Friday, August 22, 2014
The Iceland two
Last weekend, it was kind of cool. My first repeat ride was two of the interns from Iceland who rode with me a few weeks ago.
Posting has been light
Travel, family and work have cut into the driving time. I have been saving up some topics for future posts.
Tuesday, July 22, 2014
Heart Palpitation
I popped on line for a while today to check out my new telecomm configuration - still a few bugs there.
I got a hail from Doctors Hospital - quite a ways away. Usually there is an Uberx driver in that area. However, this was meant to be. I picked up a young man who had been sent for to the emergency room in an ambulance with heart palpitations and high blood pressure. It turns out they prescribed the same generic medication I take for may heart palpitations. We had similar experience with palpitations. I shared my experience with 30 years on this class of medication (beta blocker) and several years with this particular medication. This young man went from fearful and uncertain to facing the his future with much more confidence.
Priceless.
I got a hail from Doctors Hospital - quite a ways away. Usually there is an Uberx driver in that area. However, this was meant to be. I picked up a young man who had been sent for to the emergency room in an ambulance with heart palpitations and high blood pressure. It turns out they prescribed the same generic medication I take for may heart palpitations. We had similar experience with palpitations. I shared my experience with 30 years on this class of medication (beta blocker) and several years with this particular medication. This young man went from fearful and uncertain to facing the his future with much more confidence.
Priceless.
Insurance is fixed!
Uber has just announced an update to its insurance program that addresses every concern I had.
1. The insurance is active from when I accept a ride until I end the ride.
2. It is primary when it is in effect. If I have an accident when it is in effect, I do not have to first submit a claim to my company.
This is better than I had expected Uber to do on its own - I thought the insurance industry would have to do more.
Assuming implementation is good, Uber has done everything it can in the insurance area.
I think this will expand the pool of part time drivers.
Good on you - Uber!
1. The insurance is active from when I accept a ride until I end the ride.
2. It is primary when it is in effect. If I have an accident when it is in effect, I do not have to first submit a claim to my company.
This is better than I had expected Uber to do on its own - I thought the insurance industry would have to do more.
Assuming implementation is good, Uber has done everything it can in the insurance area.
I think this will expand the pool of part time drivers.
Good on you - Uber!
Sunday, July 13, 2014
The Iceland three
The fun part about driving for Uberx is meeting the people. Last week I had the privilege of driving a significant proportion of the citizens of Iceland. Three young people in the area for extended internships.
While not all fares are talkative, the ones who are are fun.
Later, I drove a young lady whose parents were clearly doing well here yet wanted to return to Eritrea when they retire.
While not all fares are talkative, the ones who are are fun.
Later, I drove a young lady whose parents were clearly doing well here yet wanted to return to Eritrea when they retire.
So, how much am I making per hour?
Realize that every driver is going to be a little bit different. I am more focused on enjoying myself than making money. That effects how productive I am per hour. I hang out in areas where there are fewer fares. I take a couple of minutes between fares to make sure I am ready for the next fare. I probably drive more between fares than the typical Uberx driver.I am a part time driver with a full time day job.
So, with that caveat in mind and including the Samsung Note 3 and related T-Mobile plan I purchased to provide GPS, I have from an IRS perspective, lost money driving for Uberx. If I just include the $0.56/mile IRS mileage expense deduction, I am making $7/hour. That deduction covers everything related to the vehicle including the the insurance.
The details matter.
I charge off $0.56 per mile driven while driving. This includes miles in which I am not online. For example, I may be returning from a fare, on an expressway, and in and unfamiliar area so I don't want to get ride requests. So I go offline. The miles driven per fare has a significant impact on the hourly rate. Drivers making their living with Uberx are probably much more efficient with their miles.
The $0.56/mile probably includes about $0.31 variable expense - mostly gas and roughly $0.25/mile capital expense. That variable expense also includes things like the $50 I paid to replace a tire after hitting a particularly nasty pothole. I seem to be running 15-18 MPG overall. At $3.80/gallon, that is about $0.24/mile for just gas. The variable expense also includes all vehicle maintenance.
The $0.25/mile capital expense is a deduction without a corresponding out of pocket expense. I am going to own the car anyway. All driving for Uberx does is, possibly, shorten how long I will own it. If I take that out of the expense calculation and only include $0.31/mile operating expense, then my hourly net jumps to almost $11/hour. This looks better for leisurely, part time drivers like me. But only as long as it is fun.
The other thing to consider is what if I were a more efficient driver? For example, if I used 5% fewer miles for the fares I generate, that improves the net by about $0.25/hour. If I generate 10% more fares per hour, then that improves the net to about $12.50/hour.
According to the Uber report I receive each week, my fares/hour consistently rank about 20% below the top drivers. So, if I were a top driver and if I was 5% more efficient with mileage then I would be making net $14.25/hour use the operating expense model ($0.31/mile) and about $10.55/hour using the total mileage expense model ($0.56/mile).
Uberx drivers are independent contractors, so they have additional tax consequences that are beyond the scope of this post.
So, with that caveat in mind and including the Samsung Note 3 and related T-Mobile plan I purchased to provide GPS, I have from an IRS perspective, lost money driving for Uberx. If I just include the $0.56/mile IRS mileage expense deduction, I am making $7/hour. That deduction covers everything related to the vehicle including the the insurance.
The details matter.
I charge off $0.56 per mile driven while driving. This includes miles in which I am not online. For example, I may be returning from a fare, on an expressway, and in and unfamiliar area so I don't want to get ride requests. So I go offline. The miles driven per fare has a significant impact on the hourly rate. Drivers making their living with Uberx are probably much more efficient with their miles.
