Sunday, May 24, 2015

How Uber drivers Jack up their fares and it doesn't matter to me.

Many Uber drivers are clever, and in it for the money. In New York City, where Uber X drivers are licensed by the Taxi and Limousine Commission as livery drivers, surge prices are important to the professional Uber X drivers and these higher prices are important to driver income in many other cities. Uber uses an algorithm that determines the balance between passengers and vehicles on an ongoing basis and when the cars are in greater demand than they are available the fare goes up. Some Uber drivers are taking the situation in hand and trying their hand as surge rain makers. One Los Angeles Uber driver posted a "how to" video that didn't stay online for long. On the forum Uber drivers discuss how to make a surge happen. Their methods include cancellation while en route to a pickup and manipulation of the rider app, which many travel with.

I'm a yellow taxi driver in NYC who so far continues to benefit from Uber drivers activity. I drive for a fleet and all of the fleets are experiencing driver shortages during most shifts. Many taxi drivers went to Uber. At the same time business for the individual yellow taxi drivers still driving yellow doesn't seem to have been negatively impacted, not yet. In other words the decline in yellow taxi customers (which I think is being exaggerated) is matched by a decline in the number of yellow cabs on the streets. The danger lies ahead if Uber makes another leap and taxi owners who can't cover their shifts are driven out of business. Right now Citibank is trying to repossess 90 medallions currently held by Evgeny Friedman, the taxi mogul everyone loves to hate. Friedman hopes to be awarded "too big to fail" status. He controls 800 medallions. It's possible that if these medallions are put on auction by Citibank 14 billion dollars of value could evaporate in New York City and a domino effect may then hit other cities. I'm not a medallion owner.

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