Uber’s Auto-Loan Program Is Basically Indentured Servitude

by Paris Marx : thebolditalic – excerpt

The troubled gig-economy company breaks new ground in exploitation.

Until recently, Uber drivers had to own their own vehicles (10 years old or newer) and pay all their vehicle-related expenses out of their earnings. Yet as Uber has grown, the vehicle requirement has proven to be a major barrier to growing the number of drivers on the platform — at least partly because drivers have an incredibly high turnover rate, a testament to the fact that driving for Uber is generally not very stable or lucrative work. Recently, the company has found a solution: facilitating car loans directly for drivers so they can rent a car from Uber in order to drive for Uber — in effect, paying back the company as it pays them.

Uber’s Subprime Auto Loans

The largest US ride-sharing platform, Uber has been infused with billions of dollars in investment and, as a result, is in rapid growth mode, relentlessly hiring drivers around the country. Getting a driver’s license is a relatively easily learned skill in the United States — hence, finding drivers is not necessarily a problem for Uber; rather, finding drivers who own cars that meet Uber’s vehicle requirement is. Thus, over the past few years, Uber has made a number of deals to experiment with offering vehicle leases to drivers before finally launching its own auto-loan company, Xchange Leasing, in 2015 to offer subprime loans to drivers. “Subprime,” in finance speak, refers to the credit status of the lessee: “prime” borrowers are desirable ones with a high probability of paying back loans on time, whereas “subprime” borrowers are less than optimal for banks — and hence usually suffer higher premiums, interest rates and more predatory contracts to make up for their undesirability as clients… (more)

This looks like the perfect Ponzi scheme. Use investor’s money to multiply your investments. In this case, invest in cars, mark them up and lease them to your “contractors” at a profit. How long before the ‘contractors” pull out or go on strike and leave Uber holding the debt?

RELATED:
Naked Capitalism has published a five-part series on the economics of Uber… t sheds light on the lack of profitability in the current business model, and how fares are subsidized with billions in losses and VC money to try to achieve a monopoly position.

When their shifts end, Uber drivers set up camp in parking lots

By Eric Newcomer and Olivia Zaleski : chicagotribune – excerpt

In the 1970s, the Safeway grocery store in San Francisco’s gleaming Marina neighborhood, known as the Social Safeway, was a cornerstone of the pre-Tinder dating scene. Armistead Maupin made it famous in his 1978 book, Tales of the City, calling it “the hottest spot in town” to meet people. For years afterward, locals called it the “Singles Safeway” or the “Dateway.”

Forty years later, German Tugas, a 42-year-old Uber driver, got to know it for another reason: Its parking lot was a safe spot to sleep in his car. Most weeknights, Tugas drives over 70 hours a week in San Francisco, where the work is steadier and fares are higher than in his hometown, Sacramento. So every Monday morning, Tugas leaves at 4 a.m., says goodbye to his wife and four daughters, drives 90 miles to the city, and lugs around passengers until he earns $300 or gets too tired to keep going. (Most days he nets $230 after expenses like gas.) Then, he and at least a half dozen other Uber drivers gathered in the Social Safeway parking lot to sleep in their cars before another long day of driving… (more)

What do Uber drivers in San Francisco have in common with San Jose cops? They both sleep in parking lots.

Uber and Lyft: Friend or Foe in the Battle for Livable Streets?

by : sf.streetsblog – excerpt

UberPOOL, which gives Uber customers discounts to share rides, launched about a year and a half ago in San Francisco. Uber is now rolling the service out to the East Bay.

UberPOOL is more affordable because the cost of the trip is shared. The fare per trip is set at up to 50 percent cheaper than UberX during commuting hours (7-10 a.m. and 5-8 p.m.) and up to 25 percent cheaper every other time–whether Uber pairs you up with another passenger or not.

Lyft Line, of course, is the equivalent service from Uber’s competitor. By combining trips, both should reduce congestion–that is, if one goes with the theory that car sharing services pull people away from single occupancy, privately owned cars. But what if they’re pulling people away from transit, walking and cycling?

There are certainly some conveniences, and even some benefits of ride-hail. So far, however, the data demonstrates that overall, ride-hail is adding vehicles to our streets,” said Nicole Ferrara, Executive Director of Walk San Francisco. “For those companies that are telling us otherwise, I say, show me the data!”.

A study from the University of California, Berkeley, seems to support Ferrara’s conclusions. According to a survey that was part of the study, over 40 percent of ride-hail customers said they would have walked, biked or taken transit. Survey questions were asked of ride-hail customers right as they got out of an Uber or Lyft. A previous Streetsblog post, looking at Uber’s impact in Manhattan, seems to support the claim that Uber generates more vehicle miles, more congestion and, one can extrapolate, more pollution…(more)

Not to mention the fact that many Uber and Lyft drivers do not live in SF but commute here from long distances to drive around all day waiting for a call. That adds to the number of single user cars and long distance commuters on the road. Of course this problem and many others, such as the Shuttle buses, could be solved by establishing multi-use transit parking garage hubs near freeways and bridges on the outskirts of SF. We are advocating for that solution.