The $0.56/mile probably includes about $0.31 variable expense - mostly gas and roughly $0.25/mile capital expense. That variable expense also includes things like the $50 I paid to replace a tire after hitting a particularly nasty pothole. I seem to be running 15-18 MPG overall. At $3.80/gallon, that is about $0.24/mile for just gas. The variable expense also includes all vehicle maintenance.
The $0.25/mile capital expense is a deduction without a corresponding out of pocket expense. I am going to own the car anyway. All driving for Uberx does is, possibly, shorten how long I will own it. If I take that out of the expense calculation and only include $0.31/mile operating expense, then my hourly net jumps to almost $11/hour. This looks better for leisurely, part time drivers like me. But only as long as it is fun.
The other thing to consider is what if I were a more efficient driver? For example, if I used 5% fewer miles for the fares I generate, that improves the net by about $0.25/hour. If I generate 10% more fares per hour, then that improves the net to about $12.50/hour.
According to the Uber report I receive each week, my fares/hour consistently rank about 20% below the top drivers. So, if I were a top driver and if I was 5% more efficient with mileage then I would be making net $14.25/hour use the operating expense model ($0.31/mile) and about $10.55/hour using the total mileage expense model ($0.56/mile).
Uberx drivers are independent contractors, so they have additional tax consequences that are beyond the scope of this post.
Saturday, July 5, 2014
Some people loath DC taxis.
Obviously, as an Uberx driver, I get a lot of pro Uber and anti taxi riders.
One rider last night was passionate in his loathing for DC taxis. He said we would like to have every person of color in DC use Uberx. He had a number of stories about taxis ignoring him on the street or not making pickups. This an emotional tirade from a man who was otherwise having a good day.
Last week I had a wonderful lady as a rider who was not emotionally but very calmly laid out all the reasons she was a committed Uberx user. They were similar to the gentleman's comments. One point she made was even Uber taxi was less reliable than Uberx. I had thought taxis could get a lot of the advantages of the Uber business model by enrolling in Uber taxi. Apparently, they still have too many bad customer service habits.
Just like I don't get the anti Uber riders, DC taxis do not get feedback from the many people who have voted with their feet. So my overall insight is limited.
That said, I am an older white guy giving rides in East DC performing cashless transactions - Uber takes the cash out of the ride. I wonder if taxis drivers carrying a fair amount of cash have more to fear.
My riders who use taxis and Uberx generally say the taxi drivers complaining about Uberx just don't get it. People use Uberx because it is a guaranteed ride that will stop, wait and even call to make a smooth pickup.
Not every ride has a discussion about Uberx.Many do. People seem to be interested why I am doing this part time.
One rider last night was passionate in his loathing for DC taxis. He said we would like to have every person of color in DC use Uberx. He had a number of stories about taxis ignoring him on the street or not making pickups. This an emotional tirade from a man who was otherwise having a good day.
Last week I had a wonderful lady as a rider who was not emotionally but very calmly laid out all the reasons she was a committed Uberx user. They were similar to the gentleman's comments. One point she made was even Uber taxi was less reliable than Uberx. I had thought taxis could get a lot of the advantages of the Uber business model by enrolling in Uber taxi. Apparently, they still have too many bad customer service habits.
Just like I don't get the anti Uber riders, DC taxis do not get feedback from the many people who have voted with their feet. So my overall insight is limited.
That said, I am an older white guy giving rides in East DC performing cashless transactions - Uber takes the cash out of the ride. I wonder if taxis drivers carrying a fair amount of cash have more to fear.
My riders who use taxis and Uberx generally say the taxi drivers complaining about Uberx just don't get it. People use Uberx because it is a guaranteed ride that will stop, wait and even call to make a smooth pickup.
Not every ride has a discussion about Uberx.Many do. People seem to be interested why I am doing this part time.
Uberx - what's going on in Virginia?
It is well reported in the news that Virginia has issued a cease and desist letter to Uber. In addition, as June 27, five Uberx drivers had been cited in Arlington for operating without a license. All of these citations were issued to drivers who were violating other traffic laws.
In the WaPo article here: A spokesman for Uber said the company “will pay any unjust citations.”
I assume this refers to the operating without a license citations, not the related traffic citations.
As nearly as I can tell, most pickups involve a violation of traffic laws. It is apparently illegal to stop on a roadway, turn on your flashers and wait for your rider. I usually try to find a place to pull off. It usually means I'm in front of a hydrant, and allay/driveway or in a bus loading zone. It is not clear to me if being in an attended vehicle in one of these situations could lead to a citation.
Drop-offs are more straightforward. It appears to be OK to stop in the roadway to unload riders.
I could not find directly related regulations in the Code of Virginia.
Uber directs us to obey the law. They do not provide guidance as to what the law is in the various jurisdictions here in the DC area.
In the WaPo article here: A spokesman for Uber said the company “will pay any unjust citations.”
I assume this refers to the operating without a license citations, not the related traffic citations.
As nearly as I can tell, most pickups involve a violation of traffic laws. It is apparently illegal to stop on a roadway, turn on your flashers and wait for your rider. I usually try to find a place to pull off. It usually means I'm in front of a hydrant, and allay/driveway or in a bus loading zone. It is not clear to me if being in an attended vehicle in one of these situations could lead to a citation.
Drop-offs are more straightforward. It appears to be OK to stop in the roadway to unload riders.
I could not find directly related regulations in the Code of Virginia.
Uber directs us to obey the law. They do not provide guidance as to what the law is in the various jurisdictions here in the DC area.
Where is my rider? Should I call?
The Uber FAQ has a section on "How can I be sure of my client's pickup location?".
