Uber,- Insurance and Integrity Problems

Uber is up to it's old tricks again, advertising 'facts' that are not even close to being 100% factual. In this case Uber claims that they perform background checks that exceed the checks performed by conventional taxi companies, and they also  claim to have 1 million dollar per incident liability insurance. A recent NBC investigative report from a San Francisco TV station exposes the fallacy of these claims.

  It turns out that when you ride in an Uber car, you are typically not covered at all, neither by the drivers personal insurance nor by any insurance whatsoever from Uber. If you incur any injury while riding, or crashing, in an Uber car, you or your family will be stuck paying the entire medical bill yourself. This type of expense, potentially hundreds of thousands of dollars, could of course bankrupt even a well to do person. 

The insurance that private drivers carry does not cover the car, or the driver, if the car is being used professionally to provide transportation for hire. This kind of coverage requires commercial insurance, the type required by law in conventional taxi's and limo services. This commercial insurance is
significantly more costly than standard personal coverage, and to purchase this kind of insurance would render the driving of an Uber car economically unfeasible.

As for Ubers claim regarding extremely thorough criminal background checks, it seems that Uber is not being totally honest with their claims in this area either. They are clearly not more exhaustive than those required for legitimate taxi companies, and there is some question as to whether Uber performs any criminal background checks at all. NBC reports that they found drivers with criminal histories not only in San Francisco, but also in LA and Chicago. These drivers, some of whom were still on probation, had past convictions that include burglary, assault, and drug trafficking charges.  NBC even went as far as to have undercover felons apply for employment, and Uber hired them without question.

 Given these facts, I would not want my wife, child, or other loved ones to ride in an uninsured car
with a convicted felon which may very well be the case with an Uber ride. I'll stick with the traditional taxi companies who are required, by law,  to have proper insurance and also required by law to conduct a thorough background check performed by an accredited agency.

Can You Make Money with Uber ?

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Uber is not all it is Cracked up to be

If you are a professional driver who is considering a job driving with Uber, there are some things you need to know. Do not be fooled by their deceptive and sometimes downright dishonest, claims about the benefits of joining Uber.  Ads in most major cities are claiming incomes of $1000 per week, while in reality Uber drivers are earning less than half that amount even working 50-60 hrs. per week. The Uber concept is good for the consumer, great for Uber, and horrible for the driver.
In an article that appeared recently in Business Insider , the author interviewed several Uber drivers and they uniformly stated that they have never come close to earning what Uber ads claim, and that earnings have been steadily decreasing for some time now because  Uber has flooded the market in most major cities resulting in less than 50% occupancy for most  Uber drivers.  Not a single driver reported making anywhere near $1000 a week after subtracting gas cost and fees paid by the driver, and of course after Uber takes their 20% right off the top. Add to this the wear and tear on your vehicle and it turns out the driving for Uber pays significantly less than driving for a conventional cab company.

Uber also employs a bait and switch tactic when trying to attract new drivers;  In LA, for instance Ubert started out with a $2.50/mile rate that attracted many new drivers, since at $2.50/ mile the drivers could earn a living without working  a ridiculous number of hours. Once the needed drivers were hired, Uber dropped the rate to a measly $1.10 per mile, not enough to make a living no matter how many hours the driver works. The chart below shows how Uber empoloyed the same tactic in NJ:

NEW JERSEY:
Original Price          Summer 2014 Price              Fall 2014 Price
$2.25/mile                 $1.90/mile                    $1.64/mile
$0.30/minute               $0.20/minute                  $0.20/minute
$3.00 base                 $3.00 base                    $2.00
$7.00 minimum              $7.00 minimum                 $6.00 minimum

As this chart shows, Uber started out advertising reasonable rates that would provide a full time driver with a reasonable living, and within the space of a few months dropped the rates so that the same driver working the same hours would make 28% less; Thus a driver making $50,000/yr gross to begin with would make only $36,000/yr after the rates were lowered.

Another move by Uber to attract more business was to cut rates in major markets to well below -market levels, attracting new traffic (which Uber profits from) while forcing  drivers  to drive longer hours at the reduced fares to make the same amount of money.  Once again, Uber wins, the consumer wins, and the drivers lose.

It is also worth noting that Uber discourages tipping, and didn’t even include the tipping option in the app until very recently. That is because tipping doesn’t benefit Uber, and by not encouraging tipping the service appears more economical to the consumer.

Probably the best indicator of how Uber views their drivers is the fact that they try to convince their drivers that all of their sleight of hand concerning rates, fares, and commissions is actually in the driver’s best interests. Not only do they brazenly exploit the very drivers who have made them rich, but they treat them as if they are ignorant fools who will believe the wild claims that Uber has been making a standard component of their business model. Compare this shady way of doing things with the legal, moral, and business philosophy of the traditional cab company or limo service, and I think you will agree that there really is no comparison at all.

This is also true when it comes to vehicle maintenance and replacement costs since with the legal cab company the driver does not incur any repair or replacement bills like the Uber driver will encounter as his car ages rapidly from the grueling regimen a commercial car endures. The expense of having to purchase a replacement vehicle is enough to put most single car Uber drivers out of business, or at best deeply in the red for a considerable time.

After taking all of these  factors into consideration, it becomes clear that driving for Uber has absolutely no advantages over driving for a traditional, legal, cab company. The cab company’s rate ( currently around $2.40/mile in most urban markets) is not going to fluctuate wildly. This provides the driver with a stable income allowing them to make future financial plans with a reasonable amount of confidence that their incomes will remain stable moving forward. The cab company is unlikely to flood the market with excessive cars/drivers as has been the case with UBer in several locations. The bottom line is that Uber does not live up to it’s claims and there is more money and more security driving for a legitimate, legal cab company.

Request your local Uber drivers in Tampa, Miami, Orlando, St. Petersburg, Clearwater, Sarasota, Jacksonville, Ocala, Naples, Gainesville, Tallahassee, Fort Lauderdale, Cape Coral  and ask how much money they really make......

Round trip St Petersburg - Tallahassee for $1.5 K

Picture by Tampa Bay.com

Charlie's Luck and round trip to Tallahassee

"A few weeks before Thanksgiving, staff at the Loving Care assisted living facility in St Petersburg realized something had changed in Malcolm Ramsey's life.

Relatives who had never paid much attention to Ramsey, 55 and mentally incompetent, suddenly started showing up in droves. Bulging bags from T.J. Maxx and Bealls filled his half of a tiny, shared bedroom. Boxes of new athletic shoes — Nike, New Balance, K-Swiss — towered against the wall.

Then there were the rumors that Ramsey had hit it big in the Florida Lottery.

Ramsey's legal guardian got involved. So did St Petersburg police, an adult protective services worker and, eventually, a judge. And slowly, the story came out.

Sometime in October, Ramsey had won "$500 a week for life" on a scratch-off Florida Lottery ticket. With the help of a cab driver, he had gotten an ID, a copy of his birth certificate and a ride to Tallahassee to claim the prize. He took it as a lump-sum payout — $403,288........."

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