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Speaker: Confessions of an Uber Driver II: How we doing?

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  • BenWilson, in reply to David Hood,

    Actually, we (the association) have done quite a lot of research into this. Many drivers are IT people, and have explored the API for all sorts of reasons. I can tell you that there's no way to find that information out. It's been carefully engineered not to keep persistent tags that link cars in a way they could be catalogued or tracked.

    We were mostly just hoping to find out how many drivers are on the road. But it's can't be done. There's no way to eliminate overlap between areas. The API does not actually give the longitude and latitude of the cars that you can see on the rider app.

    Perhaps some very, very aggressive data mining could do it. But it would stick out like a sore thumb to their countermeasures that enforce the Terms and Conditions of access to the API.

    What we have collected that is interesting, though, is a time series on all the surge data around the country.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • goforit,

    This is where some experience of demand plus an educated guess comes in, looking at the Uber user app and judging satruation of various areas at certain time I would have a good guss at approximately 1800 Uber vehicles in Auckland. The actual amount of course would vary depending on day/night etc.

    Auckland • Since May 2016 • 314 posts Report Reply

  • BenWilson, in reply to goforit,

    The app shows you some of the cars in a neighborhood around the pin. We don't know if that's all of them that would show at that level on the map. The density of them varies from location to location and from time to time so we can't make assumptions about the way that it spreads out. We can't query the entire map of any large city because there's just too many areas to get the detail on. We can't see drivers who are currently carrying passengers. We can't see anyone who has turned the app off temporarily, perhaps waiting for a surge.

    In short, I don't think you can put any level of confidence on that claim. You've got no way of validating if it's correct. It's a pure guess. Who can say if it's a good guess? I suggest Uber can, but no one else.

    What we do know is how many drivers have signed up, roughly. Before April, Uber claimed it was about 2000. After then, NZTA has sent 2400 letters out to Uber drivers signing up under their non-compliance regime based on the background check. So we're in the territory of 4000 drivers. We don't know how often they work, what the average hours worked are, where they work, when they work. It's a fair guess that they mostly work the busiest times, but there's always people working somewhere.

    We also don't know much about churn. Lots of drivers just stop working once they discover that it's not viable. For a great many, it's a stop gap for other work, and they get a real job and move on. Others rove in and out as their other casual work goes up and down. But the numbers? Even Uber probably doesn't know. They don't ask about other employment.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • goforit,

    hi Ben, upon reflection you are proberly right, I only been looking at things from midday to dinner time and to put the past taxi numbers into the mix, taxis numbers drasicaly increase in the evening/night over day time numbers especially on friday and saturday by about twice. Also taking in the mix there was approximately 4,000 taxis in Auckland whicle now pretty much at a stand still there could be between 3,000 to 4,000 Uber vehicles. The number of non compliant drivers and vehicles could be any ones guess, at least 50%.

    Auckland • Since May 2016 • 314 posts Report Reply

  • BenWilson, in reply to goforit,

    I'd think the taxi drivers are likely to be much more committed to their work, though, having made a much more significant investment. Uber drivers take it or leave it at whim if they're part timers doing it for pocket money, but some guy who has bought a taxi, signage, a meter, a camera, paid into some organization, paid their compliance, etc, is much more likely to be out on the road a lot more. Also, they still have the big advantage of being able to cruise for hire and park on taxi stands, and tout in the street for business.

    So it's hard to say what the comparative numbers are. But I can say anecdotally that the Uber drivers are extremely busy. I'm sure you know this anyway, if you've done some of it. There's no waiting around touting on the side of the road, jockeying for the best spot on the rank. Just doesn't happen. You pull up nearby or just cruise slowly along, and you don't wait long for a ride when its busy. Passengers know they have to find you, they get really good at it.

    So 1 Uber driver can probably significantly disrupt the work of several taxis.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • goforit, in reply to BenWilson,

    Especially now there is so many unlicenced vehicles and drivers completing in the same space.

    Auckland • Since May 2016 • 314 posts Report Reply

  • Sacha, in reply to BenWilson,

    park on taxi stands

    how long before Uber tries that on?

    Ak • Since May 2008 • 19745 posts Report Reply

  • BenWilson, in reply to Sacha,

    how long before Uber tries that on?

    There's no need. Ubers can't take street hails even if they wanted to. They don't carry any means to process payments other than the app, so unless the ride was booked in the app, the driver can't get paid for it. So you really, really don't want randoms jumping in the car. What if they won't get out, after stuffing around for a bit trying to work out how to book you as the closest driver? Offering to pay, and then expecting to do it with a credit card at the end of the trip, or with a $50 note? It's not worth the grief for drivers, unless they are actually also taxis. Which a great many Uber drivers/vehicles are.

