Uber has been slowly rolling out its latest “trust me, I’m saving the world” product, this one a service that allows its Uber-taxis to pick up multiple passengers in serial fashion. Much like a commercial airport shuttle, strangers share part of the same ride and pay a reduced fare for just their part of the ride. It’s called UberPool, as in carpool, and CEO Travis Kalanick touted its alleged environmental and labor positives in a recent interview with the New York Times, saying that “reducing traffic was part of Uber’s mission.” If true, this is a welcome change from the CEO whose previously stated mission was to flood the streets with Uber cars to win his war for market share with Big Taxi and ridesharing competitor Lyft.
Before going into the considerable labor, environmental, consumer and public transit downsides to this latest blitz of Uber hype, I can’t help but say that it has been puzzling to see the New York Times consistently offer up its pages to Uber as a genteel and uncritical forum for promoting its private interest. Much of the latest article from its tech columnist Farhad Manjoo reads like a press release from Uber, without a single comment from a critic or transportation expert on the impact of UberPool. To be fair, Manjoo has written some excellent articles about technology – his series on the impact of robots and automation for Slate a few years ago was first-rate – but that’s what makes his “Uber blind spot” all the more baffling.
No question, taxi service in most U.S. cities has been sub-par for many years, and if Uber and Lyft have demonstrated nothing else, it’s that there were not enough taxis on the road to service all the customers (in Berlin, where I am currently living for a few months, taxi service has always been pretty good and Uber has had a hard time gaining traction). Properly regulated, there could be room for app-driven ridesharing in the overall transportation matrix. Despite its considerable downsides, Uber has become popular in the U.S. because it’s filling that “taxi gap,” and that makes it harder for many well-meaning people to figure out what to make of a service like UberPool. So let’s break it down, sector by sector:
Labor issues. Uber drivers are complaining that with UberPool they are working a lot harder for no more, and possibly even less, income. A website called TheRideshareGuy, which is run by Uber driver Harry Campbell and is chock-full of insightful advice and discussion for fellow drivers, provides a helpful example of what’s wrong with this picture.
Imagine two Uber drivers each carrying a single passenger along the same route which results in a fare of $11. After Uber takes its brokerage cut as well as its “safety fee” (even though the company still has the poorest driver background checks in the taxi industry), each driver ends up with $8 each in her or his (usually his) pocket, while Uber ends up with $6, a 27% commission for Uber.
Now along comes UberPool, and these same two serial riders get picked up by a single driver. Since UberPool offers passengers a substantial discount for sharing a ride, that means each passenger now pays $6 (in this example). After Uber takes its commission, including the safety fee, the payout to the driver is $4 for each passenger, or a total of $8. So the driver makes the same amount, but Uber’s take of the overall $12 for this ride is also $4 – a 33% overall commission. So Uber makes a higher percent on UberPool rides, yet the driver makes about the same amount.
But it turns out driving passenger after passenger, picking up and dropping off in a serial fashion, is a grind. Christian Perea, a longtime Uber and Lyft driver says, “Drivers end up doing a lot more work for the money.” Experienced drivers, he says, know that pickups and drop-offs are the most stressful part of each ride, and adding in a second or third rider only compounds the difficulty. “As people get added into your ride or cancel along the way, it becomes frustrating having to change direction every few minutes while constantly checking your phone while in traffic,” he says. “It’s honestly kind of a safety hazard.”
Uber’s response is that drivers will benefit because they will have less downtime waiting for the next fare. By picking up passenger after passenger, the driver won’t have any idle time and the meter (so to speak) will keep rolling, resulting in steadier earnings. But another Uber driver, Frank, disputes that. [MORE]