We Dug Into Uber's Finances. What We Found Will Shock You.
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- Опубликовано: 12 май 2024
- Uber wants you to think that “innovation” and “diversification” are the reason they finally turned a profit in 2023.
The real reason? The company has raised prices 65% in 5 years while taking a bigger cut from drivers.
And they even admitted their scheme 5 years ago. We have the proof.
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If your business model requires you to underpay your employees to turn a profit, your business is a failure.
Slave owners and land owners did as such for centuries. That is how the big house and lavish lifestyles were paid for.
It doesn't though: their business model is connecting drivers to customers for a percentage of the fee.
@@seriouslyshortofnormal925 That’s pure Kool-Aid speak.
that's every corporation in america
@shacktime
I have a very simple fix for this issue: let the drivers choose their rates and bid for jobs. There could be a 3-5 minute bidding window that closes with the lowest bid and Uber gets a standard percentage, or they could even change to a monthly subscription fee to use their infrastructure.
No one forces anyone to drive for Uber.
That's american corporate discipline in an nutshell: F*CK the employees and consumers to turn a profit.
why should they subsidize customers and drivers forever?
Because these companies take the money out of the company and funnel it to the boards crowd fund through he stock market never turn "profit" then look for a bailout from the government while also taking government funding to cover startup costs. It's criminal stock buybacks should be illegal.
@@kennethb6211 Saying anything should be illegal is lame, our nation is run by criminals, they craft laws to protect their criminal cronies from the public not the other way around.
What this country needs is competition for the market.
Go ahead and try build a cheap and fair version of Uber. It seems like you already got a lot of willing drivers in this comment section. Next up you just need to offer cheap rides to consumers
As a Uber driver. I am begging for everyone to push for change. They have us driving for crumbs now. It’s horrible.
So DON'T drive for them.
join a union
Get a taxicab license or a taxi driver license. Like the people you stole their bread did.
It’s insane to read these comments. I can’t wait til your job starts eating away at your pay and seeing ppl tell YOU to just “go find somewhere else to work” ALL of these jobs are eventually going in this direction. We ALL need to be fighting for equal pay. You don’t think your jobs are taking note on profitability?
Then find another job. Sorry, that's just the way it is.
Get a small business loan, buy a stupidly expensive black SUV, and become a chauffer. I talk to the ones around where I live pretty often. They make 85-100k a year (granted, almost 80% of that goes into expenses - chiefly insurance). Try to avoid chauffer companies, they're as bad as Uber if not worse.
They undercut taxis to create a monopoly using investor money, then start screwing everyone over now they have that monopoly. Everyone saw this coming.
Now in bed with those taxis companies to make more
@@christhayer5498 Of course. Because that's capitalism baby!
Contractors, Temps, Seasonal Workers, and Part Timers: Different titles with a singular purpose: screwing over workers!!!
Damn straight!!! Full time, Union, or bust!
Please boycott these industries. Their employees should have 0 income
Uber drivers are actually not contractors. They’re employees that are misclassified as contractors. More like employees on flexible schedule. They don’t have the full autonomy to do their jobs like contractors do.
Contractors - TRUE contractors - should be allowed to be what they are.
Temps/Seasonal/Part time should have a limit of 90 days. After 90 days (not consecutive) it should be required by LAW that they be taken on as W2 employees. The whole 'part time with zero benefits' should be illegal. Even if they can't find use for an employee more than 20 hours they should be given the same benefits as those who work full time.
And executive pay should be limited to no more than 200x that of the lowest paid employee in the company. (for a $10/hr minimum employee wage that's 2 million a year - MAX - for executives). What's left goes into the corporate coffers and are then taxed appropriately - and can allow reduced cost of product, improved employee benefits & wages. So, for the executives to get a raise they have to raise the lowest wage in the company - TO INCLUDE UNPAID POSITIONS SUCH AS INTERNS. Which means if they employ interns they get paid 200x that...
All benefits such as stock and profit sharing should follow the same multipliers, with 'consultants' and other non-corporate positions maxing out at 25x.
And all while completely violating the employment guidelines that define each of these categories.
The title for this video should be "exactly what you would expect" not "will shock you"
Gotta give an exciting title for the youtube numbers. The system incentivizes scandal.
I would have been shocked if they planned to look after workers and pay taxes. Anything else is not shocking.
"The answer will NOT surprise you, it's capitalism, it's using investor capital to dominate market share and then squeezing". Come on guys, is this video title for people who've been in a 50-year coma?
Came to the comments to say this. It's been said, so I'm just going to leave a thought. The elites are eating up the country from the inside out. Leaving America hollow and weak.
yup..... Who would have thought? companies making profit by screwing over employees? damn....
the actual definition of profit is "Salaries that have not been paid"
I'm an uber driver and I've noticed the "reduction in incentives" for months already. It's truly not worth it most of the time anymore, they're trying to pay as little as $15 an hour which is more like $10 an hour after gas and car costs.