Bottom line, the advice in this FAQ is just wrong.
The biggest error is this statement: "Zoom in on the map to find the black rider icon. The feet of the rider icon are always exactly where your client placed their request, regardless of the address shown." It is simply not true. In fact, it is wrong than it it is right. This problem seems to be getting worse. Yesterday, on July 4th, some errors were over a block off. Uber frequently gets the wrong side of street even on major street.
This advice is simply not workable: "If the requested location is not clear, or is not accessible, call your client to coordinate a quick pickup. Try not to call unless you have to though." Uber, in other places in the their training discourages calling the client. The application is simply not mature enough. For example, the rider is not given the color of the Uberx driver's car (they all not all black any more). The driver does not know if the rider is waiting on the street or is six floors up in the building still getting ready to go out.
After a miserable 4th of July trying to locate riders, I call every time when I get close. I have also suggested some improvements to the app to improve pickup coordination.
Bottom line, the advice in this FAQ is just wrong.
The biggest error is this statement: "Zoom in on the map to find the black rider icon. The feet of the rider icon are always exactly where your client placed their request, regardless of the address shown." It is simply not true. In fact, it is wrong than it it is right. This problem seems to be getting worse. Yesterday, on July 4th, some errors were over a block off. Uber frequently gets the wrong side of street even on major street.
This advice is simply not workable: "If the requested location is not clear, or is not accessible, call your client to coordinate a quick pickup. Try not to call unless you have to though." Uber, in other places in the their training discourages calling the client. The application is simply not mature enough. For example, the rider is not given the color of the Uberx driver's car (they all not all black any more). The driver does not know if the rider is waiting on the street or is six floors up in the building still getting ready to go out.
After a miserable 4th of July trying to locate riders, I call every time when I get close. I have also suggested some improvements to the app to improve pickup coordination.
Nellie the seeing eye dog
Of course, Uber supports service animals and makes it clear to drivers this is the case.
Last week I had the privilege of giving a ride to a group which included Nellie - a very well behaved black lab. Nothing to report on the trip other than a conversation about doggie booties when we passed a golden retriever wearing them. The consensus was they were probably a good idea when the sun is baking the concrete or asphalt.
Last week I had the privilege of giving a ride to a group which included Nellie - a very well behaved black lab. Nothing to report on the trip other than a conversation about doggie booties when we passed a golden retriever wearing them. The consensus was they were probably a good idea when the sun is baking the concrete or asphalt.
Sunday, June 29, 2014
Taxis verses Uberx --> why consumers love Uberx
With a full week of part time Uberx driving, I have some observations why so many consumers are passionate about the Uberx experience. The idea is this forms a punch list of issues taxis need to address just to create a similar user experience.
1. Hailing a cab on the street is too anonymous. The rider has no idea who the driver is. One rider was actually kidnapped by a fake driver who intended to sell her into white slavery. This guy apparently went to jail. With Uber, the dispatch model guarantees only one driver will pick up, the rider has a picture of the driver and a description of the vehicle. This is another aspect of the dispatch model. Riders find Uberx safer and more trustworthy than hailing a cab on the street.
2. Calling a cab is too uncertain. Riders have no idea when or if the cab will show up. The Uber model is once a driver has accepted a ride, that ride is the driver's only responsibility. The rider gets constant updates about the driver's progress to the pickup location. This is another aspect of the dispatch problem. In this case, there appears to be no centralized dispatch for DC (I could be wrong here) so the rider must deal with a number of small operators each with a small pool of rides to offer. This fragmentation might work for the hail a cab model, but it fails for the call a cab model. This message comes through loud and clear from almost every Uber proponent. In order to compete, taxis need an Uber-like system that efficiently allocates ride requests to truly available and nearby drivers and provides the same rider updates about the progress of their driver to the pickup location. The small providers have to aggregate their driver supply into the efficient allocation dispatch system and work out a way for the rides to be allocated.
3. Riders love the payment model. There is nothing else to say here - taxis need to move into the second decade of the 21st century in terms of managing money.
4. Matching riders to drivers in well served areas is inefficient. This is a new one for me. Apparently, there is a bottleneck allocating drivers at major pickup points like airports. A well-travelled rider said that even if there were plenty of cabs available, if there was a line of people waiting for a cab, then it might take 20-30 minutes to service the line. She would rather call an Uber. This is interesting to me. Given 100 riders and 100 cabs - that group would fairly efficiently sort itself out without the help of the bottleneck. Given 120 riders and 100 cabs, there might be problems between the riders. Given 80 riders and 100 cabs, the ad hoc self allocation can be orderly. The entity managing the pickup location need only note which cabs are trying to jump the line. The excess riders at airports (or wherever) problem is one the taxi industry should embrace Uber like services to resolve. This is a subject for the coopetition post.
1. Hailing a cab on the street is too anonymous. The rider has no idea who the driver is. One rider was actually kidnapped by a fake driver who intended to sell her into white slavery. This guy apparently went to jail. With Uber, the dispatch model guarantees only one driver will pick up, the rider has a picture of the driver and a description of the vehicle. This is another aspect of the dispatch model. Riders find Uberx safer and more trustworthy than hailing a cab on the street.
2. Calling a cab is too uncertain. Riders have no idea when or if the cab will show up. The Uber model is once a driver has accepted a ride, that ride is the driver's only responsibility. The rider gets constant updates about the driver's progress to the pickup location. This is another aspect of the dispatch problem. In this case, there appears to be no centralized dispatch for DC (I could be wrong here) so the rider must deal with a number of small operators each with a small pool of rides to offer. This fragmentation might work for the hail a cab model, but it fails for the call a cab model. This message comes through loud and clear from almost every Uber proponent. In order to compete, taxis need an Uber-like system that efficiently allocates ride requests to truly available and nearby drivers and provides the same rider updates about the progress of their driver to the pickup location. The small providers have to aggregate their driver supply into the efficient allocation dispatch system and work out a way for the rides to be allocated.
