UberEats could be underpaying delivery drivers on 21% of trips • Hacker News Board

Re: UberEats could be underpaying delivery drivers on 21% of trips

#51

Post by rrrrrrrrrrrryan » Mon, Aug 24, 2020, 5:25 PM UTC

AlexandrB wrote: post #35

supernova87a wrote: post #32

Uber is making it harder and harder to get on board with the idea that it's not an employer. Leveling out people's pay over multiple trips or retroactively adjusting the reward per job sure sounds like an employer having very strong control over the work conditions and compensation. And this almost brings back echoes of Doordash (?) when it was caught taking drivers' tips so that their pay was reduced to the minimum…

> It's like Uber are trying to shoot themselves in the foot with all the cost squeezing and profit seeking at the same time they're in a fundamental fight defining what they are. I don't think they have a choice. UberEats is fundamentally unprofitable. If it was run profitably, the high(er) prices would drive a large portion of their customers away and into the arms of other "startups" willing to run at a loss or tow…

I wouldn't go so far as saying they're "fundamentally unprofitable". They have a couple long-term options: the often-discussed one is autonomous driving (though it's becoming increasingly obvious this is many years out), but the less discussed one is vertical integration.

It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants" in quotes, because it'll almost certainly just be warehouse-style kitchens, where drivers skid up out front and grab food from heated tables, and you won't be able to dine-in at all. It would fill the same role for aspiring restaurateurs as food trucks do today: a startup cost, low-barrier to entry way to build out a brand, rapidly iterate menu-items, and begin building revenue to eventually secure a business loan to open a proper restaurant.

If UberEats can really squeeze both the drivers AND the restaurants, there's no fundamental reason that food delivery can't be done profitably - pizza companies have been doing it in almost all markets for decades.

Brick and mortar retail stores got eaten by Amazon warehouses, and it seems inevitable that many brick and mortar restaurants will eventually get eaten by a massive tech company as well.

Re: UberEats could be underpaying delivery drivers on 21% of trips

#52

Post by joking » Mon, Aug 24, 2020, 5:30 PM UTC

danpalmer wrote: post #49

jacquesm wrote: post #44

Middlemen are always going to try to increase their take on both sides. It is the only way they can grow the profitability of their business because they can't add more value, they can only subtract.

Agree with the part about profitability, but middlemen can definitely add value. I’d say that Uber’s wide reach is valuable, the fact that they likely exist in the city you’re visiting, the fact that they likely have enough cars to pick you up in under 5 minutes. These are valuable things that don’t come from individual drivers or small taxi companies, but rather from big aggregators.

you don't need uber for that, google maps shows you available carpooling ang taxi companies directly when you search for a destination.

For uber is good that wide reach, for the end user not so much.

Re: UberEats could be underpaying delivery drivers on 21% of trips

#53

Post by artoonie » Mon, Aug 24, 2020, 5:31 PM UTC

bluesign wrote: post #46

artoonie wrote: post #19

Earlier quoted context omitted.

Most spot on (within 0.5 mi), some overpayments. Overpayments are much less frequent than underpayments, and regardless: when someone accepts a trip, who knows if they did it because they thought "that amount sounds fair" or thought "that amount given the distance shown sounds fair." The only fair thing for Uber to do here is to rectify all underpayments, and let the overpayments stand. Further: just because Uber cou…

Can you share one route uber underpaid by big margin? For the second part I agree, but without seeing outlier, maybe in some cases google couldn’t find the best route, compared to the app. PS: all this stats used Google Maps shortest path or best path?

https://imgur.com/v4bSD5S

I was paid 1 mile, actual distance 3.5-4.0 miles.

Previous versions of the app would use the first result returned by Google Directions API, which could have been best not shortest (I'm not sure, anyone know?). Newer version (pending app store review) does shortest always.

Re: UberEats could be underpaying delivery drivers on 21% of trips

#54

Post by ab_testing » Mon, Aug 24, 2020, 5:32 PM UTC

AlexandrB wrote: post #35

supernova87a wrote: post #32

Uber is making it harder and harder to get on board with the idea that it's not an employer. Leveling out people's pay over multiple trips or retroactively adjusting the reward per job sure sounds like an employer having very strong control over the work conditions and compensation. And this almost brings back echoes of Doordash (?) when it was caught taking drivers' tips so that their pay was reduced to the minimum…

> It's like Uber are trying to shoot themselves in the foot with all the cost squeezing and profit seeking at the same time they're in a fundamental fight defining what they are. I don't think they have a choice. UberEats is fundamentally unprofitable. If it was run profitably, the high(er) prices would drive a large portion of their customers away and into the arms of other "startups" willing to run at a loss or tow…

COVID-19 is like the golden age of food delivery. If these food delivery apps are not profitable now, they will probably never be profitable. When the severity of COVID subsides in a few years, people will like to go out to eat again rather than have it delivered.

Re: UberEats could be underpaying delivery drivers on 21% of trips

#55

Post by jacquesm » Mon, Aug 24, 2020, 5:32 PM UTC

danpalmer wrote: post #49

jacquesm wrote: post #44

Middlemen are always going to try to increase their take on both sides. It is the only way they can grow the profitability of their business because they can't add more value, they can only subtract.