An Uber Labor Movement Born in a LaGuardia Parking Lot

By : newyorker – excerpt

Last Tuesday afternoon, at LaGuardia Airport’s Lot 7, fifty Uber drivers logged out of the app and staged a strike. Lot 7 is where drivers typically wait to pick up arriving passengers, and it was full of rows of black and gray sedans and S.U.V.s. The protesters stood at the entrance to the lot, holding hand-drawn signs that read, “Support us we have family too” and “Bring back rates to where they were!” Any car leaving to take a job had to pass through the gauntlet. If the crowd determined that the driver was working for Uber, it slapped signs against the driver’s windows, blew plastic whistles, and shouted, “Shame!” and “You work for Uber; you are a slave!”

On January 29th, Uber had reduced fares in more than eighty cities in the U.S. and Canada. Drivers in some of those cities, including San Francisco, San Diego, Tampa, and New York City, have reacted with strikes and protests. One of the many barriers to sustainable organizing for those working for sharing-economy apps like Uber and Lyft is that the flexible, cloud-based nature of the service creates a relatively tenuous connection to other workers. Uber drivers have protested policy changes in the past, but this round appears to be more widespread and intense than before… (more)

Add this to the fact that Uber was one of the Super Bowl sponsors that was supposed to be the driver of choice for the audience, and they could not pick people up after the Super Bowl because they couldn’t get there. All the traffic was moving against them.

Angry Uber Drivers Threaten to Make a Mess of the Super Bowl

wired – excerpt

This Sunday, Super Bowl 50 will thrust San Francisco—and Silicon Valley—into the national spotlight. Though the city is officially hosting Super Bowl festivities, the game itself will be played a long drive to the south at Levi’s Stadium in Santa Clara, the suburban home of tech giants such as Intel. One of the easiest ways to get from the city to the stadium is to summon an Uber. But that might not be so easy tomorrow, if drivers follow through on their pledge to protest their wages by turning off their apps ahead of the big game.

A movement to boycott the Super Bowl is bubbling up among Uber drivers in online forums and on social media threads. Protesters at a recent demonstration outside Uber’s San Francisco headquarters also called for a driver protest.

One flyer circulating online urges drivers to take Sunday off to make the point, and to spread the word on Twitter using the hashtag #UberSuperBowlStrike. Another calls for drivers to convene at Candlestick Park—where the NFL’s 49ers used to play in San Francisco proper—likely in order to replicate a  driver caravan protest that snarled traffic on Monday in San Francisco.

All of which puts Uber in a particularly delicate position. The company snagged an official partnership with the Super Bowl Host Committee, stealing away an exclusive lot for pick-ups and drop-offs 15 minutes away from the stadium, plus a special “lounge” for riders after the game—a move seemingly designed to draw good publicity for the oft-criticized company. But that positive attention will fade quickly if drivers leave Super Bowl fans stranded… (more)

Couldn’t happen to a more deserving company.

1500-2000 Uber Drivers Expected To Participate In Super Bowl Protest Monday

Because we have the Super Bowl happening here, we have them by the balls,” “Uber Drivers United” leader Mario says in a video posted to YouTube Sunday. That why, he says, between 1500-2000 drivers are expected to drive slowly through San Francisco Monday afternoon, protesting what he says is Uber’s practice of “screwing over” drivers.

According to Mario (who did not give his last name in the video), Uber is planning on dropping driver wages to “50 cents per mile before [the] Super Bowl,” and this protest is an effort to register displeasure over that as well as to indicate interest in “Cityride,” which he says will be “a new company that is not going to screw over the drivers anymore.”

(It’s unclear if Mario is referring to the CityRide car service app, which was recently established by a trio of local limo services, or another, similarly-named service.)

Mario says that today, drivers will meet at 2 p.m. at “the big parking lot” at the former site of Candlestick Park. From there they’ll proceed slowly, caution lights on, to protest at Vermont and 16th Street, which is apparently Uber’s San Francisco driver’s office.

After a pass there, drivers will proceed to San Francisco City Hall to stage another slow-driving demonstration. Then it’s off to protest at Uber’s headquarters at 1455 Market Street, which is between 10th and 11th Streets — yes, a significant distance from the road blocks near Super Bowl City, but given how rotten the downtown closures have made traffic overall, anyone traveling on surface streets should expect to find themselves at a standstill.

In the video, Mario suggests that drivers are shooting for even more of an impact than their “honk-in” on January 25(more)