# How much would raising rates really help us?



## Muki (Oct 15, 2015)

Given that Uber can pay a dollar a mile or even less and still have a city saturated with drivers, what would happen if they doubled rates? I think you'd have a lot more people joining up to drive, even more driver competition and people may end up making the same or even less because you'd rarely have surges and there would be way more drivers.

Now let's say Uber dropped fares to 50 cents a mile. A huge amount of drivers would quit, you'd have way more demand given the low prices and lack of drivers and you'd start seeing constant surge prices that would bring the take home pay of the drivers up.

Maybe Uber pay is about what it should be. It's low enough so that people with real jobs aren't about to quit to join Uber, but it's just high enough for drivers to not quit en masse. Just think, if it was easily possible to net $250 a day Ubering(with 8 hour days), people would be quitting their jobs and flooding into Uber which would mean everyone would make less because of driver saturation.

I think the only way a serious rate increase could work out is if they limited the number of drivers the way cab medallions are limited. But in the current free market system where there is no control under the number of drivers that sign up, raising rates would mean even more driver saturation and everyone ends up making less.

Thoughts?


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## Bob Reynolds (Dec 20, 2014)

If Uber raised the rates, back to where they were before the "promotional rates" were put in place, several things would happen:

1. Uber would make more money.
2. The drivers would make more money.
3. They would attract more professional drivers
4. The vehicles would be in better shape.
5. Uber will limit the number of drivers online at one time just like Lyft does in their busy areas. They would ask drivers to sign up for the hours they are going to drive for the next week. (Just like Lyft does in their busy areas). If not enough drivers sign up for those hours, the app would still let anyone on that wants to drive until the quota has been filled. This will insure there are always enough vehicles and this will insure that the drivers will be busy and will make money. 
6. Passengers will still ride with Uber.


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## melxjr (Sep 10, 2015)

They would never double the rates, because Uber has niched the market for select, black, lux etc. They do need to increase uberX rates to at least $1.30/mi $.29/M. People would still pay, since a majority of trips aren't long enough for people to notice a HUGE difference, but as pointed out above everyone wins.


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## corn (Oct 21, 2015)

Yup! Raise rates and limit drivers .


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## melxjr (Sep 10, 2015)

corn said:


> Yup! Raise rates and limit drivers .


That's not effective for their business model.


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## corn (Oct 21, 2015)

Maybe not for the short term. But soon enough people will wise up and quit uber until they've cycled through so many drivers. So if they're just looking for a quick money grab then get out, I agree that the current system works. Long term it will go down hill fast IMO


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## XUberMike (Aug 2, 2015)

Raise the rates, let me worry about keeping my car full


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## UberInABox (Dec 21, 2014)

The fact that you even asked this question shows me how low you're willing to go to drive, that is if you are a driver. Your the type of person that would drive for 75 cents a mile and believe you're making out pretty good because you only drive weekends.




I don't know where the delusion ends, high rates and surge are the only way to make L-UberX profitable as a driver.


Do me a favor and stop drinking the L-Uber koolaid, I know it's tasty at times with surges going as high as they sometimes do, but that taste should eventually become bitter when you see your pay statement at the end of the week.


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## melxjr (Sep 10, 2015)

corn said:


> Maybe not for the short term. But soon enough people will wise up and quit uber until they've cycled through so many drivers. So if they're just looking for a quick money grab then get out, I agree that the current system works. Long term it will go down hill fast IMO


I totally agree with this, because many people won't Uber at all. Those bad pax... They will hit a market cap of drivers, when? As soon as you hear Travis walk away and sell off.


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## Bob Reynolds (Dec 20, 2014)

The number one complaint with Uber passengers are the surge rates. They feel ripped off. I would much rather see the rates put at a proper and sustainable level and reserve surge for very limited times.


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## XUberMike (Aug 2, 2015)

Bob Reynolds said:


> The number one complaint with Uber passengers are the surge rates. They feel ripped off. I would much rather see the rates put at a proper and sustainable level and reserve surge for very limited times.


