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Businesses The Almighty Buck Transportation Technology

How Uber Profits Even When Its Drivers Aren't Earning Money (vice.com) 180

tedlistens writes: Jay Cassano spoke to Uber drivers about "dead miles" and what work means when your boss is an algorithm, and considers a new frontier of labor concerns and big data. "Uber is the closest thing to an employer we've ever seen in this industry," Bhairavi Desai, founder of the New York Taxi Workers Alliance, told him. "They not only direct every aspect of a driver's workday, they also profit off the entire day through data collection, not just the 'sale of a product.'"
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How Uber Profits Even When Its Drivers Aren't Earning Money

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  • by Gojira Shipi-Taro ( 465802 ) on Tuesday February 02, 2016 @09:29PM (#51425891) Homepage

    Let's see. An organization with a vested interest in perpetuating the Taxi industry's grip and pricing doesn't like something about Uber and it's ilk. I think there's a picture of Captain Picard captioned "I've just shat myself with surprise!".

    Fuck cabbies. Fuck cab owners. Let 'em all starve like buggy whip manufacturers. Price gouging, monopoly having, tourist and local abusing, talking to their overseas family on the phone motherfuckers.

    I don't give a single shit about your labor concerns. You screwed yourself out of that with your attitude, your work ethic, and your lies. Fuck off and die already.

    • by 110010001000 ( 697113 ) on Tuesday February 02, 2016 @09:32PM (#51425897) Homepage Journal
      I 100% agree. Uber is optional for drivers and passengers. Taxi service is terrible. Taxis are dirty and old and frequently rip you off if you don't know where you are going. Uber doesn't have this problem. Ever seen a dirty Uber car? I don't even use Uber, but I have no love for the taxi "alliances".
      • by Anonymous Coward on Tuesday February 02, 2016 @09:39PM (#51425923)

        > Ever seen a dirty Uber car? I don't even use Uber,

        Solid reasoning.

      • by BarbaraHudson ( 3785311 ) <barbarahudson@NOSPaM.gmail.com> on Tuesday February 02, 2016 @09:42PM (#51425933) Journal

        Complain to your municipal government. Taxis here are clean, the drivers have to conform to a dress code and a service code, and there are dedicated inspectors to make sure that standards have to be maintained. When a taxi enters service, it cannot be more than 5 years old, and has to be retired when it it 10 years old, no matter if it's still in great condition. Rusty cars aren't allowed. Heck, there's even one cab driver driving a tesla because the extra initial cost is offset by the lower running costs.

        If taxi drivers are expected to live up to professional standards, they'll actually behave like professionals, which is good for everybody. When you get a company that just reinforces the race to the bottom, all you're going to get is bottom-feeders.

        • by Gojira Shipi-Taro ( 465802 ) on Tuesday February 02, 2016 @09:45PM (#51425957) Homepage

          The taxi industry in South Florida has (or had) the municipal government in it's back pocket. They tried to shut down Uber, etc, until it became clear that everyone knew that the commission was being bribed, and that federal investigations were incoming unless they started representing the will of the people and not the will of Yellow Cab (Jessie Gaddis, here).

          • its.

          • Bwhahahaha!!! You actually call your government is corrupt? Check out the Uber situation in the state of New York. Uber and Lyft are banned from the entire state of NY except for New York City.... I dare anyone to explain the logic of that situation. Hint: there is no logic. Cuomo is just a corrupt bastard who panders to NYC and sells out the rest of the state.

        • by DarkSabreLord ( 1067044 ) on Tuesday February 02, 2016 @09:51PM (#51426019)

          Complain to your municipal government.

          This is really going to depend on where you live - around here, lobbying groups for taxi companies and their drivers forestalled any attempts at legislated change for over a decade before Uber stepped in, quickly picking up market share due to its reliability. It used to be that even if you called to schedule a pickup (in an hour!) there was only a 30-40% chance a taxi would actually show up. I remember the days of being unable to get home via taxi at night without offering a 100% tip in advance all too vividly and have no desire whatsoever to return to that.

