The Uber Shortage

It's no secret that Uber upended the taxi industry and have caused real hardship. The price of NYC taxi medallions plummeted because of ridesharing. Getting around went from standing at the curb with an outstretched arm into tapping some buttons in an app. It's really convenient but convenience comes at a price.

Uber was thought to be rich with cash prior to going public. After disclosing their financials people learned that Uber was subsidizing every single ride in order to keep fares low. They paid good fares to drivers in order to entice them to drive for Uber. It was a "grow at all costs" mentality.

In the second quarter of 2019, Uber lost $5.24bn on 1.68 billion trips, effectively paying consumers an average of $3.12 per trip to take over large swathes of the global taxi market.

The Newstatesman

Over time, the fares have gone up and the pay for drivers have gone down. I'm not surprised at all to find that it's getting harder to actually use Uber as time has gone on. Basically there is an Uber shortage: in drivers, in customers still not comfortable with the pandemic, and affordable fares to make it worthwhile.

Reporting from The Statesman reveals that drivers are declining offered rides because of the low price offered.

As we spoke, Awaad was offered a 24-mile job – 48 miles in Friday afternoon traffic around Luton – for £29. Some jobs offer less than £1 per mile. “Hundreds of drivers are the same, because the jobs that are coming in have no value,” he told me.

The Newstatesman

A fare of less than a dollar-per-mile. Consider the high cost of gas plus wear on the car and this is once again a terrible gig. No wonder there's an Uber shortage. It's not just a shortage in trying to find a ride, but for workers to not take awful fares that are a losing proposition. As time goes on, gig work makes less and less sense.

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