# Strategy Behind Rate Cut



## UbermanFLL (Oct 1, 2014)

Uber's growth potential is in the logistics area. The attraction for investors is Uber will be the leader in the same day delivery arena. Competing with UPS, Fed-Ex, etc. On-line retailers need a means to delver their products in a timely manner. Uber is the answer.

The current rates are more in line with delivery rates than taxi/limo rates. Any Uber driver that is willing to transport passengers in their vehicle at tremendous risk at the current rates would be more than willing to deliver packages. Package delivery doesn't carry the liability that livery service entails. As we all know Uber is experimenting with delivery services in some markets.

Many people have posted that this is a grand social experiment. I argue that it is market research into penetrating the same day delivery market.

Does Uber have the capability of providing a nationwide network of drivers to online retailers? This rate reduction will give them the answer.

I look forward to reading other thoughts on this premise.


----------



## remy (Apr 17, 2014)

Why talk about it? After fare cuts drivers continue to drive.


----------



## Marcuber (Oct 23, 2014)

Uber can barely win a fight against the taxi industry. When these other industries get affected, including gas stations, car rental, and automakers as it is way cheaper to use uber than lease a car and pay for parking an auto insurance, Uber will be gone in a minute.


----------



## Tx rides (Sep 15, 2014)

UbermanFLL said:


> Uber's growth potential is in the logistics area. The attraction for investors is Uber will be the leader in the same day delivery arena. Competing with UPS, Fed-Ex, etc. On-line retailers need a means to delver their products in a timely manner. Uber is the answer.
> 
> The current rates are more in line with delivery rates than taxi/limo rates. Any Uber driver that is willing to transport passengers in their vehicle at tremendous risk at the current rates would be more than willing to deliver packages. Package delivery doesn't carry the liability that livery service entails. As we all know Uber is experimenting with delivery services in some markets.
> 
> ...


I get what you are saying, but don't think it is viable. Packages will still be in the hands of BigDelivery until they reach last hub, so drivers would have to contract with those companies for the last leg.


----------



## ElectroFuzz (Jun 10, 2014)

I believe Uber strategy is to go for 80 billion evaluation.
This is the last push before the IPO release and they will do
anything to achieve this.
If they can get drivers to keep driving at a loss for just a couple of months
that would do the trick and their books will be glowing with potential profits.
Once the IPO is released and they will pocket the 80 billion..... well who cares what happens after that.
Will they **** you over for an extra $40 billion?... I believe they will.
Don't you?

PS
The recent off-shoring of Uber customer reps fits this idea as well.


----------



## UberHammer (Dec 5, 2014)

ElectroFuzz said:


> I believe Uber strategy is to go for 80 billion evaluation.
> This is the last push before the IPO release and they will do
> anything to achieve this.
> If they can get drivers to keep driving at a loss for just a couple of months
> ...


I agree with this 100%. Venture capitalists are not in it for the long term. Once venture capitalists are involved, the focus is to grow the valuation and exit with either an IPO or an acquisition. The quicker the better. They don't want their capital tied up for long terms. And they expect high returns for taking the risk.

Once Uber is a publically traded company (or acquired), then the focus turns to creating other streams of revenue. That's not to say the venture capitalists won't promote the "look at the potential for other revenue streams" as they sell and exit. Of course they will.


----------



## UberLuxbod (Sep 2, 2014)

There is no strategy other than trying to find out how low can they go before drivers leave in droves.

As in the US it appears "Rideshare" drivers only have a choice of Lyft, Sidecar and Uber really from what I have read then they have few options.

If they drop the rates in say London or Dublin then the licensed drivers they have will go to one of the hundreds of other licensed operators.


----------



## PNWuber (Dec 20, 2014)

Funny, I just typed a long ass post explains this same thing. You beat me to it. Expansion is coming in my opinion.


----------



## UbermanFLL (Oct 1, 2014)

PNWuber said:


> Funny, I just typed a long ass post explains this same thing. You beat me to it. Expansion is coming in my opinion.


The other bloggers don't seem to get it. I read the business press regarding Uber. Logistics is where they predict Uber's growth will be.


