Is Uber a scam? Yea it kinda is.

After driving for Uber for just a few months I recently decided to delete my account and beg my insurance company to let me switch back to the much cheaper private insurance. My experiences with the company were a good learning experience of scams to avoid in future because honestly, Uber (and likely all rideshare companies as a rule) is essentially a scam.

Much like pyramid scheme companies rideshare transportation app companies exploit their employees or drivers by putting most of the costs of operation onto the employee instead of the business. Now while pyramid scheme sales companies require employees to essentially become the primary customers of the company, purchasing all of the sales products themselves before then re-selling them at a mark-up, ride-share companies require their employees, or drivers, to bear the great majority of operating costs. For a pyramid scheme company this system ensures that employees really do not make any money, so the companies promise profit if the employee recruits other people and takes a portion of their earnings. Ride-share drivers may not have to purchase sales merchandise but they do have a great many costs that include: the purchase or rental of a vehicle, wear-and-tear, value depreciation, gas, maintenance, complimentary candy, gum or mints, air fresheners, cleaning supplies, insurance, oh god the insurance, the list goes on and on and on. This would not perhaps be too bad if the pay clearly and significantly outweighed these costs but in depth analysis shows that this is just not the case. The youtube channel ScIQ published a great video breaking down the pay versus costs of Uber specifically back in 2016 and Cracked did an even better one all the way back in 2015, but the issues these videos bring up are no less prevalent today.

All told before costs my income with Uber was only about eleven dollars per hour. After gas alone my profit was down below minimum wage. Once taxes and all the other costs are factored in that profit falls to precious little.

It is thus little surprise that Uber seems to be struggling to recruit drivers and has recently started a program of a hundred and eighty days of change. Unfortunately after experiencing several months of those changers I was still left seriously underwhelmed. Sure Uber seems to be trying to make things easier and more convenient for their drivers, provide cost-cutting incentives and regular bonuses but even so none of these factors change the simple reality that the total cost to the rider and pay to the driver is just too low to balance out costs. Modest weekly bonuses are at best a band-aid stuck over a gaping gut wound, it is just not enough.

If all of that was not enough another recent addition to the ride-share business model also includes elements of pyramid schemes within the greater transportation business. It is common for ride-share companies to offer a sign-up bonus for using an existing driver's personal code, which also provides the driver with a one-time payment. Thus drivers are incentivized to recruit new drivers for a financial reward. While similar to the pyramid-scheme recruitment this sign-up bonus system is a one time payment but Uber has recently dived directly into full pyramid scheme territory with UberFLEET. This remarkable new system launched by Uber allows a driver-partner to recruit and manage additional drivers and vehicles and take a cut of their earnings. If Uber was not a scam before then incorporating such an infamous business scheme certainly pushes the whole concept over the line.

After just a few months with Uber I had to quit, a process that was seemingly made as tedious, difficult and petty as humanly possible. The profit just is not there and the costs are too high. Uber and other ride-share apps have banked their entire existence on a muddy gray area of business where they can essentially run a cab company while pretending they are just a technology company. These companies can hire all the drivers, set all the rates, handle all the money, and dodge the vast majority of the costs and regulations and yet still pretend they are just providing an app service. Perhaps if prices were negotiated by the drivers individually and the app was simply a one-time or even a monthly charge rate to use then Uber and other ride-share companies might have a legitimate argument but this is just not the case. One way or another ride-share companies take advantage of their drivers to make money as a cab company without the huge overhead costs.

At the end of the day I am just left sad and frustrated. There is a very real need for improvements to the transportation industry. Traditional cabs are expensive, dirty and uncomfortable. Ride-share companies offer a cheaper service with vehicles that are often cleaner and nicer than the old, lower-end of the market vehicles of traditional cab companies. The problem is that what profit exists with these companies does not really make it to the drivers and long-term I can't see ride-share surviving on such a broken scheme. Sooner or later ride-share companies are going to have to decide, are they an app company or a cab company, I think we all know which one they are but the line has to actually be drawn at some point. Hourly pay rates, shared vehicles, in-house mechanics and whole-sale fuel prices are all ultimately going to become necessary if these companies want to continue operating. The insurance cost bump alone for operating my own vehicle as a commercial transport was five hundred percent. Something needs to be done to shift the costs from the employee to the employer here, until then Uber, and ride-share companies as a general rule, really do kinda fall into the pyramid scheme scam company territory.

I guess the next best hope in transportation are these newfangled self-driving vehicles, here's hoping those work out better.