UberEats could be underpaying delivery drivers on 21% of trips
businessinsider.comUber is making it harder and harder to get on board with the idea that it's not an employer. Leveling out people's pay over multiple trips or retroactively adjusting the reward per job sure sounds like an employer having very strong control over the work conditions and compensation. And this almost brings back echoes of Doordash (?) when it was caught taking drivers' tips so that their pay was reduced to the minimum hourly promised "wage".
It's like Uber are trying to shoot themselves in the foot with all the cost squeezing and profit seeking at the same time they're in a fundamental legal fight defining what they are.
You would think they would go in the opposite direction and pay people such good rates during this controversy, you could hold that up and say, "see? People are clearly much better under this system". But I guess not.
On a separate note, I will say that this is pretty expected in terms of how software errors go. Of course programmers at a company will be checking quite diligently that they're not overpaying through their algorithms. But underpaying? Only those who can't easily check your code are harmed by that one. It is a rare company that spends money and resources on verifying from their users' point of view that they're being delivered what was promised -- unless that company actively cares about the user.
> It's like Uber are trying to shoot themselves in the foot with all the cost squeezing and profit seeking at the same time they're in a fundamental fight defining what they are.
I don't think they have a choice. UberEats is fundamentally unprofitable. If it was run profitably, the high(er) prices would drive a large portion of their customers away and into the arms of other "startups" willing to run at a loss or towards picking up the food themselves. Plus Uber can't pretend to be an early-stage startup anymore and their constant quarterly losses are starting to add up.
I'm still not convinced this new food delivery industry is viable without constant cash injections.
COVID-19 is like the golden age of food delivery. If these food delivery apps are not profitable now, they will probably never be profitable. When the severity of COVID subsides in a few years, people will like to go out to eat again rather than have it delivered.
The only reason I could think of to use something like ubereats, deliveroo, justeat, etc would be if I wanted a non-pizza delivered while I was staying in a hotel in a strange city somewhere.
If I'm at home I'll look at the menu of my favourite indian/chineese/whatever place, phone them up, and they deliver it as they have done for decades.
I've spent two nights in a hotel since March, normally it's 70 a year. One night I ordered a dominos as I got back to the hotel just before 2300. The other night I ate out with a supplier.
Likewise with Uber, if I'm at home and not flying off somewhere, I'm not going to be ordering a taxi, either to get to the airport, or when I'm in a strange city on the other side of the planet.
I can see this is the golden age of takeaways and home-delivery (which basically means amazon or groceries), but I don't see it for takeaways.
I get so frustrated when people act like these food delivery services aren’t a WAY better user experience than the old version of having to call for delivery.
So many times, I will be super busy with the kids, or work, or housework, and I will just pull up DoorDash with one hand (while the other is feeding a hangry 1 year old) and hit ‘reorder’ on one of my past meals. Literally 15 seconds and food is on the way.
Compare this to having to call someone, wait on hold, give my phone number/address, tell them my order, correct the mistakes, find my wallet, get out my credit card, give them the number, confirm the number and expiration and security code, then sign a paper copy with the tip when the driver drops it off.
Can I do the old style of delivery? Sure, but man it is a lot easier now.
Sure, if that's how food delivery works where you live, then I'm sure that the SF/Silicon Vally type services works better. But that's because the service suck where you live.
Most fast food place either use JustEat or Hungry to accept your order and take your credit card information, if they don't have their own website or app. They will have their own drivers, employed and paid directly by the restaurant and they don't expect a tip.
That's what I compare any "startup" food delivery service to. So they will always be worse and more expensive, because a third party is now involved.
Most local places have a very strong accent.
Tastier the food, stronger the accent.
Several places we flat out can’t communicate with.
The worse is a local pizza joint with the thickest Indian accent I’ve every heard. I work with Indians, and I still can’t understand them. Really good pizza.
Ask the whole kid angle. Kids screaming, work screaming, wife screaming...
I wonder if there's a business in building apps specifically for individual restaurants (chains or even local ones, using cookie-cutter apps) that integrates card processing and such; white label doordash. The business would pay a flat monthly fee for the service and would have to have their own delivery people. Apple Pay et c make the payment side of things painless and prevents people having to re-enter details in each app.
Why isn't this a thing? Is it that few/no restaurants have delivery drivers?
I can't imagine many restaurants benefit that much from the discovery features in UE/DD/etc.
This loses such a big advantage that the current services have... only entering your information once and being able to order from any restaurant in a single portal.
As for discovery, I don’t have data, but I know personally that about half of my regular order spots are places I found by scrolling through door dash.
Shopify for restaurants, with shopify pay?
Not to trivialize your experiences (toddlers are not easy), but for me, the list you give isn't all that much of a barrier. Yes, it is simpler to use the app, but not all that much more. Also, where I am, they take the credit card at the door, not over the phone. Most use a Square-style card reader attached to a work phone, even the mom-n-pop delivery, even now in the pandemic (they use gloves mostly).
Again, I am not saying it isn't doable to order the old fashioned way, but the newer system is CLEARLY easier and faster. There is simply no way you could order and be done with a call in order in 15 seconds.
Your argument (that it is not much of a barrier to use the old way) can be made for so many of the quality of life improvements we have made over the course of human history. Not every advancement is an entire new category of things we can accomplish; so much is just slight improvements that save time and make things a bit easier.
I feel like there has been a backlash against time saving tech, where people wax nostalgic about how much better the older/slower systems were. I don't understand it. I am so happy for all the timesaving advancements we have made over the years. Now, if we don't use that saved time wisely, that is a whole other issue. However, I don't think going back to slower systems is the solution to not using our free time well.
> I feel like there has been a backlash against time saving tech
It isn't a luddite backlash. It's just that in many cases the value-add for customers doesn't justify the price difference.
