# The Toll Of Uber’s Reduced Fares



## chi1cabby (May 28, 2014)

*Driving A Hard Bargain: Calculating The Toll Of Uber's Reduced Fares*

http://cognoscenti.wbur.org/2014/09/23/taxis-ride-share-living-wage-paul-fallon


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## Swed (Jul 20, 2014)

chi1cabby said:


> *Driving A Hard Bargain: Calculating The Toll Of Uber's Reduced Fares*
> 
> http://cognoscenti.wbur.org/2014/09/23/taxis-ride-share-living-wage-paul-fallon


Great article.


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## chi1cabby (May 28, 2014)

*A Failure to Treat Workers with Respect Could Be Uber's Achilles' Heel*

*http://www.technologyreview.com/vie...rs-with-respect-could-be-ubers-achilles-heel/*


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## Mimzy (Jun 10, 2014)

Excellent. I love that the press has been getting wise to the pay / ratings / respect issues we face daily. 

PRESS ON!


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## LAuberX (Jun 3, 2014)

Wow. he got it exactly right. well done article.


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## chi1cabby (May 28, 2014)

LAuberX said:


> Wow. he got it exactly right. well done article.


You aught to actually go comment on the article itself too... Just saying.


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## Edzzz (Sep 3, 2014)

Yahoo should do an article too. A lot more people would read about it.


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## LAuberX (Jun 3, 2014)

chi1cabby said:


> You aught to actually go comment on the article itself too... Just saying.


I did !


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## 556baller (Sep 8, 2014)

Reducing the rates continuously looks like Uber has launched a war of attrition against the taxi cab companies. Question is which will break first? The Taxis or the Uber drivers? You can bet if the taxis don't hold their ground and Uber takes over, rates will exceed what they have been in the past, potentially higher than that of the taxis...


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## chi1cabby (May 28, 2014)

556baller said:


> Reducing the rates continuously looks like Uber has launched a war of attrition against the taxi cab companies. Question is which will break first? The Taxis or the Uber drivers? You can bet if the taxis don't hold their ground and Uber takes over, rates will exceed what they have been in the past, potentially higher than that of the taxis...


@556baller I disagree. The Ride-sharing vs Taxis battle based on pricing, driver quality, service etc is over. Ride-sharing won!
Now it's Uber vs Lyft, with drivers being the road kill in this price war.


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## 556baller (Sep 8, 2014)

Riding sharing hasn't won anything as long as the Taxi industry is funding lobbyist to declare it illegal. If ride sharing comes out on top, it wouldn't surprise me if Uber buys out it's competition to some degree.


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## SupaJ (Aug 12, 2014)

556baller said:


> Reducing the rates continuously looks like Uber has launched a war of attrition against the taxi cab companies. Question is which will break first? The Taxis or the Uber drivers? You can bet if the taxis don't hold their ground and Uber takes over, rates will exceed what they have been in the past, potentially higher than that of the taxis...


The prices will not go up, it just makes no business sense to raise prices after they've been so low, the drivers will suffer more (loss of customers).
Win of rideshare over taxi is not necessarily good for the customer. That just mean same "smelly cabbie" will drive for uber - the whole point of why rideshare is loved by the customer.


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## 556baller (Sep 8, 2014)

If the ride share product is superior to the competition than why undercut them by 50-60%? It makes perfect sense to raise prices when your the only game in town, happens everyday.


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## Mimzy (Jun 10, 2014)

Uber loves their race-to-the-bottom price lowering "market research."

I for one, would like to see them JUST ONCE -- Test an alternate strategy:

Pick a market or two - and RAISE the UberX or Lyft rates. And fine, keep it 15-20% below the local cab rates. My guess is that most customers still choose an Uber/Lyft over a cab. The business will still increase as more and more people continue to start using the app. The drivers would be happier, and provide better service and I bet Uber and Drivers would make more money.


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## SupaJ (Aug 12, 2014)

556baller said:


> If the ride share product is superior to the competition than why undercut them by 50-60%? It makes perfect sense to raise prices when your the only game in town, happens everyday.


Because the main reason the customer loves uber*X *is the price. People that have never taken the taxi before are now taking uberx to get somewhere and they don't even know about higher options with uber and would never take them. UberX is a very price conscious product for the masses.


