# Is Rideshare Recession Proof



## Tom Oldman (Feb 2, 2019)

*







*

June 9, 2019

Last week I created a thread here on UberPeople.net, that asked the question "Is Rideshare Recession Proof?"

https://uberpeople.net/threads/is-rideshare-recession-proof.332231/

It was rather a question than a statement and I asked for your opinion and help to better navigate the path through the troubled waters ahead, just in case. I was amazed by the depth of the knowledge and intuition of my fellow drivers. Thanks to your participation, this -Part 2- is inspired by your responses. I just summarized what I received from you..

Now again, I'm asking you to express your opinions because this economy of our has its own will and moods. Rideshare has seen only the pretty face of this moody $20 trillion monster during the longest expansion in recent history. We would not know the Rideshares' reaction to a recession. There is no precedent.

I gather from your inputs that we need to look at two main factors; the *Stage* which would be an economy in recession and three *Actors*; the _rideshare companies_, the _rideshare drivers_ and _rideshare riders_.

*THE STAGE:* This would be the economy in a hypothetical recession; will it happen? Most probably yes. When? We just don't know. What about those Harvard educated analysts and bankers? Those financial experts? Sorry, they mostly just talk into their own pockets. Worst of all are those characters on CNBC's Fast Money, Mad Money, "This money" and "That money." Usually they leave you "Without Money." At this point, we just stick to the golden two letters: "IF." What _*if*_ recession occurs. It's just the nature and mechanism of our capitalist, consumer-oriented system: Boom and Bust, Expansion and Contraction, Consumer Sentiment. Presently, we are on the longest economic expansion in modern times and hopefully it stays that way. Our Stage is just a theoretical scenario.

*ACTOR ONE:* _Rideshare companies_. The shares of the Uber and Lyft are mostly owned institutionally, which means investment bankers, hedge funds, mutual funds and of course offshore corps belonging to God knows who. About a decade ago, we learned and we were told; those financial institutions are "Too Big to Fail" and you and I must pay for them to survive. They will keep their "pet projects" such as Uber and Lyft alive even if they lose most of their stock value. They will stay as "Actors" in this play and someday, they will bring out the AV (Autonomous Vehicles) and let the shareholders walk into the promised land of profits and more profits. Hallelujah!

*ACTOR(S) TWO:* _Rideshare drivers_, you and I. The rideshare companies will water down our pay to the level of janitorial, agricultural and other low wage occupations, just to bridge the time until they can launch a successful AV platform. This _will_ happen. There have been always those who don't mind taking their lives down a notch, just above slavery. Taking backbreaking jobs such as agricultural, farm jobs, mopping floors, boss boy and other low wage jobs. There's always going to be folks who can survive with very little income. Those of us who are working to pay a mortgage, a car payment, and manage a middle-class life will struggle, unfortunately.

*ACTOR THREE:* _The riders_. They will have less money to spend, and they will still use rideshare as a staple service such as to and from work, but Pool rides will be the new norm. Those that cannot even afford Pool/Shared rides on a regular basis, may opt for the city bus and other forms of public transportation. Some may even ride bikes, such as one member here mentioned. Unfortunately, public transportation isn't very advanced in this beloved country of ours but that could change and cheap rideshare may fill the gap. One thing is certain; The discretionary rides such as barhopping, dining out and other unnecessary rides will be reduced and with it also goes away those nice fat tips.

*UNEXPECTED RESULT:* One more factor in all of this is the revolution of car ownership. There are tons of reports, statistics and editorial from highly credited sources that say rideshare will impact the car ownership and transportation overall. It will reshape the car ownership landscape but how and when, it is unclear. Each expert has his/her own take on this subject. I found a quote by Bill Gates which is worth sharing: "We tend to overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don't let yourself be lulled into inaction." (1.)

Please share your thoughts. This rideshare business of ours hasn't seen a recession yet and we all hope that it won't happen anytime soon. Again, there are many members here with great knowledge and good education in this forum. Please enlighten us, share with us your thoughts, your opinions... This is about our future and I would like people to voice their concerns over what we should, or could do to prepare for this.

LASTLY: Please note that I'm writing this article because it's just a complex subject about an "uncharted territory" that we may have to go through.

Sources Cited:

Gates, Bill; Microsoft Corporation Co-founder. From his book: The Road Ahead. Penguin Books, 1996.


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## 20yearsdriving (Dec 14, 2014)

Heads in the sand sir heads in the sand


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## Yam Digger (Sep 12, 2016)

Considering that the rideshare industry has never experienced a recession, it’s difficult to predict how it will affect pax use of rideshare. 

But there is one thing I can predict with absolute certainty: As people lose their jobs and become desperate to pay their bills, it’s a given that many of them will turn to the Gig Economy. 

You think there’s too many ants ? on the road now? Wait till the recession roles into town and watch everybody and his dog become a rideshare driver. One shorty per hour will actually start looking good!


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## Tom Oldman (Feb 2, 2019)

Yam Digger said:


> Considering that the rideshare industry has never experienced a recession, it's difficult to predict how it will affect pax use of rideshare.
> 
> But there is one thing I can predict with absolute certainty: As people lose their jobs and become desperate to pay their bills, it's a given that many of them will turn to the Gig Economy.
> 
> You think there's too many ants ? on the road now? Wait till the recession roles into town and watch everybody and his dog become a rideshare driver. One shorty per hour will actually start looking good!


Well said.
Then, the golden rule of supply and demand will set in. A large supply of driver will certainly push down the driver's pay even further.


