Several very interesting stories this week, including #deleteUber’s impact on Uber, another study on how much drivers “really” make, and one driver gets extremely fed up with a passenger. Senior RSG contributor John Ince covers these stories and more in this week’s round up.
Vows to ‘delete Uber’ weren’t just talk: Uber loses market share to Lyft after year of scandal: [USA Today]
Sum and Substance: Some Uber customers vowed to turn their back on the ride-hailing company after a string of revelations about unethical practices and workplace harassment. They apparently did more than just grouse. According to research firm eMarketer, fewer people will ride with Uber than originally projected, while rival Lyft is narrowing the gap…
However, don’t cry for Uber. It will continue to be the dominant player in the ride-hailing industry but with less of a market share than originally projected, eMarketer says…
Some 48 million people will ride Uber this year in the United States, which is up 18% over 2017’s 40.7 million but lower than eMarketer’s original projection of 51.4 million. Rival Lyft will serve 29.9 million riders in 2018. That’s a 41% jump over 2017, eMarketer notes.
While the gap is still wide between Uber and Lyft, eMarketer says the two should get closer within the next five years. By 2021, Uber will have 62.6 million U.S. riders to 47.8 million for Lyft. Both Lyft and Uber are in about 300 U.S. cities, and the runner-up has benefited from being No. 2, Shum says, because Uber created awareness and addressed regulatory issues.
Shum expects Uber to remain on top for at least the next five years…
My Take: While not unexpected, this narrowing of the gap between Uber and Lyft is pretty remarkable. Just a few years ago, Uber’s passenger base was ten times as big as Lyft. Today it’s about 2 to 1, at least in terms of the people served. I wonder a little about these statistics and exactly what “people who ride with Uber” measures? Is it total rides, total unique users or the number of people on the platform?
These are vastly different numbers with vastly different implications for the industry. I suspect a lot of people are like me and have both apps on their phone. They then use one app predominantly and don’t use the other except in special circumstances.
In any event, Uber’s stumbles have been Lyft’s gain. Check back in 5 years. I suspect there are going to be more surprises ahead.
Uber CEO Khosrowshahi is rolling out a series of ads to save its reputation and market share [CNBC.com]
Sum and Substance: Uber CEO Khosrowshahi is rolling out a series of ads to save its reputation and market share. Uber is deploying its top executive Dara Khosrowshahi in a series of national commercials. The shorter of two commercials features Khosrowshahi dispensing wisdom from his father and vowing that under his leadership, Uber will be a “much, much better service.”…
He’s become the face of Uber’s turnaround in the months since, promising to deliver better rides for users and better working conditions for drivers. “Moving forward, it’s time to move in a new direction. And I want you to know just how excited I am to write Uber’s next chapter,” Khosrowshahi says in the longer, 60-second commercial.
Khosrowshahi’s had to battle back from the days of the #DeleteUber movement, that Lyft executives have said contributed to one of the rival ride-hailing service’s biggest growth weeks in company history.
Lyft earlier this week said it now claims more than a third of the U.S. ride-hailing market.
My Take: Well, that was quick. It didn’t take Uber long to realize they’ve got a problem on their hands – a massive defection of passengers from their platform to Lyft’s.
Their response came swiftly and true to Uber’s modus operandi – it’s more PR than substance. I saw one of these ads while watching the NBA West finals and was pretty amazed that Uber would be shelling out big bucks to buy that kind of audience.
The ad I saw showed multiple images of DK in various settings. Mostly they showed him listening to others, which isn’t something that TK was very good at. So I suppose the message is that DK’s arrival heralds a new era for Uber.
They’ve got the money to manufacture a new reality for Uber – and try to get viewers to believe it – but I’d prefer to see that money spent in ways that truly improve the company, or give the drivers a better deal for their efforts (see article below).
This is how much Uber drivers really make [Marketwatch]
Sum and Substance: After expenses, Uber drivers don’t take much more than minimum wage home. Maybe driving for Uber isn’t so profitable. For the drivers, at least.
