Tech Brew Ride Home - The Ride Hailing Industry From The Driver's Perspective With The Rideshare Guy

Episode Date: March 24, 2019

Not too long ago I recommended The Rideshare Guy podcast because I’ve fallen in love with it. That and his website, the Rideshareguy.com. Harry Campbell allows us to look at a space from a different angle than we usually do on this show. So, here’s a great conversation with Harry about the rideshare driver community! What they think about the upcoming IPOs, what they think about the ridesharing platforms generally, who might be the driver’s favorite, what do they think about self-driving cars? TheRideShareGuy.com Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to another weekend bonus episode of the Techmeme Right Home. I'm Brian McCullough. All right, this is part two of my make-good on not having podcast recommendations on Fridays recently.

Not too long ago, I recommended the Rideshare Guy podcast because I've fallen in love with it. On that show and on his website, the rideshare guy.com, Harry Campbell, allows us to look at a space in tech from a different angle than we usually do on this show. So here's a great conversation with Harry about the ride share driver community, what they think about the upcoming IPOs, what they think about ride sharing platforms generally, who might be the driver's favorite among the platforms, and what they think about the promise or peril of self-driving cars. If you haven't done it before, look up The Ride Share Guy podcast and The Ride Share Guy.com. The big news coming down the pike again from the way I'm covering this space is the upcoming IPOs for the likes of Lyft and Uber. How does the driver community feel about these IPOs? Yeah, well, you know, I've been getting a ton of questions over the past six months from drivers, kind of just wondering what's going on with the IPOs and really more than anything,

wondering how they can get in on the IPOs. And I think that's kind of a common theme for drivers, is that, They feel like they're definitely a part of this company, but they're not always rewarded financially the same way as the employees or even the valuation of the company. So I think with Lyft's recent announcement that they're actually going to be giving cash bonuses to their most loyal drivers, so drivers who hit 10,000 rides would get a $1,000 cash bonus that they could then go and invest in the IPO. It was sort of a nice surprise for a lot of drivers and not a ton of them qualified because it's pretty tough to get 10,000 rides on Lyft. But for the ones that did, they were definitely, it was a nice surprise. And then Uber is at least making noises of doing something as well. I know that they haven't officially filed yet, but I think they've been making noises about maybe

even allowing people to buy in at the IPO price. Yeah, and so that's exactly what Lyfted. Lyft allowed drivers. They gave them a cash bonus, and drivers could just take the cash or they could buy in at the IPO price. And it sounds like from reporting in the Wall Street Journal that Uber is going to do the same thing. And it wouldn't surprise me if Uber made their program actually a little bit better than Lyft, because

Usually these companies like to copy each other, but also one-up each other when it comes to programs and rewards for drivers. So I think we're actually going to see a lot more drivers qualify if the threshold is 10,000 trips on Uber, for example, since even though that's a lot of trips, you have a lot more demand on Uber. So I think we'll see a lot of drivers qualify for that. What about even on the level of, I don't know if pride is the word, but the driver community is there some sort of like, yeah, man, our industry is almost being valid? in a way. You know, I think that there really isn't, and I think that it kind of is one of the unique things about some of the bigger tech companies these days, and especially in the gig economy, where you have a lot of income disparity between the people working at the companies. I mean, Uber has thousands of employees and Lyft has a few thousand employees, but there's millions of drivers for

Uber and Lyft around the world. And, you know, relative to the employees at the company, they're very low paid, you know, and there's a big disparity. So I don't think there's that that same kind of buy-in, you know, partly because they're not getting the financial reward or the upside, but also I think that they just don't feel, you know, that same pride that maybe an employee who has spent the last few years working at the company would. Well, as I just said to you off the air, the reason I'm so fascinated by your podcast, and actually I've been reading the website as well, is that I feel like I only ever look at this industry from one side of it, from the, again, the company side like you're describing.

