I recently did an UberPool. The passenger and I each paid $6 for the entire ride.<p>Between pickups and dropoffs, it lasted 45 minutes. The driver explained it would take him 15 minutes to return to an area with customer demand. After taking into account Uber's take, plus the other costs of being an Uber contractor/driver, how long can we expect these rates to last before either a driver revolt or significant price increase to customers?
Mechanically, the answer is until what ever is pouring money into the system runs out of money.<p>But figuring out all the money flows can be quite complex.<p>So from the driver's perspective there will always be people available for whom "some money" is better than "no money." That is the part of the labor pool who have multiple jobs which each contribute some part of their overall income. Uber is good for those people because the hours are <i>very</i> flexible and so they can be "fit in" around a lot of other more scheduled economic activity.<p>So an interesting question is this, what is the supply of these laborers and is there any other activity that can get them the more income with the same flexibility? Is that the critical resource here? "remainder" laborers?<p>If that is the case, then that shortage will drive the price up in order to meet demand for Uber rides. And if the price for Uber rides goes up, it will mean that some Uber customers for whom it was marginally useful at the previous lower price will drop out.<p>And that summarizes to there will neither be a driver revolt nor a significant price increase. There may be fewer drivers which leads to a gradual price increase or there may be higher driver turnover and stable prices. Time will tell though, regulation could step in that changes the balance significantly in favor of one party or another.
Remember that Uber subverts the traditional employee model. Drivers are contractors, responsible for their own hourly wage. Sometimes they will earn below the minimum wage, and at other times, well above it.<p>In the areas where Uber is prominent, it's hard for low-skilled workers to find any employment at all. Consequently, some of them turn to Uber. This means that no matter how bad the wage, Uber has a ready supply of drivers.<p>It's extremely important for Uber to make Uber a cost-effective alternative to driving or public transit. The drivers are less important to Uber -- both in the short and in the long run (automated cars), the drivers are the expendable part of the equation.<p>(However, do note that under certain circumstances, Uber subsidizes the drivers: sometimes they are paid more than the passenger is charged.)
When I talked to drivers, I came to the conclusion that the drivers are paid more than the passengers are charged, which makes sense. Uber makes huge losses every year.<p>The hope is that this can last long enough before the drivers can all be fired and replaced with automated cars, or at least that the system will get better (i.e. better at stuffing cars full of people, more demand by training people to order the carpools, etc.).
We can't keep expecting "employers" to solve problems like this because fewer and fewer people will have employers. Coase's theory of the firm explains employment as a way to reduce transaction costs—it's hard to find the right person for each task and negotiate a deal with them each time, so just pay people to obey orders and use them to get things done instead.<p>The technology we build is driving transaction costs closer and closer to zero. Fewer tasks will need firms to coordinate them—they'll be coordinated by the market instead. More people will sell their work directly to the people who want it.<p>The basic income approach can solve the living wage problem without relying on the employment relationship. Any energy we spend trying to get Uber to solve the problem will be wasted when we build ride hailing marketplaces that don't require an Uber to connect the rider and the driver.
You used to have a much smaller amount of cab drivers making a pretty good living due to unions blocking competition and stifling the entire industry.<p>Now, you have many more people making a smaller amount of money. This is essentially what happens in any competitive industry.
Even if they aren't, Uber will likely be able to survive the burn rate until the cars drive themselves. Uber just placed a "long term" order for 100k S-class cars.