There are certain benefits to apps that exist, don't get me wrong. Discoverability, flexible pricing, direct-to-consumer-marketing, etc. But most of those don't apply to me at the consumer level. Do I want to pay 20% more for the convenience of browsing menus? Not really. I'm on the app to buy food and get it delivered. Insofar as some places now offer delivery where before they didn't, I benefit. Insofar as the same places I used to frequent now apply a markup to cover the cut the app gets, I lose out.
The UX improvement of being able to press 'reorder' has never eclipsed calling into my favourite local spot, asking for the regular, wishing the owner well, then discovering he put extra dumplings in the bag for me.
> It's just that in many cases the value-add for customers doesn't justify the price difference.
Hold on, why does your opinion about the value-add get to determine whether I should be allowed to pay for that convenience?
You should be allowed to pay for that convenience, but at the moment you're not because it's being susidized by run-at-a-loss startups that exploit their workers.
I don't see how you got that from what I said. Are you looking for an explanation of how a demand curve works? Sorry, a bit confused here.
I guess the features means more for me... I would pay 20% more for the consistent menus, one touch ordering and reordering, not having to re-enter payment information, and not having to talk to anyone on the phone.
> It's just that in many cases the value-add for customers doesn't justify the price difference.
Let the market decide that.
I don't think the backlash is against saving time FWIW (although I get you, time is precious especially with kids around!!). It's more something like -- is this an investment society would bother to make without loads of cheap VC money?
I view it as an unstable equilibrium -- something's gotta give sooner or later, these businesses are barely sustainable. Is the convenience ultimately worth it in the aggregate, if Uber needs to embrace tactics like these just to survive?
(I admit I have a bias here, I think the gig economy sucks.)
I would happily pay more for the service to pay delivery drivers more. I tip a ridiculous amount on each order.
by using Uber and virtually all delivery apps, you're eating into the restaurant's margins and allowing a big corporation to shaft the delivery guy and really everyone in the supply chain.
You're also enabling a parasitic corporation to generate more revenue, when it should be shuttered with nearly a billion in losses every quarter.
> you're eating into the restaurant's margins
Some restaurants in Australia have higher menu prices for delivery services.
Personally, I prefer to give my money directly to the food maker if possible. They are local and I want them to succeed. Admittedly I don't use these services often, but a couple of local places have mobile friendly webpage and I'm happy with the friction. I think over the food makers will simply gat decent platforms.
I like having a single portal to order from hundreds of restaurants. I use them for food discovery, and then I can order from any without having to re-enter info.
I would happily pay more for this service. I don’t want to take advantage of anyone, so please charge me enough to get me this kind of service and pay everyone a fair wage.
My preferred Sushi place will recognize me by my phone number and take my order within seconds. Payment in cash at the door. There is no reason why the process could not be quick and hassle free, even using the phone.
Sure, but that is still not as convenient. I don’t carry cash very often, and with doordash/grub hub, they can leave the food at the door for no contact.
I can also try a ton of new restaurants without having to re-enter my details, and there is a consistent interface. In addition, I get some sort of guarantee that the place is legit... if I don’t get my food, I can get a refund.
> My preferred Sushi place will recognize me by my phone number and take my order within seconds.
What about a new restuarant?
The problem is most restaurants in my city unless they're pizza just don't deliver, and this applies to lots of cities across the country let alone suburbs.
I wonder if it's a cultural thing, what country are you in?
US. I've had delivery when I visited family in London or Dubai where there was a much better delivery experience so I know it can be great, but it just doesn't seem to be a thing outside of a few cities here.
This was exactly me in Oakland, CA, last year when on a business trip from Atlanta. On the way to the hotel, I was on a shuttle with a pilots and flight crew heading to stay overnight. Was advised not to go walking around by myself. Ended up using Doordash for the first time that night at the Hotel. Now my wife has us on the monthly subscription plan back home because of COVID.
> but I don't see it for takeaways
.... from somewhere new
Mmm Naan Pizzas are good
Food delivery will probably never be profitable unless you're able to schedule food delivery days ahead... and utilize the same pathing algorithms used for regular deliveries (like UPS and Fedex).
There's a maximum amount of time someone will wait (1 hour) and the product degrades after it's created (cools off)
I mean, it's not that bad. Delivery is an important part of many restaurants (pizza, jimmy johns (sandwiches), chinese in many cities). The issue in my mind is those restaurants with hugh delivery volume can do multiple deliveries in a single run, and can time the completion of the food to the return of the driver, so the food doesn't spend a lot of time sitting at the restaurant, and neither does the driver.
It's very hard to do that when you're aggregating restaurants and drivers.
Right, but there's an incentive to perform well because if you don't, the food is returned.
Uber can just write off the loss as more and more money is shoveled into it like coal was shoveled into an engine on a trail.
I'm guessing they're just trying to hold on until they can convert to robotic delivery. Then it'll be profitable. In the meantime they're preloading the platform, building brand recognition, etc.
I wouldn't go so far as saying they're "fundamentally unprofitable". They have a couple long-term options: the often-discussed one is autonomous driving (though it's becoming increasingly obvious this is many years out), but the less discussed one is vertical integration.
It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants" in quotes, because it'll almost certainly just be warehouse-style kitchens, where drivers skid up out front and grab food from heated tables, and you won't be able to dine-in at all. It would fill the same role for aspiring restaurateurs as food trucks do today: a startup cost, low-barrier to entry way to build out a brand, rapidly iterate menu-items, and begin building revenue to eventually secure a business loan to open a proper restaurant.
If UberEats can really squeeze both the drivers AND the restaurants, there's no fundamental reason that food delivery can't be done profitably - pizza companies have been doing it in almost all markets for decades.
Brick and mortar retail stores got eaten by Amazon warehouses, and it seems inevitable that many brick and mortar restaurants will eventually get eaten by a massive tech company as well.
