someone from Oakland, let alone SF.
The uber announcement notes that "Partner Drivers will receive fares based on time and distance, the same as they normally do." So it appears they aren't taking the hit. Lyft doesn't comment on it...
Drivers' salaries can only go as low as drivers are willing to be paid to drive. That's no different than literally any commercial interaction. You could always volunteer to pay more, and the other party would probably be appreciative.
Of course, in this case I think it's pretty clear that Lyft and Uber are subsidizing the rides and paying drivers much more than the cost of the ride. If wealthy investors want to pay people to drive me around, I'm game.
This only holds so long as you believe the drivers are rational actors, and account for all of their own costs. From talking to drivers I've ridden with, most have literally no idea how much their driving is depreciating the car, nor do they factor in things like an increased maintenance schedule into their calculations.
I suspect Uber and Lyft would continue to experience their current glut of drivers, even if the entire model boiled down to nothing more than drivers effectively trading the equity of their vehicles for cash at a terrible exchange rate.
I prefer the assumption that people tend to be rational actors who account for their own costs than the assumption that there is some group of people able to rationally prescribe actions and account for the costs of other people they have never met.
What does meeting people have to do with anything?
It's pretty straightforward to figure out what the costs are of an UberX or Lyft driver, knowing their car model and year and also knowing how much they drive. These are facts, and they can be calculated once and held to public scrutiny and review. There's no need for everyone to redo that calculation.
Now that we have something that can be calculated, we can move forward based on reason, without having to decide which of two assumptions we prefer.
Routing and capital intensity (lack of car idle-times) continues to improve. Shared-rides in larger-vehicles (vans) grow in proportion and convenience. Cities expand pick-up/drop-off zones for car services. Attempts at monopoly price hikes spur freelance/coop/upstart competitors along the most profitable corridors, able to snipe Uber rides via overlay apps/services. So costs and prices stay low long enough until...
Driverless vehicles become the major mode of urban short-trip car travel. Driver costs are eliminated, insurance costs reduced, and capacity/intensity further improved – with high-capacity vehicles that tirelessly reposition without breaks/distractions. Automated rides stay nearly as cheap as 'mass' transit on dedicated rails, indefinitely.
Who owns the cars? Who is liable for problems which arise? If I'm anywhere near home, I'm using my own self-driving car, not something used by tens of thousands of unknown people. If I'm somewhere else, I'd like to use a restricted set of cars of people that I know and trust and vice versa. Probably just trade favors and pay for gas/charging rather than a straight up fee. Would be nice to coordinate with a place to stay, so I don't have to do two separate tasks (esp if I'm visiting somewhere I have friends or family nearby).
Also, it seems like regulated utilities have been more effective at providing essential services widely at low cost than large private oligopolies such as cable and wireless, so I have no particular desire for an Uber/Lyft duopoly.
Whoever wants to be in the business owns the cars, like every other rental/service offering. Whatever the liability challenges, they are likely less than current cars-with-drivers, after removing human error, emotions, and criminality.
You aren't likely to want to own your own self-driving car in a major city, unless you're an eccentric rich person, or a car hobbyist, or a old fogie. Urban garage/parking space is expensive for an asset that's idle 22+ hours of every day, and fueling/maintenance/looking-for-parking are likely not the best marginal use of your time.
What's your dislike of "something used by tens of thousands of unknown people", as long as it's well-maintained? Do you avoid libraries, sidewalks, parks, airports, shops, and restaurants?
Right now, Uber and other transport-network-providers are becoming "people I know and trust", because their systems have consistently delivered quick, clean, reasonably-priced rides across many times/places. App-dispatching a suitable-quality autocar from the nearest competitive local provider is going to save a lot of time/energy/pollution, compared to coordinating loaners from friends/family.
If transport regulators like city councils and taxi commissions were better at this sort of thing, they'd have bootstrapped a similarly rapid and ubiquitous ride-service years earlier, using their unique governmental coordination powers. Instead, they let a patchwork of inferior alternatives fester for decades.
I'm not sure of the eventual market structure of autocar-dominated city streets. Automation and standardization might make room for many providers, or just a few. Regulators could easily screw things up, by locking in specific practices or incumbent providers based on early guesses, biases, and corruption.
We'll just have to let lots of things be tried and see what works. For rapidly exploring the possibility space, the vigorous investor-fueled competition we're seeing now is very helpful.
