# Uber's EPIC blunder



## Oscar Levant (Aug 15, 2014)

Uber, in an effort to make car ownership more expensive than taking an UberX car to and from wherever, Uber has failed to consider that the net savings gained by the riders by abandoning car ownership is transfered to the driver as a cost. Whatever it costs riders to maintain and operate vehicles, that cost is exponentially increased to drivers, and there is a point of diminishing returns for drivers regarding rates.

Effectively, driver morale has tanked. With the new rates, they are so low that Uber
us crossed the threshold of diminishing returns. For me, $2 a mile felt like the right rate for an UberX.
Plenty cheaper than a cab, and plenty of incentive to use UberX.

That is precisely what happened to the taxi industry. in the 90s , we made good money.

But, taxi corporations weren't focused on customers, they were focused on squeezing more out of drivers, not considering what effect on busines the inevitable diminished driver moral had on the business, and so they switched to leasing, instead of paying commissions, and when they did that,
if forced drivers to work a 12 hour shift to get the full benefit of the lease ( leases were 12 hour shifts).
Now, many leases are even higher since they are 24/7, with the logic the day rate isn't that bad, if you work 16 hours a day, 12 days a week. Well, many drivers do and you'd get burned out, too, if you had to work like that. This caused many Americans like me to quit, and so the only people left driving are foreigners who can't find a job anywhere else. So, drivers are in a constant bad mood, driver morale tanked in the taxi industry. This caused a huge void, and now, enter UBer, it was easy for them, and with the clever app an all, they inherited all the business.

And now, it's happening with Uber. The race to the bottom has the same squeezing and morale killing effect. Taxi-land mediocrity, here we come !

I dont' think Uber understands how low driver morale is a cancer on the enterprise. It won't show up immediately balance sheets. It will, in time, but it will be too late to do anything about it

It is what I call an "insidous" thing, creeping danger. Insidious means "an attractive idea (rates crossing diminishing returns threshold ) at first, but it will consume you alive at a time when it is too late to do anything about it". Alluring, but harmful, is the dictionary definition.

When drivers are in a bad mood, customers pick up on it, and gradually get fed up with the service, and go with another company, if there is one, and, of course, there is the one that wears a mustache.

Uber, you'd better listen to what this old man who has driven for 15 years in the transportation industry is telling you. The situation with Travis ( CEO ) reminds me of the Wall Street flick, we have a young hungry entrepeneur who is doing so well he cannot see the cliff his vehicle is driving at breakneck speed towards. The energy of the momentum forward will render the car irreversable if he waits until he's at the cliff's edge to turn the car around. Travis can't see it, but I can. I'll bet a lot of drivers of X cars can, too. I've seen it happen to a number of cab companies, all of whom came and went, and now are mere footnotes in the dustbin of transportation history.

During the 90s, there were a couple of real cheap cab companies, cheaper than Yellow, trying to compete against Yellow. But, all the cheap cabs went out of business, and a number of them came and went from the late 70s to the 90s, when I quit. Yellow had higher rates, but faster service, and they had the lion's share of business, during that time. But, they chose mediocrity and now they don't have squat and have to rely on foreign nationals to pay their egregious leases.

It will take some time for Uber to really hurt, but in today's world, a lot less time than it used to take.

Also, CEO seems to think that by making taking an UberX cheaper than car ownership, Americans will abandon, sell, their cars, etc. No, they will not . Americans have a love affair with the auto, and the primary reason people use UBer is to prevent getting a DUI, and that means it will always be a Friday and Saturday thing. So, if they hire enough drivers for Friday and Saturday, there will always be too many drivers on the other days.

Uber, you'd better listen up. UBer was fun, several months ago, but the money isn't worth it, and alas, Uber isn't fun anymore. And when driving becomes drudgery, Uber will be just another mediocrity, in a sea of mediocrity, all because the CEO lacked the wisdom to hire a guy like me to give him a second opinion on policy decisions.

tick tick tick tick, it's just a matter of time. Now, the rates are so egregiously low that driver of X cars are not compensated for use of their cars. Effectively, Uber is stealing driver's cars, collectively, mile by mile driven. Is it any less of a crime to steal one dollar from a million people over one million dollars from one person? Oh, I've heard Uber's rebuttal: "But drivers will make more". Hey Travis, when drivers were at capacity on the previous rate, which was competitive, how can the do more trips at the new rate, if they are at capacity already? How is a person more incentivized to call and Uber when, at the previous rate, it was 100% cheaper than a cab, and better service, when now, you have a even cheaper rate, but drivers are complaining a lot to customers ( do not believe they aren't, they are, big time) ? See, Travis? Driver morale doesn't appear on balance sheets. Surveys might help a little, but how can they be trusted if the drivers don't trust them to be anonymous? how about telephone surveys? Noooo, you're not wise enough to consider that, I didn't think so.