And so it's so fascinating to look at it from the driver's side. And even from the point of view of like, you're right, this is sort of like a unique model where you guys are sort of these independent entrepreneurs in a way under this umbrella. But so let me just ask some probably naive outsider questions, if you'll forgive me. Let's do it. What is the community's relationships with these big companies generally? I think you've kind of already gone into it a bit. Is it a genial partnership? Is it somewhat antagonistic?

Is it sort of like, we'll take what we can get from you, but we've got to fight for every scrap? Like, what generally is the relationship? Yeah, I mean, I would say generally there's sort of an inherent tension between the platforms like Uber and Lyft and the drivers. Uber and Lyft, I think, I've really clearly showed that, you know, as you might imagine, they're in this business for themselves. They kind of care first and foremost about their shareholders and their investors and the employees at the company. And I think that drivers, I wouldn't say that they've been looked at as disposable commodities, but they're definitely not valued in the same way that other aspects of the business are. And I think that that definitely comes across as a driver. You know, drivers definitely overwhelmingly, the two reasons when we survey a thousand drivers every single year in our annual survey, the two main reasons why they're driving ride share is for the money and also the schedule flexibility. So, you know, these drivers understand that this is a unique work opportunity and, you know, they do get to. take advantage of being able to drive whenever and wherever they want, but they kind of also know or they realize pretty quickly that Uber and Lyft don't necessarily have your back. I mean,

you're actually running your own business as an independent contractor, and really no one cares more about your business and no one cares more about your money than you do. It just takes some drivers a little bit longer to realize that than they might have hoped for. Is there some player out there that drivers do feel maybe is more on their side, more has their back? Yeah, I mean, even from the start. You know, Lyft, I would say, has always been the more driver-friendly option. And when we kind of survey drivers who are working for both services and ask them which service, they're more satisfied. Lyft is usually the clear winner. Yet the kind of interesting thing is that drivers tend to make more money and get more rides with Uber. So they sort of have this situation where

Uber, since they're the dominant market share player, a lot of drivers by default drive for them because they need to get trips and they need to make money. Yet a lot of them do prefer driving for Lyft. I think we've seen both companies kind of become more and more similar over the years because as you scale, it's sort of hard to keep that, you know, driver-friendly feel. And there've been a couple companies like Juno and New York that has really come out and tried to be the more driver-friendly option. But it's been tough because I think that it turns out that passengers are pretty important, pretty important too. And, you know, while you might want to keep drivers happy, it's sort of, you need to have those passengers to request rides in order for the drivers to make money.

Well, and Juno, I think, is apparently circling the drain, right? I think I did a segment out recently. Yeah, I think so right now that things are not looking great for Juno. You know, they use sort of a strategy of heavily priced discounting for riders, and they were able to gain some market share in New York, but it seems like it may not have been that sustainable, and now it seems like they're losing quite a bit of money and in need of a buyer.

So if anyone is listening and wants to pick up a ride share company, there's an opportunity out there for you. So, and you've already sort of gone into this a bit, too. My assumption is, you know, from when I hail a ride, is that it seems like everybody will do any service, even via here in New York. So is that it? Is that it? Is like everybody basically always got all the services on and you just catch as catch can? Yeah, I mean, for the most part, you know, one of the big things that I recommend to drivers is to sign up for at least two services. So the most obvious choices would be Uber and Lyft.

But in New York, there's other options like Via and Juno. And of course, there's also food delivery options like Postmates and DoorDash. So that's one of the nice things about being an independent contractor is that you do have the ability to basically work for competitors. And I mean, there are even apps out there like Maestro, for example, is an app for drivers that allows that sort of automates your Uber and Lyft driving. So it automatically logs you onto both apps and accepts trips for you and logs you off the other app. So there's sort of some cool tools and services out there that actually make that dual and even triple apping for drivers a lot easier. I keep hearing that Uber Eats especially has quietly become a monster business. From the driver's side, are you all seeing that?

