Quote:
Originally Posted by zikzak
MIT study shows how much driving for Uber or Lyft sucks
The researchers found profit from ride-hail driving to be “very low”. On an hourly basis, the median profit was $3.37 per hour, with 74% of drivers earning less than the minimum wage in the state where they operate.
...
So what does the study tell us about the ride-hailing business model? “It tells us that it’s a ****ty place to work,” says Mark Tluszcz, co-founder and CEO of Mangrove Capital Partners who has described the gig economy model as the modern day sweatshop, and says his VC firm made a conscious decision not to invest in gig economy companies because the model is exploitative.
That is the case while uber bleeds billions a year too. They think driverless cars will be the savior to their business but they would be wrong.
There is not much evidence to support the idea that large number of people would pay the rates required for them to be profitable and to also pay employees. That is a fundamentally flawed model.
Even if they managed to have a relatively disaster free migration to driverless cars they are still going to have to raise their prices substantially which makes them less appealing to a large number of customers and causes their business to be less useful to those who will pay as cars will be more scarce and less convenient.
So far there is no tangible evidence ride sharing services have viable business models. Although I think uber wastes massive amounts of money that don’t relate to their core business. This far in though they have not come close to making their core business work and they seem to be spinning the roulette wheel where driverless cars save them. Even though the easiest part of having a driverless car ride service is the only part they have done.
I don’t use rideshare services a lot but if I looked at my last few trips and guesstimated a doubling in cost, I would have found alternative transportation almost every time.