> If UberEats can really squeeze both the drivers AND the restaurants, there's no fundamental reason that food delivery can't be done profitably - pizza companies have been doing it in almost all markets for decades.
Pizza delivery is profitable because they sell cardboard and depend on teenager drivers relying on their parent's auto insurance.
Anyone who's actually looked at the person delivering their food would have thought twice about the margins in food delivery. To spell it out: food delivery is often performed by immigrants with few choices for under-the-table work. The margins are thin-to-none. The current system has worked because no one's investigating the thousands of independent restaurants.
Now tech companies are trying to do the same thing, but multimillion dollar corporations have a harder time hiding their labor exploitation from the public.
Going back to ryan's point, I agree that with full vertical integration (dirt cheap ingredients and centralised factory kitchens), food delivery could be profitable, but at what point is one just selling frozen food from a microwave/oven in the back of a car?
>It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants" in quotes, because it'll almost certainly just be warehouse-style kitchens, where drivers skid up out front and grab food from heated tables, and you won't be able to dine-in at all.
The term for this is dark kitchens.
It's noteworthy that Deliveroo is already doing the kind of vertical integration you describe, it's called "Deliveroo Editions"
>It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves.
I always wondered something about those meals that are available on airplanes:
in the past I liked quite a lot most of them (e.g. a small piece of meat/fish/other, some vegetables and/or rice, a slice of bread, a small dessert) => wouldn't it be quite profitable to have a similar delivery service for "kits/menus" like those ones (just e.g. ~4 different "kits" available to be ordered daily), cold (but pre-cooked if needed) that only need to be warmed up at home? (if 3 stewards/esses, on a moving tube, managed to warm that up for 300 people then I guess that I'll manage to do the same for myself at home)?
I admit that on one hand the "delivery"-part of the service would be related only to getting fresh (uncooked or "freshly pre-cooked") stuff (not ready for consumption), but on the other hand that way the delivery could be spread over a longer timespan (multiple deliveries per trip, better delivery organization, therefore less costs) and could be left in the mailbox (assuming at least a mediocre insulation of the package).
Here in Switzerland/Zurich I am aware of some similar services, but they deliver only the ingredients (then I would still have to actively cook). Supermarkets do have some similar pre-cooked stuff, but most (not all, but most) is quite terrible (probably because there the stuff has to be able to lie there for days/weeks - definitely not similar to what I used to eat on airplanes) and especially it never changes.
(I used to fly only in Europe using "Swiss", "Air Berlin", "Lufthansa", maybe as well "KLM"/"Air France", always to/from Zurich - your experience with other airlines / in other location might be different)
Woudln't it be nice to get back home and find in the mailbox a ready-to-be-warmed-up (maybe actually "cooked", but in an extremely simple way) menu?
The delivery, being all sourced from the same place and being spread over many hours would not be as expensive as it is currently done for hot stuff coming from multiple restaurants, and the small amount of different menus (4 as mentioned above or slightly more) would allow to buy more source material for less $.
EDIT: I admit of not having any clue how the companies that prepare meals/menus for airlines operate => there might therefore be some important details that make the whole concept crumble... :)
Switzerland is strange because restaurant food is so tremendously expensive there compared to the rest of the world. In most cities in America, for $5 you can get a half-decent meal that's quite a bit more palatable than airline food, and for $10 you can get something from (mostly immigrant-run) restaurants that's somewhat nutritious as well.
There are meal-delivery services here that are basically what you describe, but they usually deliver food weekly and they're kind of pricey. They're mainly targeting time-strapped single people who are trying to eat healthier and don't want to do all the mental work that goes into grocery shopping, meal prepping, cooking, etc.
It's getting harder and harder these days to get a good meal in the US for under $10 all-in w/ tax outside of rural super low COL areas.
In any of the major urban areas in the states, a $5 budget would limit you to various street foods (a couple of tacos, a banh mi, maybe a slice of pizza) or a couple of items from the dollar menu at the various fast food chains. Frankly, your typical airline meal is more filling and nutritious (but not as tasty, unless you're flying a middle eastern or flagship asian airline, of course).
A decent McDonald's meal for example, would blow up your $5 budget pretty easily.
Thanks for the reply - I agree & disagree with you.
On one hand you are absolutely correct stating that swiss restaurants are in general more expensive than anywhere (subjective - e.g. a 30$ small menu might be ok here, but we do have as well a higher income and going to the restaurant is not something that people do often), but on the other hand I did like airline food (which you basically describe as being "the worst" while for me was on par with one offered by restaurants), therefore we have a mismatch of our experiences.
(talking about restaurants, I must mention that Stockholm was for me a lot more expensive than Zurich)
Personally, I would have all kind of doubts about a $5 meal (in most parts of the world, if it's not something extremely simple).
> There are meal-delivery services here that are basically what you describe, but they usually deliver food weekly and they're kind of pricey. They're mainly targeting time-strapped single people who are trying to eat healthier and don't want to do all the mental work that goes into grocery shopping, meal prepping, cooking, etc.
I'm not currently aware of something like that in my area , but my profile is very similar (and I did try to cook different stuff, but the failure rate is quite high and the overall quality quite low). Still, I think that the concept that I described was a bit different than that?
I can expand upon the $5 - $10 meal by example.
I'm from southern California. I worked in Wellington, New Zealand for a stint, and I found that restaurants were priced about the same as back home. That is to say, an average sit-down restaurant meal of equivalent quality was roughly the same price in USD.
However, in America, there's an entirely different class of much cheaper food (takeout food), and younger people in metropolitan areas eat this food very often. These were usually powered by cheap immigrant labor, often paid under the table to skirt taxes and mandatory benefits.
Labor protections in New Zealand are much higher, of course, and without an easily exploitable underclass, this food simply can't exist there. There weren't really regular kiwis who ate out 1 - 2x per day - virtually all of them cooked most of their meals at home themselves.