----------



## Lee56 (Dec 14, 2014)

UbermanFLL said:


> Uber's growth potential is in the logistics area. The attraction for investors is Uber will be the leader in the same day delivery arena. Competing with UPS, Fed-Ex, etc. On-line retailers need a means to delver their products in a timely manner. Uber is the answer.
> 
> The current rates are more in line with delivery rates than taxi/limo rates. Any Uber driver that is willing to transport passengers in their vehicle at tremendous risk at the current rates would be more than willing to deliver packages. Package delivery doesn't carry the liability that livery service entails. As we all know Uber is experimenting with delivery services in some markets.
> 
> ...


You just don't jump into the freight business. You need cargo ibsurance, DOT NUMBERS IFTA stickers. I own a small trucking company. You just can't start delivering packages and freight.


----------



## Driver8 (Jul 29, 2014)

Somewhat. Veteran drivers all tell me this time of year is excruciatingly slow. Perhaps Uber HQ thinks they simply have nothing to lose, as the burden goes to the driver, anyway. 

In addition, and where your logistics come in, Uber drivers aren't just moving people around town: you're gathering data on users, their locations, and to some extent, their spending habits for HQ.


----------



## Driver8 (Jul 29, 2014)

Lee56 said:


> You just don't jump into the freight business. You need cargo ibsurance, DOT NUMBERS IFTA stickers. I own a small trucking company. You just can't start delivering packages and freight.


It wasn't all that long ago, someone would have said, "you don't just jump into the taxi/limo business ..."


----------



## Lee56 (Dec 14, 2014)

They have special police just decimated to ****ing freight transportation companies. It's called DOT,secondly transportation freight companies are regulated federally go ahead **** with the Feds UBER. Your a idiot


----------



## Lidman (Nov 13, 2014)

Maybe Uber and Amway will merge.


----------



## UbermanFLL (Oct 1, 2014)

Lee56 said:


> You just don't jump into the freight business. You need cargo ibsurance, DOT NUMBERS IFTA stickers. I own a small trucking company. You just can't start delivering packages and freight.


I am not talking about freight. Picking up a small-medium package at a retail warehouse and delivering it. Much like delivering a pizza.

Distribution warehouses that come to mind are Amazon, Amway, Target, Wal-Mart, etc.


----------



## fork2323 (Aug 27, 2014)

postmates does this with tipping in th the ap. plus it shows you pick up, drop off, and your pay out before tip before you accept the drive delivery


UbermanFLL said:


> Uber's growth potential is in the logistics area. The attraction for investors is Uber will be the leader in the same day delivery arena. Competing with UPS, Fed-Ex, etc. On-line retailers need a means to delver their products in a timely manner. Uber is the answer.
> 
> The current rates are more in line with delivery rates than taxi/limo rates. Any Uber driver that is willing to transport passengers in their vehicle at tremendous risk at the current rates would be more than willing to deliver packages. Package delivery doesn't carry the liability that livery service entails. As we all know Uber is experimenting with delivery services in some markets.
> 
> ...


----------



## JaxBeachDriver (Nov 27, 2014)

Lee56 said:


> You just don't jump into the freight business. You need cargo ibsurance, DOT NUMBERS IFTA stickers. I own a small trucking company. You just can't start delivering packages and freight.


Lmao! Have you met this company?! Hi, this is Uber. Uber doesn't give a flying **** about regulations or insurance. All of those things are up to their "partners" or "third party providers" to ensure they are within the laws, regulations and have all the proper insurance and documents. Uber will assure you it is a legally grey area and that they are working it out.


----------



## hanging in there (Oct 1, 2014)

Lee56 said:


> You just don't jump into the freight business. You need cargo ibsurance, DOT NUMBERS IFTA stickers. I own a small trucking company. You just can't start delivering packages and freight.


s

Silly wabbit!!! Uber would not be a package and freight delivery company, but rather a TECHNOLOGY company which simply connects people or entities who need freight delivered with people or entities who need to have their freight delivered, by means of idiots like us who just so happen to be going in that direction and feel like making an extra couple bucks to deliver said package! See! Magic! No permits, fees, stickers, insurance, whatever, needed! Uber makes the rules, not the government, don't you know that by now? How else are they going to undercut and destroy all the existing legit players in the biz if they can't skirt all those pesky expensive rules and laws! That simply wouldn't fit into their business plan!!!! That would be "stifling innovation"!!! THE HORROR!!!!


----------



## DjTim (Oct 18, 2014)

There are too many things to quote from this thread, so I'll just start here.