3. Riders love the payment model. There is nothing else to say here - taxis need to move into the second decade of the 21st century in terms of managing money.
4. Matching riders to drivers in well served areas is inefficient. This is a new one for me. Apparently, there is a bottleneck allocating drivers at major pickup points like airports. A well-travelled rider said that even if there were plenty of cabs available, if there was a line of people waiting for a cab, then it might take 20-30 minutes to service the line. She would rather call an Uber. This is interesting to me. Given 100 riders and 100 cabs - that group would fairly efficiently sort itself out without the help of the bottleneck. Given 120 riders and 100 cabs, there might be problems between the riders. Given 80 riders and 100 cabs, the ad hoc self allocation can be orderly. The entity managing the pickup location need only note which cabs are trying to jump the line. The excess riders at airports (or wherever) problem is one the taxi industry should embrace Uber like services to resolve. This is a subject for the coopetition post.
Friday, June 27, 2014
Take a Taxi!
Last night, I was driving home and got a hail from a suburban metro station near RFK stadium. It was quite a ways away. I don't want to take fares from places like metro stations that are generally well serviced by taxis, but I figured an event must have cleaned out the supply of taxis and maybe there were a bunch of people needing rides. I've been stranded at an airport with an hour wait for a cab to show up and it was not fun. So I took the fare.
I ended up driving by a long line of taxis to pick up the fare. I have some thoughts on avoiding this situation in the competitive-cooperation (coopetition) post I am formulating.
I asked the fare why she did not take a taxi. It turns out is was a young adult recently in town for an internship. Her mother told her to use Uber and she did despite the short trip, long wait for an Uber ride and the available taxis. Sweet kid. After some discussion, it appears the Uber hail had rolled off at least one and possibly two other drivers before getting to me many miles away. I explained that I had come from quite a ways away but had thought there might have been no cabs available. I did not think to remind the fare that they have the option to cancel without penalty within a couple of minutes of hail when they see how long it will take the driver to arrive.
Sometimes, you should just take a cab.
I ended up driving by a long line of taxis to pick up the fare. I have some thoughts on avoiding this situation in the competitive-cooperation (coopetition) post I am formulating.
I asked the fare why she did not take a taxi. It turns out is was a young adult recently in town for an internship. Her mother told her to use Uber and she did despite the short trip, long wait for an Uber ride and the available taxis. Sweet kid. After some discussion, it appears the Uber hail had rolled off at least one and possibly two other drivers before getting to me many miles away. I explained that I had come from quite a ways away but had thought there might have been no cabs available. I did not think to remind the fare that they have the option to cancel without penalty within a couple of minutes of hail when they see how long it will take the driver to arrive.
Sometimes, you should just take a cab.
Monday, June 23, 2014
Insurance company cooperation with Uberx can address the information gap
One of the arguments I have read on-line from the insurance people is the insurance company cannot tell whether someone is driving for Uberx (and the Uberx "supplemental" insurance is in effect) when an accident occurs. Currently, that is true. It is however, a technology and cultural problem. The data to figure this out exists.
Uberx knows to the second when its insurance is in effect. That should be good enough for the vast majority of accident situations.
As the number of Uberx drivers increases, there is a real business opportunity for the first insurance company to integrate its systems with Uberx (and other P2P dispatchers) and provide a hybrid insurance product.
Uberx drivers have an enormous incentive to drive safely. We know that when we have an at fault accident, we are out unless there are enormous extenuating circumstances.
Hopefully soon, Uber and the other P2P companies will have enough data to share that will allow traditional insurance to build a risk model and figure out how to price a hybrid product.
Uberx knows to the second when its insurance is in effect. That should be good enough for the vast majority of accident situations.
As the number of Uberx drivers increases, there is a real business opportunity for the first insurance company to integrate its systems with Uberx (and other P2P dispatchers) and provide a hybrid insurance product.
Uberx drivers have an enormous incentive to drive safely. We know that when we have an at fault accident, we are out unless there are enormous extenuating circumstances.
Hopefully soon, Uber and the other P2P companies will have enough data to share that will allow traditional insurance to build a risk model and figure out how to price a hybrid product.
Sunday, June 22, 2014
Insurance - the new service agreement
On the same day I posted about Uberx and insurance, Uberx issued a new subscriber agreement. I think this fills the role of the older service agreement. Both agreements have confidentiality clauses so I will not quote and will sparingly disclose the contents.
Bottom line: the new agreement is much better than the old around insurance. Rather than telling the driver to get insurance that covers P2P (old) it now tells us our insurance may not cover P2P(new). This is a big improvement,
The agreement then discusses the Uberx insurance policy. In the agreement, it is only a liability policy - it does not cover the damage to the Uberx driver's car. However, the description of the insurance on the Uber blog says it does provide contingent collision and comprehensive deductible. This insurance is discussed here:
http://blog.uber.com/uberXridesharinginsurance
Having driven extensively on DC streets for a whole 3 days now, I have already avoided potential accidents where an unsympathetic police officer might declare me liable. The most ambiguous situations are lane changes in congested areas. Even when I have plenty of space, an oncoming car that declines to let up on the gas might catch my quarter panel rather than my bumper.