This is the environment in which these food delivery companies are operating. These restaurants already have extremely thin margins, consumers are price-sensitive, and as long as the delivery company is just a middle-man, they'll struggle to do this thing profitably. If they lose access to their cheap labor by having to re-classify drivers as actual employees, it might be impossible.
Interesting! Thank you :)
I use a company called Snap Kitchen for that (no affiliation). They have a menu, I pick what meals and how many I want. Twice a week they cook the food, package it up, and deliver it to my door. Let's you pick how many calories per day you're aiming for, and if you're on one of a couple dozen diets they support they'll limit the auto-suggested meals for you.
The food tastes pretty good. It's better than frozen food, but still a far cry from a freshly cooked meal. It's not terribly cheap either. If I did all 3 meals from them 5 days week, it cost somewhere around $8 a meal. I ended up quitting because of the price. It's too expensive to use for many meals, and has to short of a shelf life to keep around as a backup if I don't want to cook.
Yes, eating only this way would end up becoming expensive - but I would do it as well ~2-3 times per week, at least to have a break from cooking and to eat something different.
I don't understand why an investor would fund unprofitable Uber 2.0. Without a massive differentiator there is no reason to believe their trajectory would be any different from Uber's - except with increased capital requirements from being the third(fourth?) mover.
Uber's burned 10s of billions in the hopes of becoming a few hundred billion dollar company. Would Uber 2.0 need to burn hundreds of billions in the hope of becoming a hundred billion dollar company?
Uber 2.0 would probably make the same pitch Uber did— that all of this is temporary moat-building as we prepare for a glorious self driving future.
So I think the difficulty is less around investors being more savvy to the economics of ride sharing and delivery services, but that they're more savvy to the realities of how far off those technologies are. And that the entrenched firms like Waymo will be far, far better positioned to offer an autonomous taxi service on day 1 than some plucky startup will be.
It would be interesting to hear why investors keep throwing money at Uber. Does anyone honestly believe that they will ever be profitable? You would have to throw billions at them to keep them alive long enough for autonomous vehicles to be a possible rescue.
Has there been a delivery service that didn't have these issues? Raising the prices is effectively the only means, people don't seem to be put off by how much Instacart can jack prices; Costco even warns you the prices are much higher if you choose this as delivery.
Pizza chains and others who own their delivery process can at least set where they will deliver and tend to encourage bigger purchases to avoid delivery charges and hopes of fresher food.
I am going to assume the only type of agreement would be tighter integration with restaurants to the point the service name is hidden, as in contracting out drivers to particular restaurants but the difficulty there is guaranteeing a driver is always available. Basically an outsourcing for drivers. Restaurants get some filtering of drivers and drivers have a set number of stores with instant familiarity.
I can imagine a UberChef where an Uber driver gets an order, and drives a freelance Chef to a freelance kitchen where the chef cooks the food (groceries provided by an uber shopper who can also get one-off ingredients from specialty stores), the chef cooks the food to order (steak, medium rare, or seafood boil for a party of 2, etc) - and then uber driver delivers the food.
If you’ve ever managed a food business, this is unimaginable.
only if you imagine small.
at Uber scale, they can get VC funding for $500-800 million, to hire the thousands of chefs that were laid off during the covid shutdowns. You can also imagine going international, so Uber Chef is actually thousands of chefs around the world. (hiring chefs without the overhead of restaurants - that's the play)
Why?
Because any food business already has insanely tight margins, and operates incredibly efficiently.
The scenario proposed by the grandparent poster adds so much waste and slack and overhead in the system that the family-owned-and-operated Thai kitchen on Main St. will eat Uber's lunch, and the Dominos franchise two doors down from it will pick through its bones.
the family operated kitchen on Main St. has rent, fire codes, safety equipment needs, some form of sanitation code/inspection to pass with the city.
Uber Chef ignores all of that and bypasses all overhead - you don't need a restaurant or even the physical location of a building to employ chefs to cook food. No need for health inspections or expensive fire suppression equipment. (you use people who want to rent their home kitchens out for cooking)
That's Uber's raison-d'etre - to bypass all legal restrictions and externalize all overhead in the way of getting the items to you.
This isn't a joke, this is what Uber did with their taxi service at the beginning as MVP so why not do it to food services as well?
The reason a restaurant wants the physical location of a building to cook food is because you can't make industrial quantities of food in your kitchen. Well, you can try, but it's going to be slow, inefficient, and your kitchen will become unusable quite quickly.
If you use your home kitchen commercially, you'll still need to get health inspections, etc. Even camp kitchens at Burning Man (https://burningman.org/event/preparation/health-safety/permi...) get visits from health inspectors.
I recall some East-Bay based startup a few years ago that basically tried this model.
They allowed individuals to sell food / operate as a pop-up restaurant.
IIRC, it got closed down because of health and food-safety related regulations.
A more sustainable version of this business model is basically a food truck / cart.
Food business is laborious, hard work that needs to be done at undesirable times (when others are out enjoying themselves). It’s hard enough to find quality workers via humans, I find it hilarious that one would be able to do it via software.
It’s also a high liability business, especially when dealing with animal products.
Not to mention prepared food is barely affordable for the vast majority even with the tiny margins that exist today, so the only people who would be able to afford such an on demand personalized chef service surely could just afford their own chef?
I once got paid 17 dollars to deliver a smoothie. Took me nearly an hour.
I found most of clients fell into two categories.
Rich areas where cost isn’t an issue.Poor and really should not be using the service.Middle of the day was to a lot of businesses/schools. Lunch tips were crap so I avoided that time frame.
Just 17% of Uber and Lyft drivers surveyed want to remain full-time employees [0].