And the #2 complaint being not enough cars. Combine that with drivers #1 & 2 complaints of low pay and too many cars.


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## Davesway10 (Aug 7, 2015)

If I could make the same money with half the trips, then, give me half the trips.


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## Lack9133 (Mar 26, 2015)

In my mind drivers would make more because there would be less competition and customers would be forced to pay the higher rate.

Example: If Uber is charging $2.00/mile and Lyft charging $1.00/mile, drivers working on both platforms would be picking up Uber trips at a far higher rate leaving Lyft under-supplied. Passengers would then be forced to either pay the higher rate or face long wait times on the under-supplied Lyft. Since supply would be limited resulting in high wait times for the company offering lower rates, demand would rise for Uber since people would rather pay an extra $5.00 to save themselves 30 minutes or more.

This would become an ongoing circle until Uber has a monopoly and regulators are knocking at their door putting the brakes on them. Low rates are essential to keeping regulators and the public off Uber's back.


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## TwoFiddyMile (Mar 13, 2015)

This is a good thread. 
Because it's a thoughtful thesis question.
Here's a better question; 
Why are most of you willing to destroy your car for peanuts, yet look down on a cab industry which fought almost a century to obtain the right to charge enough to make a living?

In other words, you stick your nose in the air at stinky cabs/stinky drivers, but drive your car for less than half my meter rate?

The cab model is the way it is because in 2015, $2.00 per mile or more is neccessary in order for both parties to turn a profit:
The driver,
AND the owner.
Owner operators are in the unique position to need both parts of that implied contract. 
At $2.00 per mile with driver caps, Uber might be sustainable.


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## XUberMike (Aug 2, 2015)

TwoFiddyMile said:


> This is a good thread.
> Because it's a thoughtful thesis question.
> Here's a better question;
> Why are most of you willing to destroy your car for peanuts, yet look down on a cab industry which fought almost a century to obtain the right to charge enough to make a living?
> ...


It's easy we're jealous (well except the free schedule part.)

That being said I am able to carve out about $100/150 a day income in my pocket working 15/20-25 hours a week peddling my X car around like Fred Flintstone ; )


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## Muki (Oct 15, 2015)

TwoFiddyMile said:


> This is a good thread.
> Because it's a thoughtful thesis question.
> Here's a better question;
> Why are most of you willing to destroy your car for peanuts, yet look down on a cab industry which fought almost a century to obtain the right to charge enough to make a living?
> ...


I think the price of a cab makes sense. I totally see that after driving for Uber even a few days and computing the math. I think Uber will eventually have to raise rates. I do think there's a finite amount of drivers out there for Uber to churn through. That's why they've began lowering vehicle age limit in some markets. They're going down to year 2000 cars in some places like my city. Now why would they need to do that if they didn't fear burning through the willing pool of drivers? I'm guessing that taxi drivers tend to stay in that occupation longer. Many Uber drivers are also completely ignorant on how to calculate expenses and think that just because they are getting a paycheck from Uber that they are making money. These people just haven't had the major repairs come due yet or tried to sell their car and found out that it's now worth half the value they thought it was due to Uber. There's a bit of a lag time in driver awareness of what is fair compensation for using your car as a taxi. I think it will eventually catch up to the mass of drivers and Uber will have no choice but to raise rates. And if the law ever weighs in and forces Uber to provide commercial insurance from app on till app off, they are really going to have to raise fares. Uber has done what they've done by skirting regulations and abusing driver ignorance. I think Uber is a truly scummy company run by a complete ******bag asshole.

I'm only Ubering temporarily. I've worked out the math I make moderate profit. Probably comparable to what I'd be getting at a temp job and I'd rather have the flexibility of Uber. I like the variable nature of driving and having all these different people in your car really breaks the monotony of work and makes time go by fast. I don't plan to be doing this forever. Just using it as a fill-in until something better comes along.