And, by the way, I really and truly want Uber to succeed. I am an optimist, that this post on this forum will somehow find it's way to upper management, and they change things to make Uber fun again. That's all I ever wanted, a fun way to make extra money, decent money during my off-season on my other business, which has its own set of problems I'm dealing with.

If Uber were smart, they would hire an experienced driver, an old fart like me, who could play devil's adv0cate. I could have easily debunked Travis's libertarian-influenced 8x on surge to become a PR flap of epic proportions. Today, I predict that current rates are tantamount to driver exploitation. The cancer that will ensue, will eventually engulf Uber, and this, plus the underhanded and unfair cutthroat biz tactics will color Uber as the big bully, and that narrative has already begun, and it's growing, and it's growing, and it won't be long that all of your celebrity buds will drop Uber like a polluted potato .......

NO ONE likes a bully, Travis. Wake the **** up. You are sitting atop a powerful vehicle, and it's moving fast, the money and attention is a tremendous high, and the ride is exhilerrating, seductive, intoxicating, but you just don't see the cliff, do you?

Do you? I didn't think so. 

Another thing, Lyft is not going to turn over and die for yo' ass, so get over it. Lyft is here to stay, now you two need to get along, and share the terrain, there's plenty for everyone, and with that attitude, your riders will love you for it, even more. But, once the word gets out you're a big bully, it's over. 

But, I'm probably living in La La Land, it wont be the first time -- yeah, I know, "dream on", if Travis even gets this message. He's surrounded by yesmen on twitter.


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## Daemoness (Aug 27, 2014)

Terrific post! I agree with you 100% although I have just a short tenure doing this.


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## UberNation (Jul 16, 2014)

AWESOME! I love this! You said it best when you said driving for Uber used to be fun. You're right, it isn't anymore. 

I had huge plans to drive most of Friday, all of Saturday, Sunday, and Monday. I tried to pump myself up for the long weekend, as I knew I would make some money and that always makes me happy. 

I ended up driving only 5 or so hours on Saturday and made less than $100 in compensation. I picked up a drunk crowd early on Saturday night and it all came rushing back - the crap I have to deal with when carting drunks around. So, I cut the evening way short and turned the phone off for the rest of the weekend. I am taking a couple weeks off of driving. I might not even go back. I'm heading to Vegas on Friday for a military reunion and will be gone for a week. When I get back, I'll take another week off to recover and then will think about putting the Uber sign back in and driving again. As of now, it's a 50/50 chance. 

Uber used to be a lot of fun but now, it just sucks. Lower earnings, more miles to make the same as before, and drunk aholes I have to deal with have ruined it for me. I could deal with the drunks but the lower earnings and increased mileage make the whole thing a losing deal for me.

So, Mr. CEO, you can kiss my ass and kiss it real good!


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## UberNation (Jul 16, 2014)

I know of a driver here in OC who is taking rides off the books. He is charging 95% of the fare estimate that Uber gives the passenger on their app and giving them a $5 discount for the passenger's cancellation fee they're likely to be charged. He isn't doing this with every trip but the big money ones, he is. 

He got the idea from a passenger during the July 4th weekend. He says he made several trips from Huntington Beach to Laguna Beach and Newport Beach to Laguna and was paid by the passengers. The trips I made from Newport to Laguna were ranging $90-$110 total fare so I'm sure he made a shit load of cash.


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## Oc_DriverX (Apr 29, 2014)

UberNation said:


> I know of a driver here in OC who is taking rides off the books. He is charging 95% of the fare estimate that Uber gives the passenger on their app and giving them a $5 discount for the passenger's cancellation fee they're likely to be charged. He isn't doing this with every trip but the big money ones, he is.
> 
> He got the idea from a passenger during the July 4th weekend. He says he made several trips from Huntington Beach to Laguna Beach and Newport Beach to Laguna and was paid by the passengers. The trips I made from Newport to Laguna were ranging $90-$110 total fare so I'm sure he made a shit load of cash.


Those trips were probably made at 5x surge rates, if my memory serves me correctly. Its a dangerous games your friend is playing. But, I guess there isn't much risk, since right now, being deactivated might be a blessing in disguise.