How does this not stop this whole conversation in its tracks immediately? There's so much grandstanding about this, you and every other politician or upper middle class tech worker has their takes on how these poor drivers are being tricked into bad deals they can't understand and need the protection of full-time employment. But it's not a very good protection! There are a lot of downsides, and drivers simply don't want it, but for some reason a lot of people feel the need to force this change through anyway.
Our current labor system, and its default assumption that tying yourself to a full-time job with a large company is the only way you deserve to have stability, is just very clearly showing its flaws here. It's not compatible with gig economy work, why can't we look for solutions that drivers would actually want, and that would help every other independent contractor? Things like improving overall safety nets, so that everyone has health coverage and is covered in the case of things like disabilities even if they don't work for a large company.
Almost every take I read on the pro-AB5 side of this argument seems more focused on punishing Uber the corporation for some perceived moral failing, than on actually helping the drivers. It's quite bizarre.
[0] https://www.forbes.com/sites/michaelgoldstein/2020/08/19/wil...
It's not surprising that only a minority would want to be full-time employees.
But that's the wrong question.
The better question is: What percentage would want to be either full-time or part-time employees?
I would imagine the percentage would be much higher.
When classified as part-time employees, they'd have much of the same flexibility they currently enjoy, but they would at least be covered under minimum-wage laws, same as part-time workers who work at McDonald's or the grocery store.
If Uber/Lyft don't think it's financially viable to offer its workers the same bare-minimum protections that a McDonald's worker gets, then I don't see how it can claim to be a non-exploitative business.
Does being an employee change their liability at all? In CA they seem to be willing to meet some pay and health insurance demands, so I wonder what part of the employee relationship they're opposed to. Is it firing and unemployment?
Is there a more reliable source for that 17% number? The quoted figure comes from a poll by "TheRideshareGuy", which is apparently a magazine for rideshare drivers giving tips on maximizing earnings, and so whose entire existence is predicated on the rideshare business remaining as it is. So as a source for a question like this, it's basically worthless.
This is another survey with similar findings [0].
It was commissioned by Uber but conducted by an independent research firm, and the methodology is documented, so it's up to you how reliable of a source you find that.
Since these are major lawsuits and it's also becoming a pretty big story in California, I imagine if there are significant flaws here or if there are other reputable surveys that have found the opposite, that those will start to surface. So far I haven't seen anything to that effect.
[0] https://www.cadriversurvey.com/
Edit: I missed in the irony in your comment as well on first read. There's an entire side industry devoted to helping workers maximize their profit, and many seem to have success doing so. That seems like a good thing, at least for those who want it? Compare that to other industries like Amazon warehouse workers, where many are full-time employees. It doesn't seem to have helped their working conditions much as there are a lot of complaints about the job, and if certain employees are more productive the company pockets the savings rather than the employees being able to make more money.
> Just 17% of Uber and Lyft drivers surveyed want to remain full-time employees [0].
Because that doesn't include the number of people who would want to be ride-share/delivery drivers but don't because they can't be employees.
That pool could have 99% people who want to be employees, but only a small number them (17% of current drivers) keep driving despite their preferences.
Might as well link the source of the survey vs a Forbes blag: https://therideshareguy.com/california-sues-uber-and-lyft-fo...
Too bad they didn't ask questions like "do you want to deal with independent contractor taxes" and "do you want to set your own hours" and so on, to drill down into why they liked the independent contractor status.
Maybe the solution is to force ride share companies to truly act as matchmakers, where they show passengers and drivers the book and collect a small fee for completed transactions rather than using opaque pricing to maximize their take from both sides of the transaction.
A lot of the difference is caused by the words "full time" - the parent post and related arguments are not using these words.
The main case here is about requiring employee status or employee-like basic standards of workers rights for the drivers, even if they don't work full time for a single company but (for example) five hours for Uber followed by three hours for Lyft on the same day.
Workforce moving to the 'gig economy' does not by itself justify abandoning the basic standards and protections from exploitation that our society has decided long ago to afford for even the poorest and most vulnerable workers. There currently are legal loopholes that enable the 'gig employers' to skip these standards. That's a bug, not a feature - it should be fixed.
With extreme propaganda and marketing of anti-labor rights movements by the companies they work for, why would they?
> It is a rare company that spends money and resources on verifying from their users' point of view that they're being delivered what was promised -- unless that company actively cares about the user.
I wouldn't say it's rare. Companies that do this are very open to lawsuits but also bad press, and that's the thing all companies hate - having to make public statements and ultimately fix the issue, isn't worth it to any business at scale. The DoorDash tipgate was hugely embarrassing for them, and Uber has also been very publicly ridiculed in the past that the the last thing Dara wants is anymore bad press.
> It is a rare company that spends money and resources on verifying from their users' point of view that they're being delivered what was promised -- unless that company actively cares about the user.
I have gotten a check from the CA Treasurer on a few occasions because I didn’t check some box and take a tax deduction that I was entitled to. Not a company, and certainly if I underpaid the state would come after me to be made whole. But some organizations do work both ways.
The biggest reason I would say that the drivers are not independent contractors is that they are not allowed to set their own rates.
Uber's argument that they are not employees is based on the concept that they only a platform facilitating a connection between drivers people who need rides or in this case deliveries. But if the contractors are truly separate entities, then Uber by controlling the cost of the ride/delivery, is fixing prices.
https://www.huffpost.com/entry/legal-problem-could-crash-ube...
I am not aware what the current status of legal rulings for or against Uber in this regard, but I believe my point still stands.
Wouldn't Uber's argument about this be that drivers do get to set their rates by the platform showing them and matching them with jobs that are at a rate they accept? Just because they can't put out a published $ figure on their desired per job rate, doesn't mean they're not setting their own rates that they accept?
Driver's can get kicked off the platform if they reject too many rides, so I wouldn't necessarily call that setting your own rate. They can decide whether or not to be active based on surge rate which is something somewhat akin to setting a rate.
