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11 min read

    11 min read

    I’m not a fan of UberPool, granted, I’ve done more rides as a passenger than a driver but that could change soon.

    I’m moving from Orange County (where there’s no UberPool) to LA County (where there is) this weekend so I suspect I’ll be able to get more UberPool rides done as a driver very soon.

    New Lyft Driver - Earn 1500:week
    Belmont Heights - Long Beach, CA

    Belmont Heights – Long Beach, CA

    But in my mind, the verdict is already in amongst drivers and while UberPool may be great for passengers, it hasn’t been very well received by drivers.  Uber has clearly taken a very passenger-centric view of its operations in general and it shows with low retention rates and driver loyalty.  There’s no doubt in my mind that this is eventually going to come back and bite them though.

    This week, I shared a guest post from my friend and fellow personal finance blogger, Sam, about how he’s been declining low rated UberPool passengers.  Other drivers that I’ve talked to have taken the extreme stance that they’re going to decline the second passenger on UberPool altogether 🙂  And with the onslaught of employee lawsuits against Uber, it appears as if Uber is being forced to become more lenient with things like acceptance rate since that could be seen as a sign of employee-like control.

    What this means for drivers is that going forward you may have more freedom to decline rides that don’t benefit you.  Now this obviously hurts the experience for the passenger but hopefully it will inspire Uber to take a more balanced approach when launching new initiatives like UberPool and maybe even solicit some feedback from drivers and actually listen to it 🙂

    Today, RSG contributor, John Ince, takes a look at what’s going on with UberPool and Lyft Line, Uber’s Shaky Background Checks and some driver/passenger controversy.

    The Case For Carpooling: Inside Lyft And Uber’s Quest To Squeeze More People In The Backseat

    Sum and Substance: Riders care more about price than anything else. When rides are cheap, people ride a lot, so Uber and Lyft have a habit of burning venture capital money to pay for ride discounts. But that won’t last.

    Carpooling, on the other hand, is a real way of lowering prices: Pay the driver the same mile-and-minute rate, but possibly collect two or more fares per ride. Those fares can drop up to 50% without hurting the company’s net revenue and can make its driver pool up to twice as efficient. “We operated for two years as this competitor to taxis … but really the entire company was set up to make shared rides possible,” Lyft CTO Chris Lambert said at a media event on Lyft Line last month. “That’s the efficiency we’re trying to bring to the market.”

    My Take: Ellen Huet, author of this story, has written a lot of good pieces on tech for SF Chronicle and Forbes, and in this one she captures many of the nuances of the oft mischaracterized Carpooling options – Lyftline and Uberpool.   Yes, by and large they have been popular with many passengers, because they’re cheaper than regular rides.  Yes, once perfected they could improve profitability for TNCs, but right now they’re loss leaders being subsidized so that drivers don’t take a hit from the lower fares.   Yes, they have a vague whiff of sustainability because they have the potential of reducing emissions and putting more passengers inside the car …

    But no … they’re not really “carpooling services.”  True carpooling is what Google owned, Waze, is experimenting with in Tel Aviv in their new app called RideWith (See: Google’s Waze to start carpooling pilot program in Israel) … Huet, captures the curious social aspect of “matching”  … but skims over what to me are the overlooked downsides.

    First off, the on boarding problem is typically the most problematic aspect of the ride, and here they’re magnified often causing passenger angst.  Second, Lyftline and Uberpool are appreciably more hazardous, because the driver is constantly being surprised with new instructions on their smartphone. This distracts the driver from the road and often requires dangerous last second lane changes. … and no no no they’re not the least bit popular with most drivers.  See Sam’s, The Financial Samauri’s excellent article on Harry’s Rideshare Guy blog here.)

    Why?  For starters for every second passenger that get stuffed into the car, its one less fare for the driver that didn’t get their ride request.  From my experience it’s created some very awkward interactions between strangers in the car, and generally results in passengers becoming disgruntled which they reflect in unjustified driver ratings.  Don’t believe me?  Check out the comments about Uberpool on the SF Driver’s page on Facebook.  Drivers will especially appreciate the “Piss in the Pool” initiative aimed at Uberpool … which is fairly disgusting but indicative of how many SF drivers feel about Uber’s faux carpooling option.

