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Retired Senior note: Very little of this lengthy article has to do with UBER per se. It strives to be a comprehensive look at the overall "1099 " independent contractor labor market... which includes UBER, LYFT, and a score of others. We are entering a new economy unlike any that previously existed. It may suit our needs today, but what will it offer us 20 years from now?

http://www.newyorker.com/magazine/2017/05/15/is-the-gig-economy-working

TaskRabbit, which was founded in 2008, is one of several companies that, in the past few years, have collectively helped create a novel form of business. The model goes by many names-the sharing economy; the gig economy; the on-demand, peer, or platform economy-but the companies share certain premises. They typically have ratings-based marketplaces and in-app payment systems. They give workers the chance to earn money on their own schedules, rather than through professional accession. And they find toeholds in sclerotic industries. Beyond TaskRabbit, service platforms include Thumbtack, for professional projects; Postmates, for delivery; Handy, for housework; Dogvacay, for pets; and countless others. Home-sharing services, such as Airbnb and its upmarket cousin onefinestay, supplant hotels and agencies. Ride-hailing apps-Uber, Lyft, Juno-replace taxis. Some on-demand workers are part-timers seeking survival work, akin to the comedian who waits tables on the side. For growing numbers, though, gigging is not only a living but a life. Many observers see it as something more: the future of American work.

(There is a LOT MORE of this article at the website.)

Here is another very recent article about our industry:

http://www.crainsnewyork.com/articl...ys-a-price-for-its-focus-on-a-driver-friendly

May 9, 2017 12:01 a.m. Updated 05/10/2017

For Juno, being the anti-Uber comes at a price
Gett buys the failing e-hail company, which lost money on its driver-friendly approach
By Matthew Flamm
1 Comment Comments[EMAIL='?subject=Check out this page from CrainsNewYork.com&body=http://www.crainsnewyork.com/article/20170509/TECHNOLOGY/170509890'] Email[/EMAIL] [URL='http://www.crainsnewyork.com/article/20170509/TECHNOLOGY/170509890?template=print'] Print
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Photo: Buck Ennis RIDE ALONG: Marco at first lured Uber drivers to Juno by offering better terms, such as a lower company commission off their earnings.

When Juno launched last spring, the e-hail newcomer's marketing pitch was that it would be nicer to its drivers than Uber. It would take a smaller cut of their fares, have a 24-hour help line and even issue them shares in the company.

Juno's approach to equity-sharing fueled its growth, but the plan blew up in its face last month, when fellow e-hail operator Gett bought the company for a reported $200 million in an all-stock transaction. Drivers were told they could cash in their stock for pennies per share, fueling accusations of betrayal and a sense that Juno was just as bad as its rivals.

Juno is not discussing the deal, but there may be a simple reason why the payouts were minuscule-and why the sale happened. And it shows just how much money it takes to compete against Uber in New York's brutally competitive ride-hail world, where discounts for customers and incentives for drivers drain cash in a race for market share.

Juno was thought to have had $10 million on hand before raising $30 million in April 2016. But it quickly burned through its money. In October Reuters reported that CEO Talmon Marco was looking for new funding. According to a person familiar with the situation, Marco started out talking to investors about a $50 million to $75 million round that would have valued Juno at more than $300 million-a big jump from the $110 million valuation it had months earlier. But in a difficult climate for venture capital investment, Marco was unable to secure backing, even after he brought the valuation down to $50 million, which would have given investors a greater share of the company for their money.

"Juno did an amazing job," the person said, "just in terms of the sheer volume of rides they were able to get onto the platform. But in terms of the economics and gross margins, it was tough for them."

Ultimately, Marco sold the company to Gett. And according to people who have spoken to Juno investors, the deal assumed that Gett, at its next funding round, would be worth twice what it was at its last one a year ago, when Volkswagen invested $300 million at a valuation believed to have been around $1 billion.

The $200 million sale price "is theoretical," the person familiar with the matter said. The deal could be worth that much-or it could be worth half or less, depending on how well Gett performs.

The company, which is based in Tel Aviv, Israel, and has ride-hail operations in roughly 100 cities around the world, is currently looking to raise $700 million at a $2 billion valuation to fund its expansion, according to Bloomberg.

Keeping drivers happy

Whether the deal with Juno turns out to be a success may depend on how angry drivers remain. In less than a year of full-time operation, Juno attracted 20,000 drivers to its platform, according to a spokeswoman, nearly double the 11,000 that Gett says it has in New York. Combined, that's about equal to the roughly 30,000 that a spokesman says work for Lyft.

For the first two months of the year, Juno's share of New York's e-hail market came to 6.7%, dwarfing Gett's 2.6%, according to Taxi and Limousine Commission data. The two companies' total 9.3% of the market will bring them within shooting range of Lyft's 13.7%, though still a long way from Uber's 71.2%.

"This was a very smart acquisition," said Evan Rawley, a Columbia Business School professor who follows the taxi and ride-hail business. He cited the shorter response times that come with more drivers and said he didn't think the controversy would hurt Juno: It's far more important that Juno and Gett continue to take only a 10% commission from drivers' earnings, compared to the 25% rate for Uber and Lyft.

"Drivers will leave if Gett gets greedy," Rawley said. "Gett will have to continue losing money in New York for the foreseeable future."

Gett has promised to keep the low rate in place at least through next April. For now Juno is still operating independently, but it eventually will be rebranded as "Juno by Gett," the new owner said in a memo. Gett CEO Dave Waiser, in an interview with The Information, said Juno would one day take over as the main brand as the combined company expands across the United States.

But some observers were not so sure Gett bought anything worth having.

"A lot of drivers feel screwed over, and I can't imagine they're going to be passionate about driving for Gett," said Harry Campbell, an Uber driver in Los Angeles who runs industry blog The Rideshare Guy. In addition, though Juno won over drivers and got them to promote the service to other drivers-and even to riders while driving for Uber-it did not distinguish itself to customers.

"These services are becoming more and more of a commodity product," Campbell said. "It's not like you're buying a group of subscribers."
Gett, which declined to comment, has promised a new profit-sharing plan for its drivers. But it faces an uphill battle in winning back their trust.

"Juno's whole pitch was 'We're going to be ethical. We listen to drivers,' " said Cory Savary, who stopped driving for Juno on the day he was offered $100 for his more than 3,500 shares. "They made me like Uber, and I don't like Uber."

Additional reporting by Gerald Schifman

A version of this article appears in the May 8, 2017, print issue of Crain's New York Busi
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