Don't forget your employer taxes as well. (Social Security and Medicare)
Uber had a policy of cutting driver pay every 6 months when I finally gave up. At a point where the car was costing more to operate than I could make after taking into account all vehicle expenses. That was before the pandemic.
At this point all these companies are operating on the idea that drivers and their vehicles are easier to replace than maintain.
Yep, Uber and Lyft kept the prices really low until they destroyed all the local cab companies. Then they put the screws on us. It's dirty and rotten. I'm glad states and cities are banning the apps. Rich people suck😊, eat them!
I hope you have been building a little black book of customers who can contract with you directly ?
@@rrmackay technically illegal. Taxi drivers can do that but not Uber or Lyft Drivers.
This is a huge part of the problem. Drivers for these companies do not have commercial licenses, are not subject to state or federal regulations on licenses for driving passengers and do not even have to conform to rules about criminal background checks.
That is not even getting into all the fake accounts where one person signs up, but another person does the actual driving.
The entire plan (like airbnb) is to not have any overhead or responsibility as they don't own the vehicles or owners' properties but to profit like they are real hotels or other actual businesses.
It is the new way to scam the middle class for major profits for you or your stockholders.
It’s not just drivers they take advantage of. They hire A LOT of contractors on the tech side too, overwork them, and then lay them off before their contracts are over. They do this regularly.
Yup. Rich gotta rich. 💪😎✌️ Poor gotta serve, suffer, and submit.
They need to he reigned in
As a former Uber driver I can say that they screw the drivers. 6 years working for gig businesses from driver to regional management I can say confidently that the system is rigged.
Yup. If you ain't rich, powerful, influential, and well-connected, then you ain't nothin'. Get rich. Be rich. Else, you must serve, suffer, submit... and OBEY.
Side note. Their venture into driver-less cars failed because they "relaxed" some of the safety protocols in pursuit of scaling up the service. The "safety driver" in their fatal accident was on her phone watching videos and the collision avoidance had been nerfed. They weren't even fully autonomous yet. To this day, the sole fatal accident involving a self-driving car was Uber. They almost killed an entire emerging industry in the pursuit of fast money. (source: I know people who worked there back then)
And they’ll spend all of their profit trying to build Machines to replace humans rather than just paying humans a decent wage.
Part of their scam is getting the drivers to cover the cost of ownership, insurance, maintenance, gas, etc. If they owned self driving cars they would have to cover these costs.
There have been many fatal Tesla FSD crashes. Not to mention Chinese cars...
@@animusadvertere3371 A Tesla is not a self-driving car. Despite the name of the feature, it needs someone behind the wheel at all times.
@@gordonmills2748 There is no real self driving car yet. It's divided in 5 levels and the highest we achieved so far is level 4, where self driving is possible in very specific roads. Tesla is level 2. I think Mercedes had level 3 and stopped R&D on it, as level 5 is not feasible at the moment.
The truth is, and most people who know anything about AI will concur - true FSD requires a GP-AI, and we have no idea how to get there. There is no prototype, no paper, no public hypothesis on how we can reach general purpose level in AI. We have to get there first, before we can talk about level 5 FSD.
The gig economy is a failure. Terrible.
Fact 8- If a driver is driving a XL car, which is a a comfortable full size sedan or SUV, the Uber denies them of the XL status for the bogus reasons like cloth seats. But then Uber books passengers Uber XL in the same drivers car. Where customer is paying for Uber XL and driver is getting paid Uber X. They are screwing over both by directly lying and stealing from both.
XL vehicles must hold minimum 6 passengers plus a driver.
More like charging uber suv price and driver getting uber x fare
Yes, that's happening coz stoopid drivers buy a leather seated car for uber x and xl where the riders actually paying for uber black and suv
The wealthy, powerful, influential, and well-connected control everything. If you're poor, weak, and unknown... you ain't sheet! 😂 You gotta serve, suffer, and SUBMIT. There's a word for what that is, too. 💪😎✌️
It’s literally like a 2 dollar difference. And you rarely get XL requests. I was doped into getting a SUV thinking I’d get more money. Boy was I wrong. Just paid more for gas. Uber are thieves!
I gave 5000 rides for lyft from 2016 to 2019. They cut the pay rate 30 days after i started and continued to cut driver pay, each time attempting to disguise the pay cut as a benefit. It's sad that neither if these companies has an ounce of integrity. Both treat their drivers as if they are a valueless commodity.
the stock market demands you treat your employees as a valueless commodity. as long as shareholders are involved, they will be the true reason for all business decisions
They are predatory
It's not a valuable skill. That's why the best advice is to get out. In order for both of them to stay competitive they both have to have the same business model.