Agree with the part about profitability, but middlemen can definitely add value. I’d say that Uber’s wide reach is valuable, the fact that they likely exist in the city you’re visiting, the fact that they likely have enough cars to pick you up in under 5 minutes. These are valuable things that don’t come from individual drivers or small taxi companies, but rather from big aggregators.

Small taxi companies could still have general dispatchers.

Re: UberEats could be underpaying delivery drivers on 21% of trips

#56

Post by darrenoc » Mon, Aug 24, 2020, 5:34 PM UTC

rrrrrrrrrrrryan wrote: post #51

AlexandrB wrote: post #35

Earlier quoted context omitted.

> It's like Uber are trying to shoot themselves in the foot with all the cost squeezing and profit seeking at the same time they're in a fundamental fight defining what they are. I don't think they have a choice. UberEats is fundamentally unprofitable. If it was run profitably, the high(er) prices would drive a large portion of their customers away and into the arms of other "startups" willing to run at a loss or tow…

I wouldn't go so far as saying they're "fundamentally unprofitable". They have a couple long-term options: the often-discussed one is autonomous driving (though it's becoming increasingly obvious this is many years out), but the less discussed one is vertical integration. It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants"…

It's noteworthy that Deliveroo is already doing the kind of vertical integration you describe, it's called "Deliveroo Editions"

Re: UberEats could be underpaying delivery drivers on 21% of trips

#57

Post by fireattack » Mon, Aug 24, 2020, 5:40 PM UTC

indymike wrote: post #43

fireattack wrote: post #20

Earlier quoted context omitted.

If frontpage is the indicator (which isn't nearly close to perfect), what I gathered all these years is that HN hates most of big tech companies, of not all.

I've never felt like the community hates the big tech companies... most of us are trying to grow something up to be big one day... BUT it is controversial when we see bad behavior, or potentially bad behavior. The discussions here really become useful in forming my own opinions.

I don't have any issue with this particular article (or this kind), people should be critical to any company anyway.

What shows the "hate" more clearly is when there is "good" news or just an neutral announcement from/about these companies, where you will see most of the comments being negative to a point they are often irrelevant to the article itself.

Re: UberEats could be underpaying delivery drivers on 21% of trips

#58

Post by s_dev » Mon, Aug 24, 2020, 5:43 PM UTC

rrrrrrrrrrrryan wrote: post #51

AlexandrB wrote: post #35

Earlier quoted context omitted.

> It's like Uber are trying to shoot themselves in the foot with all the cost squeezing and profit seeking at the same time they're in a fundamental fight defining what they are. I don't think they have a choice. UberEats is fundamentally unprofitable. If it was run profitably, the high(er) prices would drive a large portion of their customers away and into the arms of other "startups" willing to run at a loss or tow…

I wouldn't go so far as saying they're "fundamentally unprofitable". They have a couple long-term options: the often-discussed one is autonomous driving (though it's becoming increasingly obvious this is many years out), but the less discussed one is vertical integration. It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants"…

>It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants" in quotes, because it'll almost certainly just be warehouse-style kitchens, where drivers skid up out front and grab food from heated tables, and you won't be able to dine-in at all.

The term for this is dark kitchens.

Re: UberEats could be underpaying delivery drivers on 21% of trips

#59

Post by supernova87a » Mon, Aug 24, 2020, 5:44 PM UTC

zadkey wrote: post #50

supernova87a wrote: post #32

Uber is making it harder and harder to get on board with the idea that it's not an employer. Leveling out people's pay over multiple trips or retroactively adjusting the reward per job sure sounds like an employer having very strong control over the work conditions and compensation. And this almost brings back echoes of Doordash (?) when it was caught taking drivers' tips so that their pay was reduced to the minimum…

The biggest reason I would say that the drivers are not independent contractors is that they are not allowed to set their own rates. Uber's argument that they are not employees is based on the concept that they only a platform facilitating a connection between drivers people who need rides or in this case deliveries. But if the contractors are truly separate entities, then Uber by controlling the cost of the ride/del…

Wouldn't Uber's argument about this be that drivers do get to set their rates by the platform showing them and matching them with jobs that are at a rate they accept? Just because they can't put out a published $ figure on their desired per job rate, doesn't mean they're not setting their own rates that they accept?

Re: UberEats could be underpaying delivery drivers on 21% of trips

#60

Post by bluesign » Mon, Aug 24, 2020, 5:46 PM UTC

artoonie wrote: post #53

bluesign wrote: post #46

Earlier quoted context omitted.

Can you share one route uber underpaid by big margin? For the second part I agree, but without seeing outlier, maybe in some cases google couldn’t find the best route, compared to the app. PS: all this stats used Google Maps shortest path or best path?

https://imgur.com/v4bSD5S I was paid 1 mile, actual distance 3.5-4.0 miles. Previous versions of the app would use the first result returned by Google Directions API, which could have been best not shortest (I'm not sure, anyone know?). Newer version (pending app store review) does shortest always.

This looks like an obvious bug if it is straight line.

Yeah google can show longer but faster route depending on traffic etc.

Also one more thing can be, gps location point and address can point to different locations. Not sure how Uber is showing, or calculating from which one.