    Prosecutors: Uber background checks missed drivers’ criminal records

    Sum and Substance: The background-check service that ride-hailing company Uber uses to screen potential drivers did not flag the criminal records of 25 drivers who gave thousands of rides to customers in Los Angeles and San Francisco, prosecutors said Wednesday. The findings were made public in an amendment to a consumer protection lawsuit filed last year by the district attorneys for Los Angeles and San Francisco.

    The suit alleges that Uber has misled customers about the safety of the app-based ride service, including how they screen potential drivers.  In the amended 62-page civil complaint, prosecutors detailed the criminal histories of 25 people who gave rides to passengers in Los Angeles and San Francisco in the last two years. The Times reported this month that four Uber drivers cited at Los Angeles International Airport had criminal records that would bar them from driving a taxi in Los Angeles. Prospective Uber drivers are not required by state law to submit fingerprints as part of their background checks. The company says its background-check service identifies all criminal convictions in the last seven years.

    My Take:  The perception of safety is at the core of Uber’s business model.  So they need to effectively address the PR fallout from these revelations.  If one reads the online comments to this article, you get the sense that most readers aren’t particularly concerned that 25 or so former “criminals” fell through the cracks of Uber’s screening process.  Out of 20,000 that’s not a bad percentage, and probably better than taxis.  But with Uber’s history we might at least ask whether the comments posted in response to this article are in fact objective or perhaps with Uber’s deep pockets some at least were paid comment in defense of Uber.  After all – over $50 billion is at stake here, and much of that valuation is subject to public perceptions of safety.

    Complaint Over Muslim Driver’s Headscarf Sparks Outrage

    Sum and Substance: An Uber client submitted a discriminatory complaint against a Muslim woman driver, sparking outrage across social media and unraveling a complex conundrum about the ethics of mass public shaming of racist behavior. Uber user Rene Hunter allegedly complained that the ride-sharing company “allowed” a Muslim driver, Sonia Marcella Martinez, to wear a headscarf, which Hunter mislabeled as a “berka.”

    On August 8, Martinez posted a screenshot of the alleged complaint—which said Martinez’s husband could be “the enemy within”—on the Facebook page Muslims Are Not Terrorists. The post went viral, spreading across Tumblr, Twitter, Reddit and various women’s forums. In part, it garnered support and prompted others to share similar stories: One Muslim-American, Leilah Abdurahman, wrote that she also received Uber and Lyft cancellations that she suspected were motivated by prejudice and Islamophobia. The complaint also ignited outrage at Hunter’s behavior and sparked a sort of social media witch hunt, aimed at teaching Hunter a lesson about religious discrimination.

    My Take:  For most drivers like myself, I suspect this story will touch a nerve.  How many of us feel that a passenger has dinged us for something that is entirely unjustified?  If we could just put their behavior up to public scrutiny how many of them would be shamed?  For all the downsides to the social media, one really positive aspect is the ability to bring transparency to behavior that in earlier times might have just been kicked under the rug.  When it involves racist or discriminatory overtones it becomes combustible.

    Uber’s Business Isn’t Built to Help Disabled People

    Sum and Substance: Uber’s issues with the disabled community have been widely covered. Uber drivers have been accused of refusing to pick up wheelchair users, as well as blind passengers traveling with service animals. Stories have surfaced of Uber drivers putting guide dogs in the trunk, and both Uber and its smaller rival, Lyft, are now facing several lawsuits in states across the country.

    My Take: I gave a ride to a blind woman a few weeks ago in Berkeley.  The pickup was smooth even on one of the busiest streets in the city.  The woman was an absolute delight and very appreciative.  She talked about how she takes Uber twice a day and how it’s changed her life … opened up possibilities that never existed before.  I certainly hope this issue gets sorted out.  The upside for both the TNCs and disabled passengers is huge.

