The True Cost of Prop 1 for Austinites: $29M, Jobs, Funding and Lives
Courtney Powell
28248

Uber drivers tend to grossly underestimate the costs of operating their vehicles. According to Intellichoice, the total cost of ownership of a vehicle is at least $0.50/mile with most vehicles costing $0.70 — $0.75/mile and many others such as SUV’s costing over a dollar per mile. Uber drivers tend not to consider vehicle overhead and depreciation costs. In the article you cited, there were three flaws. The first flaw was that the writer was not an expert on business cost modeling — he was an Uber driver. Second, the cost model used figures from another city. Austin Uber drivers were getting $0.85/mile and $0.11/minute. So Uber was snookering drivers who are not good at math into accepting the cost of the business model while Uber reaps the profits. While driver utilization may vary widely based on a number of factors, I think you could conservatively estimate that the meter is “on” for a driver about 50% of the time and the average intercity speed is about 30mph (average). In this case, the driver barely makes $7/hour before taxes and doesn’t get any benefits. Step back and think about it — were taxi drivers or taxi companies getting wealthy before Uber, Lyft and other app companies came along? Of course not. Uber and Lyft are just another marketplace app play that does not create value or real jobs. Given that most people’s understanding of cost modeling is weak (while the app developer has strong financial people on its team) I think it’s a good thing for local governments to turn away these businesses. They are not good for the drivers.

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