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## Westerner (Dec 22, 2016)

Recession for ride share =more drivers with fewer riders, let the good times roll


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## U/L guy (May 28, 2019)

The real question to ask is will Uber and lyft survive a bad economy, if there losing there shirts now how do you think they’ll survive with less income generated. They can increase the drivers by 10 fold but if they don’t have paying pax’s to use the service they’ll go bankrupt. There not far from bankruptcy now.


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## jaxbeachrides (May 27, 2015)

I can tell you from the taxi days that ride demand is a leading indicator.

It really goes down leading into a recession, and quickly recovers as people who lost jobs start selling their cars or not buying cars they dont need and buy cheap rides instead.

What is not recession proof is saturation. You will have twice the drivers for several years once unemployment spikes. And they wont care how little they make because they're just out there networking, looking for other jobs, or just need to fill their gas tank for the day.

It will be interesting to say the least. Uber will benefit from a recession in the long term because it works towards their goal of people not owning cars.

Drivers will lose just because they almost always do. This has been going on long before uber.


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## Tom Oldman (Feb 2, 2019)

jaxbeachrides said:


> I can tell you from the taxi days that ride demand is a leading indicator.
> 
> It really goes down leading into a recession, and quickly recovers as people who lost jobs start selling their cars or not buying cars they dont need and buy cheap rides instead.
> 
> ...


Well said, every word of it. 
And thank you for sharing the taxi ewxperience in a recession. There is no doubt in mind that the saturation of drivers will happen as you wrote.
Both companies area already hiring drivers aggressively. They understand the very economic basics of supply and demand. Saturating the market with drivers is reducing driver's pay, as it happened in Los Angeles.


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## Listentoreality (Jun 17, 2019)

I’ll help you in the simplest way. Recession or no recession, Uber/Lyft won’t survive. They are selling $3 bills for $1 and hoping to make it up in volume, which is an economic falsity. The business press has repeatedly pumped them up. As Uber/Lyft racked up thousands of complaints ranging from rape to robbery by drivers, suddenly they’d flood the market with news about FLYING CARS! They are currently doing that right now because of the botched IPO. FLYING CARS coming soon! But..... the facade is cracking. They need to show growth and profit now that they are beholden to stock holders. Neither is going to happen unless they do one of two things, one of which is the only that can work in the long run. Cut drivers pay even more is one way. However, they will lose drivers completely so that’s a no go on the long run because they will never get to driverless cars in time. The second option is to raise the prices by at least 40% to bring them even with market level rates(the actual price of running a transportation company). They will take an even larger cut from the drivers so there pay won’t rise, but Uber’s profits will. This of course is not what the customers want as the leading reason people use Uber is because it’s cheaper. You can try and defend its convenience but the brand has no loyalty. Whoever is cheapest wins. It’s been proven, look it up. 

Also, STOP CALLING THEM RIDESHARE. Check the reports of how many rides are shared, it’s about 2%. It’s the word they came up with when UberTaxi was running into regulatory issues. The amount of energy and time used to talk about these companies is ludicrous. They are ILLEGAL TAXIS. Most major insurance carriers don’t cover them. Commercial insurance companies don’t cover them because they are not recognized as a legal entity of transportation. Only in SOME of the US and Canada are they moderately successful at buying off(lobbying) state governments to let them undermine the legal transportation industry. They are detrimental to all large cities. They cause more traffic and deaths. The drivers are not vetted. They are fully regulated or outright banned in most of the world.


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## U/L guy (May 28, 2019)

Listentoreality said:


> I'll help you in the simplest way. Recession or no recession, Uber/Lyft won't survive. They are selling $3 bills for $1 and hoping to make it up in volume, which is an economic falsity. The business press has repeatedly pumped them up. As Uber/Lyft racked up thousands of complaints ranging from rape to robbery by drivers, suddenly they'd flood the market with news about FLYING CARS! They are currently doing that right now because of the botched IPO. FLYING CARS coming soon! But..... the facade is cracking. They need to show growth and profit now that they are beholden to stock holders. Neither is going to happen unless they do one of two things, one of which is the only that can work in the long run. Cut drivers pay even more is one way. However, they will lose drivers completely so that's a no go on the long run because they will never get to driverless cars in time. The second option is to raise the prices by at least 40% to bring them even with market level rates(the actual price of running a transportation company). They will take an even larger cut from the drivers so there pay won't rise, but Uber's profits will. This of course is not what the customers want as the leading reason people use Uber is because it's cheaper. You can try and defend its convenience but the brand has no loyalty. Whoever is cheapest wins. It's been proven, look it up.
> 
> Also, STOP CALLING THEM RIDESHARE. Check the reports of how many rides are shared, it's about 2%. It's the word they came up with when UberTaxi was running into regulatory issues. The amount of energy and time used to talk about these companies is ludicrous. They are ILLEGAL TAXIS. Most major insurance carriers don't cover them. Commercial insurance companies don't cover them because they are not recognized as a legal entity of transportation. Only in SOME of the US and Canada are they moderately successful at buying off(lobbying) state governments to let them undermine the legal transportation industry. They are detrimental to all large cities. They cause more traffic and deaths. The drivers are not vetted. They are fully regulated or outright banned in most of the world.


Millennials and those who don't have a car are Uber's and lyft's primary source of income. All other riders use U/L when going out and tourist flying in are secondary sources, this is not sustainable in the long run.
The only way for U/L can survive is to cap the number of drivers in a market, stop wasting money on SDCs and flying cars and focus on their original business model.
Gas prices are going to rise, society is aging faster then young people are born, this will help sustain rideshare companies. Uber and lyft are going to have local competition in the near future, these companies will be the new transportation services that'll put U/L out of business.