Drivers become a valueless commodity the moment they say yes to their shitty deals, then expect "help" from the outside in the form of regulations or unions. It's absurd. I quit the moment I saw my profit going down because of competition from other drivers that they purposely hire there. People need to grow common sense!
@@japprivera3129 Exactly, being an uber driver is like being a fast food worker. You are not a valuable member of the team, just a commodity to be used to make a profit.
It always baffled me how uber/lyft could loose money when their only fixed cost is insurance and servers and labor, vehicle wear/upkeep and fuel are all covered by the "independent contractors".
yeah it would be nice if the engineers of this company just ran these in each city for a small profit it could be called Austin Rideshare or NYC Rideshare, becuase this is a software company that's it, but if someone did that they would probably end up like the guy who used to work for Boeing.
Most of their losses are legal fees to keep drivers pay low. That how shitty elites are they rather lose money than help anyone out.
Uber and Lyft can’t make money keeping almost 50% of the fair but the drivers are supposed to be able to Pay all the vehicle expenses and still have a wage?
Yes, Uber is not a value add and only exists due to regulatory capture and anticompetitive practices. They are a technology platform that could be replicated for zero cost, and has in the past been subsidized by the state, meaning the source code should be seized and implemented on a public chain with 100% revenues going to drivers.
@@dustinbicknell2690 Yes , they would rather spend billions looking for new drivers rather than paying the current drivers
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Misleading is such a kind term. They are lying.
Its really hard to find a taxi service in medium sized cities and small towns now. Uber subsidized fares just long enough to destroy the competition. Gaming the "free" market is now the norm.
This is what I hate about monopolies. They destroy all the small business competition and then your forced to use the service or go without. It is a ridiculous practice and should not be allowed. We all knew what would happen after Amazon took over. There are fewer places to shop outside of the biggest stores to buy anything and prices are the most unaffordable they have ever been.
@@margaritoamargo6347Uber is also burying public transit too…so it’s worse because of all this too. And traffic is worse because of all the deadheading that rides gare causes (driving without a fare).
The market was never free
Uber has found a way to pay drivers less than minimum wage, no overtime, no benefits. Stopped using Uber a few years ago and returned to using cabs. Cab service has improved, you don’t have to sign a list of terms and agreements to ride, drivers are happier and help you with your luggage, price isn’t much different.
Don't they also pass off most of the tax burden onto drivers? I thought that was the biggest part of their scam.
100%
They are independent contractors, which means the drivers can make deductions on business expenses.
Yeap.
@@ryantetreault3447 , yes but those deductions are less then 1/2 the cost of doing business.
@@ryantetreault3447 If you think the drivers are genuinely treated like independent contractors you have no idea what that actually means and entails.
75% of a market is dangerously close to the M-word
we need to start looking at any company with over 10% of the marketshare to be dangerous, and not allow it to happen. if monopoly isnt the right word, then we need a new word.
@@ohiasdxfcghbljokasdjhnfvaw4ehr "Oligopoly"
No no. See 40% IS monopoly territory unless it is a duopoly.
At 40% you get to set the prices for every service hands down, and the standards too boot. Again, unless someone has more market share nationwide.
We should be worried when anyone has 2% of the market share by area covered. (I.E. to adjust for population and local costs by only looking at area covered and what percentage of that total landmass is served by the companies in question)
That might sound absurd. Until you look at US history. From before the declaration of independence was signed until 1979 multi-State companies where fully illegal. For a reason.
You had to export across state lines. the reason? STATES ARE NATIONS. The united states are a collection of 50 Vassel nations.
Not pick an choose when its convienent 50 vassel nations, but always 50 vassel nations, under whats supposed to be... leaderless governance of treaties, by treaties and constitutions.. plural. with mutliple constitutions and each nation is supposed to be a true democracy at beck and call to the popular voice therin.
The only things States aint supposed to be allowed to do is limit rights prior granted to people, leave the US, and violate the constitions amd treaties, and those treaites are the highest law of the land period end of story.
Like. fricken heck the entire US went slowly crazy these past 45 years. And its all been over greed. And its all just a repeat of 1890-1930. And its all just increadibly stupid. and that include Uber.
Sorry to vent.
@@AnonymousAnarchist2 no need to apologise. It's perfectly understandable and you comment extremely informative
any type of completely free market will 100% of the time tend to a monopoly.
Competition is nice while no one has won it... but somewhere down the line, someone will.... and even if "someone comes and beat them" comes true someday, the monopoly will still be there, just being exercized by someone else.
Competition in free market is a myth.
Hope Minnesota calls their threat to leave the State. Hope other cities and states follow Minneapolis' lead.