That's certainly not what is meant by the use of the word 'set' here. They do not have the choice to select their rate. Uber sets the rate and drivers have the option to accept the ride or not.
Uber Pool functions so that drivers automatically getting more and more riders added to their trip, without any way for them to reject passengers. I've been told stories of drivers getting 20+ pool rider chains in a row, without any option to take a break.
This is false. It’s like 2 clicks to stop incoming requests, same with Lyft.
What matters is the aggregate amount over multiple trips. If you underpay on some trips and overpay on others and it is a net wash, then it doesn't really matter for the couriers if the payment algorithm is on the low side on some trips so long as it is on the high side on other trips.
Under or overpaying on trips is more of an interest to those engineers trying to optimize marketplace efficiency. Meal delivery businesses have as much of an interest in not underpaying as doing so reduces supply availability and therefore reliability and they have also an interest in not overpaying as that reduces profitability. The ultimate goal is optimal pricing in a three sided market to maximize liquidity as the business model does best when you optimize for volume of transactions. Maximizing liquidity amortizes fixed costs over more transactions. This applies as much to the meal delivery companies as to the restaurants involved.
At the end of the day, distance driven is very imperfect as you have issues like poor GPS signal and in cities you have the dilemma of urban canyons and tunnels. Also, drivers don't always take the suggested route. At vehicle speeds, it's hard problem to solve due to time between GPS pings. Another issue besides GPS inaccuracy is clock inaccuracy, especially with round-trip times between server and client and client and server aren't always symmetrical, especially on cellular networks, and this messes up all sorts of clock synchronization strategies. The peanut gallery on HN is seriously underestimating the complexity of measuring distance using GPS. It's pretty darn good when conditions are ideal, but when they aren't, good luck.
Another question is the magnitude of the underpayment in the 21% of trips. Are we talking about 1-2%, 5-10%, some other deviation? If it was something like 1-2%, we should all be amazed. Gage repeatability and reproducibility matters.
I strongly suspect that, to a driver, it makes a huge difference that you can't rely on the app to accurately tell you what your take will be, even if you can validate that after 1000 rides, it's all a wash. And even if you don't care about drivers, that introduces a marketplace inefficiency if they don't expect $1 promised compensation to result in $1 actual compensation.
Exactly. Besides making the marketplace inefficient, underpaying participants in the marketplace and leaving them disappointed also creates churn. You want, as much possible, for marketplace participants in the system to experience a strong link between effort and reward.
If they are running a business, especially something at scale, and they are properly funded - they should be 'paying the right amount', there's really no excuses.
If they can snare people into driving for them, there are material switching costs for workers, and 'underpaying' on some level is actually something they can get away with.
At the 'low end of labour' workers generally have zero power, much less during covid, so it's not a 'marketplace' in the more broad sense. If it was, we wouldn't even need minimum wage laws, or Medicare for employed people etc..
If the technical challenge is 'insurmountable' then they need to figure something out: minimum guarnatees etc. , even over the aggregate, as you say.
Yeah, and also if Uber was doing this intentionally, they could’ve just as well lowered their $/mile rate if that’s what maximizes profit.
Lowering the "front page" $/mile rate could make the service immediately less attractive to workers, who can select between multiple services based on the apps on their phone. Lowering mileage paid is much harder for workers to detect, since it requires carefully checking each trip and measuring what's actually paid.
This could also be an "unintentional-intentional" bug, meaning its presence was just an accident -- but that the company has chosen to prioritize its engineering resources addressing issues that improve its revenue, rather than decreasing it.
In a business that is trying to optimize a marketplace, accurate measurability of everything matters as the performance of every marketplace optimization is degraded by having poor gage repeatability and reproducibility in its measurements. It's like trying to play darts when you're nearsighted and have 20/400 vision. This is process engineering 101 stuff.
There's way more money to be made in having accurate measurements than having inaccurate measurements that optimization engineers can't rely on. The more accurate the measurements, the more confidence you have that your marketplace optimization algorithms are producing the desired marketplace dynamics.
1. I tend to doubt they did it intentionally.
2. I could see a company with various ethical lapses like Uber not prioritizing an unintentional bug for a speedy fix.
3. In the intentional scenario, it'd be a case of https://en.wikipedia.org/wiki/Salami_slicing (popularized by Superman 3 / Office Space). Easier to get away with than a public rate cut, with the downside of bad PR if you get caught.
It's probably a bug that no one will fix or talk about fixing because it makes the company money. Standard large company stuff. You don't get promoted for costing the company money.
Click through businessinsider to the sourced salon article, where they directly interview the driver. His initial case was a 75% underpayment, when he was paid for 1 mile on a 4-mile trip.
The interview seems to indicate it's an aggregate underpayment across all trips. The tool is available for examination if you are truly skeptical.
edit: also, you seem to have made your account just to comment on this thread. what's up?
I'm more interested in the data than the tool. What was the start and end point for the trip and other details.
For example, this makes no sense:
"I had this one delivery that was an hour-and-a-half long and I got paid $16 and I thought, 'There is no way that's right,'" Armin Samii, an unemployed computer scientist who has been working Uber Eats on the side, told Salon. "I looked into it and found out that Uber paid me for a one mile delivery instead of a four mile delivery. Of course it's all made worse because I'm on a bike and they don't account for that, but that's a separate issue."
A 11 mile hill climb of Mount Hamilton with 2700 of elevation gain takes me about 1.5 to 2 hours to do. A straight hill climb which you would only find in cities like Hong Kong or Rio de Janeiro is like the worst case scenario. A 4 mile trip in pretty much any major city should be maybe 20-25 minutes with stop signs and traffic lights. Not saying there wasn't an issue with that trip, but this makes no sense.