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## Listentoreality (Jun 17, 2019)

Millions of millennials have cars. The major car producers are moving towards full electric/hybrid which will be a huge boom for them. When the millennials start coming out of debt they will buy vehicles just like every other generation. U/L will collapse but the technology will stay. It will be for hailing regulated licensed taxis, which exist solely as a go between to Mass Transit, not a permanent sole rider chauffeur service.


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## ntcindetroit (Mar 23, 2017)

Since rideshare is not an organic product, it's highly speculative trying to analyze it with any business theory or model. If anyone is interested to take a peek of the future, she or he can simply review how Uber fares in the Republic of China or how it got out of communist China. Two regions outside US jurisdiction have no Lyft but some vestige of Uber operation.


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## TwoFiddyMile (Mar 13, 2015)

Taxis barely survived recessions. I remember in 1990 or 1991 I was renting a cab usually on night shift out of the South End of Boston. Many nights I barely turned a profit. It was a bad recession, and one of the first things to go by the wayside in a recession is supplemental spending like non-essential Transportation. People ride the busses and Subways during a recession.

and furthermore if you think there are a lot of ants now, just wait till the recession. After the layoffs the entire pool of blood is going to turn their car into an Uber Lyft car. LOL!


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## Fuzzyelvis (Dec 7, 2014)

Tom Oldman said:


> *
> 
> 
> 
> ...


You lost me at "nice fat tips."


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## Tom Oldman (Feb 2, 2019)

Fuzzyelvis said:


> You lost me at "nice fat tips."


My apologies. What was I thinking, what nice fat tips!?


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## Eugene73 (Jun 29, 2017)

Uber will always make their cut and the computer program is already written and paid for. Drivers on the other hand…


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## Yam Digger (Sep 12, 2016)

TwoFiddyMile said:


> I remember&#8230;1990 or 1991.


I remember it too. That recession was pretty brutal up here in Cana as well.


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## Dammit Mazzacane (Dec 31, 2015)

Simple:
Passengers down
Driver saturation up
Bar drunk traffic way down
They suggest it may hit in 2020. Kill your debts now.


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## Tom Oldman (Feb 2, 2019)

TwoFiddyMile said:


> Taxis barely survived recessions. I remember in 1990 or 1991 I was renting a cab usually on night shift out of the South End of Boston. Many nights I barely turned a profit. It was a bad recession, and one of the first things to go by the wayside in a recession is supplemental spending like non-essential Transportation. People ride the busses and Subways during a recession.
> 
> and furthermore if you think there are a lot of ants now, just wait till the recession. After the layoffs the entire pool of blood is going to turn their car into an Uber Lyft car. LOL!


Well said and thank you for sharing the taxi experience during the 90-91 recession. That economic contraction started in late 1988 into 89 and hit the bottom and showed its ugly face in early 90's.

I couldn't agree more with you in regards to ants flooding the streets. The U/L are already hiring drivers aggressively as they follow the simple "supply and demand" rule; more supply of drivers will reduce the driver's pay. There are always those folks from everywhere and anywhere who can live with very little as they work in farms, at janitorial jobs, and other minimum wage jobs. U/L know that they need to cut on drivers expenses and they are intentionally targeting and inviting those folks and they will replace us in a recession or prosperity. I'm witnessing it right now in Southern California.


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## zidane00 (Aug 15, 2017)

Of course not. Look up the history of cabs in New York during the Great Depression.


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## Oscar Levant (Aug 15, 2014)

Tom Oldman said:


> *Is Rideshare Recession Proof -Part 1-*
> 
> 
> 
> ...


If there is a recession, drive in the poor neighborhoods, there's always a recession there, and for some reason, they take a lot of rideshares despite this fact.


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## Tom Oldman (Feb 2, 2019)

Oscar Levant said:


> If there is a recession, drive in the poor neighborhoods, there's always a recession there, and for some reason, they take a lot of rideshares despite this fact.


Well said; somehow this economical, political, social system of ours and the "trickle down" prosperity concept is leaving out majority of people and those at the end of the spectrum remain poor while the rich gets richer.


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## Mista T (Aug 16, 2017)

This is a subject of which I have much interest and have done quite a bit of research, the "true" financials of Uber and Lyft, as well as where the future lies for them, and drivers. My background: 20 yrs securities licensed.

I'm sure my response and analysis will draw much criticism.

1. Uber and Lyft are profitable NOW. They have publicly stated, both of them, that their gross profits "from contribution" are about a billion dollars each, last quarter. I'm rounding up, btw. Translation: If they were to drop all the other outside crap, the sign-on bonuses, the legal payments, the R&D, and the investments into scooters, flying taxis, bikes, and whatever else ... they each made about a billion dollars gross profit last quarter FROM RIDESHARE. Can they survive in a recession scenario? Yes, very likely. Cut all the extra crap out, and there is already money flowing there. (Tax free money, since they have years of tax losses built up to offset any future profits).

2. What will happen to rider prices? That's the hard part. Normally, a company charges more in the good times and cuts prices when recession hits in order to keep customers. But the companies are at the point where they are RAISING prices, out of necessity. If they had to keep prices where they are now, in order to keep customers, then that makes their future more challenging.