When accounting for the ride-sharing company’s commissions and fees, vehicle expenses and a modest health insurance package, Uber drivers end up earning just $9.21 in hourly wages, according to a new study from the Economic Policy Institute, a left-leaning nonprofit think tank based in Washington, D.C…
Here’s what the latest report found:
• Uber drivers typically collect $24.77 per hour in passenger fares.
• From that, Uber takes $8.33 in commissions and fees, about a third of all passenger fares.
• Vehicle expenses like gas and maintenance cost drivers about $4.87 per hour, Mishel determined, even after taking into account their tax deductibility.
• That leaves drivers with $11.77 per hour, from which they pay $0.90 in extra Social Security and Medicare taxes, because they are self-employed.
• If drivers don’t pay for health insurance or contribute to a retirement plan, they can take home $10.87 per hour.
• If they do want to purchase some basic benefits, their take-home pay would come out to about $9.21 per hour.
Uber provides drivers with a commercial insurance policy with $1 million of coverage per incident, but drivers are responsible for their own expenses, including cleaning their vehicle and filing their own taxes.
Approximately 833,000 people drive for Uber in a year, accounting for 0.56% of all employment. But Uber drivers have high turnover, working an average of three months and average only 17 hours per week, the report said. Adjusting for the part-year and part-time character of the work, Uber has approximately 90,521 full-time, full-year workers, or just 0.07% of overall national full-time, full-year equivalent employment….
That said, compensation can vary widely depending on location, whether or not it is a busy time of day that creates “surge” pricing — during peak times — and how often drivers decide to work. The average Uber driver in New York City takes home $25 an hour after commissions and sales tax, Uber said in 2014, and make median incomes of $90,000 per year. In areas with less demand, making that much could prove difficult.
For many drivers, Uber is not their main source of income, according to a separate study by Princeton University researcher Alan Krueger. Krueger, who has previously been employed as a consultant to Uber, worked with Jonathan Hall, chief economist and director of public policy for Uber, on a paper distributed by the National Bureau of Economic Research in 2016. Most Uber drivers had full- or part-time employment before becoming drivers, and many continued to work other jobs after starting to drive for Uber, they found.
My Take: Since that questionable MIT study came out a few months back with shockingly low after expenses hourly pay for Uber drivers, there have been a flurry of stories by major media outlets trying to settle once and for all what Uber / Lyft drivers make.
The reality is that what a driver makes is all over the map depending on how and where you drive, when you drive, how smart you are and how lucky you are. Fair to say, in any event drivers make a lot less than Uber/Lyft wants them to believe.
Uber driver accused of taking off with customer’s luggage and $8,000 [ABC13.com]
Sum and Substance: Uber says they are investigating a trip to the airport that ended with a rider missing his flight and losing $8,000 in cash.
Hamid Beris told Eyewitness News that he got in an Uber Monday night, and the driver took off with all his luggage and cash. “I said before going to the airport, ‘Can we just go to my friend’s house? I want to say goodbye to him before going,'” Beris said.
Beris was headed to Iran for a medical procedure, and he said he packed his laptop, medical records and $8,000 for his surgery.
“I just came back, and I see he’s not here,” Beris said.
Keith, the Uber driver, allegedly took off with all of Beris luggage and personal items…
During the Eyewitness News interview, the Uber driver finally returned Beris’ call. He claimed he became frustrated with Beris and decided to leave and drop his luggage off in a parking lot.
Beris found his luggage abandoned with his cash, laptop and passport intact.
After minutes of standing in the parking lot in disbelief, an Uber representative returned Beris phone call.
“You are the only person who called me,” Beris explained to the Uber representative. “It’s almost 12 p.m. Tuesday. I begged you guys to tell me what I should do next.”
Uber refunded his car ride and said they would look into refunding his plane ticket.
My Take: The headline is misleading here. Unless you read the whole story, you would probably get the impression that the driver was a thief. The reality is that he just got fed up with the wait and took the unusual route of disposing of the guy’s luggage etc.
Everybody here can heave a sigh of relief that the passenger got everything back. But why did it take so long for anybody at Uber to get back to the guy?
Readers, what do you think of this week’s round up?
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-John @ RSG
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