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## Oscar Levant (Aug 15, 2014)

Please understand that, what is the taxi equivalent of "high flagging" ( stealing fares without turning on the meter, ie., the meter's flag is not lowered, but left raised ) , is not hard to detect by management, given their sophisticated system ( don't think for a minute they are not aware of this possibility and have devised ways to detect it ) and, once discovered, you will be deactivated. Also, though I doubt it will happen, you could be prosecuted, and they just might if they feel that it is happening a lot in order to make an example of you to discourage others, I really don't know. But, in my opinion, it is better to assume you are playing with fire. I have been offered to collect, with the app off, and have turned down such offers. I"m not a "company man" by any means; for me, it's a personal integrity issue, I just can't do it.


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## Nova (Sep 3, 2014)

I agree with Oscar's opening post. I drove a cab many years ago for more than 5 years and liked it a lot, and with extra time on my hands this year decided to try Uber. It was fun for the first few months, but it turned into drudgery after the rate cut here in the DC area. Too many "fares" under $9, and most too far away to make it worthwhile if the trip was a shorty. And many short rides were also "I'll be out in a minute" that often turned into 5 minutes.

Also, the $1 per ride "Safe Rides Fee" is brilliant for Uber as every single trip regardless of amount generates revenue (how many trips do you run each week?). I used to make good money running numerous short trips as a cabbie, so long as I did not have to drive too far to pick up (we used a radio dispatch system in addition to street hails). But the initial charge for the flag drop (the equivalent of Uber's base fee) made it worthwhile. Used to say I made money because my flag was like a fan, always moving.

The rider call-in and radio dispatch system also had pros and cons: pros included the pickup location was always specific, having been worked out and confirmed by a company operator, and they always got the destination and number of riders. So the dispatchers knew the destination and number of riders, and if a call was in an area with no cabs but it was an emergency or the rider was going a long distance or it was a regular rider, the dispatcher could make that known. The big con is that it is expensive to hire operators and dispatchers 24/7/365. Computer dispatch reduces some of those costs, but not all.

And why are cabbies so upset about Uber? It's not just the loss of trips to Uber and Lyft and Sidecar and others, it's also the loss of cash trips (fare and tip), as many cabbies do not declare all of their cash income (also why credit card machines in cabs are often "broken").

Driving for Uber in the DC area, at the beginning many people told me they loved Uber and hated cabs and cabbies. After a few months I heard that less and less, and started hearing complaints about other Uber drivers taking long routes, starting trips before the rider was picked up, not ending trips after riders were dropped off, pressure for tips, dirty cars, rude drivers, etc., etc. Uber drivers are starting to sound like cab drivers.

Uber doesn't seem to have a clue that its drivers are the face of the company, but that will become increasingly obvious as Uber becomes yesterday's news and driver quality declines.


PS. If y'all want to have an impact on the Uber narrative in the press, you need to reach out to journalists on Twitter. And use some kind of consistent hashtag so it is easy for other journalists to find similar posts. (Most journalists will respect your request to remain anonymous if you ask.) 

#UberXploits is one, but maybe something a tad more rider-friendly would be better. With the latest admission by Uber in court that it lied to pax, maybe #UberLies would be better.


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## Allaffair (Jul 21, 2014)

UberNation said:


> AWESOME! I love this! You said it best when you said driving for Uber used to be fun. You're right, it isn't anymore.
> 
> I had huge plans to drive most of Friday, all of Saturday, Sunday, and Monday. I tried to pump myself up for the long weekend, as I knew I would make some money and that always makes me happy.
> 
> ...


This is exactly the way I feel also!!! Great posts!


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## pissedoff (Aug 23, 2014)

The end game is a IPO. It's all about building an empire on the backs of others, selling a dream to workers and later selling a dream to investors.

Think back to the days of the industrial revolution. It didn't matter how poorly you treated workers because there were a number of boats pulling into Ellis Island each day with more people who are more hungry to do the dirty work for less.


There is no long term play, churn and burn and sell off to someone else.


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## Nova (Sep 3, 2014)

pissedoff said:


> The end game is a IPO. It's all about building an empire on the backs of others, selling a dream to workers and later selling a dream to investors.
> 
> Think back to the days of the industrial revolution. It didn't matter how poorly you treated workers because there were a number of boats pulling into Ellis Island each day with more people who are more hungry to do the dirty work for less.
> 
> There is no long term play, churn and burn and sell off to someone else.


This.