I have not found any public statements by insurance companies on their attitude toward P2P. I just bought a GEICO policy and cancelled my USAA policy because I have a ton of insurance with USAA and do not want to jeopardize that relationship. I will be interested to see USAA's response.
The GEICO application did not have a question for P2P. It did have a question for business use of the vehicle and I truthfully declared I was using it to drive to job sites. Once I am at the job site (respond to an Uber ping), then I pop off the private insurance and onto Uber's commercial policy.
When I get my GEICO policy documents, I'll look for the P2P language.
Bottom line: the new agreement is much better than the old around insurance. Rather than telling the driver to get insurance that covers P2P (old) it now tells us our insurance may not cover P2P(new). This is a big improvement,
The agreement then discusses the Uberx insurance policy. In the agreement, it is only a liability policy - it does not cover the damage to the Uberx driver's car. However, the description of the insurance on the Uber blog says it does provide contingent collision and comprehensive deductible. This insurance is discussed here:
http://blog.uber.com/uberXridesharinginsurance
Having driven extensively on DC streets for a whole 3 days now, I have already avoided potential accidents where an unsympathetic police officer might declare me liable. The most ambiguous situations are lane changes in congested areas. Even when I have plenty of space, an oncoming car that declines to let up on the gas might catch my quarter panel rather than my bumper.
I have not found any public statements by insurance companies on their attitude toward P2P. I just bought a GEICO policy and cancelled my USAA policy because I have a ton of insurance with USAA and do not want to jeopardize that relationship. I will be interested to see USAA's response.
The GEICO application did not have a question for P2P. It did have a question for business use of the vehicle and I truthfully declared I was using it to drive to job sites. Once I am at the job site (respond to an Uber ping), then I pop off the private insurance and onto Uber's commercial policy.
When I get my GEICO policy documents, I'll look for the P2P language.
Saturday, June 21, 2014
An Uber to rule them all
Core Uber fixes dispatch. As a driver and potential user, I have a ton of minor issues with the implementation (future posts). However, the proof is in the user acceptance. Users (riders) love Uber. Because of pricing, they love Uberx more than the other Uber offerings. I believe without Uberx, they would still love Uber. Smarter folk than me will have to figure the price elasticity of livery service.
I am 100% convinced the Uber dispatch model will come to dominate the livery industry.
Currently, DC Metro has a chaotic mix of ride providers servicing the ride consumer community. Data is not shared. There is no single place one can go to find ride usage patterns.
My vision here is, once everyone is on Uber like technology, the ride provider community can establish a data sharing cooperative which tracks demand throughout the Metro area. The cooperative maintains the confidentiality of the source data but provides aggregate statistics to the entire ride provider community. This type of anonymous data sharing is common in industry.
Individual ride providers (Uber included of course because they are just another member of the data sharing coop) can use the data to make tactical decisions on how to deploy their drivers. This should be real time. The ride provider companies would be able to track demand and call upon their part time drivers to provide surge capacity. P2P drivers working for traditional livery companies on a surge basis is a logical extension of the Uberx model.
With the data from the coop, companies can plan campaigns to expand usage in underserviced areas. Right now the focus is on the metropolitan core. However, I believe the Uberx model can greatly reduce the incidence of two and three car households in the suburbs when appropriately implemented.
The next logical extension of this idea is a unified dispatch service where riders get to choose among brands.
I am 100% convinced the Uber dispatch model will come to dominate the livery industry.
Currently, DC Metro has a chaotic mix of ride providers servicing the ride consumer community. Data is not shared. There is no single place one can go to find ride usage patterns.
My vision here is, once everyone is on Uber like technology, the ride provider community can establish a data sharing cooperative which tracks demand throughout the Metro area. The cooperative maintains the confidentiality of the source data but provides aggregate statistics to the entire ride provider community. This type of anonymous data sharing is common in industry.
Individual ride providers (Uber included of course because they are just another member of the data sharing coop) can use the data to make tactical decisions on how to deploy their drivers. This should be real time. The ride provider companies would be able to track demand and call upon their part time drivers to provide surge capacity. P2P drivers working for traditional livery companies on a surge basis is a logical extension of the Uberx model.
With the data from the coop, companies can plan campaigns to expand usage in underserviced areas. Right now the focus is on the metropolitan core. However, I believe the Uberx model can greatly reduce the incidence of two and three car households in the suburbs when appropriately implemented.
The next logical extension of this idea is a unified dispatch service where riders get to choose among brands.
Uberx - replacing idle automotive capacity with productively employed drivers
Having seen how much my riders love Uberx I am forming some conclusions about its potential. Today was a 14 rider day for my. Let's consider the impact of greatly expanded livery and Uberx service in a city like Washington DC. This is a toy financial model. There are bucket loads of PhDs in the area who can do it right (after begging Uber to release some of its treasure trove of data).
I don't know how many cars sleep during the typical day downtown, but it is a lot. Let's consider replacing 100,000 of them with Uberx drivers (it could be a combination of livery and Uberx, but I'm keeping it simple.)
I made good money today delivering 14 rides over 9 hours (this will be another post). So let's consider 10 rides a day a decent showing for an Uberx driver. Ten rides per day because, as I explain below, in this toy analysis, the average ride is probably longer.
Let's consider those 100,000 cars sitting downtown to represent 200,000 rides in the metropolitan area. The real number is probably higher based on multiple trips per vehicle: one trip back and for to work and possibly another back and forth for other reasons. These vehicles probably mostly represent trips from the suburbs. The corresponding Uberx trip would either be a long drive in from the suburbs or, more likely a trip to a Metro station. My two trips to suburban Metro stations were better fares than most of my downtown trips.
