Uber’s inconvenient truth revealed by Columbia analysis, gig economy thrives amid cutbacks, Uber pushes for a ballot measure in Nevada, and Uber CEO doubts Tesla’s Robotaxi plans. We break it all down for you.
Uber’s Inconvenient Truth: Soaring Prices, Declining Driver Earnings, Columbia Business School Professor Analysis Shows 📈💸
SOURCE – Medium
According to an analysis of millions of Uber trips by Len Sherman, Adjunct Professor of Business at Columbia Business School, the company has sharply raised US rideshare prices faster than inflation since CEO Dara Khosrowshahi took the helm in 2017.
Meanwhile, driver pay has declined significantly since Uber launched new business policies in 2022, giving the company complete control over how its algorithms determine driver compensation.
- Sherman writes that despite Khosrowshahi’s claims of transparency, the company has been reluctant to disclose key metrics about its U.S. rideshare operations.
- Sherman also suggested Uber’s market dominance allows it to exploit its asymmetric information advantage over riders and drivers. The company actively blocks third-party apps from offering consumers and drivers valuable information on competitive rideshare prices and pay rates, thwarting attempts to level the playing field.
- The combination of elevated prices and driver pay cuts enabled Uber to achieve a take rate of 40% in Q3 2023, boosting its annual operating cash flow by billions at the expense of drivers.
- Uber disputes these findings, arguing that its take rate is much lower and that driver earnings have grown faster than inflation over the past six years.
Gig Economy Thrives Amid Consumer Cutbacks 🚴📦
SOURCE – Financial Times
Despite American households cutting back on various expenses, the gig economy remains strong, with consumers unwilling to give up the convenience of ride-hailing and home deliveries, especially those with higher incomes.
Gig economy companies are also benefiting from a slowing economy as more people seek side gigs, increasing the pool of drivers and delivery personnel.
- Uber and Lyft reported significant growth in gross bookings and revenue, with Uber’s trips increasing by more than 20% to 2.8 billion. DoorDash and Instacart also saw increases in revenue and order volume.
- However, not all gig economy companies are equal. Uber is further along in reaching profitability compared to its competitors, while DoorDash reported a loss and Instacart saw a 46% drop in net income.
Uber Pushes for Ballot Measure to Limit Contingency Fees in Nevada 🗳⚖
SOURCE – The New York Times
Uber is backing a ballot measure in Nevada that would drastically limit the amount of money lawyers can collect when they bring successful lawsuits against companies. The initiative, spearheaded by Nevadans for Fair Recovery, a political action committee created and solely funded by Uber, aims to cap contingency fees at 20 percent.
- Contingency fees allow lawyers to take on cases without requiring clients to pay out of pocket, but businesses argue that high fees drive up costs and primarily benefit lawyers.
- However, this initiative is viewed as a method for companies facing numerous lawsuits and insurance claims, such as Uber, to protect themselves from expensive legal proceedings and settlement payouts. Uber denies this, stating that the goal is to ensure plaintiffs receive at least 80 percent of the proceeds from their lawsuits.
- The proposed 20 percent cap in Nevada would be the most stringent in the country, making it financially difficult for many lawyers to take on complex cases against deep-pocketed companies.
- Uber faces a torrent of lawsuits in Nevada and elsewhere from customers who accuse the company of failing to protect them from being sexually assaulted or harassed by drivers.
Uber CEO Expresses Doubts About Tesla’s Robotaxi Plans 🚗❓
SOURCE – Teslarati
In a recent interview on The Logan Bartlett Show, Uber CEO Dara Khosrowshahi shared his skepticism regarding Tesla’s ability to effectively execute its robotaxi plans. He highlighted several challenges that Tesla may face in the ride-sharing business.
- Despite the progress in self-driving technology, Khosrowshahi questioned whether society is prepared to accept autonomous vehicles, even if they become safer than human drivers.
- Khosrowshahi emphasized the significant differences between the ride-sharing and vehicle-building businesses, noting the complexities of handling millions of daily transactions and customer service issues.
- He later suggested that Tesla could benefit from partnering with established ride-sharing services like Uber, leveraging their existing infrastructure and experience.
Watch RSG Senior Contributor Interview Voom CEO Tomer Kashi on “Show Me The Money Club” 🎙🚗
SOURCE – YouTube
Did you miss this week’s episode of “Show Me The Money Club?” Be sure to catch up to see RSG Senior Contributor Sergio Avedian take the reins solo!
Don’t miss the exclusive interview with Tomer Kashi, CEO of Voom, as they discuss the importance of dash cameras and insurance for rideshare drivers. Be sure to learn more about Voom here.
Sergio also dives deep into a controversial issue at Lyft, where drivers are facing temporary deactivations for canceling too many rides. This is one episode you don’t want to miss out on!
QUICK HITS
Autonomous delivery robot company Serve Robotics experienced volatile trading in its shares following its latest quarterly report and a new partnership, with sales exceeding expectations and a single analyst’s buy rating struggling to keep up with the stock’s rapid appreciation. – BARRONS
Uber is considering launching a formal opposition campaign against a Massachusetts ballot question that would grant rideshare drivers the right to unionize, potentially leading to a multi-million dollar investment in the labor-focused battle, according to a source close to the company. – BOSTON HERALD
Some DoorDash drivers are calling customers out on their small orders, which usually come with no tip. In one case, a customer ordered a medium fry from McDonald’s, which netted the driver $3.55 for the delivery. The customer did not tip. – DAILY DOT
Uber Eats recently announced a partnership with Instacart that would offer Costco groceries via the service. However, Steven Porrello of The Motley Fool said he is never ordering from Costco again via Uber Eats due to the high product markups and fees. – YAHOO FINANCE
Must Listen Or Watch RSG Content
Here are this week’s featured podcast episode and YouTube videos:
- RSG259: Breaking Down GetAround and Hyrecar’s Vehicle Rental Programs
- Can Lyft DEACTIVATE Drivers For High Cancel Rate/Low Acceptance Rate?
- What Is Going On With Uber’s Driver Pay Algorithm?
- Uber Passenger Discover the Truth About Rideshare | Driver Diary with Sergio
- The Rideshare Guy en Español
- Make sure you Subscribe so you don’t miss out on future conversations and interviews!