But Uber reputation is starting to decline among riders, and as Uber expands we'll see how far a billion dollars goes to buy ride promotions all over the world. Can Uber outrun these?

BTW - if you have free Uber rides, suggest using them on long trips and UberBlack on short trips - and tell the driver to take the long route.


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## Driver23 (Sep 4, 2014)

Woderful post Oscar! It perfectly articulates what the majority of drivers will soon be thinking. 

"Im mad as hell and I'm not gonna take it any more"


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## Sami (Sep 8, 2014)

Oscar, thanks for the eye opener post. Your view assured me not to waste my time any longer driving drunk or rich stingy people around for less than minimum wage. I added an average of 4k miles per month on my car, wearing down the breaks, tires and everything else. Uber does not communicate well with the drivers; such things as if going to the national airports is OK or not. You have to send them e-mail on daily basis to find out the latest rules.
I gave over 1000 rides to people who hate Taxis, and it was not due to the Taxi fares, but the Taxi drivers who some did not speak English and are slaved to the Taxi companies where they have to pay $2200 a month to rent a Taxi, in which it translates to just live in the Taxi in able to make some extra money on top of the lease debt.
The bottom line is Uber riders LOVE Uber and also Uber investors love their future investments. Even if all Uber drivers go on strike(I doubt if they do), Uber will go forward and their PR person will know what to say.
If the drivers are not happy, it will reflect in their ratings and Uber has a very unfair system that terminates the drivers if their ratings drop.
I think working at in-n-out pays $11.50 an hour, plus all the benefits, and of course one free meal per shift. I think I will take Uber to work at in-n-out.


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## pissedoff (Aug 23, 2014)

That anal effluence that spewed from the Uber Spokeshole would be laughable if it just wasn't so pathetically untrue and disheartening.

Maybe in sum drivers are making more money i.e. their (uber) revenue is increasing, but individually, people are hurting.

So, simple math... You have $200 in revenue for the drivers and you have 4 drivers. Each one gets $50 pretending they get an equal share. If you increase demand, and your revenue is $300 you can say you increased your driver revenue by 50%. There is 50% more money for the drivers in total, but you doubled the number of drivers. So now you have $300/8= $37.50.

That's why marketing and PR people do what they do because they can't do math. They can only talk out of their asses and what comes out stinks.

Oh, and about this small business crap, if it's a small business, I should set the price for my services. If people don't want to pay the price I choose, then they can go elsewhere. Which becomes a vicious cycle because there's always someone willing to work for less.


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## The LAwnmower (May 1, 2014)

pissedoff said:


> That anal effluence that spewed from the Uber Spokeshole would be laughable if it just wasn't so pathetically untrue and disheartening.
> 
> Maybe in sum drivers are making more money i.e. their (uber) revenue is increasing, but individually, people are hurting.
> 
> ...


Yea. I stated this in an earlier post a week back. It is UberMath. They will keep testing lower rates. Maybe 10 out of 50 drivers will be so pissed off they stop driving but Uber has 10 more to replace them. Uber counts on drivers complaining but in the end doing nothing about it. I'm a moron myself for driving but now its just Fri and Sat night (hoping to pick up a few surge) whereas before I would drive randomly during the week. 
My buddy also drives for Uber. It is his only income. He goes berserk every time they lower rates but he never does anything about it. He is out there for 40 hours each week. He says he is going to update his resume and look real hard for another job. Each week I ask him how the job hunt is going. He always says he didn't have time to look because he got caught up on Youtube for 3 hours or watched a game on ESPN. Next week though he tells me he will look for another job. And it repeats every week.
Uber banks on that kind of driver. Will drivers REALLY do something about it or just say they are going to do something about it?


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## HisShadowX (May 19, 2014)

I agree with you but the picture Travis sees is the future and that is manless vehicles. They already are out there on the highways and around various cities in Cali with Google. Travis has already stated that is the route he wishes to go and once he pushes this agenda forward and gets the low priced robo cars out there thats it the Taxi Industry is done. 

Every mile someone drives for Uber they are essentially digging there own graves whether they want to believe it or not. Manless vehicles are already proven in Cali Rush hour traffic its a matter of time now and the more rides you do for Uber the more money they get to making this dream a reality for the Taxi Industry.


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## frndthDuvel (Aug 31, 2014)

There will be legal pot in 30 states, gay marriage in 50 before driverless cars are the reality of Travis's dreams. Prices WILL go back up. too much money on the table at this point. Drives have subsidized so far, Riders will eventually pay the freight.