Remember that people are fickle and prone to price sensitivity. A little price difference is no big deal, but a big price difference can put the entire taxi industry on it's hands and knees. It works both ways... U/L major markets are already saturated, and the growth they are seeing now (in new customers) is coming at the expense of mass transit. In a recession, people will return to mass transit unless Uber rides stay around $5. So they either raise prices (and lose customers) or keep prices artificially low (and sacrifice profits). Either way, recession is a lose-lose for Uber and Lyft. In their ignorance, they initiated a price war TOO SOON and now they are screwed.

3. What will happen to driver pay? It will be cut again. The companies will promise to make it up to us with more bonuses, which we all know is a lie. As pay drops dramatically below (the equivalent of) minimum wage, more and more drivers will cut and run. The only ones left will be extreme part timers (10 hours a week and under), new people who are temporarily lured in by sign-on bonuses, and people who cannot get a minimum wage job for whatever reason (use your imagination here). Uber and Lyft will milk this system for as long as they can, which may be a couple more years. Eventually it will catch up to them, and they will be just like every other low end business with a "now hiring" sign in the window.

So, back to the question: Is the business recession proof? For the companies, I believe it is. For the drivers, no, we will once again draw the short end of the stick. However ...

4. Government is finally catching up! Government is slow and business is fast. Uber and Lyft moved fast and loose and planted themselves in our lives. They had minimal resistance, in general. Lots of outcry from the taxi industry, but nothing really stopped the revolution. But now, government is pumping the brakes. Look at the actions and initiatives that have taken or are taking place in numerous cities: San Francisco, Austin, Seattle, Chicago, Portland, New York, London... the list goes on and on.

Anyone who has watched government work knows that once a city successfully figures out how to hit these azz hole companies for money, then EVERY city is going to go for the wallet! It's all about the tax dollars!!

My prediction: within 2 years, one of two things will have happened: 1) We will be classified as employees, or 2) regulations will force U/L to provide us with higher pay and some benefits. And when either of those happen, it will be more damaging to the companies than a recession.

You heard it here first!


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## Tom Oldman (Feb 2, 2019)

Mista T said:


> This is a subject of which I have much interest and have done quite a bit of research, the "true" financials of Uber and Lyft, as well as where the future lies for them, and drivers. My background: 20 yrs securities licensed.
> 
> I'm sure my response and analysis will draw much criticism.
> 
> ...


Mista T,
Yes Sir, we won't forget, it was you who predicted:

Mista T said: "My prediction: within 2 years, one of two things will have happened: 1) We will be classified as employees, or 2) regulations will force U/L to provide us with higher pay and some benefits. And when either of those happen, it will be more damaging to the companies than a recession"

If I just may; you and I are on the same page; I described the complex and you answered in detail with great knowledge from 20'years in securities and exchange business.

I really have nothing to add just to thank you for your time to write this valuable response. And I shall emphasize that you're correct; they are making money. The majority of shares in both companies are institutionally owned, except the two partners of Lyft managed to keep great numbers of Class A shares. The institutions; Banks (especially Soft Bank,) Mutual and Hedge Funds and other major investment institutions shuffle around losses and gains from one stock to another and get away with less taxes or no taxes at all. The top dogs pay themselves heavy salaries. The Uber CEO received $200 million just to accept the job. Few million benefits here and there is the topping on the cake. So, yes it's a win, win situation for the company owners and mangers at the cost of drivers who try buy grocery after 10 hours of driving through LA traffic, taking sh&t from pax and middle finger from driver next lane. At the cost of small investors, at the cost of tax payers.... And so on. Yes Sir Mista T, I agree with every word, you nailed it.


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## Yam Digger (Sep 12, 2016)

Tom Oldman said:


> "trickle down" prosperity concept is leaving out majority


The only part of Trickledown Economics that actually works, is the urine of the wealthy trickling down the faces of everyone else.


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## Kurt Halfyard (Dec 13, 2017)

Yam Digger said:


> The only part of Trickledown Economics that actually works, is the urine of the wealthy trickling down the faces of everyone else.


My favourite is that they started with the 'trick down' in the early 1980s, and it has shown again and again since then that it doesn't work, and yet every conservative politician keeps hammering at it. Definition of Insanity, I tell you, we need new models, not just fantasy & wishful thinking propped up by narrative lies.


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## Tom Oldman (Feb 2, 2019)

Kurt Halfyard said:


> My favourite is that they started with the 'trick down' in the early 1980s, and it has shown again and again since then that it doesn't work, and yet every conservative politician keeps hammering at it. Definition of Insanity, I tell you, we need new models, not just fantasy & wishful thinking propped up by narrative lies.


And they, politicians employed and corrupted by the, lobbyist of more corrupt corporations, continue with the shameless lies, especially with the socially, politically and economically fallacy of the trickle-down economy. It's like saying; "we are gonna take it all, I need a new jet and the wife a bigger breast implant but we throw a bone and some breadcrumb here a there, so you don't starve."


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## Yam Digger (Sep 12, 2016)

Tom Oldman said:


> but we throw a bone and some breadcrumb here a there, so you don't starve."


I think Machiavelli wrote something akin to that.


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## Tom Oldman (Feb 2, 2019)

Yam Digger said:


> I think Machiavelli wrote something akin to that.


Thank you, although born in Italy and traveled several times to my most favorite city, Florence, I never knew about Machiavelli. Just looked up Google and Wikipedia, the 15-16 th century diplomat, historian, philosopher, a significant renaissance period character. Now I have great reads again about my favorite period in history.

It truly amazes me the knowledge of some members in this forum such as yourself.

Of course there is no shortages of members with some awkward attitude like the guy who is bragging how he lies about a relative needing organ transplant to get tips. I was so mad, I almost closed my account.

