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Discussion Starter · #1 ·
Everybody is angry that Uber is cutting pay, that many drivers are losing money.
You can rant / threaten /gripe all you want, but it is simple economics.

Uber needs X number of drivers to meet demand at any one time (X can be variable depending upon conditions). Too little and they will start losing customers, too many, is OK.

If Pay is above equilibrium, the number of drivers will be X+.
If Pay is at equilibrium, the number of drivers will be X
If Pay is below equilibrium, the number of drivers will be LESS than X.

Uber will continue to lower pay until the drivers hit X.
If the number of drivers is too low, Uber will increase pay.

As a company, Uber will work toward equilibrium. There is no incentive to pay more than they have to. In fact, the owners / shareholders will be upset if they do.

1) Uber will never pay you more than they have to
2) There are many people out there who will work for less than you.

Ergo, 50% of the drivers will be underpaid in the long run.

Rant away
 

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As a company, Uber will work toward equilibrium. There is no incentive to pay more than they have to. In fact, the owners / shareholders will be upset if they do.
I think "below equilibrium" has been reached in many areas with low rates during morning commute times.

There is no incentive to pay more than they have to. In fact, the owners / shareholders will be upset if they do.
Except Uber drivers are not hourly employees. Obviously, Uber is playing the volume game and hopes to increase their stacks that way. But if Uber is not increasing demand enough with the lower rates, owners/shareholders should be upset that the rates are too low.
 

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It's also a safety issue. You can't expect drivers...be they full time or part time...to increase the wear and tear on their vehicles and not allow for increased compensation for the increased maintenance of these vehicles. When lives are on the line, this isn't something you can play around with. It's a shame that the geniuses in upper management don't understand this.
 

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Discussion Starter · #4 ·
Case in point.

I work downtown Chicago.
I work until 4:00 and my wife doesnt get home until 7:00. So I'm bored.
So I drive when surge pricing is over 2X.
Then I go home. I'm always within 4 miles of home when I finish.

People like me pull down the pay.
Same thing for retired people. Or people just bored.
 

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I don't know what anyone would drive for Uber out of boredom. There's way too much risk of being in an accident if you don't have to do this. There are ways to enjoy free time....go for a walk or do some other type of exercise, do home improvements or other projects...etc.
 

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Discussion Starter · #6 ·
I do.
(But then, I'm a Dog)
 

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Alrighty then. Whatever floats your paws.
 
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Tenzo you get maybe 1 surge ride in downtown traffic. I know how garbage traffic is during rush hour. Not worth it.

I wouldn't do it.
 

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Everybody is angry that Uber is cutting pay, that many drivers are losing money.
You can rant / threaten /gripe all you want, but it is simple economics.

Uber needs X number of drivers to meet demand at any one time (X can be variable depending upon conditions). Too little and they will start losing customers, too many, is OK.

If Pay is above equilibrium, the number of drivers will be X+.
If Pay is at equilibrium, the number of drivers will be X
If Pay is below equilibrium, the number of drivers will be LESS than X.

Uber will continue to lower pay until the drivers hit X.
If the number of drivers is too low, Uber will increase pay.

As a company, Uber will work toward equilibrium. There is no incentive to pay more than they have to. In fact, the owners / shareholders will be upset if they do.

1) Uber will never pay you more than they have to
2) There are many people out there who will work for less than you.

Ergo, 50% of the drivers will be underpaid in the long run.

Rant away
I appreciate such an eloquent and simple argument. I am in complete agreement and many people miss this particular point! Uber is not out to screw you, me or anyone in particular, but are instead changing pricing to react to a constantly changing market. They are always trying to reach this equilibrium point.

This equilibrium seems to be met in some markets while other markets have not yet hit that sweet spot. Only time will tell but 35 cents/mile in one market may actual be that sweet spot (or lower, for that matter), of course dependent on the marketplace.

The way drivers AND riders react to these price changes is what causes Uber to move prices around.
 

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Case in point.

I work downtown Chicago.
I work until 4:00 and my wife doesnt get home until 7:00. So I'm bored.
So I drive when surge pricing is over 2X.
Then I go home. I'm always within 4 miles of home when I finish.

People like me pull down the pay.
Same thing for retired people. Or people just bored.
Case in point for what? Surge opportunists dent the surge. It is known. /Khal Drogo

Uber raising rates increases Uber driver's earnings AND Uber's earnings as long as demand doesn't decrease too much.

Uber lowering rates decreases Uber driver's earnings and increases Uber's earnings as long as demand increases enough. This latter case assumes the driver was already saturated with rides prior to rate decrease. Obv, this can vary, but given the widespread rate cuts, who makes more now than they did before?!

Since many drivers will apparently drive for free or at a loss, this is the equilibrium Uber should be, and hopefully is, focusing on, as far as their investors are concerned. Somewhat major footnote, increasing marketshare is important, which the above completely neglects. That will cause Uber to lean more towards lower rates. Can't go too far, though.
 
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