I have worked a lot with this stuff in my career, so I'm inclined to want to see the data myself so I can try and reverse engineer what may have happened.
Furthermore Armin Samii appears to have worked for a direct competitor of the company he's criticizing while developing this.
On a related note, I don't understand the point of tips on UberEats.
(a) I thought the whole point of these apps was to simplify things for the user. I just want to know how much I pay in total, upfront, as I'm selecting food. Include taxes and delivery fees in a big fat "this is what you will pay" display on the screen and I'll be a 10X happier user. Delivery apps were a great opportunity to axe the complexities of tipping culture and they screwed it up IMO.
(b) They ask you for tips before they even dispatch your food, which makes zero sense to me. Tips are supposed to be "extra" based on the quality of service, so how are you supposed to blindly give 10% or 15% without even having received service? (I always put 0% when ordering and up it to 10-15% on delivery OR give cash tips, which is how things have always worked before the age of apps, but it's cumbersome to do that.)
Just like in the restaurant industry, it's a way to offload costs onto the customer. Luckily in UberEats you don't have to confront someone if you don't tip them and aren't at risk of getting the side-eye which happens a lot, particularly in America.
(b) you can change your tip afterward if your service was not as expected.
Just like in a restaurant: maybe your default tip is 25%, but great service bumps that up, and bad service bumps it down. You go in expecting to pay 25%.
> Just like in a restaurant
My expectation of apps is to get rid of these artifacts of the past. In most other parts of the world prices are given to you upfront, no tips necessary.
Not only that, but Uber asks you before you even check out if you want to give 10%, 15%, 20%, 25%, or a custom amount. Considering I haven't gotten my food or service yet, how the hell am I supposed to know? I don't want to deal with this decision. You tell me how much I'm supposed to pay and just present me one number. I'll hit "buy" if it fits my budget.
Uber got rid of cab driver run-arounds, they can get rid of tips in the same way and just ask for a fair price upfront. As a customer I would find up-front, no-tip pricing a MUCH better UX.
We bought a second car at the weekend, I phoned up my insurance company and asked them to put it on. They did so, and it was cheaper than the quote I'd got online - £180 for 9 months vs £290 for 12 months.
So I immediately tipped the person on the phone £45
How ridiculous does that seem?
I’ve even started asking my friends and family for tips anytime I do anything for them.
US culture of tipping is so ridiculous that I think people actually derive enjoyment from tipping by giving themselves an ego boost when they do, as some sort of charity or having role played as an extremely rich person being benevolent with their wealth.
That's the point. There's a friend episode where Rachel and Ross go out for dinner with her Dad. He pays the bill ($200 or so - fancy resturant) and goes to the bathroom. Ross comments he'd 'only' tipped 4%, and leaves some cash.
Great putdown when the father comes back, sees the tip, rips up the credit card receipt and tells Ross to pay the whole bill if he wants to be the 'big man'
"In boxing I can punch people in the face, but in baseball it got me disqualified! How is that fair?"
You're comparing apples and oranges. Tipping is just the way portions of the food service industry works.
> Tipping is just the way portions of the food service industry works.
A number of industries (but which industries - how do I tip the person who takes my order at a mcdonalds drivethrough. Do I tip my builder who put in a new window? How about the binman?), in a small number of countries (do I tip in Mexico City? Quito? Brazzerville?)
The U.S. seems to have built an expectation of tipping into its economy and tries to export that expectation around the world.
The salon source linked in the article has a bit more (and slightly different?) detailed information, including a link to the tool developed to track mileage
https://www.salon.com/2020/08/20/programmers-say-uber-eats-i...
https://chrome.google.com/webstore/detail/ubercheats/pkdblhe...
The salon article was posted with about 8 hours of data in Google Analytics. Business Insider has more up-to-date numbers, with about 4 days of data from the Chrome Extension.
also, the extension author is on twitter if you have questions
Hard to know what to make of this without seeing the full data. On 21% of trips, Uber undercounts the miles. What about the other 79%? Spot on, or is there over counting?
Most spot on (within 0.5 mi), some overpayments.
Overpayments are much less frequent than underpayments, and regardless: when someone accepts a trip, who knows if they did it because they thought "that amount sounds fair" or thought "that amount given the distance shown sounds fair." The only fair thing for Uber to do here is to rectify all underpayments, and let the overpayments stand.
Further: just because Uber couldn't find a route as efficiently as the extension could doesn't mean it was an overpayment. The extension uses Google Maps. If the driver used Uber Navigation to navigate, and Uber navigation was twice as long as Google's - is that really an overpayment?
I'm not sure how ubereats works for drivers, but based on what you just said, wouldn't the reverse hold true as well? If someone accepts an under-paying trip it must be because they thought the amount sounded fair.
Can you share one route uber underpaid by big margin?
For the second part I agree, but without seeing outlier, maybe in some cases google couldn’t find the best route, compared to the app.
PS: all this stats used Google Maps shortest path or best path?
I was paid 1 mile, actual distance 3.5-4.0 miles.
Previous versions of the app would use the first result returned by Google Directions API, which could have been best not shortest (I'm not sure, anyone know?). Newer version (pending app store review) does shortest always.
This looks like an obvious bug if it is straight line.
Yeah google can show longer but faster route depending on traffic etc.
Also one more thing can be, gps location point and address can point to different locations. Not sure how Uber is showing, or calculating from which one.
The problem is you used Uber Car, instead of Uber Airplane (please don't)
I just got a lease on an UberCopter. Runways are too far from restaurants. Hope it works out for me!
Always deplatform your tips.
Agreed, but keep in mind that the platforms have started making design changes to discourage this. Some of them now surface the tip to the driver which can lead to $0 in-app tips lowering the displayed value of your request so you end up being passed over for other people. If you don't tip in the app you risk waiting a lot longer for service.