But now, I see educated people with vast knowledge like yourself as members here which makes very happy that I didn't leave and got to know you.

Thank you again for the Machiavelli name and thank you for being who you're. 
Tom


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## Hunter Knight (Aug 7, 2018)

Westerner said:


> Recession for ride share =more drivers with fewer riders, let the good times roll


I think this is really all there is to it. For those that do this as a side gig, ever thought about this job as a nice safety net in case you lose your main job? So has every other part-timer...

Drivers will take the brunt of the recession-based rideshare damage. Demand in an absolute sense *may* go up due to some abandoning their cars, but the TNCs will be flush with tons of drivers trying to hold onto their cars and will be able to reduce rates even further. Therefore demand in terms of rides/driver/hour is certain to go down.


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## Crosbyandstarsky (Feb 4, 2018)

Tom Oldman said:


> *Is Rideshare Recession Proof -Part 1-*
> 
> 
> 
> ...


You're overthinking the future. Relax what happens happens and no one knows


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## Darrell Green Fan (Feb 9, 2016)

Yam Digger said:


> Considering that the rideshare industry has never experienced a recession, it's difficult to predict how it will affect pax use of rideshare.
> 
> But there is one thing I can predict with absolute certainty: As people lose their jobs and become desperate to pay their bills, it's a given that many of them will turn to the Gig Economy.
> 
> You think there's too many ants ? on the road now? Wait till the recession roles into town and watch everybody and his dog become a rideshare driver. One shorty per hour will actually start looking good!


My thoughts exactly. I don't see how a recession can do anything but hurt us, less riders and more drivers is never a good thing.


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## Yam Digger (Sep 12, 2016)

Crosbyandstarsky said:


> You're overthinking the future. Relax what happens happens and no one knows


Going through life with no kind of plan and no backup plan is like starting a long road trip with only a quarter tank of gas and no money: it's not going to end well.


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## Tom Oldman (Feb 2, 2019)

Darrell Green Fan said:


> less riders and more drivers is never a good thing


Well said.


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## HumbleKid (Mar 16, 2017)

Yam Digger said:


> The only part of Trickledown Economics that actually works, is the urine of the wealthy trickling down the faces of everyone else.


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## denise gray (Jun 7, 2017)

Tom Oldman said:


> *Is Rideshare Recession Proof -Part 1-*
> 
> 
> 
> ...


Sad to say but this is a dying industry.. to many drivers that want to make a quick buck. Uber/Lyft ruined the transportation industry



Tom Oldman said:


> Well said and thank you for sharing the taxi experience during the 90-91 recession. That economic contraction started in late 1988 into 89 and hit the bottom and showed its ugly face in early 90's.
> 
> I couldn't agree more with you in regards to ants flooding the streets. The U/L are already hiring drivers aggressively as they follow the simple "supply and demand" rule; more supply of drivers will reduce the driver's pay. There are always those folks from everywhere and anywhere who can live with very little as they work in farms, at janitorial jobs, and other minimum wage jobs. U/L know that they need to cut on drivers expenses and they are intentionally targeting and inviting those folks and they will replace us in a recession or prosperity. I'm witnessing it right now in Southern California.


U/L is a bullshit company ! drivers like me and a few others have mandatory drug tests along with FBI fingerprinting and background checks and at certifications.. with uber and Lyft you just smoke a joint and go to work!! everyone including their mother is driving now !



Tom Oldman said:


> *Is Rideshare Recession Proof -Part 1-*
> 
> 
> 
> ...


 figure it out you already know that there are way too many drivers flooding the market



denise gray said:


> Sad to say but this is a dying industry.. to many drivers that want to make a quick buck. Uber/Lyft ruined the transportation industry
> 
> 
> U/L is a bullshit company ! drivers like me and a few others have mandatory drug tests along with FBI fingerprinting and background checks and at certifications.. with uber and Lyft you just smoke a joint and go to work!! everyone including their mother is driving now !
> ...


So if you're good with numbers you're actually loosing money when you do the math



denise gray said:


> Sad to say but this is a dying industry.. to many drivers that want to make a quick buck. Uber/Lyft ruined the transportation industry
> 
> 
> U/L is a bullshit company ! drivers like me and a few others have mandatory drug tests along with FBI fingerprinting and background checks and at certifications.. with uber and Lyft you just smoke a joint and go to work!! everyone including their mother is driving now !
> ...


And a useless vehicle after a few years along with no money to show for all of those $7 rides.. lol


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## Darrell Green Fan (Feb 9, 2016)

Quoting and responding to your own post is kinda like referring to yourself in the 3rd person.


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## mbd (Aug 27, 2018)

Yam Digger said:


> The only part of Trickledown Economics that actually works, is the urine of the wealthy trickling down the faces of everyone else.


Some of the wealthy, non attention seeking wealthy, give out billions to charity 
Bill Gates is ok

Attention seeking wealthy give out $$$, for publicity. Very easy to identify these guys.


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## TomH (Sep 23, 2016)

Mista T said:


> This is a subject of which I have much interest and have done quite a bit of research, the "true" financials of Uber and Lyft, as well as where the future lies for them, and drivers. My background: 20 yrs securities licensed.
> 
> I'm sure my response and analysis will draw much criticism.
> 
> ...


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## Darrell Green Fan (Feb 9, 2016)

mbd said:


> Some of the wealthy, non attention seeking wealthy, give out billions to charity
> Bill Gates is ok
> 
> Attention seeking wealthy give out $$$, for publicity. Very easy to identify these guys.


