For those wondering why this is WSJ news —<p>Uber wouldn’t be profitable, or even viable, if it had to reimburse for mileage like any other business does. In the business world, offsetting a billion dollar expense off of your books altogether is newsworthy.<p>The federal government left a loophole in the mileage coverage rules, specifying that only employees of a business need to be reimbursed for mileage. Uber exploits this loophole by treating each driver as a business, but also prohibits them from operating as a business of 2+ people, which forces drivers into a scenario where they are not reimbursed for their costs by any business - yet are somehow considered a ‘business’ even though they are no such thing.<p>That’s financially newsworthy for those considering whether to invest in Uber or replicate its abuse of law, as the chances remain high that the government will find their contractor arrangement in violation of labor law.<p>Uber’s practices, and therefore Uber’s risks, apply theoretically to any business that uses “individual independent contractors” (Uber, Lyft) to offset these costs. It is unresolved what will come of this attempt to sidestep employee reimbursement rules.
Most Uber drivers know they are putting wear on the car that is going to cost a lot in the long term.<p>But also, most Uber drivers are like most people: when they needed a job, they needed one sooner than later, and they cannot easily just quit and find another better one.<p>People are not driving for Uber because they think its the ultimate investment strategy or something or because they are too dumb to realize car maintenance adds up.
The Uber Game. See if you can win! <a href="https://ig.ft.com/uber-game/" rel="nofollow">https://ig.ft.com/uber-game/</a>
I've asked a lot of Lyft drivers about this. Only one said, "Yes, exactly, I've tried to explain to other people that after my expenses I'm not really earning any money." The others blew me off.
The author of this article, who possibly already lost a bunch of money on Uber or is a short seller of Uber stock, does not think much of the intelligence of Uber drivers. They can't do math apparently. It's possible to make a profit driving for Uber taking into consideration all expenses. The drivers who don't know how to do this don't last.