‘They were taking us for a ride’: how Uber used investor cash to seduce drivers
Firm faces ongoing battles over workers’ rights and unpaid waiting times after drawing in drivers with huge subsidies
What does anyone think a company needs capital for? To cover the losses while growth moves revenues up to cover costs maybe?
Sigh.
The dear old Grauniad’s really got it in for Uber, hasn’t it?
The complaint here seems to be that there was too much redistribution of wealth, and we need to make sure that doesn’t happen in future.
I find it interesting that the bloke they’re quoting was minicabbing before Uber.
Features of minicabbing.
Drivers are generally self-employed.
They pay a fixed weekly fee to the cabco. Used to be for radio + service. If you owned your own radio it saved a few quid. A percentage of all rides.
All cabcos promised the earth to lure drivers. You might even get a free first week. But never money.
If you weren’t POB (passenger on board) you weren’t earning.
Ideally, control would give a driver a pick up not to far from the last drop. But tended to be for control’s favourites. If you weren’t one they’d run you empty all over the patch. Favourite drivers get all the good runs. Others get the dregs. If it’s quiet, favoured drivers get the majority of runs.
The minicab strategy. So well known it gets capitalised for other sectors.
If it’s busy, they take on more drivers so existing drivers earn less. If it’s quiet they take on more drivers because they gain the weekly fee. There is never a reason not to take on more drivers.
Even Uber can’t be as bad. Be impossible
BiS, In the late ’70’s, I used to work for the largest black cab firm in London. A phone call would come in, we would write the details down and send it to the dispatcher who would call out where the pickup was on the radio. The drivers would respond with their location and whoever was closest got the job.
The dispatchers were all cab drivers and knew who was nearest – me, I worked on the phones and the radio channel dealing with any problems and the account work but one time they let me have a go as a dispatcher, where I promptly gave a job to the wrong cab and all hell broke loose. They didn’t let me do it again for some reason……
They hated minicabs for some reason too…..
“They hated minicabs for some reason too…..”
Ah, but everybody but everybody hates black cab drivers. Even their mothers.
As I’ve always said, Uber is Just Another radio control taxi company. Nothing they do will be any different to any other radio control taxi company that has been around since the invention of the messenger boy.
jgh,
The one advantage is scale. The software can do more accurate matching, so reduce wasted journeys.
Same as how Amazon is just the Grattan catalogue, only it’s a much bigger catalogue.
BOM4: Yes, it’s just the difference between Jim&Julie’s Cabs and City Cabs, but more so. It’s still Just A Taxi Firm.
Those huge investor subsidies mostly went to riders not drivers.
I wonder what the shortage of micro chips for Prius taxis is doing to Uber’s economic model. Nothing good, I suspect.
That Uber circumvented (or broke) a lot of laws getting going has been known for years. Their service was rolled out over local government objections world wide. It’s also been reported for years that drivers may not make as much after costs as they think, but people still drive for it.
It turned out that a lot of people like Uber more than taxis. It’s popular. People don’t want it to go away. Had Uber not been so aggressive it would have been strangled in the cradle by the bureaucrats. Would that be the more desirable outcome?
Reminds me of the old comment about for laws to be respected they should at least be respectable.
Those huge investor subsidies mostly went to riders not drivers.
Thanks venture capitalists! Now the drivers are getting more too, it is even better.
I am a big fan of Uber and its equivalents. In London, it means I can miss the horrors of the Tube without bankruptcy; in Sydney, it means I don’t need to take shitty dirty expensive taxis; in Cape Town it means I can travel safely without driving; in Beijing and Shanghai it means I can get to and from the airport without a near-death experience.
In Sheffield City Taxis were doing online booking back in 2005 when I was a freshly minted taxi board member and a half a decade before Uber appeared.
“Uber is Just Another radio control taxi company.”
One big difference between Uber & radio control taxi companies Is that if the driver gets a long run off his patch he’s a good chance of picking up rides will get him back on it. That’s a very big difference from a driver’s point of view. Could double his earnings. Was always a trouble with radio cabs. Get an airport & unless you can blag a punter off the front, you’re going to be coming back empty. A driver can make much more money shuttling backwards & forwards around a smallish patch if the controller’s good & drops match the pick-ups. Uber can make all jobs effectively locals.