With current evaluation, according to Wall Street, Uber has an extremely bright future but I was wondering if this positive attitude was being shared across the board. It’s a no-brainer from a rider/customer’s point of view. The selling points of “reliable pickups; clearing pricing; and cashless and convenient” play directly into the needs of the millennials who haven’t bought into the need to own cars as their parents did. For the drivers, however, it’s a whole different game. As Uber tries to attract more drivers, it offers quick and easy money; working only when the drivers wants; to name but a few. In today's job markets where most job seekers fall short of the required skills for the job that are available. So what Uber offers paints an end job searching for a lot of people, but how do these benefits fare with those for the formally employed? "Drive your car and be your own boss".
The former cab driver, while his view is equally important, has only been doing this for a couple months so I am hesitant to say his vote is in. His positive view is based on saving on the expenses he used to have as a cab driver that are now greatly reduced. He was working 6 days a week and now with Uber he only needs to work 3 days, and still feels he is on top. What he hasn’t factored in is his taxes; social security; medical aid and I told him as much. When he was cabbing his expenses were higher, which greatly reduced his taxable income. I asked him if he had increased his estimated tax payments to accommodate the increase. The increase in income definitely puts him in a much higher tax bracket. While the USA tax are pay-as-you-go it is lost on most people. Waiting until tax time leaves you paying a small penalty for untimely payment of taxes. Willful neglect is not a viable excuse.
For some people who have been formally employed, it’s extremely difficult to move to the self-employed side without making a few mistakes. The biggest trap is the cash trap. Your financial habits are very different when you’re always liquid as compared to when you’re receiving your pay monthly or bi-monthly. Many of us who are not disciplined enough to have a handle on our monthly expenses.
The story did not have a happy ending for the fast food manager turned Uber driver. Not having a car of his own, he signed on for one of the options that Uber offers to finance a vehicle and pay installments on a weekly basis. These payments, on the high side, ate into what his supposed profits thereby making the venture much less profitable. Hence why he quit Uber and is now back to formal employment. If he had owned a car, he would have been under Uberx – the ride-sharing version of Uber.
In no uncertain terms the cab driver is extremely unhappy about what the introduction of Uber has meant to his ability to earn a living, especially where Uberx is concerned as the drivers appear to fly under the radar with different classification requiring less regulation. For all intents and purposes, the Uberx are operating a business of transporting people from place to place. While many might say, why don’t all cab drivers get on the bandwagon and become an Uber driver to him it would be as good as asking him to join the anti-Christ.
“1. We have established they are in direct competition with taxis, so why
are they not made to maintain the same licensing and permits as cabs?
They are not required to maintain 24/7 insurance, be subjected to
federal level drug testing, and maintain a good driving record,
subjected to random drug testing, and yearly car inspections as is
demanded of people who operate cabs.
2. Without having to bear the cost of the necessary commercial insurance, they can offer a much lower rate/mile than cabs.
3.
Without a gatekeeper like the Department of Transportation, any and
every one can become an Uber driver… -thus flooding the supply of
drivers and driving down the earning potential of full-time drivers.”
For our fireman it appears Uber is just the right fit. The extra income aptly covers vacation money after he had paid off his outstanding bills. Being that he has his benefits, including retirement burdens carried by his full time employer he is not as vulnerable as the other Uber drivers.
In
a world hungry for innovation, since it’s not coming soon enough, it
appears we are opting for disruption instead. It’s a dog-eat-dog world
where companies are rewarded for huge profits that are not burdened with
corresponding employee expenses. While we, as investors, yearn to see
our investment profits grow are we aware that our future customers need
to be employed by someone so that the equation works?