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## SupaJ (Aug 12, 2014)

Mimzy said:


> Uber loves their race-to-the-bottom price lowering "market research."
> 
> I for one, would like to see them JUST ONCE -- Test an alternate strategy:
> 
> Pick a market or two - and RAISE the UberX or Lyft rates. And fine, keep it 15-20% below the local cab rates. My guess is that most customers still choose an Uber/Lyft over a cab. The business will still increase as more and more people continue to start using the app. The drivers would be happier, and provide better service and I bet Uber and Drivers would make more money.


I would disagree that 20% below taxis is enough to get huge number of people to get uber ride. Definitely not in SD lol it would still be expensive to go to work via uber. As in now it makes sense to get uber instead of driving self.


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## duggles (Aug 25, 2014)

SupaJ said:


> Because the main reason the customer loves uber*X *is the price. People that have never taken the taxi before are now taking uberx to get somewhere and they don't even know about higher options with uber and would never take them. UberX is a very price conscious product for the masses.


Absolutely right. I had one lady get in my ride last weekend during a 3.0x surge (our Sat/Sun mornings typically surge every hour from :45-:00 between 9am-12pm as people catch rides to work, in addition to rides of shame, and off to brunch rides) and starts *****ing at me for the price being so high. "I thought Uber was supposed to be cheap, isn't that the point? Didn't they get cheaper than everyone else?"

It was a 20 minutes ride of complaining and whining. Ya know, if you were so upset, why the **** did you choose the ride? Call a cab next time.


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## chi1cabby (May 28, 2014)

556baller said:


> Riding sharing hasn't won anything as long as the Taxi industry is funding lobbyist to declare it illegal. If ride sharing comes out on top, it wouldn't surprise me if Uber buys out it's competition to some degree.


@556baller you seem to have some facts about "Ride-sharing" upside down:
"Ride-sharing" ala Uber, Lyft & SideCar is not Ride-sharing. It's Vehicle For Hire operation like a taxicab, without the street hail component. True ride-sharing, also called carpooling, does not entail picking up passengers for profit. It involves rides originating and ending in proximal locations. There have been hues and cries raised by true ride-sharing proponents by these companies deliberate misappropriation of the term ride-sharing to confuse the public and the regulators.

As things stand Ride-sharing is operating in defiance of most local Regs or in the vacuum of regulatory arbitrage. It is ONLY legal in CA, CO, Chicago, Houston (starting in Nov), Minneapolis, NYC (Com. Insr + chauffeurs lic.), Cleveland OH, Seattle, Milwaukee, and a few other markets that I'm forgetting.

So taxi industry isn't funding lobbyists to declare "Ride-sharing" illegal. It is funding this campaign for its survival against dubiously insured, unlicensed, unregulated and illegal in most jurisdictions "Ride-sharing".


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## Mimzy (Jun 10, 2014)

SupaJ said:


> I would disagree that 20% below taxis is enough to get huge number of people to get uber ride. Definitely not in SD lol it would still be expensive to go to work via uber. As in now it makes sense to get uber instead of driving self.


Fair enough - but given the propensity of Uber to run these "market experiments" - I for one, would like to see them at least attempt to test it out.

Wishful dreaming, no doubt...


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## SupaJ (Aug 12, 2014)

I think lowering the commission is the best bet. At least that's what I'd like to see. Keep prices low to have enough demand but lower commission to have enough quality supply


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## chi1cabby (May 28, 2014)

SupaJ said:


> I think lowering the commission is the best bet. At least that's what I'd like to see. Keep prices low to have enough demand but lower commission to have enough quality supply


Omg...Uber's has raised the base commission to 25% for SF drivers since Sept 2nd, with other markets to likely follow soon. And yet drivers are engaging in this wishful thinking that nice Uber should lower their commission!

What existing UberX drivers should be doing is going over their Partnership Agreement with a magnifying glass to see if they themselves can be subjected to 25% commission.
I don't have access to a current UberX Partnership Agreement, or I'd do the digging myself.


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## Jeeves (Apr 10, 2014)

I thought @Sydney Uber had a copy perhaps. He has referenced it a few times. It would be good for the forum to maintain a copy perhaps.


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## mp775 (Jun 26, 2014)

Mimzy said:


> I for one, would like to see them JUST ONCE -- Test an alternate strategy: Pick a market or two - and RAISE the UberX or Lyft rates.