So, in order to keep 100,000 vehicles out of downtown, we need 200,000 rides or 20,000 Uberx driver days each and every workday of the week. The distribution of the rides is clustered, hence the need for the type of surge capacity the Uberx model can provide. Let's assume an average ride of 10 miles. At $0.56/mile for the all in cost of using an automobile established by the IRS, that is $1,120,000 in forgone automotive costs on the part of the riders. Let's go with $10/day for parking and that is another $1 million in forgone parking fees. That works out to $100/day in forgone cost for each Uberx driver. With Uberx institutionalized and supported throughout the metropolitan area, many families will be able to get rid of their second car, saving even more money.
This notion does not decrease traffic unless it diverts traffic from downtown to the suburban Metro stations. I suspect it would. Today, I drove down many close in streets primarily devoted to parking, not traffic. Consider the impact of a car free culture on those close in neighborhoods. Consider how much better traffic would flow without so much on street parking. Some of those parking spaces would be converted to loading zones for livery and Uberx.
The DC area has two idle capacity problems. Too many idle vehicles and too many people who do not have the skills for jobs in health care or information technology. The Uberx model can help with both.
I don't know how many cars sleep during the typical day downtown, but it is a lot. Let's consider replacing 100,000 of them with Uberx drivers (it could be a combination of livery and Uberx, but I'm keeping it simple.)
I made good money today delivering 14 rides over 9 hours (this will be another post). So let's consider 10 rides a day a decent showing for an Uberx driver. Ten rides per day because, as I explain below, in this toy analysis, the average ride is probably longer.
Let's consider those 100,000 cars sitting downtown to represent 200,000 rides in the metropolitan area. The real number is probably higher based on multiple trips per vehicle: one trip back and for to work and possibly another back and forth for other reasons. These vehicles probably mostly represent trips from the suburbs. The corresponding Uberx trip would either be a long drive in from the suburbs or, more likely a trip to a Metro station. My two trips to suburban Metro stations were better fares than most of my downtown trips.
So, in order to keep 100,000 vehicles out of downtown, we need 200,000 rides or 20,000 Uberx driver days each and every workday of the week. The distribution of the rides is clustered, hence the need for the type of surge capacity the Uberx model can provide. Let's assume an average ride of 10 miles. At $0.56/mile for the all in cost of using an automobile established by the IRS, that is $1,120,000 in forgone automotive costs on the part of the riders. Let's go with $10/day for parking and that is another $1 million in forgone parking fees. That works out to $100/day in forgone cost for each Uberx driver. With Uberx institutionalized and supported throughout the metropolitan area, many families will be able to get rid of their second car, saving even more money.
This notion does not decrease traffic unless it diverts traffic from downtown to the suburban Metro stations. I suspect it would. Today, I drove down many close in streets primarily devoted to parking, not traffic. Consider the impact of a car free culture on those close in neighborhoods. Consider how much better traffic would flow without so much on street parking. Some of those parking spaces would be converted to loading zones for livery and Uberx.
The DC area has two idle capacity problems. Too many idle vehicles and too many people who do not have the skills for jobs in health care or information technology. The Uberx model can help with both.
Why traditional livery services should love Uberx
Today I spent a full day driving for Uberx. Longer than I had intended. I am now up to a grand total of 21 paying fares. Of the folks who chatted about Uberx - they all loved it. The reason was primarily the broken dispatch model of the traditional services. I'll have more on this in another post but in short, traditional livery is OK dispatching out from concentrations of customers such as suburban metro stations, downtown core areas and large events. It is terrible at getting the ride to the rider's home. Again and again, the story was the same - riders have to call well in advance and the rider has no certainty the driver will show up. Added to traditional livery's comparative disadvantage is the very positive experience with Uberx drivers compared to traditional taxi drivers. They folks I talked to have no reason not to use Uberx in terms of quality or cost of services. This is also fodder for another post.
So why should traditional livery not try to regulate Uberx out of existence?
Uberx is not the enemy.
The privately owned automobile (POV) is the enemy of livery.
Uberx is part of the solution to eliminating POVs from the major metropolitan areas.
The reason is simple. The high entry costs (medallion fees) and fixed costs (commercial insurance) of a traditional taxicab means it has to be in service almost 100% of the time in order to provide a decent living to its driver(s). Because of this traditional livery will never be able to surge to meet peak demand. There will always be periods when people must wait too long for a taxi or not get one at all. More importantly, many people do not consider livery because of service problems and poor experiences. Since ride demand is starved by the available pool of traditional rides, it does not grow and flourish. Enter Uberx with its very low entry cost and its pool of part time drivers. While it is admittedly competing with traditional livery, Uberx is also expanding the demand pool by allowing people to easily hire a ride rather than have one sit idle on the street or in a garage 95% of the time.
One of my rides today was taking a young person from her home in the suburbs to her job in the suburbs. This person is a routine Uberx customer. Before Uberx, she probably would have had a car.
Cars are capital assets that mostly sit idle. It is the American way.
Uber has a compelling fix for the dispatch problem. This was an evolutionary advance that will, one way or another, eventually be embraced by the livery industry. The Uberx model (admittedly pioneered by others) is revolutionary. It has the potential to fundamentally change the relationship between the automobile and the urban core. This is one case in which human capital can productively replace idle automotive capacity clogging our inner cities. Consider the impact of removing 100,000 of the cars parked in downtown DC every day. I will, in the next post.
So why should traditional livery not try to regulate Uberx out of existence?
Uberx is not the enemy.
The privately owned automobile (POV) is the enemy of livery.
Uberx is part of the solution to eliminating POVs from the major metropolitan areas.
