London Banter - View Single Post

Robin9 · September 21st 16, 11:11 AM

Quote:

Originally Posted by Recliner[_3_]

Robin9 wrote:

'Recliner[_3_ Wrote:
;158096']Robin9 wrote:-

'Recliner[_3_ Wrote: -
;158092']Robin9 wrote:-

'Recliner[_3_ Wrote: -
;158072']Robin9 wrote:-

tim...;158053 Wrote: -
came into my in box via my linkedin account

https://www.linkedin.com/pulse/uber-...jared-carmel-2

posted without comment (for now)

tim

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Interesting. What surprises me is that Uber is deemed to be
losing money hand over fist. Not making enough profit to
provide investers with a satisfactory return is one thing.
Actually making a substantial loss is another. As Uber's
drivers are paid only a percentage of what customers are
charged, in London at least the business must show a profit
before overheads are included. Are Uber's overheads far
too high?-

Uber's overheads are famously low. Why do you think Uber is making a
profit
in London? It doesn't even make a profit in the US.

-

If Uber can't make a profit before overheads are included,
they must be grossly incompetent. Remember how the London
minicab trade works. The driver is deemed to be self-employed,
and pays for the car, insurance and petrol himself. The customer
pays Uber by credit card and Uber pays a small percentage to the
driver.

As Uber seems to have taken a huge share of the market away
from both Hackney cabs and minicabs, the number of jobs per
day must be in the thousands. Multiply that number of jobs by
an average net revenue of, say, five pounds and you arrive at a
gross income which must be more than the cost of a minimal
office set-up.-

Uber is investing in market growth. That's where the big money goes.
So
it
subsidies drivers to get into new markets, and spends a lot on
marketing. I
dare say it spends a lot on political lobbying as well.

The really big losses were in China, but that's now stopped, so from
now
on, the losses should taper. But it's still fighting competitive
battles
in
many markets, so bottom line profits will remain illusive.

It also seems to be spending a lot on driverless technologies, as it
expects these to be cheaper than drivers within a few years. But that
means
it will need to invest in the cars.-

I'm discussing the situation in London, and there is no
indication that Uber are subsidising their drivers here. I am
sceptical that they do anywhere, and I'm not persuaded
merely because it is stated on the Internet.

I'd like someone who believes that Uber are subsidising their
drivers to explain in detail how this is done.-

Google is your friend:

http://tinyurl.com/zrtmng4

http://tinyurl.com/h4a9dz4

http://tinyurl.com/grxowog

http://tinyurl.com/j3fknwr

http://tinyurl.com/meu2elv

http://tinyurl.com/zrfhsdl

http://tinyurl.com/pyo4b3m

http://tinyurl.com/zk2hg4u

http://tinyurl.com/h7aac2h

Google is not my friend and none of those links will
change that.

In other words, your mind is made up, regardless of the evidence.

Not one persuaded me that Uber are genuinely
subsidising their drivers anywhere, least of all in London.
It is clear from those links that the idea of Uber's losses
arising from subsidies to drivers came from their financial
director, Guatam Gupta, who seems to have made no
attempt to substantiate the contention. As is the way of
the Internet, those unquantified assertions have been
repeated by people who are trying to pretend that they
have done original research and are in possession of
confidential information.

It looks like you've not read many of the links then.

There is also the issue of semantics. Some of those links
show people confused by the differences between a subsidy,
a guarantee and a loss-leading market strategy.

What confusion? Uber often pays its drivers more than the usual 80% of the
fare the customer paid. That's a driver subsidy, which hits Uber's bottom
line. It doesn't matter why Uber chooses to do it.

In the UK, new customers get a £15 discount. That's paid by Uber, not the
driver. In other words, a driver subsidy:

https://www.list.co.uk/offer/2097-ge...jor-uk-cities/

https://www.vouchercodes.co.uk/uber.com

So do you still maintain that "there is no indication that Uber are
subsidising their drivers here. I am sceptical that they do anywhere, and
I'm not persuaded merely because it is stated on the Internet"?

And if you disregard everything you read on the internet, what are you
doing here?

The facetious answer to your ill-mannered question
is that I'm trying to learn the mind-set of people who
do believe everything they read on the Internet.

The point you seem to have missed is that all those links
are repeating and elaborating on an assertion made by
someone who has a vested interest in propagating the
idea that Uber are subsidising drivers. Can you find
anywhere a confirmation by a driver that they are being
subsidised? Can you find any verification that the
calculations quoted are valid?

Another point you seem to be overlooking is that Uber
now find it necessary to advertise regularly for drivers on
LBC and on the Internet. Why do they? Almost certainly
because they are losing drivers. If drivers are being
subsidised and/or paid 80% of the fare paid, why are they
leaving Uber? Why do so many phone-in programs on the
radio have drivers complain that they can't make a living
working with Uber?