I’m an idiot, everybody! See? I just called myself an idiot. Now, with that out of the way, let’s talk truth.
What is the truth about ridesharing? Well, in one of my previous musings I’ve managed to hit the soft spot, once again. An article on Business Insider managed to shed some light on Lyft inner metrics, which is kinda nice since Lyft and Uber are sort of similar. Ignore the money please, that isn’t the point – focus instead on the metrics: out of 150k drivers, 100k (2 thirds of them, in english) drove fewer than 60 hours in 4 years. 83k drivers drove fewer than 30 hours total, over a 4 year period. Note that this isn’t exactly a number of total drivers, but the actual number covered by that settlement. About a bit more than 1.5k drivers drove more than 1000 hours in those 4 years, and I’m sort of betting that if the number was higher than 2k they’d have used the expression “more than 2,000” – right there they used it as “more than 1,500 drivers”… Since this isn’t exactly a representative figure for the total of Lyft’s drivers, I wouldn’t rely on it having some sort of extreme accuracy. Even so, it’s sort of making my point – the money is in choosing the right time-slot and the right place, because if more people join and compete, the less they make individually. And Uber? Well, I’m also betting they’re exactly the same. However, I’d quote Pareto’s principle: 20% of them make 80% of the money. Why? Because them’s smarter in choosing when to offer their services, have more fuel efficient cars and do it for a living. The Sunday drivers don’t make money, but they do advertise for the mothership err, company.
The media (The Verge, mainly) loves good stories and managed to write one about Uber and the like. I do say it’s a story since any resemblance to the truth is sort of coincidental. They quote a survey from APTA which sort of states that, and I quote here, “In addition to owning less cars, people who use ride-sharing services were more likely to also use public transportation and spend less on transportation overall than those that don’t.”. Heh. Which goes first, the chicken or the egg? Now, to see how this works, you actually have to read the survey (and maybe they had access to the raw data, however to the public there isn’t a better source) so the form of the article including “gems” like this one from the president of APTA that makes me want to check either his or the Verge’s bank records for “donations”: “You can actually get a better body by using ridesourcing in conjunction with public transit”. Now, the survey has 4500 people(ouch, I wonder if they’re a representative sample or not) lined up, which makes me sort of wonder how they found those people, did they use Uber or Lyft’s cars to get them? Anyway, they state this: 79% of the respondents indicated they have “at least some” experience with shared-use modes beyond transit, so… How the hell did this story get published in the first place? In my opinion this survey is so biased and screwed up it’s hard to tell where the authors end and where “ridesharing” companies begin, to put it mildly.. Ouch.
A better, albeit older study from Princeton shows a similar metric even though their conclusions are also somewhat biased. For instance, they interpret the fact that roughly half the drivers continue doing it after 1 year as “Uber provides a bridge for many who are seeking another position in the labor market” when I’m reading it somewhat differently, like “the money isn’t that good so either they stop and do something else or they increase their hours”. I wonder which one it is.. Also, 62% of the drivers already have another job, either full-time or part-time. The metric does say one thing, almost dead on Pareto’s principle: 12% of the drivers work 35 to 49 hours a week, while 7% worked 50+ hours a week. Add them up, I dare you. And I’m also, once again, betting my current half-finished shot of whiskey that the numbers haven’t changed that much even after a year.
In the real world (my opinion, right or wrong, it’s mine, all mine), drivers join ridesharing “platforms” because of 2 very specific reasons: A) either they need money and there’s no other way to make it or B) they got into it because others told them the money’s good. Bad news is, neither group makes money, individuals make money. Who makes money? Those who play it smart. If demand is up at 8:30 a.m. and at 5:30 p.m., there’s no real financial reason to stay up at 4 a.m. unless you really want your backseat stained with urine (which is a thing, actually). Competition is there for a reason – it’s one indicator pointing the way to money. Also, if you’re doing it without a fuel-efficient car, it’s also not that smart. The rest is branding – good behavior, clean car, fresh mints.