That what used to be maybe just filling downtime can actually be increasingly a part of your overall picture? Yeah, well, what's interesting about Uber Eats on the driver's side is that it's essentially just kind of a one-tap sign-up, right? So if you were to go sign up for Postmates and DoorDash, you have to go through their whole onboarding process and get approved. But since UberX drivers are obviously already approved, you can very easily add on UberEats. So when we survey drivers and talk to drivers, a lot of drivers are UberX and UberEats drivers. But that's sort of how they use it. They really kind of only use it in their downtime because typically you can make more with rideshare than you can with delivering food. And so we definitely see some drivers, you know, kind of going for that food delivery option, but they also kind of report earning a lot less on Uber Eats.

So I do, on the driver's side, I do still sort of see it as a stopgap or just filling downtime. Well, and this is, you know, maybe from like a macro level anecdotally. I always wonder, because you've been doing this for many, many years now, over time are you seeing, are things still growing? And again, this is almost anecdotal, but like, would you be able to report, well, two years ago, it was super easy to fill a really great shift. And now it's sort of saturated and it's harder. Like in macro trends, where is the market right now? Yeah, I mean, I've been driving for Uber and Lyft for almost five years now, which makes me pretty old in ride share years and probably talk to over 50,000 drivers in that time period. So at a macro level, I think one of the clear trends we've seen is that drivers are making less these days.

than they were at the beginning. And I think when Lyft released their financials, you sort of saw that, that these companies are losing a lot of money. In fact, they're losing money on every single ride. And so they sort of have to and make sense that, you know, they've been trying to pay the drivers less and less so that they can take a bigger portion of the fare. And as far as, you know, what drivers call, they call it saturation, right? So how many drivers are out on the road? I think there's this feeling that there's always, you know, it always feels like there's more drivers on the road. But in the biggest cities like L.A., San Francisco, Chicago, New York, you can still get rides pretty easily. It just may not be for the pay levels that you've seen in the past.

So I definitely think that the demand is still there and growing. And, you know, one of the tough parts about this job from a driver's perspective is that there is a lot of turnover. You know, there are a lot of things that Uber and Lyft struggle with. And so that means that they're constantly hiring new drivers. So there isn't this huge glut of drivers, you know, just sitting there always waiting for rides. Well, to be clear, so what you're saying is the companies are paying less, which I guess, you know, is almost an inevitable, inevitably, especially maybe after the IPOs and they're going to have to go for profitability. But I'm asking, is the volume that you're seeing, is the demand from writers as strong as it was five years ago?

Yeah, I think the demand is definitely as strong and it may be even better. You know, we've sort of seen that Uber and Lyfts ridership has continued to grow. And that's kind of the unique thing about these marketplace businesses is that, you know, as ridership grows, they kind of need to balance it on the supply side. So I think volume is definitely at least the same, if not better. I'm assuming that you talk to drivers overseas as well. Just paint a picture for me. Are there huge differences operationally if you're driving in, say, Thailand or China or wherever for these other companies that maybe aren't Lyft and Uber? And maybe are there like cultural differences as well?

Yeah, the international ride share scene is very interesting because there's some big cultural. There's some big sort of operational and even logistical challenges here in the U.S. where personal vehicle ownership is very high. Almost every UberX driver that you meet is going to be owning their own car and driving it or renting or leasing it. Whereas in other countries, you know, driving a car is actually sort of really only reserved almost for the rich, you would say. And so a lot of UberX drivers in other countries will actually go through a fleet owner. And in this case, it's really just kind of like the old taxi medallion set up where you're renting a car by the week. And it can be quite costly or quite expensive.

So that's sort of some of the issues that, you know, drivers in other countries face. And I know that in certain parts of the world, it definitely, you know, kind of some of the cultural issues can take place too. And there's there are, because I was reading this on your blog this morning, I think. there are leasing companies and things like that for drivers here in the U.S. as well, right? Yeah, this is actually one segment that we've seen kind of explode, to be honest, in the past year or two. Uber's official partner is fair,

so they used to run a program called Exchange Leasing. Lyft has a program called Express Drive, and essentially what these programs are are flexible rideshare rentals that come with unlimited mileage, included maintenance, but they're usually pretty expensive anywhere from $180 a week to $250 a week. Drivers are responsible for gas, but that's about it. But you can imagine that for someone who doesn't own a car, they may not also have a job. And so any of these kind of flexible products, you know, kind of vehicle products that can get them into a car and driving for Uber and Lyft,