The reason is simple. The high entry costs (medallion fees) and fixed costs (commercial insurance) of a traditional taxicab means it has to be in service almost 100% of the time in order to provide a decent living to its driver(s). Because of this traditional livery will never be able to surge to meet peak demand. There will always be periods when people must wait too long for a taxi or not get one at all. More importantly, many people do not consider livery because of service problems and poor experiences. Since ride demand is starved by the available pool of traditional rides, it does not grow and flourish. Enter Uberx with its very low entry cost and its pool of part time drivers. While it is admittedly competing with traditional livery, Uberx is also expanding the demand pool by allowing people to easily hire a ride rather than have one sit idle on the street or in a garage 95% of the time.
One of my rides today was taking a young person from her home in the suburbs to her job in the suburbs. This person is a routine Uberx customer. Before Uberx, she probably would have had a car.
Cars are capital assets that mostly sit idle. It is the American way.
Uber has a compelling fix for the dispatch problem. This was an evolutionary advance that will, one way or another, eventually be embraced by the livery industry. The Uberx model (admittedly pioneered by others) is revolutionary. It has the potential to fundamentally change the relationship between the automobile and the urban core. This is one case in which human capital can productively replace idle automotive capacity clogging our inner cities. Consider the impact of removing 100,000 of the cars parked in downtown DC every day. I will, in the next post.
Friday, June 20, 2014
Uberx drivers are great people
Before I get too far into this blog I just want to remind everyone that Uberx drivers are great people. As independent contractors organized by Uber, they embody what is good about this country. Primarily, that is the desire to work hard and get ahead.
When I picked up my phone, there was a great cross section of the community from struggling young folk who really needed the work to soon to be retired part timers. All these drivers had passed a background check and were eager to get started.
The Uberx system is designed to weed out those who should not be driving. The immediate rating system is key. If an experienced Uberx passenger with lots of high ratings rates a driver at a one, Uber will surely take notice. They have enough drivers coming in the front door that they have no incentive to keep people who should not be driving and enhancing the Uber brand. I think the statistics on driver mortality would be very interesting.
By and large, the drivers are hard working Americans. Every customer contact has the possibility to be rated at the option of the passenger. I bet Uber management in each community has a dash board that tracks those ratings and 1s and 2s get a lot of attention.
When I picked up my phone, there was a great cross section of the community from struggling young folk who really needed the work to soon to be retired part timers. All these drivers had passed a background check and were eager to get started.
The Uberx system is designed to weed out those who should not be driving. The immediate rating system is key. If an experienced Uberx passenger with lots of high ratings rates a driver at a one, Uber will surely take notice. They have enough drivers coming in the front door that they have no incentive to keep people who should not be driving and enhancing the Uber brand. I think the statistics on driver mortality would be very interesting.
By and large, the drivers are hard working Americans. Every customer contact has the possibility to be rated at the option of the passenger. I bet Uber management in each community has a dash board that tracks those ratings and 1s and 2s get a lot of attention.
Uberx and insurance
Uberx has a copy of my insurance card. My current company, USAA, has as its first exclusion:
1. Loss to your covered auto which occurs while it is used to carry persons for a fee. This exclusion (1.) does not apply to a share-the-expense car pool.
I had read online this was the case based on statements by people. This is the first confirmation in black and white I know of that it is in the policy documents.
From the DC area Operations manager (Tom):
Thanks for the note. This link represents our policy on insurance: http://blog.uber.com/uberXridesharinginsurance
More importantly, while the policy documents are not available, this Uber blog post contains more detail about the coverage. http://blog.uber.com/ridesharinginsurance. This includes comprehensive coverage so Uberx drivers not covered for an accident do not lose their car (though it may sit for a long time while the insurance companies dance).
The kicker here is the Uber insurance is a contingent policy that kicks in after your primary insurance has declined to pay - so you have to submit the claim to your primary insurance first. Anecdotes on-line indicate that if your insurance company knows you were carrying paying passengers for any of the services, they will deny your claim and terminate your coverage.
I have been with USAA for 40 years and have all of my insurance with them. I will be looking for a new company to cover my Uberx car.
The online stories say that no regular auto policy will cover drivers carrying paying passengers. I have one example in black and white that confirms this.
The Uberx service agreement with its drivers is a confidential document (for reasons which will become obvious in this and future blog posts). It is however, abundantly clear that Uberx expects its drivers to get insurance that covers this type of service. I would argue the Uberx supplemental policy provides this coverage so maybe there is no big deal here.
Part of the Uberx model works on asymmetric information between it and its drivers - more on this in future posts. The legal team at Uberx probably knew my USAA policy contained this exclusion, but they accepted my USAA proof of insurance.
1. Loss to your covered auto which occurs while it is used to carry persons for a fee. This exclusion (1.) does not apply to a share-the-expense car pool.
I had read online this was the case based on statements by people. This is the first confirmation in black and white I know of that it is in the policy documents.
From the DC area Operations manager (Tom):
Thanks for the note. This link represents our policy on insurance: http://blog.uber.com/uberXridesharinginsurance
More importantly, while the policy documents are not available, this Uber blog post contains more detail about the coverage. http://blog.uber.com/ridesharinginsurance. This includes comprehensive coverage so Uberx drivers not covered for an accident do not lose their car (though it may sit for a long time while the insurance companies dance).
The kicker here is the Uber insurance is a contingent policy that kicks in after your primary insurance has declined to pay - so you have to submit the claim to your primary insurance first. Anecdotes on-line indicate that if your insurance company knows you were carrying paying passengers for any of the services, they will deny your claim and terminate your coverage.
I have been with USAA for 40 years and have all of my insurance with them. I will be looking for a new company to cover my Uberx car.