I think cabs will always have their unique advantage, like just being able to step out on the sidewalk and raise your hand to get a ride(if it's a medallion taxi). Sometimes cheap isn't always better and you just need to get where you need to go quickly and not wait around. And at major events like concerts, sport events etc, Uber is a nightmare, at least as a driver. Most pax are too dumb to realize that you can't locate them from any of the other 1000 people walking around and don't know how to communicate with precision exactly where to find them. In this case it's easier just to walk up to a cab and get your ride there instead of all the back and forth communication with an Uber driver.

Taxis will need to evolve and learn from what Uber is doing right. It's not just cheaper prices, it's also better overall customer experience that is drawing people to Uber. Taxis need to figure out ways to implement the type of technology Uber is using and also provide friendlier customer services. Some taxi drivers are cool, but a huge number of them seem like they are annoyed by having to drive you around.


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## Oscar Levant (Aug 15, 2014)

Muki said:


> Given that Uber can pay a dollar a mile or even less and still have a city saturated with drivers, what would happen if they doubled rates? I think you'd have a lot more people joining up to drive, even more driver competition and people may end up making the same or even less because you'd rarely have surges and there would be way more drivers.
> 
> Now let's say Uber dropped fares to 50 cents a mile. A huge amount of drivers would quit, you'd have way more demand given the low prices and lack of drivers and you'd start seeing constant surge prices that would bring the take home pay of the drivers up.
> 
> ...


I've worked for many big taxicompanies of the last 30 years and they all failed --and for one reason only: poor driver morale .when morale tanks , eventually maybe not right away but eventually they go belly up every time. I can't see Uber lasting another five years given how they treat drivers,. but we'll see. I would be really surprised if they are making a profit and there is at least one strong indication of this, the big hurry to switch to driverless cars . if Uber really were profitable there wouldn't be such a big effort. but even if they do develop them they won't be cheaper you have to buy thousands and thousands of these vehicles and they won't be cheap , and you have to warehouse them with technicians etcetera. Travis is in la la land.


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## Muki (Oct 15, 2015)

Oscar Levant said:


> I've worked for many big taxicompanies of the last 30 years and they all failed --and for one reason only: poor driver morale .when morale tanks , eventually maybe not right away but eventually they go belly up every time. I can't see Uber lasting another five years given how they treat drivers,. but we'll see. I would be really surprised if they are making a profit and there is at least one strong indication of this, the big hurry to switch to driverless cars . if Uber really were profitable there wouldn't be such a big effort. but even if they do develop them they won't be cheaper you have to buy thousands and thousands of these vehicles and they won't be cheap , and you have to warehouse them with technicians etcetera. Travis is in la la land.


The wildcard is if the economy tanks again. You will then see a rush of people signing up to drive because there are few better options.

I think for now driverless cars are pie in the sky. It will eventually happen but I don't think we're even close to perfecting the technology to the point that it would be as safe or safer than a human driver. If there's a glitch and someone is killed, Uber is done for.

And from what I've read, Uber has not yet been profitable. They make a lot of money but they spend more than that on marketing and growth.


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## William1964 (Jul 28, 2015)

Raising rates would give me more disposable income.

A few drivers might make ends meet and have a little Savings or disposable income.

Most people will come to a point to where the new rates aren't worth it.


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## Lack9133 (Mar 26, 2015)

TwoFiddyMile said:


> This is a good thread.
> In other words, you stick your nose in the air at stinky cabs/stinky drivers, but drive your car for less than half my meter rate?


This might be the best quote I have seen on here. I find it absolutely hilarious that Uber drivers will take a vehicle worth five times the amount of a taxi, put the same costs, wear and tear into it for half the rate of what a taxi costs and somehow they feel they are more profitable than a taxi. But hey, let's not let money get into the way of the cool thing to do.


