# A solution to driver over-saturation



## MadTownUberD (Mar 11, 2017)

Here's where I start to lose friends:

In markets where there is driver over-saturation, Uber can raise the rating average threshold by 0.05 or 0.10 stars. That will cut out quite a few drivers so the good ones will get more business, and the pax will have better experiences using the service. Of course they might have to wait slightly longer for pick-up.

An alternative would be to offer more tiers of service: Like make UberX 4.8 stars and up, and then offer "UberE" (for Economy) or something which is 4.6-4.8 stars. UberE could charge the current UberX rate, and UberX could move up to 1.5x its current rates or something. I made up the names and rates as an example...could be different.

Just like with any job I've had, I always appreciate the opportunity to get paid more than others when I offer better performance. I think the pax would pay a little more too if it meant a better assurance of a positive experience.


----------



## tohunt4me (Nov 23, 2015)

MadTownUberD said:


> Here's where I start to lose friends:
> 
> In markets where there is driver over-saturation, Uber can raise the rating average threshold by 0.05 or 0.10 stars. That will cut out quite a few drivers so the good ones will get more business, and the pax will have better experiences using the service. Of course they might have to wait slightly longer for pick-up.
> 
> ...


Uber wants us all driving uber mini busses on endless pool rides while handing out mints water and loading luggage for the price of gas.

It WONT GET BETTER.


----------



## MadTownUberD (Mar 11, 2017)

Markets have a way of reaching equilibrium. Driving for Uber is probably a similar difficulty level to working at Wal-Mart or McDonalds, but it is slightly riskier for many reasons. That risk commands a premium. However the flexibility offered to drivers means drivers are willing to work for lower rates (flexibility has value).

So I'm not sure where the equilibrium point is...I would guess somewhere around $10/hr after expenses. I guess I'm just miffed that my 2006 BMW is one year too old to quality for UberSELECT despite its very good condition and low mileage...literally does not make sense to drive it unless my main Uber car is in the shop. Would be nice to get a little more $$$ for my 4.9 star rating.


----------



## Mars Troll Number 4 (Oct 30, 2015)

MadTownUberD said:


> Here's where I start to lose friends:
> 
> In markets where there is driver over-saturation, Uber can raise the rating average threshold by 0.05 or 0.10 stars. That will cut out quite a few drivers so the good ones will get more business, and the pax will have better experiences using the service. Of course they might have to wait slightly longer for pick-up.
> 
> ...


The problem is shorter wait times = happier customers.

More drivers = shoter waits

Drivers only get paid while on trips

Uber doesn't care about its drivers

combine these 4 assumed facts together and uber has no need to cut drivers that aren't causing problems.



MadTownUberD said:


> Markets have a way of reaching equilibrium. Driving for Uber is probably a similar difficulty level to working at Wal-Mart or McDonalds, but it is slightly riskier for many reasons. That risk commands a premium. However the flexibility offered to drivers means drivers are willing to work for lower rates (flexibility has value).
> 
> So I'm not sure where the equilibrium point is...I would guess somewhere around $10/hr after expenses. I guess I'm just miffed that my 2006 BMW is one year too old to quality for UberSELECT despite its very good condition and low mileage...literally does not make sense to drive it unless my main Uber car is in the shop. Would be nice to get a little more $$$ for my 4.9 star rating.


The problem is... people don't realize what their expenses really are. I have no clue what driving uberX very part time has cost me in the last 2 years. Absolutely no clue. And i won't ever know until I sell my car i used for it.

Because of this the natural equilibrium point is artificially lower than it would be if drivers knew what they were really making. And the quintessential example of this is Orlando.

on X, $7-10 an hour with 20+ miles driven... 6-9 is kinda sorta worth it. Once you factor in the cost of running a car... nope-ity nope.


----------



## MadTownUberD (Mar 11, 2017)

Mears Troll Number 4 said:


> The problem is... people don't realize what their expenses really are. I have no clue what driving uberX very part time has cost me in the last 2 years. Absolutely no clue. And i won't ever know until I sell my car i used for it.
> 
> Because of this the natural equilibrium point is artificially lower than it would be if drivers knew what they were really making. And the quintessential example of this is Orlando.
> 
> on X, $7-10 an hour with 20+ miles driven... 6-9 is kinda sorta worth it. Once you factor in the cost of running a car... nope-ity nope.


You are correct. However people not knowing their true expenses is not Uber's problem. We should use this forum and others to educate drivers on how to estimate expenses. I see people often just subtracting gas from gross pay and calling it good, and I try to comment.

If drivers drop out because a year or two later of driving a new-ish car they realize they are upside down, and drop out of the driver pool, then we get back to equilibrium. Eventually we should reach the point where there are no new drivers left and those remaining have found a way to be profitable with the gig.


----------



## Mars Troll Number 4 (Oct 30, 2015)

MadTownUberD said:


> You are correct. However people not knowing their true expenses is not Uber's problem. We should use this forum and others to educate drivers on how to estimate expenses. I see people often just subtracting gas from gross pay and calling it good, and I try to comment.
> 
> If drivers drop out because a year or two later of driving a new-ish car they realize they are upside down, and drop out of the driver pool, then we get back to equilibrium. Eventually we should reach the point where there are no new drivers left and those remaining have found a way to be profitable with the gig.


I ran a NEW van i bought as a taxi for it's entire lifespan (230,000 miles) and was able to cover all my expenses with commercial insurance and came in just under 45c a mile.

By my math a car costs about 10-15c for JUST purchase price/depreciation. Let's be honest, 3-4 years ubering and your car is going to be worthless.

In the 3 1/2 years I owned my taxi, i brought in about $250,000 in revenue, and about 98,000 went out in expenses ($28 for the new car,$15,000 insurance $20,700 gas, $34,000 enginework, maintenance/repair/ect)

Gas was honestly the tip of the iceberg.


----------



## MadTownUberD (Mar 11, 2017)

Mears Troll Number 4 said:


> I ran a NEW van i bought as a taxi for it's entire lifespan (230,000 miles) and was able to cover all my expenses with commercial insurance and came in just under 45c a mile.
> 
> By my math a car costs about 10-15c for JUST purchase price/depreciation. Let's be honest, 3-4 years ubering and your car is going to be worthless.
> 
> ...


Amen. A lot of people think they're saving a ton of money by driving Priuses etc (which don't qualify for XL). Well my car gets 25 mpg which is like 8 or 9 cents per mile. The rest of the 22 cents per mile come from estimated repairs, insurance, car washes, etc. (I am not including the purchase price / depreciation since the car was fully depreciated when I started driving it for Uber, after 7 years of being a family truckster).

Gas is just one small part of total cost per mile. In my case about a third of it...but in most cases gas would be even less of a contributor. It's just the most tangible immediate expense that people can understand.


----------