But that's not the same as trickle down economics where in theory you give money to the rich and that trickles down eventually to the middle class in the form of jobs, pay increases. The problem is this theory does not work and it never has, the rich simply keep most of the money.


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## calimade (Apr 13, 2017)

We got a trail run of how it will look when the government shutdown in DC. Everyone became a driver. People made $3 a hr uber/lyft still collected their money and the service was actually WAY better since everyone was out driving their new SUV's


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## Yam Digger (Sep 12, 2016)

mbd said:


> Some of the wealthy, non attention seeking wealthy, give out billions to charity
> Bill Gates is ok
> 
> Attention seeking wealthy give out $$$, for publicity. Very easy to identify these guys.


Then there's the Steve Jobs types who won't even spare a prayer for the less fortunate, let alone some spare change.


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## sUBERbs (Dec 14, 2018)

Personally, i believe that a recession will create a delayed boom for the individual rideshare driver!

10% job losses result in thousands of new ants on the roads. These ants are driving their same commuter with 5-10 years and 100000 miles under their hoods already. 

Business is in a downturn due to saturation. Riders still exist, as many that uber do it because they don't have vehicles, can't afford parking, or have no license. 

These cars begin falling within the first 50k miles on platform. Drivers are now spending their entire income just maintaining their vehicles. They get out of the business, along with most that start up now. 

Now there's another rider, because they ruined their transportation trying to utilize the gig economy. Demand rises. Those that run efficient vehicles and planned for this business weather the influx, and then come out ahead when the startups fail. 

Drunks will increase. Per capita alcohol consumption goes up during economic drought. It's cheaper than vacationing. 

Many 20 somethings don't have any interest or experience driving, and don't get their licenses. 

I don't see having struggles if we all just run our businesses properly. Proper prior planning prevents piss poor production.


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## REX HAVOC (Jul 4, 2016)

Tom Oldman said:


> *Is Rideshare Recession Proof -Part 1-*
> 
> 
> 
> ...


Gold is also way up. What does that tell you?


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## Tom Oldman (Feb 2, 2019)

REX HAVOC said:


> Gold is also way up. What does that tell you?


If it's a question, in my opinion gold along the10 year treasuries (US Japan Germany) has been always the favorite safety besides only cash considering the US dollar weakness in the last few days. The 10 year treasuries yield fell briefly below 2% yesterday. As you know; as bond prices rise due to the high demand, the yield falls. The US 10 year note yields 2.05% (lowest in almost 2 years) German 10 year treasury yield is negative -0.3% and Japan 10 year note is negative as well at -0.14.

But none of above would give a clear signal of the market direction. The Fed could jump in with lower rate and qualitative easing and change the direction.

what really concerns me and that's just my opinion after reading a comment by Sheila Bair, former head FDIC. She is pointing at the leveraged borrowing by less solvent corporations and she is comparing it to 2008 market crash due to mortgage backed securities and derivatives.

But again none of this gives us the slightest idea what direction this economy is going to, we just don't know. The market and our economy have the mind of their own which is very unpredictable.


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## Dingo (Jun 15, 2016)

Yes Ridshare is recession proof.
Theres a recession and you drink proof.....
150%


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## DDW (Jul 1, 2019)

Tom Oldman said:


> *Is Rideshare Recession Proof -Part 1-*
> 
> 
> 
> ...


What happened to the taxi industry in the last recession? There's your answer


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## TwoFiddyMile (Mar 13, 2015)

DDW said:


> What happened to the taxi industry in the last recession? There's your answer


Taxi drivers always survive. King Arthur flour and Wesson oil.
Flatbreads. About $0.50 per batch.


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## Uberate (Dec 29, 2018)

ridesharing is going to cause a great depression. People need to wake up and realize these companies are stealing the value from your car. When you go to sell it and it is worth a fraction of what you invested and you look at your bank account and realize you didn't get compensated for it, then you will realize. It takes over a year for this to happen.

The world economy is ubering straight over a cliff.



sUBERbs said:


> These cars begin falling within the first 50k miles on platform. Drivers are now spending their entire income just maintaining their vehicles. They get out of the business, along with most that start up now....
> 
> Those that run efficient vehicles and planned for this business weather the influx, and then come out ahead when the startups fail....
> if we all just run our businesses properly. Proper prior planning prevents piss poor production.


"proper prior planning" you are just delaying your demise by buying a newer car and maintaining it well. The system will eat you up too.


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## Yam Digger (Sep 12, 2016)

sUBERbs said:


> Now there's another rider, because they ruined their transportation trying to utilize the gig economy.


Also, because they're not making enough to pay their bills, maintain the car and service the car payments, their chariot gets *repoed* by the creditor.


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## Jamesmiller (May 8, 2017)

Mista T said:


> This is a subject of which I have much interest and have done quite a bit of research, the "true" financials of Uber and Lyft, as well as where the future lies for them, and drivers. My background: 20 yrs securities licensed.
> 
> I'm sure my response and analysis will draw much criticism.
> 
> ...


If uber wa


Uberate said:


> ridesharing is going to cause a great depression. People need to wake up and realize these companies are stealing the value from your car. When you go to sell it and it is worth a fraction of what you invested and you look at your bank account and realize you didn't get compensated for it, then you will realize. It takes over a year for this to happen.
> 
> The world economy is ubering straight over a cliff.
> 
> ...


The rich has been praying on the poors lack of financial wisedom. As darwin said only the strong will survive and uber is betting on most of its driver to have the financial understanding of a 4th grade. People would rather settle for crumbs because the rich dress it up to look like gold. Business uses free labor and the cheapest labor is the poorly educated.

