It indeed subsidizes drivers. In my city (where Uber has just set up shop) it offered a signing bonus to new customers and for now fares are on the cheap, peanuts cheap. I recently needed to summon a Uber car to go to work because my truck was in the shop and one ride ride was free, the ride back home cost me just $2…

I’m glad for your edit, because I was about to respond but we seem to be in agreement now.

I don’t think it’s so much “hurting for drivers” as it is “high churn.” Most people realize that driving a taxi for a living sucks, and they move on to other things.

That’s exactly what a “loss” is. When you spend more money than you make in a year, you have made a negative profit, or a loss.

You wrote “I don’t think the article makes this clear, but Uber “subsidizes” drivers in a couple ways - offering huge bonuses to people who sign up and referral bonuses to people who get their friends to sign up, and with guaranteed hourly rates to keep up supply when the demand doesn’t necessarily support it.!

^…

One way of making money is to advertise “offers” of various products/services while the ride is on and then not open the doors until the customer signs on at least one of the offers.

I think part of the original Uber strategy was to throw money at the fairs by charging customers below market rates to undercut cabs. I don’t believe for one second that anyone at Uber had even the slightest glimmer of a thought about self-driving cars when the company was started.

Their business model is charge for a service from a customer, contract that service out at a lower price. If you’re not making money off of that, you’re got something wrong in the calculations. The only way to remedy this is to pay the contractors less, charge the customers more, or both.

When Uber’s rates are already…

Sounds almost like a pyramid scheme..

You’re absolutely right. The drivers are simply part of the cost structure. Uber is an interesting hybrid business - whether it will admit it or not, it is at once a transportation business with associated labor costs AND a software as-a-service business. The former has poor margins and the latter has good ones.…

Maybe they can just get bought out by Air BnB and they can reclassify Uber rides as (very) temporary property rentals?

the point is that it’s a net loss business model, which is stupid and not sustainable. And I highly doubt they’re anywhere close to fully understanding how to get an autonomous car business model off the ground, nevermind the fact that it can’t legally exist in most places and likely won’t for a very long time. So…

I have a significant issue with the tone of this article. Uber isn’t “losing” money to its drivers. It is paying them for the work that they do. Uber doesn’t exist without drivers. People deserve to be compensated for their work. A business that views its employees as nothing more than a loss to the bottom line that…

“Going to have to pay for cars”

Those ads don’t necessarily point to a need for drivers. There’s a high turn over rate for Uber drivers which is why you see those ads - all those drivers who quit working for the service have to be replaced by enough people in order to maintain the super short service times.

They might very well have investors who are willing to hold out for a decade or more with the current stopgap model. Because holy crap, the pot at the end of that rainbow.

So, they pay their drivers like shit and do everything they can to ensure that the drivers are treated like contractors so that they get exactly 0 benefits, thus making their employee costs as low as possible, and Uber is STILL losing money hand over fist?

Uber’s biggest cost is labor. That’s not news- that’s how most business works and it doesn’t count as a “loss” so much as it is a “cost”- and the difference between the two is huge.

Huh. It’s almost as though there’s a hard floor on how much a taxicab service costs because taxicab service is really hard on an automobile, and the equipment has to be maintained one way or another. But, y’know, disruptive. App. Disruptive app. New way of doing things. App. App.

This isn’t going to fix their business model for a long time though. Self-driving cars are years out, possibly over a decade tbh. I can’t think of many people who would be comfortable getting into a car in the city and letting it drive you to your destination at the moment.