Austin call their bluff over background checks and when Uber left Austin locals started ride share companies to fill the vacuum. Any large city will see this happen. We don't need Uber.
From what I read, Minneapolis is also establishing some alternate rideshare companies. Three have been approved.
@@puggirl415Yes , they need to go out of business.
I drove Uber rides one time. When they offered $300 boost plus fares for 5 rides. After that, it dropped to $7 “opportunities “. Never again. Plus too many scary fares. No more. I’d rather take a bus if I have to.
Drive the bus instead, its more fun.
I only ever drove for these apps when they were running "promotions." No promotions, no work. The pay just doesn't math out. The US government is failing everybody who has not had the luxury of leaving this line of work.
The US government is failing the working class, PERIOD, FULL STOP.
Until those holding the money have it stripped away and redistributed (which would never have been necessary prior to Reagan and all of the polices that have been carried down ever since - by BOTH parties) the working class will always get f*cked over.
Look up who Tony West is.
I had a passenger Saturday that paid $100 for a trip, I only received $43 of that
Good god that's robbery
Which makes you bad at math. After a leased is paid a taxicab driver would keep a whole lot more after expenses.
@@serafinacosta7118 k
i thought employers taking your tips was illegal
@@ohiasdxfcghbljokasdjhnfvaw4ehr it technically is. They didn't tip tho
Keep exposing what rideshare companies are doing as they increase profits explore loopholes and treat their workers like trash.
According to some analysts, the drivers are not making much money when considering all the real costs of using your own car. Like very little money.
Drivers union in a state in India made their own app which is cheaper than Uber and doesn't take cuts.
Drivers will do that in the US also
@@ErkanAkaltun I really hope you guys do. And make it open source so that unions in other states or countries can also use it.
@echooscar5241 Yes, we designed global software structure with localization, which means SaaS . Some people call it MaaS. Indeed there are difficulties to name the model because it is not commercial. Btw, where r u located?
@@ErkanAkaltun😯 what is it called? I hope it gets widely adopted! I'm from the southern part of India.
@echooscar5241 only taxis can work on rideshare platforms in India, right? Private cars already banned?
When a business is starting out there is often an “employee first” mentality.
Once the business goes public, it’s all about the shareholders.
I feel so bad for the drivers.
Meanwhile, make sure you tip your drivers.
@@Arthur-Silvano
@@Arthur-Silva I wish your answer was less tipping. Tipping is out of control and we need to make that clear.
@@rarephoenix Whether tipping is out of control or not, if you take rides without tipping: you are the problem.
@@nikidelvalle Uber spent the first two or three years very, very diligently and carefully training their passengers they did not have to tip. Drivers made more than enough. After that it was set in stone.
Yep stop using Uber cause of what they doing to drivers
I try to!
@@Anne2u the pay is horrible I would rather use a cab. At least the person gets more. Here in Atlanta a cab is cheaper anyway.
@@Anne2u Most drivers I know are on multiple apps at the same time. If all uber usage goes to a different app they'll either already get the same ride or just install that one too.
The drivers are doing it to themselves.
If you want to help drivers, don't stop taking rides, support alternative ridesharing apps that treat drivers fairly and use them when they become available.
4:20 I can agree with this. I've only done uber eats, but when I started skipping too many fares because they literally weren't paying minimum wage, I started getting fewer and fewer offers.
Uber eats is a joke.
They dangle that carrot and people keep chasing it.
Monsters !!
I never took a Uber in my life -- only good old taxis (3 to 5 times a year)
You did well.
No Uber, no Skip the Dishes, no Air BnB and no Hello Fresh for me.
@@nadinegriffin5252 same here sister :)
@@nadinegriffin5252 old fashioned gal.
I seriously work hard to engage myself in someway of earning more income. My family are happy once again and can now afford anything for my family even with my Retirement.$57k k weekly returns has been life changing, after so much struggles.
Hello how do you make such weekly??
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Maria Angelina Alexander I really appreciate her efforts and transparency.
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YES!!! That's exactly her name (Maria Angelina Alexander) so many people have recommended highly about her and am just starting with her from Brisbane Australia.
According to the Uber statement shown in the video they openly discriminate based on gender and national origin (among other things).
That is illegal when employers do it. The "independent contractor" loophole needs to be closed.
Capitalism exploitation of the working class is the problem.
‘Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.’
John Steinbeck
Except these CEOs are devout Marxists
I feel like we need more Steinbecks and Upton Sinclairs
Criminalize the poor and defend the rich.
Also, exploitation of their customers. They don't give a crap about any of the people who actually use their services. They only care about scamming as much money as possible for their shareholders, who they see as their REAL customers.