    But if they are a taxi, then they're allowed on a taxi stand. It wouldn't be Uber trying it on. And I'm yet to hear of the taxi driver that would prefer to use the Uber meter if someone could be put on the taxi meter, at twice the price.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Sacha,

    not obvious what Uber's competitive advantage is

    .. concludes NZ investment analyst Fisher Funds.

    Ak • Since May 2008 • 19745 posts Report Reply

  • BenWilson, in reply to Sacha,

    That's a reasonable analysis. I'd go further and say that their only competitive advantage is that they've aggressively purchased market share. I don't think that's widely regarded to be a strategy that works on its own.

    In so far as locking in drivers is concerned, they're worse than vulnerable. They have very much alienated their driver base, and the regulators in most countries that they operate, such that they may face higher barriers to entry than competitors would. Drivers in NZ are rushing to sign up with every other service they can, and Uber is only maintaining dominance by being the bigger player, by having got there first and bought customers.

    Drivers have nothing at all to lose by signing up for alternative services. Zoomy has been particularly popular here. They have a ton of excess capacity, as far as I can tell.

    Certainly Zoomy's promotion led to a surge in rides. Drivers signed up were reporting that they were getting around 1-2 Zoomy rides per shift. Enough to keep them running the service on their phone.

    They'll probably live or die on whether they can get capital to just keep the race to the bottom price-war going. They have done that by wearing the cost themselves rather than passing it onto drivers so far. Can they sustain it?

    If I were choosing to invest in one of the other as a kiwi who really likes the idea of the app based ride sourcing market, personally I'd be betting on one of the local alternatives. For ethical as well as financial reasons. Their model is basically the same as Uber's without the giant speculation into driverless technology (which again could be simply yanked from under them by competitors the moment it's actually ready, whichever century that happens in), and the massive alienation of regulators and drivers.

    But all of them are vulnerable to the possibility of a driver funded cooperative open source model. These are already out there - and they could explode into the market blowing the rest away completely. We're talking about a not-for-profit model. This software is not rocket science at all. I'm envisaging something like the Apache web server or Drupal, but for app based ride sharing. A highly configurable base system that can be adapted to local needs for a comparatively small set up cost. Whoever writes it will have plenty of income from supporting the systems everywhere, without the massive need to take multinational corporate profits.

    THAT would, IMHO, be an actual revolution in the model of work in this industry, and it could easily be adapted for many other parts of the gig economy. The devil is all in the detail. The only complication is how rides would be assigned out - on what basis? Offered to nearest? Or a bidding system? I envisage that a fair rating system both ways could make it an extremely competitive system. But it would need an organizational compliance gateway of some kind to ensure the minimal level is kept. In this country the detail that absolutely has to be sorted out is the damned law. The minister is endlessly promising that law changes are coming. A timetable for that, and detail about what has been firmed up for the changes. These things are 100% necessary to enable technological change. At the moment the limbo served up is helping no one but Uber, who don't give a crap about the law. It's coming across as deliberate organizational favoritism.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • goforit, in reply to BenWilson,

    At the moment the limbo served up is helping no one but Uber, who don’t give a crap about the law. It’s coming across as deliberate organizational favoritism.

    This is what preventing any common sense approach to our industry and the problems around compliancy. I personally beleive when the proposed changes to the regulations are put into law they are not going to be the ones proposed, I now think its going to be a free for all situation around Uber.

    Auckland • Since May 2016 • 314 posts Report Reply

  • Sacha, in reply to goforit,

    This govt has a track record for putting business interests ahead of public interest, so yes. Unless current taxi companies lobby/pressure English, Joyce and Bridges as forcefully as Uber has done.

    Ak • Since May 2008 • 19745 posts Report Reply

  • BenWilson, in reply to goforit,

    Yes, I don't have a problem with there being proposed changes coming. I have a problem with the softly-softly approach being applied inconsistently to favour only one company, whilst at the same time brutally targeting the actual workers for that company. It's hard to think of a more iniquitous way to approach this issue. Hurt the little guy, and all the law abiding rivals, and let the big multinational that pays no taxes get away with inciting massive scale violations of the law and profiting from that.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • BenWilson, in reply to Sacha,

    Unless current taxi companies lobby/pressure English, Joyce and Bridges as forcefully as Uber has done.

    Which, of course, no local company has the power to do. For starters, any local company can be brutally punished for what Uber is doing – the legislation is designed for that, and it can and has been used that way in the past. But more importantly, Uber has huge resources and a willingness to litigate everything.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • goforit,

    Taxi companies don't have the resources or the membership anymore to pressure anyone, at the moment drivers are leaving the ATOs they have operated under and working under Uber because this is where the work is. The choice the drivers have now is if you remain loyal and compliant you don't feed your family but turning your back on compliancy you at least earn something, not what you should be earning but its better than nothing.