Sn having a degree doesnt change your intelligence if its not in the industry your working.


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## freeFromUber (Mar 1, 2016)

Tom Oldman said:


> *Is Rideshare Recession Proof -Part 1-*
> 
> 
> 
> ...


NOTHING is recession proof.


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## Tom Oldman (Feb 2, 2019)

freeFromUber said:


> NOTHING is recession proof.


Except those "too big to fail" and we bail them out off course.


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## Stlman (Feb 17, 2016)

To answer your question you won’t find an answer. That because like the people that started working after 2012 none of them nor the rideshare community has been in an recession so no matter what people say you will not find a credible answer due to there isn’t one out there.


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## joebo1963 (Dec 21, 2016)

Some of your answer can be found here in south Florida where we experience a recession every summer. It’s called off season. In season from December to April we have plenty of snow bird and I can rely on a steady stream of rides. Never shared. Even some power bonuses and ride challenges. Then off season hits. All businesses drop 30%. Now I take any ride I can get because I know the demand is not there. Plus extra drivers in all the workers that previously were were working OT now work less hours and drive fir extra income. 

In a real recession demand drops and all those people collecting unemployment insurance will be drivers for extra cash. Just like the Great Depression before taxis got regulated


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## Tom Oldman (Feb 2, 2019)

joebo1963 said:


> Some of your answer can be found here in south Florida where we experience a recession every summer. It's called off season. In season from December to April we have plenty of snow bird and I can rely on a steady stream of rides. Never shared. Even some power bonuses and ride challenges. Then off season hits. All businesses drop 30%. Now I take any ride I can get because I know the demand is not there. Plus extra drivers in all the workers that previously were were working OT now work less hours and drive fir extra income.
> 
> In a real recession demand drops and all those people collecting unemployment insurance will be drivers for extra cash. Just like the Great Depression before taxis got regulated


Thank you for the responses. The comparison to seasonal business contraction makes sense. Unfortunately both companies are flooding the market with drivers to push down drivers' pay using the oldest business strategy in the books; supply and demand.


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## WinterFlower (Jul 15, 2019)

Tom Oldman said:


> Thank you for the responses. The comparison to seasonal business contraction makes sense. Unfortunately both companies are flooding the market with drivers to push down drivers' pay using the oldest business strategy in the books; supply and demand.


Lyft already started to change that. New drivers are required to provide a 2017 or newer vehicle


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## Tom Oldman (Feb 2, 2019)

WinterFlower said:


> Lyft already started to change that. New drivers are required to provide a 2017 or newer vehicle


I heard they started in Florida market which may spread to other markets as well. I believe they are doing trial and error in select markets and they are cherry picking for newer cars. Although I have a 2018 car, I care less what Lyft does. In my opinion the two managers, John Zimmer and Logan Green are shameless thieves screwing rides and drivers. I use Lyft as auxiliary and Directional Filter and nothing more.


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## politeray (Jul 13, 2019)

U/L guy said:


> The real question to ask is will Uber and lyft survive a bad economy, if there losing there shirts now how do you think they'll survive with less income generated. They can increase the drivers by 10 fold but if they don't have paying pax's to use the service they'll go bankrupt. There not far from bankruptcy now.


Yes both will, because more people will be willing to drive for even lower per mile earnings.


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## libingbing (Apr 17, 2017)

During a recession you can expect getting a BJ from desperate passengers in return for a ride.


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## TwoFiddyMile (Mar 13, 2015)

libingbing said:


> During a recession you can expect getting a BJ from desperate passengers in return for a ride.


Wrong. During a recession the pax want half price rides. So maybe half a BJ, false teeth in and lights on.


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## UberLaLa (Sep 6, 2015)

That's like asking if The Great Depression was Recession Proof.


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## Mole (Mar 9, 2017)

Tom Oldman said:


> *Is Rideshare Recession Proof -Part 1-*
> 
> 
> 
> ...


We will be testing this in about 90 days.


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## libingbing (Apr 17, 2017)

scrUber lost another 5B this past Q. ouch! hope the stock crashes to zero.


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## Mista T (Aug 16, 2017)

freeFromUber said:


> NOTHING is recession proof.


Toilet paper is recession proof.

Shitty business, but it really sticks with people.


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## TwoFiddyMile (Mar 13, 2015)

Anyone have a good recipe for Puerto Rican rice and beans? With Pollo of course.


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## 5231XDMA (Apr 7, 2018)

I don't think its recession proof, the demand is price elastic, market dependent and there are alternatives (walking, biking, taxi, buses/metro, carpooling). Since people often get laid off during a recession, expect more of those people to start working gigs because rideshare companies basically runs an open recruitment process, saturating the supply of cars in a market with dwindling demand (people go out less and opt for cheaper mode of transport in a recession). Even if they cut price, the rideshare companies themselves will not survive, because they're hemorrhaging cash, and in a recession there's less liquidity available, they won't be able to keep financing as easily as they did. This can only end badly.

I do U/L in one of the busiest market, and this afternoon rush hour yielded the least amount of pings I've ever experienced, no pings for an hour! Prior to today, longest I've had to wait for a ping during rush hour was only 10 minutes. If the market crashes, I don't expect to be able to keep doing rideshare, there won't be any rides.