They just did. If the "summer promotion" to supposedly gauge the elasticity of the market was 25% off for riders, then the permanent 15% off that resulted from the experiment is actually a 13.3% increase in the fare. If ridership continues to increase (as they insist that it will, as they tell drivers we'll be busier), their model is proven wrong.


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## duggles (Aug 25, 2014)

*Service Fees*
In exchange for accepting and fully performing on a Request, you shall be paid an agreed upon Service 
Fee for your completion of that Request. Unless otherwise negotiated at the time the Request is 
received by you, the Parties agree that you shall be paid a Service Fee at the pre-arranged rates for each 
Request performed, which shall be forth in a Service Fee Schedule. You acknowledge that the applicable 
Service Fee Schedule was provided to  you in advance of your execution of this Agreement. The Service 
Fee Schedule shall be made available upon request. Before any change to the rates set forth in the 
Service Fee Schedule may become effective, the Company shall provide notice of such change(s) to you 
via email, your mobile application or other written means.

Regardless of the pre-arranged Service Fee, you shall always have the right to refuse any Request 
without penalty.

Similarly, you and the Company shall always have the right to negotiate a Service Fee different from the 
pre-arranged fee. The purpose of the pre-arranged Service Fee is only to act as the default fee in the 
event neither party negotiates a different amount.

You acknowledge that there is no tipping for any transportation services that you provide pursuant to 
the receipt of a Request. You understand and agree that, for the mutual benefit of the Parties, Company 
may endeavor to attract new Users to the Service and Software, and to increase existing Users' use of 
the Service and Software, through advertising and marketing to the effect that tipping is "voluntary," 
"not required," and/or "included" in the Service Fee paid by the User. You understand that the aim of 
advertising and marketing to the effect that there is no need to leave a tip is ultimately to increase the 
number of Requests you receive through the Service and Software. You agree that the existence of any 
such advertising or marketing does not entitle you to any payment beyond the payment of Service Fees 
as provided in this Agreement.

The Company shall electronically remit payment of Service Fees to you consistent with Company's 
practices, as set forth in the Service Fee Schedule.

In the event the User cancels a Request after you arrive at the designated pick-up location or does not 
show after you have waited at least 10 minutes, the User is subject to a cancellation fee. The amount of 
the cancellation fee will be as specified in the Service Fee Schedule. Notwithstanding the foregoing, you 
acknowledge and agree that, in the Company's sole discretion, a User's cancellation fee may be waived, 
in which case you will have no entitlement to any such fee.

*Rasier's Fee*
In exchange for your access to and use of the Software and Service, including the right to receive the 
Requests, you agree to pay to the Company a fee for each Request accepted as indicated in the Service 
Fee Schedule.


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## chi1cabby (May 28, 2014)

duggles said:


> Before any change to the rates set forth in the
> Service Fee Schedule may become effective, the Company shall provide notice of such change(s) to you
> via email, your mobile application or other written means.


So it looks like Uber can unilaterally up the commission to say 25% on ALL UberX Drivers by just sending out an email.

Any drivers with attorneys in the family wanna run the Partnership Agreement by them?


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## duggles (Aug 25, 2014)

Like most things in this agreement, it is all subject to change provided Uber "notifies" partners of the changes.


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## NightRider (Jul 23, 2014)

chi1cabby said:


> Any drivers with attorneys in the family wanna _*not too embarassed to* _ run the Partnership Agreement by them?


FTFY


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## SupaJ (Aug 12, 2014)

duggles said:


> Like most things in this agreement, it is all subject to change provided Uber "notifies" partners of the changes.


Which is, unfortunately, is pretty normal. Just like cable company or credit card or any service you pay for - can raise their fees upon prior notification


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## LAuberX (Jun 3, 2014)

SupaJ said:


> I think lowering the commission is the best bet. At least that's what I'd like to see. Keep prices low to have enough demand but lower commission to have enough quality supply


according to the Uber documents the 18 Billion dollar valuation is based upon, a 30% commission is mentioned.

They just raised the "base" commission to 25% for new drivers in S.F., plus the $1.00 per ride, Uber's Vig is not going down, just up.


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## chi1cabby (May 28, 2014)

LAuberX said:


> according to the Uber documents the 18 Billion dollar valuation is based upon, a 30% commission is mentioned.
> 
> They just raised the "base" commission to 25% for new drivers in S.F., plus the $1.00 per ride, Uber's Vig is not going down, just up.


Can you please dig up the story where 30% commission is mentioned? 
Thanx!


