UBER, Goldman Sachs & Subprime Lending

[HLS]

In its relentless pursuit for growth, Uber needs new drivers, and many of those drivers need cars.

To help them get started, Uber has been offering short-term leases since July through a wholly owned Delaware-based subsidiary called Xchange Leasing, LLC.

It partners with auto dealerships, advertises to drivers, manages risk, and even pays repo men to chase down cars whose drivers aren’t making their payments.

http://a.msn.com/r/2/BBtH9Ej?ocid=Money

[spdrun]

Uber is a privacy-stealing company — they track trips, tied to an identity, and that info stays in a database for posterity. Unlike taxis, where you can pay in good, old-fashioned, anonymous, cold, hard, cash.

Uber is also dumping their “product” on the market under cost, funded by cheap VC money. If they were a foreign firm, there’d by a trade war right about now.

[no_such_reality]

That’s the same way Amazon grew. Skirting taxes and selling below cost until competition crippled and they grew big enough.

[SK in CV]

I suspect they’ll be either out of business, or completely change their model within a couple years. They’re facing some huge DOL issues, and their drivers can’t really make a living as it is. Even their part time drivers, can’t turn a profit. Flame out or make big changes. Those are their only options.

[spdrun]

Self-driving cars, baby! This being said, if realtors are contractors, there’s no reason why their drivers should not be classed as contractors.

[SK in CV]

[quote=spdrun]Self-driving cars, baby! This being said, if realtors are contractors, there’s no reason why their drivers should not be classed as contractors.[/quote]

Realtors, or more specifically, licensed real estate agents, can be treated as independent contractors as a matter of law. The law provides no such exemption for uber drivers. The legal issues are not the same.

[Anonymous]

A substantial portion of auto loan industry has always been sub prime.

[livinincali]

[quote=spdrun]Self-driving cars, baby! This being said, if realtors are contractors, there’s no reason why their drivers should not be classed as contractors.[/quote]

Uber or one of their competitors will be a shop of self driving cars in the not so distant future. They are just exploiting people now until they can make that a reality in the future. Uber as a side job for a little bit extra money driving drunk people around on Friday/Saturday night might be relatively decent. Doing it as a full time job isn’t going to cut it. Of course Taxi drivers weren’t really making much of a living either. It was the owners of the taxi medallions that made all the money. Driving people around for money is the next job that disappears in mass.

[Escoguy]

I’ve done 600 trips with Uber and 100 with Lyft, recently switched to Lyft.

Lyft is better as it allows tips and you can put in your destination so the passenger is matched to where you are going anyway.

Uber drivers can only get 50% or $2.40 for short trips.
I try to filter rides by calling passengers, in the morning I try to only get rides to the airport.

On Friday/Saturday, I may drive downtown in the evening for 5-6 hours. My wife calls it my hobby, I make probably $20-25/hour, after expenses, perhaps $17.

In Escondido I can tell by where the ride originates if they are going to SAN Airport or not but I call anyway.
It is not worth it to do short rides as the driver may need to drive 5-10 miles to make the pickup. If the passenger is only going 2-3 miles, it can be a total of 7-15 miles for $2.40. Uber needs to let the driver put on automatic filters to prevent that.

Also if Uber would add the destination filter like Lyft, that would be helpful. I don’t mind driving 5-8 miles out of the way if I can get paid for 30-25 miles plus tip.

If they had a $5 minimum for drivers on short trips and they are not more than 2-3 miles away, that might work but passengers should still have the ability to tip.

Most riders are fine, but one did damage my car. Uber did cover that. It can be fun on occasion to drive but I wouldn’t want to try and make a full time living doing it.

Lyft does offer the ability to order a ride the previous day too.

If you use the service and you’re going to an odd direction, please text or call the driver to let them know. San Clemente or TJ doesn’t always work. Also if you take a short ride and the driver is slightly irritated, please don’t ding on the rating as that doesn’t make anything better. Just be grateful that he came as it is impossible to make a living on short rides.

Keep in mind Uber/Lyft cost about 1/3 the amount of a taxi.

[spdrun]

Uber drivers set their own hours, use their own equipment, etc, etc, etc. They pass multiple aspects of the independent contractor test.

Personally, though, I think the US labor law system needs a dramatic overhaul. A lot of the costs (health insurance, etc) should be socialized. i.e. insurance for all, funded by a % income tax.

Make work a simple exchange of money for labor, subject to reporting requirements and safety requirements. If fixed costs are minimized, then there would be less incentive to keep employees working 50-60 hours a week.

[Anonymous]

Uber is big in NYC and definitely cheaper than cabs. It works well there because there’s already an established “car service” industry and most of them just signed up for to be Uber drivers as well.

The no-tipping thing is BS, as many drivers expect a tip. Uber deliberately disallows tipping through the app and then boasts about their “tip free experience” which means you have to cash tip or be a cheapskate. Uber should just give up on this angle. It’s never good when everyone knows a core part of your brand image is a misrepresentation of reality.

[spdrun]

I live in NYC. Plenty of non-Goober cabs and cars. You can even order a non-Uber car service online. “Cheaper than a cab” really depends on time of day/surge.

[livinincali]

[quote=spdrun]
Personally, though, I think the US labor law system needs a dramatic overhaul. A lot of the costs (health insurance, etc) should be socialized. i.e. insurance for all, funded by a % income tax.
[/quote]

At current total income and current medical spending it would have to be approximately 20% gross income tax. I don’t know that the population could stomach that big of an increase. I suppose you could try to play the social security game where the employer picks up the other half. The real issue is the cost side. Obamacare for the most part attempts to throw more money at the problem rather than actually reducing costs.

[svelte]

[quote=Escoguy]I’ve done 600 trips with Uber and 100 with Lyft, recently switched to Lyft.
…[/quote]

Wow, I had no idea there were so many unwritten rules. I was about to start using Uber/Lyft, now I’m not so sure.

There is a place we like to go here in town but the parking is limited, so I was thinking of Uber/Lyft to (a) eliminate the need to park, and (b) allow me to drink as much as I want. But it would be a short 3-4 mile ride, and if drivers are upset by that, maybe I shouldn’t bother.

That being said, I’d never give a driver $2.40 for a ride. I’d feel guilty giving under $10!

Plus, I feel these companies have skirted the rules to get in the door…Uber is not a “ride sharing service” – most of the rides are NOT where the driver was going anyway! They are taxis, pure and simple, and have used the cover of “ride sharing” to get the camel’s nose in the tent. They should have to abide by the same rules as taxis.

[treehugger]

Driving for Uber is a choice, I don’t understand the controversy? Go get a job at a regular taxi service and/or only use regular taxi service if you feel so strongly against Uber. As a driver you sign up to drive for a service where tips are not expected, so why am I taking a flat fee service and putting a tip on top of it? Like anything in the service industry a tip should be earned not expected.

I have an app, I type in where I want to go, it tells me how much the ride will cost and someone comes and picks me up. There is a picture w/description of driver and reviews, I appreciate that a lot more than a regular taxi service (which I have taken in the past and been scared by my non-English speaking drivers). I have used it in various cities to get around, few miles here or there it was convenient and cheap, even with surge pricing. If we had a really engaging driver we gave them a tip otherwise no I did not tip nor did I feel obligated to. If drivers don’t like that don’t drive for Uber.

I am not sympathetic to the lawsuit.

[Author]

Posts