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Old 01-26-2015, 02:52 PM
 
Location: Pittsburgh
7,542 posts, read 8,418,221 times
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Quote:
Originally Posted by bhamoutlook View Post
Also, I've taken many 10-15 minute trips that ended up costing me like 20+ dollars. Uber only takes a small percentage of that. It doesn't sound like an awful gig to me.
20% doesn't seem like a small percentage to me, particularly as they are provided really limited services for their cut. Dispatching and processing your pay.

When I leased a cab for $58 an evening in the 90's, I booked at least $150, and usually more like 200-250 and sometimes more. $58 is like 38% of $150, I still had to pay for gasoline, but they provided and serviced the vehicle, dispatching, tow service if needed, financial services for those customers with accts, etc.

Further, you made money with tips, and the cab company didn't have a clue what you made if anything (except for those small percentage of trips that were on account).

In addition, in the cab business, you could build your own business, have your own customers call you directly for pickups.

All in all, a more superior situation for the driver the Uber.
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Old 01-26-2015, 03:30 PM
 
2,553 posts, read 2,003,828 times
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Quote:
Originally Posted by Hemlock140 View Post
I know many people that use Uber, and also use Zip Car and Car2Go. They all own cars. It's cheaper to use these services than to park downtown in a big city where here the cheapest is the "Early Bird" special at about $12. Of those services only Zip Car allows you to do a short road trip, and none of them are useful for a driving vacation. In our case, for example, I take the bus to work, but we still have 3 cars. Last year we made 4 out of state trip vacation trips of 600-3,000 miles.
Well, there's the traditional rental services if you want a car suited to a longer trip. ZipCar is for people to run some errands or something similarly one-off and relatively short-lived. The two services are not the same, but are complementary.

Now, let me ask you something different. If you had never bought a car in the first place, never gotten attached to the way of thinking that car ownership enables, and these services were all available and ubiquitous, would you buy a car today?

For most of us, car ownership is a given. How else would we get to work? Or get things from Costco?

But, if you never got in to that mindset and you had plenty of alternatives for much less than the full cost of owning a car, you might never get in to that mindset. I mean, if you biked to work, used ZipCar to get groceries, Uber to go out, and Hertz to take trips, you might never bother to buy a car. And that's the value of these services, to create the ubiquitous alternatives that erode the value proposition of car ownership.
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Old 01-26-2015, 04:13 PM
 
3,069 posts, read 3,183,599 times
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Quote:
Originally Posted by darkeconomist View Post
But, if you never got in to that mindset and you had plenty of alternatives for much less than the full cost of owning a car, you might never get in to that mindset. I mean, if you biked to work, used ZipCar to get groceries, Uber to go out, and Hertz to take trips, you might never bother to buy a car. And that's the value of these services, to create the ubiquitous alternatives that erode the value proposition of car ownership.
It all depends on how often you do those things. part of the freedom of having a car is not having to plan when you are going to use it. But then again I've always lived in the outer suburbs or country, and there were times when we only had one car in the family. going to the bank, post office or 'corner convenience/drug store' was a mile walk in each direction.
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Old 01-26-2015, 11:14 PM
 
Location: Philly, PA
358 posts, read 256,460 times
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I take Uber pretty often. I actually like them better then cabs....because cabs are very picky and are only assigned to a ceartin jurisdiction. I had to put up with cabs saying "I cant go there" , "Its to far out".....It be either they dont know where they going , they either scared of the area. or something. When i get a Uber they take me where i need to go....they will take you anywhere. Driver told me he had a guy here in Philly partying and ask to goto New York and wait for him in front of a after hour in Manhattan and the driver said he made a hefty amount.

I find it easy for me if im leaving downtown after my trolley stops running after 1:30 and im drunk also. Its the perfect choice. I rather ride in the luxury then the cab any day. If i need to go in Center City cabs take forever "We have nothing in the area" its always some **** with them. And they act like they dont know how to drive ughhhh.
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Old 01-27-2015, 11:47 AM
 
1,478 posts, read 2,001,198 times
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Quote:
Originally Posted by bhamoutlook View Post
I'm a little confused about one of the points made here. You guys are saying that the drivers don't make enough money. I have asked nearly all of my Uber drivers how they like working for them and they have all said they love it. Also, I've taken many 10-15 minute trips that ended up costing me like 20+ dollars. Uber only takes a small percentage of that. It doesn't sound like an awful gig to me.
Three problems:

-the drivers commonly aren't factoring in their "true cost" of doing business. They just look at their paychecks. Assume a driver makes $25/hr according to their pay stub. That is ubers stated "norm" when you factor in downtime. Keep in mind, this will slant heavily towards surge pricing heavy drivers and those driving under optimal urban conditions (many short trips). The median (as opposed to average) full time driver is likely to make less. Subtract employer payroll taxes (drivers work for themselves). Assume 15 miles of travel per hour and $.55 of wear/tear/gas per mile since it's the driver's gas money and the driver's vehicle. That $25/hour in earnings drops to $14.84 per hour. Not bad, but nowhere close to the pay stub. You still need to pay normal state, federal, local, and employee portion of your taxes, but you do get a deduction for mileage, which helps offset that (albeit an uber driver is probably not raking a huge salary, so the tax rate shield for mileage isn't that great).

-the market isn't mature. As more uber cars are added, the service may appeal to more consumers, which drives volume up, but it's not likely to drive volume up faster than drivers are added. Why? Low barriers to entry. Drivers need a vehicle, a valid DL, and the ability to pass a very basic background check. No special skills required. Many drivers will also be very bad at the math of what they're actually making. They'll fall in love with the $25/hr paystub and won't be sophisticated enough to realize all of the out of pocket costs. So driver volume will increase, volume/driver will go down, but "Hey, it's okay, because I'm still getting $20/hr." No you're not. The taxes will scale down with income, but the fixed costs (that per mile cost) won't. Drivers will still be driving around looking for fares, just fewer customers, incurring a flat $8.25/hr cost driving around.

-Income isn't particularly scalable in terms of hours worked. There are certain peak hours where the bulk of your money will be made. Drivers will decline during non-peak hours, but there will be enough around just looking to make that little bit more such that volume/driver will suck during these periods. And there will be many people who aren't sophisticated enough to realize what is going on and that they're only clearing a minimal figure during these periods and that it doesn't work.
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Old 01-27-2015, 06:25 PM
 
Location: Pittsburgh
7,542 posts, read 8,418,221 times
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Quote:
Originally Posted by Chicago76 View Post
Subtract employer payroll taxes (drivers work for themselves). Assume 15 miles of travel per hour and $.55 of wear/tear/gas per mile since it's the driver's gas money and the driver's vehicle. That $25/hour in earnings drops to $14.84 per hour. Not bad, but nowhere close to the pay stub. You still need to pay normal state, federal, local, and employee portion of your taxes, but you do get a deduction for mileage, which helps offset that (albeit an uber driver is probably not raking a huge salary, so the tax rate shield for mileage isn't that great).


The payroll taxes for this work are a lot higher for those Uber drivers who are moonlighting.


If they have a regular FT job, its likely they are in the 25% tax bracket, add in 15.3% FICA as a self employed person, and here in Pittsburgh 3% city wage tax and 3.07 state income tax, that's a total of 46.37% of their income. Of course that varies by jurisdiction.

Further, it complicates the driver's tax situation which could mean more costs there.
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