it's sort of a good deal for them in that sense, as long as they don't mind working full time and working 40, 50 hours a week. So this is one kind of challenge, I think Uber and Lyft have seen as they've really churned through a lot of drivers. The Uber in a recent survey, they actually reported that two-thirds of all drivers are quitting after just six months. And these numbers have actually gotten worse over time. You know, usually companies want their retention to get better, but Uber's actually headed in the wrong direction. So it does seem like in a sense that Uber and Lyft are both having to kind of scrape deeper and deeper at the bottom of the barrel to find drivers. Right. And I saw another post on your blog.

this morning about like wondering if Uber and Lyft value new or experienced drivers more. So if they're having, I guess if they're having incredible turnover, the answer would be they would want if they would want a veteran that's been doing it for five years or maybe not. What was the result of that sort of poking around? Well, you know, that's sort of the kind of unique thing. You would think that Uber and Lyft would want the more experienced drivers. They would want the people who, you know, are good at their job. You know, I mean, there's definitely driving rideshare isn't rocket science, but it definitely takes some practice and some skill to be a safe driver and be efficient at navigation.

I'm sure we've all had our fair share of terrible ride share drivers. So I think everyone can empathize. But, you know, that's sort of what it feels like for a lot of veteran and more experienced drivers. It does feel like the company's value new drivers more. And kind of how that manifests itself is that in a lot of cases, new drivers are offered sign up bonuses to start with the services. Sometimes the weekly bonus offers that are sent out, there's no guarantee that our veteran driver will get a better offer than a new driver.

So there are definitely a couple instances where it feels like, you know, even though you've been working for the company for maybe four or five years, you have 23,000 trips like one of our contributors. He got deactivated by Uber and Lyft for a simple clerical error, and it took him three months to get re-back on the service. So, you know, you can definitely see

how some of these veteran drivers feel like the companies don't care about them. Is there any theories for why, that would be true if it were true that they prefer rookie drivers? I mean, some of the theories from drivers are that rookie drivers don't know any better. You know, one of the challenges about driving for Uber and Lyft is you obviously have the income, but you also have to think about your expenses. Running a vehicle is expensive.

You know, Uber had this exchange leasing program, and they ended up losing $9,000 a car and did 50,000 leases. So you can sort of see that even, you know, kind of the MBAs, that Uber are messing up, you know, kind of the cost of running and operating vehicles. And so for a lot of drivers, you start to rack up the miles and you will put depreciation on your car. And these are expenses and maintenance that doesn't come up right at the start. You'll have to pay for gas. But in six months, when you need a new break job, you may not have factored that into your calculations.

Finally, and please understand the spirit I'm asking this. I don't mean to be glib about this. Sure. How does the driving community think of the concept of self-driving vehicles? autonomous vehicles, do you all feel like, well, this is an industry that has a timeline on it and this might not be an industry 10 years from now, 20 years from now? Yeah, you know, I think self-driving cars are definitely on the mind of a lot of drivers. And, you know, we often get questions from drivers that sort of say, hey, is this, you know, is this gig going to be around forever?

So it's definitely something that is, you know, drivers are aware of. But I think that self-driving cars are so hyped up in the media that it sort of seems like they're a lot closer than they are. And I know that you guys had a recent interview with Tim Lee, a reporter at Ars Technica, who's probably one of the best, you know, kind of reporters out there on self-driving vehicles. And I think that, you know, when you talk to the experts or people who actually know what they're talking about, I think commercial use of self-driving vehicles in kind of like a ride share setting is very far away. So while drivers might think about it, they might worry about it, they're not going out. and saying, oh, you know what, self-driving cars are around the corner. I'm going to quit and I'm going to go find something else. They may be doing that for other reasons just because they're not seeing, you know,

the opportunity to grow their career as a ride share driver, but I don't think they're doing it right now because of self-driving cars.