          I'm not saying Uber is the best answer here - clearly, the new model comes with its own share of problems - but the previous monopoly (taxis) really screwed themselves out of a future with their own behavior. There was a hotline to call to report problems, but absolutely zero accountability for the drivers at the end of the day. The situation has since improved, but generally falls along the lines of 'too little, too late'.

          • Complain to your municipal government.

            This is really going to depend on where you live - around here, lobbying groups for taxi companies and their drivers forestalled any attempts at legislated change for over a decade before Uber stepped in

            And around here drivers can only pick-up passengers at the official stands when they conform to the rules [www.stku.nl] (clean car, formal clothing, no private telephone calls, etc.).
            Note that the taxi driver organizations initiated these regulations, the municipal government stepped in later en put them into formal legislature, and currently everything is being checked by an independent board.

            It is so nice to live in a place where self-interest is not purely explained is short term monetary gain.

          • Accountability is actually a major part of Uber's legal problems.

            The difference between an employer/employee relationship and a contractor relationship is all about who has the control. With most taxi companies the Taxi Company's entire role is renting out the car, and then telling them "At 6th and Wilkins there's a guy who wants to go to the South Side. Show up if you want to. Or pay us to rent the car for 72 hours while you drive the it toi Vegas for a night of debauchery, and then come back. We really do

        • NYC a lot of the cabs are decades old, dirty, worn out and the drivers drive like murderous assholes cutting everyone off and hitting pedestrians when they are looking for a fare. most of them don't want to take you outside of manhattan or even to far away parts of manhattan
          • And you think taking that industry and releasing it from any form of regulation at all will make things better?
            • by jafiwam ( 310805 )

              And you think taking that industry and releasing it from any form of regulation at all will make things better?

              The part about removing scarcity and the monopoly taxis have is what will make it better.

        • Complain to your municipal government.

          I've never had a municipal government worth complaining to. I've seen what happens to people who enter politics around here, and I'm certainly not going to do that; any other form of complaining is a fat fucking waste of time because they will summarily ignore you. In the only town I've lived in where I took taxis regularly, the council was completely under control of business owners. In SF, the place where I notice taxis being most shit in every way (starting with frequently cutting me off on the freeway b

        • Heck, there's even one cab driver driving a tesla because the extra initial cost is offset by the lower running costs.

          How does he make a profit on the limited range? Cabbies (over here anyway) might work for eight hours straight, sometimes twelve. Very little of that time is spent stationary.

        • by mjwx ( 966435 )

          Complain to your municipal government. Taxis here are clean, the drivers have to conform to a dress code and a service code, and there are dedicated inspectors to make sure that standards have to be maintained. When a taxi enters service, it cannot be more than 5 years old, and has to be retired when it it 10 years old, no matter if it's still in great condition. Rusty cars aren't allowed. Heck, there's even one cab driver driving a tesla because the extra initial cost is offset by the lower running costs.

          This. Its the same in my city (Perth, Western Australia), the government does a fairly good job of vetting taxi drivers and taxi companies. Taxis are clean, drivers are presentable and all of them speak at least passable English (most drivers are Australian, but that reflects the demographics of Perth).

          I've lived in places with unregulated taxi services, the end result is that they operated like criminal gangs. Turf was carved up, enforced and fought over. Every tuk tuk driver carried a gun. When governm

      • Ever seen a dirty Uber car? .

        yes. i was able to give the driver a bad rating. i don't know what happened, but i received a credit towards my next ride so i felt like something happened.

      • by GNious ( 953874 )

        Taxi service is terrible. Taxis are dirty and old and frequently rip you off if you don't know where you are going.

