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Mar 9, 2023·edited Mar 9, 2023Liked by AutoMarketplace

I’d like to address this comment in the article:

“At a certain point in time you need to understand that Uber, Lyft or the TLC does not control how much money the consumer is willing or able to spend on a trip. We hope TLC drivers get paid more, but we also don’t want to see trip demand start declining too much.”

I’m surprised this bit of cold water is being thrown on at this juncture and don’t recall mention of it before. Using the standard of 7.5- mile, 30-minute ride that the TLC has been throwing around I’d like to make a couple of anecdotal observations as a driver. Prior to February 1, 2023 that ride cost approximately $24.60. After February 1, that ride became and currently is approximately $26.03. The proposal for this Monday is $26.76, an increase of 8.8% from before February 1. Drivers are already receiving 66% of that raise. Neither Uber nor Lyft nor the TLC has complained of decreased consumer demand and they are the ones that would have that data and surely would have mentioned it at the latest hearing now that some time has passed since the February 5.8% raise. All we’re talking about for Monday is the remaining 1/3 of the raise, which is 2.8% more from current levels. If consumer demands falls off a cliff because of the remaining 3% then there’s a bigger problem here. Personally, I have seen no drop off in business since February 1 5.8% increase and I certainly don’t anticipate any with a mere 2.8% increase.

Moreover, as a driver who once enjoyed an 80/20 split with Uber, keep in mind Uber and Lyft have for years been taking a larger cut of the passenger fare, sometimes as much as 50% or more of the fare. Add to this the taking away of the surge multiplier and what we’re really talking about is drivers getting back money what they have rightfully deserved and Uber having flexibility to keep demand where they want by adjusting passenger fares, either up or down.

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We mentioned this before several months ago (link to article is above).

Remember, there is a yearly inflation mechanism increase (compounded inflation adds up). TLC drivers must understand they can increase their pay in other ways and also need to understand as small business enterprises they are being paid by the consumer ultimately.

We are simply flagging this, we’re not saying that this pay increase is too much - but the consumer is weakening in our view, so it’s something to track now (we hope we’re wrong btw). Often time TLC drivers do not have a “consumer is paying for this trip” mentality they think Uber is paying for the trip, if you will. The consumer part of the discussion is almost never mentioned by advocacy groups - that’s not a good business mindset in our view 🤷‍♂️

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Mar 9, 2023Liked by AutoMarketplace

I don’t want to do a back-and-forth but, again, why are drivers (who have themselves been hammered with inflation) being the ones held responsible for consumer demand? Uber and Lyft control the consumer pricing mechanism-drivers don’t! Just because rideshare companies say they’re going to merely pass on the drive pay increase, does not mean they can’t adjust prices downward to keep their market share. Sure, their margins would be squeezed but PLEASE keep in mind drivers have had their profit margins squeezed for years now after upfront pricing was introduced and the multiplier was taken away resulting in rideshare companies taking a greater share of passenger fares. So, while rideshare companies enjoyed greater profit margins and passengers enjoyed relatively lower fares, drivers were left with the economic burden of these perks. All that is simply going on right now with a driver pay increase is drivers getting a back some semblance of what was wrongfully taken away from them years ago. And, still, it’s not enough because housing, food, and vehicle insurance have all risen by more than 9%. Drivers are entrepreneurial and they do understand consumer demand. Otherwise, they would not have complained about the lockouts. Drivers certainly don’t want to put themselves in a position where they have shot themselves in the foot by driving down demand.

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Don’t disagree with a lot of what you said. Extracting Uber/Lyft from this conversation - let’s keep track of how the yellow 🚕 taximeter increase impacts their trip demand. For a while, we think a lot of people were taking yellow cabs because they were 20% to 30% cheaper than Uber/Lyft before their December 19th raise. Consumers love low prices, unfortunately they often forget about the labor compensation. Now yellow cabs are again cheaper vs Uber/Lyft post this pay raise. It’s basically something to track, that’s all we’re saying

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Mar 10, 2023Liked by AutoMarketplace

The yellow taxi dog barely wags the rideshare tail. The entire land area of Manhattan is almost 7% of all of New York City. Considering most taxi drivers prefer to drive below 110th Street on the West Side and 96th Street on the East Side, that land area is even smaller. Let’s say yellow taxis actively compete against rideshare in 5% of the entire land area of New York City from FiDi to the aforementioned upper Manhattan streets. Rideshare still has 95% of the rest of the New York City that yellow taxi drivers abhor to drive in. Taking into consideration that rideshare drivers make their money more efficiently by driving in areas where they get higher average MPH trips, it behooves a rideshare driver to stay away from Manhattan, especially the Central Business District during the weekday. Rideshare drivers make more money being near areas with uncongested highways. These would include Staten Island, half the areas of Queens, most of the Bronx, and the southern parts of Brooklyn. Personally for me, the yellow taxis can have Manhattan. Relative to rideshare trips (that now more than ever depends on distance to bump earnings), taxi meters are better suited for those taxi drivers to make more money in Manhattan traffic, that on average can go from 4-8 mph. Taxi meters charge $42/hour to sit in traffic. Rideshare only gets a little over $33/hour. Now, I’m not saying that Manhattan transportation BUSINESS accounts for 5%. It’s multiples of that but a rideshare driver can spend weeks outside of Manhattan and make a much better living than a rideshare driver who elects to only drive in the lower parts of Manhattan and also do slightly better than even a yellow taxi driver in Manhattan. I know this because I’ve also driven yellow taxi.

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Extremely interesting insight, thanks for sharing! How long did you do yellow for? Just to give the readers some data in terms of daily avg trips it’s ~750k for Uber/Lyft vs ~115k for yellow, but ~5k yellow cabs are inactive as well

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The advocacy group did not win this as they claimed. The raise they supported was the national average includes rising gas price. They took credit for nothing and future raise will be back to the original way.

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It's a somewhat fair point your making. I do think by making noise and bringing attention to the issue, the advocacy groups probably should be given credit for the utilization rate floor coming down to reduce probability of lockouts

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How? The raise was scheduled to happen. The advocacy wanted more. They never got it. The utilization rate lowering should be thanked to Uber. Uber really put out the petition which I signed. They spoke during the meeting and negotiated this. As for the commission. I am not sure what Uber and Lyft are taking after tax commission. This I may have to do research.

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Multiple drivers giving fairly impassioned testimony against lockouts, we also think was a factor re utilization rate floor being lowered

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