Technically, Uber turned five this week, but most of its growth has definitely occurred in the past few years. Still, it’s amazing what they’ve accomplished in such a short amount of time. Today, RSG contributor, John Ince, takes a look at Uber’s birthday celebrations, some employment issues and a new earning opportunity for drivers.
Uber’s Travis Kalanick predicts future where it cuts car use
Sum and Substance: Uber CEO Travis Kalanick celebrated his company’s five-year anniversary on Wednesday with an upbeat speech predicting a future where the ride-hailing service streamlines urban transportation by making Uber cheaper than owning a car. “We went from four people around a desk to something that is around the world,”
My Take: What Uber has accomplished in five years is nothing short of remarkable, and they weren’t shy about tooting their own horn in a series of made for media events this past week. They deserve many of the accolades that have come their way, but do they deserve a $50 billion valuation? Certainly many drivers, who toil away – driving late into the night for a few extra bucks – legitimately feel cheated by this growth phenomenon. But it’s capitalism. It’s the system we’ve got – remarkable and detestable at the same time.
How Everyone Gets the ‘Sharing’ Economy Wrong
Sum and Substance: The first thing everyone misses about the sharing economy is that there is no such thing, … Increasingly, the goods being “shared” in the sharing economy were purchased expressly for business purposes, whether it’s people renting apartments they can’t afford on the theory that they can make up the difference on Airbnb, or drivers getting financing through partners of ride-sharing services Uber and Lyft to get a new car to drive for those same services.
My Take: Good article … thoughtful analysis that debunks the notion that we’re sharing things when actually we’re just using new terms and new models to exploit.
How Uber is ruining your chances of getting a decent job
Sum and Substance: Today, as the super-rich have amassed ever greater shares of wealth, …Perhaps nowhere is this disparity more evident than in the growing “on-demand” economy. Companies like Uber, Lyft, … have adopted business models that pass the costs of doing business onto workers themselves and move the wealth their service provides upwards. The on-demand economy has already created its share of billionaires – Uber’s co-founders are worth around $5 billion each, while those who drive for Uber receive meager pay.
My Take: This article points to growing awareness of the disparities created by the “on demand” or “sharing” economy. The fact that Fortune (my former employer) is running articles on this subject suggests that concern over the inequities of the on demand economy is soon to be a matter that is addressed by our institutional structure. The two pending lawsuits in San Francisco, (See Article Below) questioning the “independent contractor” status of drivers could soon tilt the balance towards the workers (ie drivers) who are the real workers that generate revenues. After all is said and done, this is what fuels the astronomical valuations of Uber and Lyft.
We need a ‘third class of worker’ for people like Lyft and Uber drivers, says investor
Sum and Substance: There’s a war brewing over what to call the Uber and Lyft drivers in this world, and “employee” might not be the answer. “I think it’s not 1099 versus W-2. I think the right answer is a third class of worker,” said Simon Rothman, a partner at Greylock and an investor in Sprig, which uses 1099 employees. “People are now becoming one-person companies, and they’re not even working for one entity.”
My Take: My guess is the the courts will end up doing something along the lines that this investor suggests. The legal system needs to adapt its classifications to the new economic models being exploited by rideshare companies.
Lyft, Uber drivers need to register with DMV by July 1
Sum and Substance: Drivers for Uber and Lyft have until July 1 to register personal vehicles with the Virginia Department of Motor Vehicles to comply with the state’s new ridesharing law. In February, Gov. Terry McAuliffe signed into law regulations to allow the companies to operate in Virginia, according to a news release. The requirements including driver screening and background checks and insuring and registering vehicles with the DMV specifically for Uber or Lyft use.
My Take: We can expect other states to follow suit on this. It’s just a matter of time until the process of screening drivers becomes more rigorous and is integrated into the existing regulatory structure at the state level. There is too much attention now being focused on this new industry to let it continue to operate in “wild west mode.”
Yahoo Finance exclusive: IBM banned Uber for employees, but quickly reversed course
Sum and Substance: At the end of March, IBM’s accounting department issued a new edict banning reimbursement for use of Uber and other ride-sharing services over safety and security concerns, … But the decision was almost immediately reversed after a single 20-something IBM employee took to the company’s internal social network, Connections, to petition for a change.
My Take: This article highlights just how far Uber and Lyft have come in a short period. Initially, it was considered a “security risk” to take a ride from Uber or Lyft, but now the company has quickly deferred to popular opinion.
Uber Continues To Finance Its Drivers With New Gas Credit Card
Sum and Substance: Ride-hailing service Uber already connects its drivers, even those with bad or no credit, with car loans. Now drivers can also get an Uber ‘credit card’. The Uber Fuel Card, issued by MasterCard and FleetCor, will allow qualified drivers to get discounts of up to 15 cents a gallon on gas purchases at thousands of U.S. gas stations, the company said Tuesday.
My Take: One of the key aspects of the war between Uber and Lyft involves the tactics each uses to incentivize drivers to stick with one platform. Lyft offers “power driver bonuses” where drivers can earn (back) part or all of Lyft’s commission. Uber sticks with its commission structure, but offers other perks like this to those who drive a lot. 15 cents a gallon might not seem like a lot to some drivers, but it must have some appeal or Uber wouldn’t be doing this.
This new startup promises Uber and Lyft drivers even more money
Sum and Substance: Uber drivers in LA are about to start making a lot more money. Minneapolis-based Viewswagen launched last week, allowing ridesharing drivers to increase their hourly rate by about $3 or 25 percent on average with their in-car advertising model. … The process for drivers to get started is simple. Drivers must purchase a tablet and download the app, Vugo, in the app store. Once they’ve attached the tablet to the seat of their car, drivers put their passenger’s route into the app and it serves those customers targeted ads based an algorithm that takes into account things like route and time of day.
My Take: I’ve never been a big fan of advertising based business models and this one is pretty blatant. Is there any place left in our society that is not being sold to by some corporate advertiser? Uber, apparently, is not pleased with this, but says it isn’t against their policy. Vugo could be a way for drivers to earn some extra cash while driving at the same time.
-John @ RSG