        You should prolly go live somewhere civilized, instead of Outer Bummfuck, Poopistan?
        I've travelled half the planet so far, and far-and-away most taxis have been clean, drivers polite, and routes pretty much optimal (I occasionally check with a GPS-enabled phone out of curiosity)

      • Ever seen a dirty Uber car? I don't even use Uber,

        Me neither. 100% of the Uber cars I've been in are dirty!

        (Technically x/0 is implementation defined behaviour in C. Saying 100% is just as valid as saying NaN% or NasalDemons%)

      • I've had to yell at Uber drivers for trying to take the long way around.

        Most of the problems with taxis arose from making them internalize costs. Like the cost of being out in a snowstorm and not charging $700 for a ride. Or the cost of having to pick up a woman and take her to the hospital to give birth. Heck, in may places, taxi drivers need to take special emergency driving courses for if they hurry someone to the hospital.

        That's leaving aside the fact that they take into account the freal costs of la

      • Last time I spent the weekend in a big city (Chicago) I split my travel between Uber and Taxis.

        Uber wins hands down. I can hail it from anywhere. It shows up. It's clean. It doesn't smell. The credit card reader isn't "no work, no work" until I have 1 foot out the door.

    • by Applehu Akbar ( 2968043 ) on Wednesday February 03, 2016 @12:46AM (#51427517)

      If medallion taxi companies tracked their drivers, they could collect the same data, and drivers could make the same pitch for getting paid something for the data they are generating. But tracking would also reveal those roundabout routes cabdrivers like to use on newbie passengers, so I'm betting the union would nix it.

    • by dbIII ( 701233 ) on Wednesday February 03, 2016 @01:09AM (#51427655)
      Yes, but on the other side of the coin it's the old story of piecework with a race to the bottom plus deliberate criminal action even if the laws broken are unfair. It's like bringing a little bit of the third world home or digging up a 19th century robber baron.
      There is nobody to cheer for in this situation. Unfair monopoly versus a new player that wants to take over the unfair monopoly and move a lot of cost onto their employees. The lie of "ride sharing" as a smokescreen is an especially blatant lie and is being used as a pretended point of difference to get around laws protecting the current local monopolies.
    • "They not only direct every aspect of a driver's workday...

      Except that they actually don't. If a Uber driver doesn't feel like driving passengers, he doesn't do it. It's as simple as that. He gets to decide whether he works 5 minutes each decade, or ten hours a day. He gets to decide whether it's a hobby, a second job, or his main way to make a living. It really doesn't get freer than that.

      "...they also profit off the entire day through data collection, not just the 'sale of a product.'"

      New York Taxi services also profit from their drivers when they're not earning a fare.

      New York Taxi companies carry advertisements on their roof, and a great number of them also

    • Hey Einstein, Uber drivers are taxi drivers and Uber are a monopolistic taxi company, arguably the worst ever.
      • Time and again we see the claim that Uber is a taxi company, despite the obvious differences between Uber and traditional taxi companies. What you are saying is that the differences between taxis and Uber are inconsequential and irrelevant, hence "Uber drivers are taxi drivers". You are entitled to your opinion about the differences between Uber and taxis, but that doesn't mean that everyone has to agree with you. I find the differences between Uber and taxis to be both relevant and consequential, so I b
        • How about you explain what these differences you perceive are so the rest of us can correct you?
        • The only way in which Uber drivers are not taxi drivers is the legalistic one that they don't have actual taximeters in their cars. This is strictly true, but pathetic as an argument.

          Whether you define them as operating "carriages for hire" or "limousines" or "small private buses" or any other combination of words that excludes "taxi", Uber drivers are basically using cars to move people from A to B for a fee.
  • by BarbaraHudson ( 3785311 ) <barbarahudson@NOSPaM.gmail.com> on Tuesday February 02, 2016 @09:35PM (#51425907) Journal
    They're collecting all this "dead time" behavior (as well as the rest) to help them figure out how to best have the driverless uber cars 10 years down the road. If you drive for uber, you're working to put yourself out of a "job."
    • Eh, as long as the drivers have their eyes open and are using Uber, et al as supplimental income as they should do, that's perfectly fine. I look forward to the day that the Taxi industry is as dead as Abe Vigoda, and I'll dance on its grave (unlike Abe's).