Uber is a centralized business indirectly sponsored by the state and a middleman overcharging everyone, it's as Soviet as it gets.
So many NYC medallion owners literally ended themselves because of undercutting regular taxi service there. The human toll is awful.
Or maybe because of the government involvement in creating a medallion market in the first place that costed millions of dollars ! I never understood why someone has to pay a million bucks to drive other people around !
Not just NYC.
Why was there mdeaillion if not to reduce supply and capture a market by regulation?
The medallion system was a monopoly as well.
@@dontbeafool Without the medallion system, NYC would have been drowning in taxis and fares would be undercut. It wasn't a perfect system but it did ensure that cabbies got reasonable fares and there weren't too many of them to undercut one another.
This makes me glad ive scammed Uber Eats out of hundreds in $20 coupon codes.
😂
I just learned about this a couple of weeks ago. I was using Uber for the first time after moving to the suburbs. My drive got reassigned three times. My wait time went from 4 to 7 to 17 minutes with each new driver. So I cancelled and tried again. This time I texted the 1st driver, who also dropped me after confirming. I called the next driver to make sure she would not drop me.
We had a great conversation on the ride after I asked whether drivers could get other Uber requests after picking up mine. She suggested that they were probably picking up a Lyft client instead. Many of the drivers sign up for both. But Lyft pays them for the ride to get the customer. Uber does not. So between the fact that Uber had significantly slashed their pay and that it would not pay for the pickup, it makes sense to the drivers to take the Lyft customer instead. Specially since in the suburbs, they are less likely to get their next customer close to the drop off location.
Needless to say, I'm ditching Uber and switching to cabs or Lyft.
It's the same with every "gig economy" company. They get the consumer used to deeply subsidised services, but then it's only sustainable if you don't pay your workers. Taxis are simply more expensive than that. Something's gotta give, and ultimately we're gonna have to go back to paying the true price of taxis -- like we did before the apps showed up.
I drive Uber in Austin. I recently gave a ride during a busy weekend from the downtown Marriott on Congress and 2nd to the airport, a distance of about 10 miles. The passenger's upfront fare was $82, my upfront fare was $36.
So profit after exspenses is ? 20$ 15 $
Ubers is one of the most unethical companies in existence. I started ten years ago when they paid a fair wage, now they take over 60 percent of the ride and I’m barely making ends meet.
Then stop dealing with them
Why don’t you quit your job too ? Why should I have to not deal with them when their the one’s breaking labor laws. They need to change not me.
@@joegug4751 first they are not breaking any laws. And second, you are a crony. You want the government to use force to obtain from others something you can t earn on your own.
The proper response to not getting the deal you want is to decline it, not to use the government to extort what you want.
@@maximemeis2867 They are in fact breaking many laws, but the government refuses to hold them accountable.An they obviously have you fooled.
Thank you for being a voice for us drivers who have been getting robbed by Uber for too long. I've been a driver for the for 9 years come October. The pay has dropped insanely over those 9 years. I don't know of any other job, where you, over the years, get pay decreases, instead of pay raises. Literally insane.
I spent $35 to Uber 3 miles because the buses in my town don’t service the literal TRAIN STATION after sunset
Damn it's almost like divesting in public transit in favor of for-profit ride sharing services has resulted in a system where everyone gets screwed while the rich get richer 🤷
You don't need data to prove drivers are making less. You just have to ask drivers directly. Some days I could drive around for 8 hours and not even make enough to cover the tank of gas after burning through half a tank.
As someone who's never thought of driving for Uber myself, what is making you and other drivers stick with it? Because you are actively losing money on that, after all the car, insurance etc costs money too. It feels like you'd be doing better covering some shifts in a minimum wage job - not that I'd recommend that, but it does serve to point out just how bad a deal it is.
Yes Uber is taking to much money from each fare.
However, why are you driving around without a fare? Drive to the nearest hot area after dropping off a fare. Park and sit there and wait with your car off. Driving around doesn't make you more likely to get a ride.
Heck, honestly, I bet you'd still make more money if you just even drove a block away from the dropoff spot and parked there. ... as long as the drop off spot wasn't in BFE.
@@csr7080 Uber runs very elaborate scams to lure drivers. For the first month or two you actually make decent money. Then they rip the rug out from under you and leave drivers who invested in the job to twist in the wind. Also, Uber’s (and Lyft’s) executive boards are staffed to the gills with former Democratic appointees and the like. Look up Tony West.
No, anecdotes aren't proof. Data is proof
@@Wesley-rn7oc The data can be found in their trip receipts and ride manifests. Then you run that against their operating costs. Many drivers operate in the red, which is why the churn rate in “ride share” is among the highest ever in any industry. That fact alone proves there’s no money in the job.
As a Minnesotan I am proud of us probing Uber and Lyft, solidarity forever!