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## HisShadowX (May 19, 2014)

frndthDuvel said:


> There will be legal pot in 30 states, gay marriage in 50 before driverless cars are the reality of Travis's dreams. Prices WILL go back up. too much money on the table at this point. Drives have subsidized so far, Riders will eventually pay the freight.


The tech is there and proven on the LA highways and the fact Uber has gotten away with fragrantly allowing people who do have any sort of chauffeurs license or taxi medallion in some of the toughest cities when they make this announcement and what the pricing will be (extremely cheap, watch) it will change the industry forever.


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## Larry B (Apr 9, 2014)

Yaaahhhhoooooo!


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## frndthDuvel (Aug 31, 2014)

Until Riders can put the freekin pin where it belongs , driverless cars can't compete. 
Oh wait, Uber/Lyft could either ask for an actual verified addy, or have the dropped pin be backed up with "does this address correspond to the ****ing location you are actually in?"


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## HisShadowX (May 19, 2014)

frndthDuvel said:


> Until Riders can put the freekin pin where it belongs , driverless cars can't compete.
> Oh wait, Uber/Lyft could either ask for an actual verified addy, or have the dropped pin be backed up with "does this address correspond to the ****ing location you are actually in?"


Hahaha, and as always it's everyone else's fault because the customer cannot input an address or drop a pin where that customer is at.


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## frndthDuvel (Aug 31, 2014)

I never said it was anybody's "fault". Did I Shadow? I am new enough to be naive enough to know shit happens. And to buy a freekin new car. Dimentia I guess. Old enough and self employed for enough years to know that as well. And one who knows the IRS is not that scary. Especially if you do not have much to lose. Like most Uber X drivers right? They will get paid of course, but you really do not have to worry unless you are a true cheat. Pay next year, penalties are often cheaper than loans or credit cars.

If you have another job, decrease your deduction to pay more through that job now if you can. Write offs in the first year may even get one more back by operating Uber at a loss the first year(after write offs for a few years, 2 years out of 5?). ONe can be quite thorough as to what are deductions in your small business. Hmm in fact,if one did not need the income, having the App on and being fastidious about record keeping one could use Uber as a tax write off more than income. 
Welcome to America.
Yeah Saturday night. 
Phone discounting personal use.
I imagine many Drivers may get a car wash a few times a week.
Mileage from the minute you leave your home and the app is on. Oh wait I need some groceries. App off. Mileage logged. 
App back on.

You have until October 2015 to do taxes for 2014. They will always arange a payment plan. Provided one files for an extension by 4/15. If not there will be a penalty, ohh I am so scared! Of course once you sign up for that plan for that year, you are obligated to it. And rightly so. But it gives you a year to see if this works or not, and if you have other income a nice shelter for some. YMMV

One of my rides today, A call apologizing for dropping the pin in the wrong location. If the App gives an address should that not be where we navigate to first? And then figure it out from there, on our time and dime btw. I imagine that offshore phone operator in India or Honduras getting the call from the Rider saying where the heck the robot is will be more expensive than we are as contractors. Are you an Uber or LYft Driver BTW Shadow, like I said I am new around here and I might have missed that. 

How does artificial intelligence figure out where the Rider is unless they know where they are? Only correct addy's do that. Do the Riders have any responsibility to know where the ****(hey,new here can we cuss like Bill Mahr around here?) The ride today were in the exact location mid block wise , just off a street. Like the time the rider placing the pin in their bedroom but it was closer to a house address around the corner. Is that their fault or mine as you seem to infer? Or just the way it is ,until an exact address is entered. I like the pin, and I try to educate Riders that if they zoom in close enough they can see the outline of the bulilding they are in. I get it, you love driverless cars. Me, I am old enough I do not care either way. But having seen gay marriage become legal in more states than legal pot in my life time, I think you think things will move a bit quicker than they actually may. You look young, I would get another job if Uber is all you have.


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## Casuale Haberdasher (Dec 7, 2014)

UberNation said:


> AWESOME! I love this! You said it best when you said driving for Uber used to be fun. You're right, it isn't anymore.
> 
> I had huge plans to drive most of Friday, all of Saturday, Sunday, and Monday. I tried to pump myself up for the long weekend, as I knew I would make some money and that always makes me happy.
> 
> ...


THREAD # 3/ UBER'N: Thank you for your
military service.


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## John_in_kc (Sep 30, 2014)

Great post esp. regarding lyft. Coke needed Pepsi to become what it is today.

Friendly competition is good. It keeps everyone honest and make prices fair and competitive and keeps driver and riders happy.


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