The online stories say that no regular auto policy will cover drivers carrying paying passengers. I have one example in black and white that confirms this.
The Uberx service agreement with its drivers is a confidential document (for reasons which will become obvious in this and future blog posts). It is however, abundantly clear that Uberx expects its drivers to get insurance that covers this type of service. I would argue the Uberx supplemental policy provides this coverage so maybe there is no big deal here.
Part of the Uberx model works on asymmetric information between it and its drivers - more on this in future posts. The legal team at Uberx probably knew my USAA policy contained this exclusion, but they accepted my USAA proof of insurance.
Thursday, June 19, 2014
First Fare
I picked up my phone yesterday and did the tax stuff. They needed the bank account information for direct deposit up front. I thought I read somewhere during training I could wait to setup the bank account - apparently not in 2014. One IRS to rule them all.
So I had a meeting across town for my day job in Vienna. After that meeting I had a few hours before the next and I had already worked a long week, so I mentally signed out from the day job and went online with Uberx and started back to the office. My Android GPS directed my home via 123. That means there was some nastiness on 495 Eastbound which was imposing a delay. All was to the good. As I was driving along, I got my first ping. My heart pounding, I pull off the road (in a safe location naturally) and program the GPS for the pickup location. It is really close and I get there in a few minutes.
The passenger was a little surprised when I asked him to approve the route but he was a good sport and offered suggestions which improved on what the GPS was going to do. We got close to the destination (a block away but totally jammed up) . I showed him the GPS that showed 4 minutes to go around the block and he asked me to pull over and let him out.
I went back to work. After work I decided to drive again and headed over to Silver Spring along 193. In the morning, the GPS had suggested I take 193 West instead of 495. I ignored the suggestion in the morning and spent almost 40 minutes covering 10 miles on 495. So in the evening I took 193 past where it runs into 495 then turned south into Silver Spring. I got my second fare - a group of 4 going into Maggios. Again, they were happy to help with navigation. This was their first Uberx trip so we had a good time talking about Uber.
I need a good voice programmable GPS. My old Android was actually pretty good. This new version of the navigation app does not take voice as well. It may be related to the phone - even though it is newer.
One conclusion so far is there is not a lot of Uberx activity in PG county.
It would be nice if Uber gave them the option to enter the number of passengers. My base configuration is for two - I have the console down in the back seat and I have stuff in the front seat. If I had known it was a larger group, then I could have cleaned that all up before arriving for the pickup.
So I had a meeting across town for my day job in Vienna. After that meeting I had a few hours before the next and I had already worked a long week, so I mentally signed out from the day job and went online with Uberx and started back to the office. My Android GPS directed my home via 123. That means there was some nastiness on 495 Eastbound which was imposing a delay. All was to the good. As I was driving along, I got my first ping. My heart pounding, I pull off the road (in a safe location naturally) and program the GPS for the pickup location. It is really close and I get there in a few minutes.
The passenger was a little surprised when I asked him to approve the route but he was a good sport and offered suggestions which improved on what the GPS was going to do. We got close to the destination (a block away but totally jammed up) . I showed him the GPS that showed 4 minutes to go around the block and he asked me to pull over and let him out.
I went back to work. After work I decided to drive again and headed over to Silver Spring along 193. In the morning, the GPS had suggested I take 193 West instead of 495. I ignored the suggestion in the morning and spent almost 40 minutes covering 10 miles on 495. So in the evening I took 193 past where it runs into 495 then turned south into Silver Spring. I got my second fare - a group of 4 going into Maggios. Again, they were happy to help with navigation. This was their first Uberx trip so we had a good time talking about Uber.
I need a good voice programmable GPS. My old Android was actually pretty good. This new version of the navigation app does not take voice as well. It may be related to the phone - even though it is newer.
One conclusion so far is there is not a lot of Uberx activity in PG county.
It would be nice if Uber gave them the option to enter the number of passengers. My base configuration is for two - I have the console down in the back seat and I have stuff in the front seat. If I had known it was a larger group, then I could have cleaned that all up before arriving for the pickup.
Wednesday, June 18, 2014
Day 1 - pickup up the phone
I'll put some more context around this blog as I have time. By way of brief introduction, I have a full time regular job. Driving for Uberx is a money making hobby to get me out of the house.
Uber finished my background check and told me where and when to pickup my phone. They also offered to send it to me. I decided to go get it and see what the Uber operation looked like. It was very much a backroom type of thing. Everything about the location is temporary. No investment in furniture. My guess is this location is only used for phone distribution. The distribution team was competent and moved the line fairly quickly. There were a lot of people picking up phones 50-100. This was the first day of the three days in a row phones were distributed. Thursday and Friday may be less busy.
I had done my homework on Uber. It was clear a lot of folks in the line had not. So they were not aware of potential issues with their insurance or, in some areas, the law. The group had a mix of people viewing Uberx as a second job and those who saw it as their only chance at a decent income.
More on all of this later.
Uber finished my background check and told me where and when to pickup my phone. They also offered to send it to me. I decided to go get it and see what the Uber operation looked like. It was very much a backroom type of thing. Everything about the location is temporary. No investment in furniture. My guess is this location is only used for phone distribution. The distribution team was competent and moved the line fairly quickly. There were a lot of people picking up phones 50-100. This was the first day of the three days in a row phones were distributed. Thursday and Friday may be less busy.
I had done my homework on Uber. It was clear a lot of folks in the line had not. So they were not aware of potential issues with their insurance or, in some areas, the law. The group had a mix of people viewing Uberx as a second job and those who saw it as their only chance at a decent income.
More on all of this later.
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