What kills me is the sheeple who watch this and still don't go beyond" I worked since I was 8 months old, 10 days a week for a nickel a week, but you don't hear me complaining!"
I never use Uber. Such a ripoff. Lyft is always cheaper when I check. The prices have become so expensive that you could just pay a taxi driver.
Lyft is over charging my credit card for rides I didn't request. One month Lyft charged me $250, and $ 350, and $500 this month. I'm retried and don't need rides that cost me that much money. I'm filing a huge credit card fraud claim. Psst off big time. 😡🤮😡.
Most likely a company that is just using the Lyft name charging your CC they got ahold of.
As a former cab driver, I was troubled that Uber was totally able to circumvent the safety, training and certification process for their drivers that cab drivers had to undergo, including things like criminal background checks, and even professional driver licensing.
As an ex driver, I’d say neither Uber or Lyft will work in the long run. While taking 35-50% of the fairs they’ve done nothing to improve basic mapping function, which leads me to believe all the money is going to shareholders, city negotiations, and financial trickery. The drivers are now making less than they did driving cabs.
The thing I never hear any of these stories talking about is wait time. I used to drive for Lyft and Uber in Seattle, and the city (then state) instituted a minimum fare law, but they failed to restrain capacity in any way. So the companies flooded the market, and even though I'd make more for a given trip, I'd have less trips. If there isn't a passenger in my car, I'm not getting paid. As a whole, I made less with the higher fares.
Any of these minimum fare laws need to include all time the driver has the app open and available for rides, and yes that likely means that the companies will need to tell drivers that they're being logged out or they have to work on a schedule, but thats how responsible companies operate.
Oh, and this'll also mean passengers have to wait a bit longer, since there will not be as many drivers waiting around for their trips.
They list uber driver's gender, age, skin color, eye color, hair color, etc.
........so that end users can discriminate against them or something? What does it have to do with the payment algorithm? You gotta be more clear about this, man.
This is a financial model called blitzscaling, plenty new companies do it.
In short, you start a company with a promise, get a massive finding by venture capitalists, and keep operating at loss until you captured enough of the market to be "too big to fail," and then start racking up prices to start making money.
Uber, lyft, airbnb, wework, spotify, the list goes on. They start by offering a great deal, and progressively get worse to pay back the initial investors. That's how they appeared out of nowhere and were suddenly everywhere. And most vanish just as fast, leaving wreckage behind
All Uber does, is run a bunch of computers.
But they require a 40% margin to turn a "profit" ?
Let's see if I can deduct 40% from my income as "computer expenses".
This is what a libertarian utopia would look like, except it’s reality, not an utopia.
i would be more shocked that Uber *isnt* doing something shady.
Thanks for doing a video on Uber. They're the WORST. This "gig economy" is the WORST.
And, INCREASE THE PRICES!!! If your company cant turn a profit, that's a YOU problem, Uber!!! What kind of company criws "poor me" for not even paying the bare minimum!!
How the hell does it cost Uber more than 7 dollars to arrange a 20 dollar ride? What kind of technological incompetence makes this possible?
I'd like to see Uber's expenses. It's an app, why do they need 40% of a ride to make a profit when their only expenses should be a few programmers, servers, and lawyers (to navigate governmental requirements). All of the big tech companies seem to claim or forcefully generate unreasonable expenditures. Is this just to avoid paying taxes on the profit or is it CEOs investing in high risk high reward expansions to try for huge bonuses or what?
CEO’s and shareholders have a lifestyle to maintain
Uber was paying for a good portion of each ride, paying the drivers more than the riders paid so that they could monopolize the market. Once they have a monopoly, they can do whatever they want with prices.
5:17 Yooooooo, they said the quiet part out loud.
Lyft is basically doing the same. Lyft is stealing.
Somehow, with all the variables inherent in various trip lengths and rider tips, I average $24 hr. with 40% of riders tipping. That's impossible unless Lyft is manipulating the numbers and taking (stealing) driver's tips.
BTW - I used to make $32 hr. with 50% of riders tipping. Lyft is stealing every day.
The 'gig' economy is all about eliminating the costs for labor by making everyone a contractor. When you work for a company your compensation, the total amount your employer pays for your labor, includes not only your wage but also your benefits as well as the overhead to put you in an office or similar. Uber doesn't pay you any of these and as an independent contractor YOU are responsible for covering these additional expenses. It's not just gas, oil, maintenance, insurance and depreciation, but you also have to account for social security and Medicare. People working in this place in the economy receive compensation from the company and wages account for about 65%-75% of those costs so if you're only getting paid the wages then your effective pay is 25%-35% less than it appears.