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## Tom Oldman (Feb 2, 2019)

5231XDMA said:


> I don't think its recession proof, the demand is price elastic, market dependent and there are alternatives (walking, biking, taxi, buses/metro, carpooling). Since people often get laid off during a recession, expect more of those people to start working gigs because rideshare companies basically runs an open recruitment process, saturating the supply of cars in a market with dwindling demand (people go out less and opt for cheaper mode of transport in a recession). Even if they cut price, the rideshare companies themselves will not survive, because they're hemorrhaging cash, and in a recession there's less liquidity available, they won't be able to keep financing as easily as they did. This can only end badly.
> 
> I do U/L in one of the busiest market, and this afternoon rush hour yielded the least amount of pings I've ever experienced, no pings for an hour! Prior to today, longest I've had to wait for a ping during rush hour was only 10 minutes. If the market crashes, I don't expect to be able to keep doing rideshare, there won't be any rides.


Well said, your response and analysis are right on spot. It can get ugly. Today we just saw the tip of the iceberg with Dow losing 800 points. The 2 and 10 year treasury spread is inverting and last time it happened was in 2007 !!

I'm putting a post together as a follow up or part 3 if I get the time to do it and I'm not sure if anyone is paying attention. But well-thought and will-written responses from reades like you with an educated understanding are encouraging. Thank you.


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## ragnarkar (Sep 2, 2016)

My predictions:

More people will lose their jobs and drive for Uber/Lyft. Increased supply means rates will go down even further to the point where driving for Uber will be a net loss for drivers where fares won't cover the cost of gas and maintenance. 

Now you may be wondering who in the world would drive if it's a net loss? I'm willing to bet plenty of desperate people, especially since maintenance costs aren't immediately incurred. For example, you might be driving for a few months making bank and one day, BAM, your transmission goes out and you're left spending several grand getting a rebuild, effectively wiping out your profits. 

Someone who needs cash fast, say to pay rent or credit card bills will not think too far ahead and will drive to make a quick buck or two even if it means he'll incurr massive maintenance bills further down the road. So there will be plenty of drivers making a net loss, at least before more and more drivers realize what is going on. 

For riders, the beginning of the recession will likely be their golden age. Of course wealthier people will also likely be hit by the recession and they might opt to use ridesharing in lieu of replacing an aging car esp if they figure out this math that owning is more expensive than riding.


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## Tom Oldman (Feb 2, 2019)

ragnarkar said:


> My predictions:
> 
> More people will lose their jobs and drive for Uber/Lyft. Increased supply means rates will go down even further to the point where driving for Uber will be a net loss for drivers where fares won't cover the cost of gas and maintenance.
> 
> ...


Although a bit gloomy, but unfortunately your response is the truth that many of us try not to think about. A recession, which seem to be unavoidable in our boom and bust economy, will impact the rideshare gig profoundly. It won't go away but it will be difficult to make a living or I should say more difficult as it doesn't give us enough as it's right now.


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## ragnarkar (Sep 2, 2016)

Things are gonna get interesting if a recession hits and causes an oversupply of drivers which then causes the wages to fall below the long-term driving costs (mainly gas + maintenance.) This can happen very quickly if we get a gas price spike like the 70s and the first part of 2008-2009. It can still happen in a deflationary recession as well.. even though gas prices are likely to drop in the latter recession, maintenance prices probably won't drop as much since there will likely be upward pressure in demand for mechanics as more people opt to fix their old cars rather than buy new ones to replace them.

And just because average wages fall below average driving costs (including gas and maintenance) doesn't mean that drivers will quit ridesharing right away. Maintenance costs, unlike gas, isn't incurred on a regular basis and it's hard to judge if they're exceeding your wages until you've been Ubering for a few months to maybe a year or more. And someone who barely has enough cash in their bank account to pay the next month's rent will still choose to drive even if they know it's gonna cost them more in the long run in maintenance.

Once wages are lower than costs of driving, I can foresee a few things playing out:


The most desperate drivers will stay. Essentially, driving for Uber will become a very time consuming form of a high interest loan where you can quickly earn cash in the near future for even higher maintenance costs in the far future.
Middle class and wealthy people might soon realize that's cheaper to use Uber instead of driving their own car, especially when their car breaks down or requires some very expensive maintenance, essentially ending its life. This person will choose not to buy a new car and instead take advantage of the large # of Uber drivers out there who are losing money driving for Uber although they might not notice it in the short term.
Eventually some drivers will quit either because they realize it's a losing proposition in the long run or they've "ruined" their car thru #1 and can no longer afford the maintenance to keep it running. The drivers who have cars with low maintenance and gas costs will more likely remain while those cars with high operating costs will likely be weeded out.
At this point, a lot of things could happen. If a lot of drivers are still continuing to drive out of financial desperation and tons of more financially savvy people are choosing to take advantage of these drivers rather than choosing the more expensive route of car ownership, then Uber will continue to make a profit. This could continue indefinitely until a lot of drivers (and former drivers) end up bankrupt and possibly sue Uber or something, and at this point, drivers might end up being classified as employees who get paid a wage and reimbursed for this maintenance costs, but at the same time, the process for becoming a driver will become a lot more competitive.
If a lot of drivers end up quitting since wages are too low, Uber might end up having to raise wages back up again. If raising wages is the only way to attract more drivers but ends up killing demand, then Uber might go bankrupt.


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## Zoz67 (Jul 14, 2019)

Tom Oldman said:


> *
> 
> 
> 
> ...


It could go either way . In Sydney Australia it is well known for its sizeable amount of Poker Machines . I am noticing more and more people are coming out of clubs during the week as the economy is slowing down . The police is very strict with its DUI policy so ride sharing is a cheaper option . I think the Taxi industry will suffer the most from Recessions , Also lot of people will sell off their cars to pay down gambling debt .,,


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