      I got rid of my car to work a 7 minute walk from my office in a downtown area. I use Uber/Lyft for some things, and car sharing services for others. An automated car service, reasonably priced, where I didn't feel obligated to tip the driver, would be mag

    • by Livius ( 318358 ) on Wednesday February 03, 2016 @12:53AM (#51427551)

      you're working to put yourself out of a "job."

      So... Uber is just like every other employer.

    • Re: (Score:2, Insightful)

      by SeaFox ( 739806 )

      They're collecting all this "dead time" behavior (as well as the rest) to help them figure out how to best have the driverless uber cars 10 years down the road.

      If you're an Uber driver and planning to be one 10 years from now you need to reexamine your life.

      • It's a possibility. Of course, I plan to be uploaded into an AI-capable processor core a few years before then, and then delegate the taxi work to a slave node, but hey, a job's a job.

        • It's a possibility. Of course, I plan to be uploaded into an AI-capable processor core a few years before then, and then delegate the taxi work to a slave node, but hey, a job's a job.

          I think, like Achmed the dead terrorist [youtube.com], you have it backwards. YOU will become the slave node :-)

    • They're collecting all this "dead time" behavior (as well as the rest) to help them figure out how to best have the driverless uber cars 10 years down the road. If you drive for uber, you're working to put yourself out of a "job."

      Is this really the case? Would information on how Uber drivers deadhead around really be all that useful?

      Wouldn't actual trip data be more useful for predicting when and where to have cars ready to pick customers up?

      • For one thing, it gives them access to the "flocking behavior" of taxi drivers. Drivers who don't have a fare will tend to wait in an area where they think they'll get one, or drive to such an area. This ties in perfectly with "cars in your area", since they can predict how many cars will be there in x number of minutes, even if they aren't there right now.
        • Drivers who don't have a fare will tend to wait in an area where they think they'll get one, or drive to such an area. This ties in perfectly with "cars in your area", since they can predict how many cars will be there in x number of minutes, even if they aren't there right now.

          Okay, that helps when they have human drivers, but what about when that's automated? That's when it shifts to using algorithms to predict where rides will be needed.

          Or heck, use actual ride data to give drivers guesses on where the best spot to go to pick up their next customer is.

    • It will be interesting as then they'll have to hire mechanics to work their fleet. Or is their plan to have an Uber for mechanics?

  • by Anonymous Coward

    ..but they're exactly a product of our current political and economic environment.

    Uber drivers will get paid for that which they have the economic power to extract payment for and not anything else.

    Is that unfair? Yes. Everything TFA suggests about how Uber is screwing drivers is true. It's also irrelevant. Uber is scum. The idea that they aren't employing people is among the most evil types of legal fictions aimed at perpetuating and protecting a corrupt and exploitive economic relationship under colo

  • That's the icing on the shit cake they feed their drivers. They bypass traditional worker protections that require people to be paid for work done. They wouldn't exist otherwise, just like all the other companies that tried this and didn't managed to fend off the courts (that maid for hire service comes to mind).

    Oh, and better hope you don't get hit by an Uber driver during that 'downtime'. The $1 mil insurance they like to tout doesn't cover you if there's no passenger in the car. Even if they're on the
    • I wouldn't expect the 1 million insurance to be in effect during "downtime".

      1 million is a lot more than the personal Injury and liability insurance that most individual drivers will EVER carry, so I'm not sure what your angle is there...

      If the Taxi industry wasn't a bunch of backroom deal making, monopolistic thugs, Uber and Lyft would never have come into existence in the first place.