Every state there are different laws pertaining to inter-state and intrastate commerce. Multi-state trucking is very different than local messenger services. Could Uber enter this market, sure - you see it in California with the Amazon partnership.

For Illinois - you do need to be licensed and have an IDOT license number to pickup or deliver packages in Illinois. It's really not expensive to get the IDOT number. Now, if you are talking about taking a package from Illinois to Indiana or even Wisconsin, now your talking federal DOT and registration. Also - CDL doesn't come into play here if you were thinking that, because it's local, unless the package is some type of protected/regulated substance (flammable, radioactive, etc...)

Most Uber drivers in most markets could partner with a local messenger company. Most if not all messenger companies are just like cab companies in the way of dispatching etc... It's all "Who you know" to get the good runs. Also, you are going to schlep packages up stairs, into peoples houses/businesses and it's going to be a bit more labor intensive then driving a person from A to B.


----------



## Just_in (Jun 29, 2014)

hanging in there said:


> s
> 
> Silly wabbit!!! Uber would not be a package and freight delivery company, but rather a TECHNOLOGY company which simply connects people or entities who need freight delivered with people or entities who need to have their freight delivered, by means of idiots like us who just so happen to be going in that direction and feel like making an extra couple bucks to deliver said package! See! Magic! No permits, fees, stickers, insurance, whatever, needed! Uber makes the rules, not the government, don't you know that by now? How else are they going to undercut and destroy all the existing legit players in the biz if they can't skirt all those pesky expensive rules and laws! That simply wouldn't fit into their business plan!!!! That would be "stifling innovation"!!! THE HORROR!!!!


 What happens when the freight is of large items. Uber will need a bigger truck. Oh no problem will just have a Uber SUV show up..


----------



## UberLuxbod (Sep 2, 2014)

They will struggle to make an impact of the on demand parcel delivery sector in the UK.

It is well served already.

And again the couriers have options so will not tolerate rate drops.

Actually i might enjoy what happens if they stick their nose in.


----------



## DjTim (Oct 18, 2014)

Just_in said:


> What happens when the freight is of large items. Uber will need a bigger truck. Oh no problem will just have a Uber SUV show up..


Your not too far off in that statement. This is back from early 2000, but the messenger company I worked for had bikes, cars, mini-vans, cargo vans & small to large cargo trucks. They also had 2 semi-trucks with 42 to 53' trailers.

Expedited cargo is a very weird market. Generally local markets have your general documents that need signatures. I was driving a car, so I would get parts for servers/data centers to small injection molds, parts for a turbine, airplane parts etc... Granger still uses messengers in almost every state to deliver same day parts for emergency repairs.

This is where UPS Logistics came from. UPS would buy a large warehouse, and get companies like IBM, HP, Dell etc.. to warehouse critical parts locally. They would then in turn use messenger companies or even independent UPS drivers to deliver parts in 4 to 6 hours.


----------



## DriverJ (Sep 1, 2014)

remy said:


> Why talk about it? After fare cuts drivers continue to drive.


Until they run out of gas and they're broke.


----------



## stiflers mom (Jan 10, 2015)

UbermanFLL is spot on with the analysis - Just forgot to mention Uber's upcoming IPO in which none of us will be a part of!


----------



## DriverJ (Sep 1, 2014)

UbermanFLL said:


> Uber's growth potential is in the logistics area. The attraction for investors is Uber will be the leader in the same day delivery arena. Competing with UPS, Fed-Ex, etc. On-line retailers need a means to delver their products in a timely manner. Uber is the answer.
> 
> The current rates are more in line with delivery rates than taxi/limo rates. Any Uber driver that is willing to transport passengers in their vehicle at tremendous risk at the current rates would be more than willing to deliver packages. Package delivery doesn't carry the liability that livery service entails. As we all know Uber is experimenting with delivery services in some markets.
> 
> ...


You may very well be right. They may also have a nearly endless stream of crackheads and criminals willing to work for -$1.37/hour, until they need gas or have some other major expense. I just know that the service will be a fiasco if they believe they're going to get reasonably intelligent, dependable, and safe drivers to work for them, for more than one pay period at least. Gots to come outta pocket with a little incentive.


----------



## Lidman (Nov 13, 2014)

Well then UBER will have its own trucking co. They'll come up with their own version of a commercial drivers license.


----------