    California regulators probing Uber’s leasing program

    Sum and Substance: SAN FRANCISCO — The California Public Utilities Commission is investigating Uber’s car-leasing program for drivers, saying it could violate the 2013 law that legalized the car-booking company. The CPUC said this week it is looking into the growing number of drivers who work for Uber, Lyft and similar companies using leased or rented cars to transport passengers. Uber last month announced a pilot car-leasing program for prospective drivers — people who want to drive for UberX, the company’s lower-cost ride service, but don’t own a car. “A TNC (Transportation Network Company) permit does not authorize the use of vehicles other than those privately owned by the driver,” said commission spokeswoman Constance Gordon, who confirmed that the commission is probing Uber’s leasing program, as well as a number of smaller companies that offer rental and leasing options to drivers.

    My Take:  Uh oh!  The more Uber expands into new line of business the more likely it will stumble up against legacy regulations.  Sounds like Uber’s got a real problem on this one.  The existing regs are pretty clear and Uber signed off on them.

    The Tesla Of The Future Could Look A Lot Like Uber

    Sum and Substance: Tesla could soon be in a position to take on Uber, according to a respected auto-industry analyst. By 2018, the electric automaker, which has pioneered new self-driving technology, could launch a new service of autonomous vehicles that would arrive on demand and shuttle passengers from place to place, according to a Monday research note from Morgan Stanley analyst Adam Jonas. “Given the pace of technology development both within Tesla and at rival technology and mobility companies, we would be surprised if Tesla did not share formalized business plans on shared mobility within the next 12 to 18 months,” Jonas wrote in the memo. The theoretical service, which Jonas dubbed “Tesla Mobility,” could come just after the introduction of the Model 3, Tesla’s planned suite of consumer-grade cars that would cost about $35,000 each. The Model 3 is expected to begin production in 2017.

    My Take:  Here’s another in the never ending “xxx may never be the same.”  series touting distant technologies that the author will never be around to take responsibility for not happening.  Maybe it will happen … but I’ll believe it when I see it.  Meanwhile investors eat this stuff up …  The author concludes the article with the kicker …”Tesla stock soared to over $255 Monday morning after Jonas’ note went out.”  

    US court rules Yelp reviewers are not employees

    Sum and Substance: US District Judge Richard Seeborg has dismissed a class action against Yelp in which a group of reviewers sought to be considered employees and therefore be compensated as such. In the case of Lily Jeung, et al., vs Yelp. the claimants alleged that they were ‘directed how to write reviews and given other such employee direction’ from Yelp, which also controlled their ‘work schedule and conditions’. Two of the three claimants bringing the class action also claimed to have been ‘fired’ by the organisation. In the judgement, Seeborg said it could be inferred that the term ‘hired’ referred to the process by which members of the public could sign up to Yelp to leave reviews, while ‘fired’ referred to user accounts being involuntarily closed. While the plaintiffs claimed that Yelp had a legal duty to treat them as employees under the Fair Labour Standards Act, the judge found that submitting reviews could not be characterised as performing a service for Yelp, or at best could be viewed as acts of volunteerism.

    My Take:  Seems to me that the plaintives here had a very thin case.  It shouldn’t have much bearing on the pending cases against Uber and Lyft.  What is more interesting is that more and more people are starting to recognize the exploitive aspects of many tech companies business models where people perform services that enrich tech investors and entrepreneurs, without receiving just compensation.  The examples are all over the map from Amazon reviewers, to eBay reviewers … to Huffpost blogger … to Forbes contributors to … well … you name it.

    What do you guys think about the week’s top stories?

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    -John @ RSG

    John Ince

    John Ince

    John Ince is a former Fortune reporter and Wall Street banker. He has about 1,000 rides under his belt driving part time for Uber and Lyft.  He’s writing a book about his experiences entitled:  Travels With Vanessa:  A Rideshare Driver Tries To Make Sense of It all - For a sneak peak visit the link above.

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