    Auckland • Since May 2016 • 314 posts Report Reply

  • Sacha, in reply to BenWilson,

    Hurt the little guy, and all the law abiding rivals, and let the big multinational that pays no taxes get away with inciting massive scale violations of the law and profiting from that.

    also sounds like this govt's MO, now that you mention it ..

    Ak • Since May 2008 • 19745 posts Report Reply

  • Rich of Observationz, in reply to Sacha,

    Well, their transaction costs are minimal (server and bandwidth). Their customer acquisition costs, as for every global 'tech' firm are high, but can be viewed as a one-off (once a customer has Uber on their phone, they'll keep using it until either Uber gets banned in their country or they have a nightmare experience).

    Their problem is that they are illegal, and as I think I mentioned before, the strategy for dealing with this is predicated on countries (e.g. AU and US) where the taxi industry is both an entrenched monopoly and a cash-cow for local government. Those industries/governments aren't going to relinquish this lightly (by moving to an NZ model where any qualified person can operate a taxi service) so Uber's approach is to try and drive taxis out of business so they can negotiate legalisation from a position of strength.

    And something being illegal doesn't mean it isn't a good investment. Indeed, since you can't buy stock in the Medellin Cartel, Uber has the advantage of rarity in appealing to certain investors.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • BenWilson, in reply to Rich of Observationz,

    Australia has pretty much killed the monopoly in the last month. Huge move on their part to legitimize Uber, although the devil will be in the details. If Uber is prepared to take the government here on over the mere $1500 or so in compliance costs per driver, I'll be pretty surprised if Ozzie betters that.

    The problem there, as here, is that when the government finds under legal advice that they can't touch Uber, then there is no reason for Uber to comply to any law at all they don't like, no matter how minor.

    The question in my mind is how it is that they can't touch Uber. It's quite a pathetic situation, really, that a company can essentially do business completely and utterly unimpeded by the law of the country in which they are doing it. I can't think of any other precedent for this, where the refusal to follow the simple rules of NZ has been met with such inertia at a high level.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Rich of Observationz, in reply to BenWilson,

    It's not impossible, it's that they are unwilling.

    The government should, I think, be able to injunct them to desist. If they then refuse, then they have the power to block or garnish their credit card payments. Sure, the bank's will whinge at this and maybe claim it puts them in breach of their agreements with Visa/Mastercard - but statute law always trumps a contract, or at least, that's what I've been taught.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • BenWilson, in reply to Rich of Observationz,

    but statute law always trumps a contract, or at least, that’s what I’ve been taught.

    A way of saying you can't make contracts to break the law?

    I don't know if blocking their credit card payments would be possible. The accounts are quite possibly not even held in NZ. But can the NZ banks be ordered not to process payments to specific offshore accounts? In which case only people using a foreign credit card could keep slipping under the radar.

    But I'd think injuncting the business would mean that if it kept operating that all premises could be entered and anything there seized, and all staff held to the injunction. Even then, this might not stop Uber operating here, but it would hamper their ability to sign up drivers. But continuing to operate under those conditions is really, really asking for it.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Rich of Observationz, in reply to BenWilson,

    A way of saying you can't make contracts to break the law?

    Exactly. (Well, you can, but the illegal bits aren't enforcable).

    But can the NZ banks be ordered not to process payments to specific offshore accounts?

    They can be ordered to do anything (almost). Firstly there's regular civil law such as garnishee orders, and then there's the Reserve Bank's powers.

    It's a fine point, but I'd argue that when an NZer makes a credit card payment to Uber, their bank holds the funds for the benefit of Uber until they settle with the credit card system. Those funds are a debt of the bank to Uber and can thus be garnished ( a court order diverting funds to a creditor, in this case the NZ government).

    Of course, the banks would claim stopping this money is hard. They'd probably have to write some special code that recognises and stops Uber payments - but having to pay your IT contractors money is not a reason for not complying with a court order.

    (and presumably they could use the same method US banks use to block some gambling transactions: http://www.reviewjournal.com/business/call-raise-fold-denied-banks-reject-use-plastic-online-gambling-sites)

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • goforit,

    Hi all, I see the bill to amend the transport act in regard to small passenger services was introduced in parlament today.

    Auckland • Since May 2016 • 314 posts Report Reply

  • BenWilson, in reply to goforit,

    Excellent. Do you have any links on that? Keen to follow the progress, to see what's coming.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Rich of Observationz,

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • BenWilson,

    Wicked, Rich, ta.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

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