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## LAuberX (Jun 3, 2014)

chi1cabby said:


> Can you please dig up the story where 30% commission is mentioned?
> Thanx!


I'll let you help... I found it back when the 18 billion dollar valuation story broke.... I read a few articles one of them mentions the 30%

hell, we are at 26% now according to my last statement, the new S.F. drivers are OVER 30% of the "fare" going to Uber.


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## chi1cabby (May 28, 2014)

LAuberX said:


> I let you help...


Come again...what's that supposed to mean?


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## LAuberX (Jun 3, 2014)

chi1cabby said:


> Come again...what's that supposed to mean?


It means I can't type on my phone! I corrected it to I'll let you help, as I intended.... there are tons of articles that mention the 17 or 18 Billion dollar valuation... it will take hours to read them all, mostly from June.

sorry, fat fingers!


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## grUBBER (Sep 11, 2014)

itchi1cabby said:


> *Driving A Hard Bargain: Calculating The Toll Of Uber's Reduced Fares*
> 
> http://cognoscenti.wbur.org/2014/09/23/taxis-ride-share-living-wage-paul-fallon


I love it when god damn drivers refuse tips according to this article. 
I bite the bullet risking of getting fired trying to educate riders about how tip is not includedbut so essential for survival, how it's cheaper for me to pay the passengers than drive to a pickup location and wait for them to drive them a short distance. And there you have an idiot ****ing it all up..


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## chi1cabby (May 28, 2014)

LAuberX said:


> It means I can't type on my phone! I corrected it to I'll let you help, as I intended.... there are tons of articles that mention the 17 or 18 Billion dollar valuation.
> 
> sorry, fat fingers!


I'm trying to find the appropriate article that says that the 18B valuation assumes a 30% commission.


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## chi1cabby (May 28, 2014)

LAuberX said:


> according to the Uber documents the 18 Billion dollar valuation is based upon, a 30% commission is mentioned.


This is the closest I could find:

Among the assumptions is that the non-U.S. taxi market equals the U.S. market at $11 billion a year, that Uber's market share will be 50%, and it can *raise its profit margin to 30% from 20%*. Put all that together, he says, and you get to $17 billion -- almost.

http://www.latimes.com/business/hiltzik/la-fi-mh-uber-valued-at-17-billion-20140609-column.html


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## LAuberX (Jun 3, 2014)

I think that is the article... I read it again and it feels right.

30% profit margin. I wish our "small businesses" made 30% of the "fare" as profit after paying all expenses and the "driver" a living wage.


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## Sydney Uber (Apr 15, 2014)

Jeeves said:


> I thought @Sydney Uber had a copy perhaps. He has referenced it a few times. It would be good for the forum to maintain a copy perhaps.


It should be on Everybodies dashboard on the bottom of the left hand side of main page headings list.


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## chi1cabby (May 28, 2014)

Yes it is, under "Legal".
But me being UberTaxi, I'm assuming it's materially different with certain terms and conditions.


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## Farman vegas (Aug 8, 2014)

SupaJ said:


> The prices will not go up, it just makes no business sense to raise prices after they've been so low, the drivers will suffer more (loss of customers).
> Win of rideshare over taxi is not necessarily good for the customer. That just mean same "smelly cabbie" will drive for uber - the whole point of why rideshare is loved by the customer.


Very often I read your posts they seem to always have derogatory remarks about taxicab drivers. I would postulate this is not de rigueur. Aggrandizement of the Uber price structure never descending is incoherent. The economies and dis economies of scale even to imbecilic elite Uber drivers should be perceptible to this fact. If you where to study the educational background of top management at Uber you would learn the unquestionable fact that collectively they lack the talent pool of transportation and logistics management. In due course this will become their Gordian knot.


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## SupaJ (Aug 12, 2014)

Farman vegas said:


> Very often I read your posts they seem to always have derogatory remarks about taxicab drivers.


Correct!


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## Jeeves (Apr 10, 2014)

Farman vegas said:


> Very often I read your posts they seem to always have derogatory remarks about taxicab drivers. I would postulate this is not de rigueur. Aggrandizement of the Uber price structure never descending is incoherent. The economies and dis economies of scale even to imbecilic elite Uber drivers should be perceptible to this fact. If you where to study the educational background of top management at Uber you would learn the unquestionable fact that collectively they lack the talent pool of transportation and logistics management. In due course this will become their Gordian knot.


Amen professor!


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