Do you spend most of your life sleeping on public beds, lounging on public sofas, and public furniture? Eat most of your meals in restaurants? Rent your clothes? I'll spend some time in a hotel if I have to (i.e. far from home, no friends or family where I'm going), but I don't pay to sleep in a hotel or couch surf in my own neighborhood, nor do I rent cars unless I'm out of town.
I own my own home, means of transportation, eat most of my meals at my own table...the idea of being a renter of all the major environmental necessities of life is simply not appealing to me in the slightest. I'd rather sleep in my own natural latex, bed bug free bed, and sit on my own sofa or read a book on my own chair, call me crazy. There's never sticky goo on mine, or weird smells. I like private ownership.
For me, Uber is the opposite of "people I know and trust," and I have no desire to have them monetize my movements.
This attitude will change over the next decade or two. As @gojomo said, the vast majority of people already use common cabs, buses, trains and planes. Convenience and price will win out. Street parking or off-street parking will become rarer and more expensive in cities.
First it will be the occasional users or those with a second car or on a budget, but eventually most of us will either pay per use or have an account for regular use rather than outright buying a car like we do now.
For commuting, many will be taking shared vans (possibly pod-based) that pick an efficient route rather than plying a typical bus route.
And we'll get the vehicle we need when we need it. You won't take a ute to dinner with your partner. You won't have a three-door hatch when you need to choose and bring home large items, or transport the family on a road trip.
The future Uber won't even be people you know or don't know. It will be a driverless car.
Fair enough, I trust you on your own preferences, but car ownership is already trending down. More people each year are living in bigger cities. That's where ride-services are most convenient – and become even more efficient with a high density of cars and riders. And it's also where private car ownership can already be superfluous and expensive.
Self-driving cars-for-rent will get you places both faster and cheaper than possible in your own car. That could make private car ownership seem quaint or even ostentatious in most cities.
I don't see why that would necessarily happen, because the barrier to entry for new competitors in the smartphone-app-ride-sharing industry is relatively low. Of course, it could happen if Uber ironically manages to get regulatory favors that increase barriers to entry to would-be competitors.
Agreed, except that we shouldn't ignore network effects. Drivers go for one smartphone-ride-sharing-app over another because it has more riders, and riders likewise: because it has more drivers. That can be very hard to shake.
There's a logic to unsustainable price wars - your competitors might not sustain them as well as you can.
Price wars can be horrible for consumers, that's why some forms of them are illegal[0]. If Lyft and Uber talk to each other about gutting prices to put cabs out of business it's illegal. If they read the same econ books and independently come to the conclusion that it's the best thing to do, it's legal.
We regulate the cab industry to insulate it from this type of thing, because once the high prices and bad service that come with market concentration happen it may be months or longer before better options become available.
I'm not sure how tin-foil or revisionist this belief considered, but I've suspected for a while that predatory pricing simply isn't a thing that is remotely common or effective. There is far too little historical evidence of it happening, and even less of it being effective.
I don't know. The Wikipedia article is pretty short and sparse. There is a short list of "examples of alleged predatory pricing," but that doesn't seem to support the certainty with which the economic theory is generally presented.
Even in non-empirical economic theory, the idea doesn't sound particularly obvious or sound to me. Obviously predatory pricing by a large firm can drive small firms out of business, but the large firm doesn't actually make profit from that until they raise their prices again, which sends a signal to others to start competing. And yes, there are barriers to entry, but it doesn't seem like the resources a small firm spends to enter a market would be destroyed when that firm gets driven out of business by the large firm's predatory pricing. Assets will get liquidated, sold to someone else, and potentially used to start competing again when the large firm raises its prices.
I really wouldn't expect there to be a mountain of evidence for predatory pricing, it's been illegal since the 50's and if done properly it's subtle. It's just one of many tools firms have to duck and move in the marketplace.
Yeah, seems dangerous for Lyft to get sucked into a price war. But I do see a lot of potential longer term value in getting riders and drivers accustomed to multiple pickups.
In my eyes Uber and Lyft have lost all moral high ground. These companies are just not following regulations to make more money. This money was going towards drivers, but it's clear that that's no longer the case. If you have any moral qualms about Walmart's treatment of employees, I don't see how you cannot have issues with Uber.