Uber and Lyft is taking 60% of the total fee. Even the cleaning fee that has absolutely nothing to do with damage to any property of Uber will be 100$ to the greedy animals and 150$ to the person who has to stop an entire day to clean vomit and miss rides.
Driving passengers for Uber was an interesting experience but not worth it when I did it back in 2017. In my midsize town you're either driving around drunks or people that don't have much money because they can't afford a car. Neither generally tip well. I switched to delivering food instead and never looked back. Turns out people tip more for you to deliver their hamburger happy meal than to deliver them alive to their destination.
That was the catch when Uber started. All I ever heard was, " you don't have to tip". An I thought to myself it's a service industry, so why wouldn't you tip ? It was a hook , line and sinker move obviously.
Isn't there a Cooperative version of Uber somewhere?? I heard there was. User Workers joining that would be better than a Union.
Or, you can say it'd be a more perfect union.
There are several companies spread across various cities. You just have to find out which one is in the city you’re in.
Co-ops really need to go mainstream worldwide.
@piku5637
Yes I totally agree. Yet I put to you that you are part of the reason that doesn't happen if you are like JT on Second Thought who unintentionally destroys Economic Class Solidarity, rather than someone like Christian Smalls or Shaun Fain (head of UAW) or More Perfect Union Channel that refrain from the temptation to break Solidarity and thereby are more successful with further reach and power to help.
Namely, the former assumes all people of the same economic class must be either culturally FAR Left wing in all things, or be made that way.
Thus it is far less as effective as it could be, and also counter productive in influence.
Which is a HUGE shot in your own foot.
I understand the temptation to destroy Solidarity, I would have the same temptation, we all do.
The latter - as far as I can tell - focus solely on economic class matters and are thus more successful.
Which one are you?
@@piku5637
I don't know for sure, but I reckon Mondragon would be more in the 2nd type - Esp when it was first forming.
As a semi truck driver I can say. If a companies driver pay cannot be explained in simple math, they're messing you over. After all what makes Uber driver pay so complex that they need an "algorithm" the make it work.
If paying your employees a fair wage makes your business unprofitable your business was always broken
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If I ever have to use uber again I'm going to let the driver know what the ride cost me
I used to work for DiDi in Mexico, Ubers main competitor in Latin America, what you guys are saying is true. While I dont know the exact data from the US, the main way to make the P/L of a city profitable is to reduce driver incentives, they tend to be the n.1 expense that every city has in order to reach profitability. The other lever being moved is also Take Rate. For me its crazy how high Take Rates are in the US, in Mexico for instance, depending on the city they tend to be between 15% and 25%, for both Uber and DiDi. It shocks me to see the 35%+ I see in the States. The main reason for those Take Rates going up is without a doubt Uber gaining market share from Lyft. A golden rule from ops in Ride Haling: The more market share you have in a city, the lest investment you put in it (incentives, discounts, take rate, etc) Since Uber is killing Lyft slowly, so will the investment they make and in turn, reduce driver earnings
This month Uber increased the fee for instant cashout for drivers. Now it's $1.25 to do it. Previously it was like 75 cents. Yet another example of Uber squeezing as much money as they can. It's pathetic and disgusting.
Don’t use Uber until they pay their drivers a living wage
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People need to start calling in to uber with their complaints. Let them know that we are done with their games.
The only needed thing is an open source non-profit system for drivers and riders. Everywhere outside of the USA there are a ton of alternatives. Maybe not as good as Uber, but they take much less than Uber.
How do most of you guys still make profit, even with the downturn of the economy and ever increasing life standards
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"No business that relies on paying less than a living wage has no right to exist in this country." -FDR
FDR also gave incentive money to Southern Land Owners to not grow crops while courting them to vote on his New Deal. Most Southerner Land Owners were registered Democrats back then.
Only these land owners were not kicking a fair share to none towards their sharecroppers out of their collected money. Mostly of these sharecroppers were negroes, with a scant few whites amongst them. .
Eleanor Roosevelt , the ever so humanitarian and distraught wife , plead good ole Frank , to look after this injustice. F.D.R . , courting Southern Democrat string votes, would not want to hear none of it. He willfully chose to ignore.
Negro sharecroppers would then meet at their local congregations , mostly baptist , to share their grievances and organize. They were brutally met with lynching mobs, cross and churches burning , and this is when KKK became known to act as henchmen for these bankrupt aristocrats.
Some swell fellow, FDR. His silence and willful omission cost countless African American lives.
Disgusting quote. The terms two parties agree to trade on is none of the government s business. If an offer is not up to your standards, don t take it. That s it.
@@maximemeis2867 Ok boomer. Here's a hw assignment. Go read the Jungle by Upton Sinclair and research the Gilded Age.
@@jackcarraway4707 so you have no argument. Whatever these book say, still none of the government’s business. If you don t like a deal, don t take it. That s it.