Why would there be a buy in the Eats tracking but not in Rideshare? I'd imagine it's the same underlying GPS tracking/routing software used in both cases. Is it just that the rides are paid differently than Eats deliveries are so they're noticing it differently?
There are some anecdotes that it also happens on Rideshare, but I don't have a car so I can't verify until Uber allows me to pick up passengers on the handlebars of my bike
Middlemen are always going to try to increase their take on both sides. It is the only way they can grow the profitability of their business because they can't add more value, they can only subtract.
Agree with the part about profitability, but middlemen can definitely add value.
I’d say that Uber’s wide reach is valuable, the fact that they likely exist in the city you’re visiting, the fact that they likely have enough cars to pick you up in under 5 minutes. These are valuable things that don’t come from individual drivers or small taxi companies, but rather from big aggregators.
you don't need uber for that, google maps shows you available carpooling ang taxi companies directly when you search for a destination.
For uber is good that wide reach, for the end user not so much.
So instead of uber, you have google, another large digital service middleman...
Small taxi companies could still have general dispatchers.
Sure, but that dispatch is a "middleman" for the service provider. The bigger that middleman becomes the more they may be able to offer. The dispatcher will take a cut of the taxi fares.
The best ubering I have ever done is in foreign countries. I don't have to speak the language and get significant reduction on tourist prices. Scale provides tremendous value.
Middlemen’s value is usually in their ability to save time for the buyer.
Costco is valuable to me because it saves me time from having to research products and supply chains. I could go to aliexpress.com, but I don’t because I’d rather spend my time in other ways.
If I land in a foreign country, I could spend time researching taxi companies, or I can save time and pay Uber/Lyft a premium if I already trust them.
As a seller, a middleman (or broker) can save me time by discriminating against buyers I don’t want to waste time entertaining.
Not sure about UberEats but just two days ago a I took an Uber ride that was paying the driver about 5.50-6 euros instead of the usual 9-9.50 euros that the ride was usually worth, I felt bad about the driver and so I helped make up the difference in cash, directly to him. I know the sums and the difference itself don't seem that big in nominal terms but I live in Eastern Europe where the difference between 6 euros and 9 euros still counts for lots of people.
Anyway, interesting to see that that wasn't an isolated incident when it comes to Uber the company.
Makes sense. Charging 30% off the top on orders wasn't enough, time to skim a little off the drivers too.
Shouldn't the drivers be able to make a profit, without the tips?
not sure why every driver isn't already using another mileage tracker app, at least for occasional trips to keep Uber accountable. theres dozens of those in the app store...
The question I would ask is how accurate all those other mileage trackers are? If they are based on GPS, then they have all the same issues with fewer engineering resources trying to correct defects.
The only mileage tracker that matters is the vehicle odometer on a stock vehicle with stock diameter tires with most of its tread. You'd need a device connected to the vehicle via ODB2 where you can press a bunch at the start and end of each trip.
Because Uber doesn't pretend to pay based on miles traveled for UberEats - they pay on shortest distance. So a GPS tracker is insufficient.
This is good news, I thought the business model was to underpay drivers on 100% of trips.
Why do these articles always reach the front page? Does hackernews hate Uber that badly? Or perhaps its profitable for news articles to always rag on them? Why is it profitable? Does everyone want to see them fail?
They're no worse than your run of the mill tech company, so I suspect something odd is going on. I dislike corporations in general and want to see them play fair, but Uber changed the way I live life, and I'm constantly worried bureaucrats and angry business/tech nerds are going to regress us back to the taxi stone ages. We're just one law away from having to go back to hailing a cab with our thumbs and trusting their internal GPS.
They're a nightmarish zombie product of venture capital. They have never made a profit, and have lost more money in the past three months than most businesses will ever achieve ($5! BILLION!) with nothing to show for it, but they continue to exist as a testament to silicon valley hubris. They operate by ignoring laws, and pulling out once enforcement becomes effective. They have launched tracking programs specifically to lie to regulators. Their employees frequently do not make minimum wage, and there's no plan on even tracking this - attempts to force them to do so cause operational cessations.
In short, they are all of the evils of a short-sighted "tech" company in one package.
Uber has changed your life for the better, by taking advantage of thousands of other people. Worrying about going back to the taxi Stone Age is actually worry about making things fair for those people.
Taxi drivers weren't treated fairly[1]. They were just abused by others instead of by Big Tech, so nobody cared. The appearance of Uber has actually allowed some progress in their labour rights[2].
[1] https://www.nytimes.com/1995/04/09/nyregion/driving-a-taxi-d...
[2] https://www.washingtonpost.com/news/wonk/wp/2015/10/29/labor...
If frontpage is the indicator (which isn't nearly close to perfect), what I gathered all these years is that HN hates most of big tech companies, of not all.
I've never felt like the community hates the big tech companies... most of us are trying to grow something up to be big one day... BUT it is controversial when we see bad behavior, or potentially bad behavior. The discussions here really become useful in forming my own opinions.
I don't have any issue with this particular article (or this kind), people should be critical to any company anyway.
What shows the "hate" more clearly is when there is "good" news or just an neutral announcement from/about these companies, where you will see most of the comments being negative to a point they are often irrelevant to the article itself.
"They're no worse than your run of the mill tech company"
So media should stop reporting on possible bad actions by Uber?
Excess coverage or not, the media exposed discrimination and harassments at Uber that led to the company changing for the better.
It is disproportionately against Uber especially on HN. I haven't seen an article here about child labour in hardware companies in forever, but I definitely don't see them daily like Uber seems to have.
It is because the numbers involved (and a little bit the blatant corrupt attitude by the former CEO). Uber by design was created to break laws and hustle (and had a lot of issues with sexual issues for example as well).
Seems like the current CEO is good, but the company gets the good and the bad from it's history. The good part is that they got a ton of money, like inconceivable amounts of money.