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## Lack9133 (Mar 26, 2015)

Muki said:


> I think the price of a cab makes sense. I totally see that after driving for Uber even a few days and computing the math. I think Uber will eventually have to raise rates. I do think there's a finite amount of drivers out there for Uber to churn through. That's why they've began lowering vehicle age limit in some markets. They're going down to year 2000 cars in some places like my city. Now why would they need to do that if they didn't fear burning through the willing pool of drivers? I'm guessing that taxi drivers tend to stay in that occupation longer. Many Uber drivers are also completely ignorant on how to calculate expenses and think that just because they are getting a paycheck from Uber that they are making money. These people just haven't had the major repairs come due yet or tried to sell their car and found out that it's now worth half the value they thought it was due to Uber. There's a bit of a lag time in driver awareness of what is fair compensation for using your car as a taxi. I think it will eventually catch up to the mass of drivers and Uber will have no choice but to raise rates. And if the law ever weighs in and forces Uber to provide commercial insurance from app on till app off, they are really going to have to raise fares. Uber has done what they've done by skirting regulations and abusing driver ignorance. I think Uber is a truly scummy company run by a complete ******bag asshole.
> 
> I'm only Ubering temporarily. I've worked out the math I make moderate profit. Probably comparable to what I'd be getting at a temp job and I'd rather have the flexibility of Uber. I like the variable nature of driving and having all these different people in your car really breaks the monotony of work and makes time go by fast. I don't plan to be doing this forever. Just using it as a fill-in until something better comes along.
> 
> ...


You've hit the nail on the head. Everything Uber has done has given taxi companies talking points on why their business model still makes sense. I've had the same conversations with traffic officers at sporting events who tell me because of Uber, they can't get people out of the venue's quick enough because no one can find their vehicle. In the bar scene, traffic is always backed up as people are trying to figure out which vehicle is theirs. There are just as many problems to the Uber model as their is the taxi model. Neither one is perfect and never will be.

But once taxi companies start shifting towards the Uber model, it will do nothing but give reason for regulators to come in and regulate everyone evenly across the board. The taxi company I work for is removing all meters in their cabs and going cell phones only next year. From what I hear, one of the reasons for doing so is the ability to surcharge if they would like. Once this happens, I can see the public, politicians and regulators start crying foul over the whole system. Just going to ride it out as long as I can.


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## SECOTIME (Sep 18, 2015)

I was driving in Orlando at 75 cents but now I go north where its $1.85 $2 base

Fewer rides but I still make more


Just find WiFi and load up Netflix.


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## TwoFiddyMile (Mar 13, 2015)

SECOTIME said:


> I was driving in Orlando at 75 cents but now I go north where its $1.85 $2 base
> 
> Fewer rides but I still make more
> 
> Just find WiFi and load up Netflix.


Seco gets it.
Work smarter, not harder.


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## Oscar Levant (Aug 15, 2014)

Lack9133 said:


> This might be the best quote I have seen on here. I find it absolutely hilarious that Uber drivers will take a vehicle worth five times the amount of a taxi, put the same costs, wear and tear into it for half the rate of what a taxi costs and somehow they feel they are more profitable than a taxi. But hey, let's not let money get into the way of the cool thing to do.


Taxi's pay high insurance, far more than your UberX driver, don't forget. Still, UberX isn't profitable, even without the insutance,


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## nickd8775 (Jul 12, 2015)

I think Uber will run out of drivers in 2 years. Also, there will be a lot more riders and some taxi companies will go out of business. Then we will see $2/mile rates


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## corn (Oct 21, 2015)

SECOTIME said:


> I was driving in Orlando at 75 cents but now I go north where its $1.85 $2 base
> 
> Fewer rides but I still make more
> How far north? Rates in volusia dropped to 1.15 pm.
> ...


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## itsablackmarket (May 12, 2015)

Bob Reynolds said:


> If Uber raised the rates, back to where they were before the "promotional rates" were put in place, several things would happen:
> 
> 1. Uber would make more money.
> 2. The drivers would make more money.
> ...


you forgot the most important point: 7. Cheap passengers will not.


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