@@maximemeis2867 Ok enjoy working 100 hours per week at a $2 an hour.
I'm an analyst too, I would like to comment. In my country Uber is great for delivering food, I still use it and try to tip my drivers all the time. The Uber app that act as a taxi has problems. Business model isn't sustainable and Uber has an increasing trend of Underpaying Their own drivers. I guess using a normal taxi might be more simpler than asking for a ride on Uber.
unsustainable business model that won't last.
15 percent should be their maximum cut
OMG thank you thank you thank you. I’ve been showing other drivers the math behind the offers and percentages that Uber is taking from drivers. This video is gold.
Seattle 5 mile trip from Airport to my home $87. Lyft? $65 Booked taxi? $37
Tried to explain to people that Uber is now taking all of the surges. I've seen Uber take as high as eighty percent of the trip. They're also using trip radar to bid on other drivers at lower pay. I've watched them cancel rides that i've already accepted to, then give it to a different driver at a lower pay. Wasting driver time. All for their profits.
Uber is perhaps a leading example, but this is the exact idealized business model for most big tech startups
1. Have a potentially killer idea, hire some engineers and get a prototype going
2. Get angel investors and venture capitalists to invest millions or billions of dollars in your idea
3. Use that investment money to operate at a loss for 5-10 years, giving consumers something that seems like a great new affordable product/app/service/whatever
4. Create a monopoly or pseudo-monopoly by driving the comparable businesses that need to operate at a profit out of business(i.e. everyday taxi drivers, delivery services, etc.)
5. Once you've cornered the market, turn on the monetization. Consumers (and workers) will now have no other options, making you incredibly rich and everyone else worse off.
Doesn't always work out that way, but that's the ideal goal. Venture capitalists love this b/c if it works out, they basically get to own the world.
Luckily Uber is not a thing in here in Norway.
I used Uber when it first became available because it was cheaper than taxi and you knew cost before booking now it’s expensive that I ended up renting a vehicle to use for the day than take Uber. The cost from airport to Airbnb was $108 while renting a vehicle cost $70. Airbnb has become expensive as well that I might stop supporting them.
Tried that using my own vehicles for my job ..ended up driving further and making less. And tires oil.. gas forget that
Seriously it is taking a big toll on. Recently reservation rides are paying 25% less .
Sadly, it's the same everywhere. Tesco's CEO just got a pay rise earning £10million per year while their workers and regular citizens are struggling to put food on the table and having a roof over their heads.
Uber commission in NYC is always more than % misleading public by its donations to the community by slaving the drivers.
Also, deactivated drivers without any notice for any false passenger complaints .
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This is crazy. Like even people working side gigs after 2 jobs just to pay for a room in an apartment they share with strangers, can't get a break.
Its a no win for drivers. Because most drivers dont account for totaled cost. Car depreciation repairs gas insurance eats most of profits. Most are making low wage.
They're in denial. The people who stick with it do it because it seems they have freedom to call their own shots. Make their own hours. Be their own boss. Which is a delusion.
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I do not, 100%, use any app that turns what was originally professional work into gig work. No delivery apps, no ride-share apps, no AI apps. All these things to replace workers reminds me of Milton Hershey. "Damn your machine, hire me 20 workers."
Unfortunately too many people refuse to stop working for these scam companies. If everyone just stopped doing Uber than Uber would either have to start actually hiring drivers or go out of business. Sorry to state the obvious. Seems redundant at this point
@@stevenotero2627 Ah, welcome to our current economy, where people are suffering so much economic anxiety, they're looking for gig work. Most Uber drivers aren't full-time drivers, they have full time jobs and use Uber as a means of earning enough money to make ends meet. So, yes, people shouldn't work for Uber, but if you want that to be the case, you need all the rest of corporate America to decide to pay their employees living wages so that gig work isn't a viable industry.
The crazy part is personally, If I'm paying for an Uber, I need that Uber. I'd much rather have a consistent price that pays a living wage instead of some weird tip expectation that likely gets eaten by the company anyhow
Sounds like they should not be independent contractors and be counted as employees now since they are taking a larger cut of their pay
They should be regulated like taxis and other livery services. The fact that they just don't pay taxes and have to follow regulations like already-established, well-regulated companies is a problem. They are profiting off of skirting around laws that we have had in place for over a century.
The government and politicians allow it all to happen. So do you fight Uber or the government?
@@stevenotero2627 Why not both?
I remember being charged £15 for a trip and quickly glanced at the drivers cut as he was concluding the trip on his phone. £4 was his cut!!!!
In the state of Victoria(Australia) Uber has made a deal with the main taxi service 13CABS to give them jobs when Uber is inundated and 13CABS has drivers free( for a fee of course).