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Comment by jacquesm | Hacker News Reader

The weird thing about the whole Uber affair is that as long as the drivers can't set their own prices that's a very strong piece of evidence that they are not independent operators, whereas that very same fact about Uber setting the prices is the biggest bulwark against a race to the bottom, which is very much to the advantage of the drivers.

Sooner or later Uber will have to let this go to enhance their position that drivers are independent and then suddenly Uber won't be nearly as interesting to work with/for and the quality will plunge.

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Uber's biggest risk will come from competitors or co-ops eating into their 20%-25% profit margins.

There are a lot of regions that like the concept of ride sharing, but don't like how an American silicon valley company is capturing wealth locally and sending it to Silicon Valley.

That's why I'm convinced we will soon see efforts to make co-op versions of Uber that copy its technology, but return 95%-99% of the money in each transaction back to the driver.

"There are a lot of regions that like the concept of ride sharing, but don't like how an American silicon valley company is capturing wealth locally and sending it to Silicon Valley."

I live in China, and enjoy cheap rides with Uber. I'm pretty sure the money is flowing the other way, and investors are subsidising local drivers and riders.

"I live in China, and enjoy cheap rides with Uber. I'm pretty sure the money is flowing the other way, and investors are subsidising local drivers and riders."

For now. When the local market is won then the taps reverse and the money will flow the other way.

Against the race to the bottom? Uber sets the pace. Their rates are a low as possible to maintain a driver base.

There is a degree of debt in Uber atm because of this. Many drivers are not accommodating the true operating costs of their vehicles. They are using vehicles they had at hand, not one they purchased for the business. When those cars start to need replacement, Uber suddenly isn't paying enough. There is a reason many jurisdictions place limits on cab age. City driving for money simply destroys vehicles.

On the other hand, I took a lot of ubers last year (in Amsterdam). We don't have uber X, but Black and Lux. Pricing of black is on average 10-20% below normal taxi's. All driver's I've asked have said that they prefer uber for mainly 3 reasons:

1. Control over when they drive

2. Higher utilisation (which in extension should be a big driver for Uberpool)

3. Friendlier/less troublesome passengers

Some actually bought (nice) new cars (Mercedes/BMW) and explained me a bit more about the economics of buying a new car and how it made sense for them while driving for Uber. Many I spoke to share the car with another driver to get more rides done per day.

As such, I wouldn't assume that most drivers don't account for the total cost of ownership. To me it seems that many do.

Those are very different drivers than those I've had experience with in the US. All I've seen are family/personal cars pressed into service when times got tight.

I mean, I don't know how this works legally, but don't most franchises set their pricing centrally?

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