      You think you're getting jack shit if a fucking TAXI hits you? They have laws for that. They bought them decades ago. Good

      • You think you're getting jack shit if a fucking TAXI hits you? They have laws for that. They bought them decades ago. Good luck.

        Yes, the really expensive insurance that actual taxi drivers have to pay for to legally carry passengers is clearly just another part of the government/taxi company conspiracy.

        You are a fucking idiot.

    • :...traditional worker protections that require people to be paid for work done" - Are talking about an hourly wage? Because around here the taxi drivers sure as hell don't get one.

    • They bypass traditional worker protections that require people to be paid for work done.

      Those protections are going to become meaningless as less and less of us become workers. We are going to need new protections not just for workers, but for people.

      Oh, and better hope you don't get hit by an Uber driver during that 'downtime'. The $1 mil insurance they like to tout doesn't cover you if there's no passenger in the car.

      The actual problem here is that their normal insurance company should not be permitted to deny them insurance coverage while they are on their way to pick up a fare. Their insurance premiums are already based on their total mileage, so if they drive more, they already pay more for their insurance. In fact, their insurance company shouldn't be able

  • Title answers itself (Score:5, Informative)

    by nitehawk214 ( 222219 ) on Wednesday February 03, 2016 @12:58AM (#51427585)

    Uber makes money because their drivers are often not earning any.

    • by jjo ( 62046 )
      Why do those drivers continue to drive for Uber? Do they all want to drive for other people as a hobby?
      • by mjwx ( 966435 )

        Why do those drivers continue to drive for Uber? Do they all want to drive for other people as a hobby?

        Because it's still new enough that there are plenty of starry-eyed suckers who are ignorant of the fact they wont make money.

        Plus a lot of costs are obfuscated. An Uber driver who isn't very good with numbers (because the app does everything for them) goes home and see he's earned $X, the ones with two brain cells will figure out that fuel costs $Y but still think the rest is profit... However they fail to take into account the costs of maintenance, insurance, repairs, so on and so forth.

        Eventually th

  • Uber's legal team first outlined this identity in a filing with the California Public Utilities Commission in 2012: "Uber is a technology company that licenses the Uber App to transportation service providers. The transportation service providers pay a fee to Uber to use its software technology; the passenger of the transportation service provider pays the transportation service provider for transportation services received.

    That's an outright lie. Uber collects the fares and pays the driver, after colle

    • That just means Uber is also acting as a payment processor. A transaction can be legally from A to C even if the money actually goes via B - you'll find it burried in the terms of services somewhere.

      • That just means Uber is also acting as a payment processor. A transaction can be legally from A to C even if the money actually goes via B

        What payment processor sets the price? What payment processor sets the terms of service between the two parties?

  • If Uber can skirt the law, why can I drive as a private driver, and screw the middle man? After all, it is my time and my car. What I do need Uber for in an interconnected world?
    • What I do need Uber for in an interconnected world?

      You don't, but you do need something that fulfills the same function, because nobody is going to bother calling you to see if you are available. They want to see if a taxi is available. In any case, taxis with human drivers are going the fuck away, so we're only going to be arguing about this for another decade or so. Then what will Slashdot do? Will it just be nonstop women in tech articles?

    • You could try, I guess you could post on Craigslist or write your own app.
  • Corporation makes a profit while employees struggle to make ends meet. What a shocker.

  • Google has been collecting this type of data for years from every type of driver. I'm pretty sure by now they have machine learning algorithms that can predict if a particular driver is a Taxi, delivery van, private person, etc ... Probably they can even predict if a Taxi driver is an actual Taxi driver or an Uber driver (since Taxis probably spot themselves at particular Taxi hubs whereas Uber drivers will have other behavior).
  • Despite recent, nonsense, court decisions Uber drivers are in fact employees. If they were independent contractors there can be no acts of supervision. The IRS has defined independent contractors for decades and Uber drivers meet every inch of what an employee is compared to actually being an iDC.

Of course there's no reason for it, it's just our policy.

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