By Oscar Levant
Uber, in an effort to make car ownership more expensive than taking an UberX car to and from wherever, Uber has failed to consider that the net savings gained by the riders by abandoning car ownership is transfered to the driver as a cost. Whatever it costs riders to maintain and operate vehicles, that cost is exponentially increased to drivers, and there is a point of diminishing returns for drivers regarding rates.
Effectively, driver morale has tanked. With the new rates, they are so low that Uber
us crossed the threshold of diminishing returns. For me, $2 a mile felt like the right rate for an UberX.
Plenty cheaper than a cab, and plenty of incentive to use UberX.
That is precisely what happened to the taxi industry. in the 90s , we made good money.
But, taxi corporations weren’t focused on customers, they were focused on squeezing more out of drivers, not considering what effect on busines the inevitable diminished driver moral had on the business, and so they switched to leasing, instead of paying commissions, and when they did that,
if forced drivers to work a 12 hour shift to get the full benefit of the lease ( leases were 12 hour shifts).
Now, many leases are even higher since they are 24/7, with the logic the day rate isn’t that bad, if you work 16 hours a day, 12 days a week. Well, many drivers do and you’d get burned out, too, if you had to work like that. This caused many Americans like me to quit, and so the only people left driving are foreigners who can’t find a job anywhere else. So, drivers are in a constant bad mood, driver morale tanked in the taxi industry. This caused a huge void, and now, enter Uber, it was easy for them, and with the clever app an all, they inherited all the business.
And now, it’s happening with Uber. The race to the bottom has the same squeezing and morale killing effect. Taxi-land mediocrity, here we come !
I don’t’ think Uber understands how low driver morale is a cancer on the enterprise. It won’t show up immediately balance sheets. It will, in time, but it will be too late to do anything about it
It is what I call an “insidious” thing, creeping danger. Insidious means “an attractive idea (rates crossing diminishing returns threshold ) at first, but it will consume you alive at a time when it is too late to do anything about it”. Alluring, but harmful, is the dictionary definition.
When drivers are in a bad mood, customers pick up on it, and gradually get fed up with the service, and go with another company, if there is one, and, of course, there is the one that wears a mustache.
Uber, you’d better listen to what this old man who has driven for 15 years in the transportation industry is telling you. The situation with Travis ( CEO ) reminds me of the Wall Street flick, we have a young hungry entrepreneur who is doing so well he cannot see the cliff his vehicle is driving at breakneck speed towards. The energy of the momentum forward will render the car irreversible if he waits until he’s at the cliff’s edge to turn the car around. Travis can’t see it, but I can. I’ll bet a lot of drivers of X cars can, too. I’ve seen it happen to a number of cab companies, all of whom came and went, and now are mere footnotes in the dustbin of transportation history.
During the 90s, there were a couple of real cheap cab companies, cheaper than Yellow, trying to compete against Yellow. But, all the cheap cabs went out of business, and a number of them came and went from the late 70s to the 90s, when I quit. Yellow had higher rates, but faster service, and they had the lion’s share of business, during that time. But, they chose mediocrity and now they don’t have squat and have to rely on foreign nationals to pay their egregious leases.
It will take some time for Uber to really hurt, but in today’s world, a lot less time than it used to take.
Also, CEO seems to think that by making taking an UberX cheaper than car ownership, Americans will abandon, sell, their cars, etc. No, they will not . Americans have a love affair with the auto, and the primary reason people use UBer is to prevent getting a DUI, and that means it will always be a Friday and Saturday thing. So, if they hire enough drivers for Friday and Saturday, there will always be too many drivers on the other days.
Uber, you’d better listen up. UBer was fun, several months ago, but the money isn’t worth it, and alas, Uber isn’t fun anymore. And when driving becomes drudgery, Uber will be just another mediocrity, in a sea of mediocrity, all because the CEO lacked the wisdom to hire a guy like me to give him a second opinion on policy decisions.
Tick tick tick tick, it’s just a matter of time. Now, the rates are so egregiously low that driver of X cars are not compensated for use of their cars. Effectively, Uber is stealing driver’s cars, collectively, mile by mile driven. Is it any less of a crime to steal one dollar from a million people over one million dollars from one person? Oh, I’ve heard Uber’s rebuttal: “But drivers will make more”. Hey Travis, when drivers were at capacity on the previous rate, which was competitive, how can the do more trips at the new rate, if they are at capacity already? How is a person more incentivized to call and Uber when, at the previous rate, it was 100% cheaper than a cab, and better service, when now, you have a even cheaper rate, but drivers are complaining a lot to customers ( do not believe they aren’t, they are, big time) ? See, Travis? Driver morale doesn’t appear on balance sheets. Surveys might help a little, but how can they be trusted if the drivers don’t trust them to be anonymous? how about telephone surveys? Noooo, you’re not wise enough to consider that, I didn’t think so.
And, by the way, I really and truly want Uber to succeed. I am an optimist, that this post on this forum will somehow find it’s way to upper management, and they change things to make Uber fun again. That’s all I ever wanted, a fun way to make extra money, decent money during my off-season on my other business, which has its own set of problems I’m dealing with.
If Uber were smart, they would hire an experienced driver, an old fart like me, who could play devil’s advocate. I could have easily debunked Travis’s libertarian-influenced 8x on surge to become a PR flap of epic proportions. Today, I predict that current rates are tantamount to driver exploitation. The cancer that will ensue, will eventually engulf Uber, and this, plus the underhanded and unfair cutthroat biz tactics will color Uber as the big bully, and that narrative has already begun, and it’s growing, and it’s growing, and it won’t be long that all of your celebrity buds will drop Uber like a polluted potato …….
NO ONE likes a bully, Travis. Wake the fu*k up. You are sitting atop a powerful vehicle, and it’s moving fast, the money and attention is a tremendous high, and the ride is exhilarating, seductive, intoxicating, but you just don’t see the cliff, do you?
Do you? I didn’t think so.
Another thing, Lyft is not going to turn over and die for yo’ ass, so get over it. Lyft is here to stay, now you two need to get along, and share the terrain, there’s plenty for everyone, and with that attitude, your riders will love you for it, even more. But, once the word gets out you’re a big bully, it’s over.
But, I’m probably living in La La Land, it wont be the first time — yeah, I know, “dream on”, if Travis even gets this message. He’s surrounded by yesmen on twitter.