If you've got a great idea for a new business that you think will disrupt an industry and take over the world, also have a think about how easy your idea will be to replicate.
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While Uber threw colossal weight behind its push to use the ruse of paying strangers to effectively carpool with them when it actually intended to disrupt the taxi industry, once they got all the laws changed in their favour this also opened the door for many others to copy and compete with them.
Uber is still probably the brand name you think of (it's certainly the one the Aussie media keeps using) but there are actually several other options in Australia (and across the world). Uber has also branched out into other services like food delivery, but they were unable to avoid competition there too.
They even invested heavily in the development of self-driving before basically giving up on it and offloading that department for someone else to discover how incredibly difficult (and expensive) it is to complete the development of a truly driverless vehicle (they have had renewed interest in the idea since October 2022, but it's a partnership with Motional; they're not going back down the path of trying to develop it themselves).
Uber and most of its competitors follow the same business model. Create an app, take a slice of the fare, try to run at a profit. In Uber's case, it's a very big slice of the fare; around 10 per cent more than some of the other apps that drivers could work for.
For consumers, the basic pricing model is called surge pricing. This is an algorithm which causes the fare between two points to fluctuate based on demand. Uber says it does this to incentivise drivers to work during the busier periods. Consumers might call this price gouging. They may have a point too because not much of that surge goes to the drivers (and so it only partially makes up for the pitifully low pay in quieter periods).
As I indicated a while ago, rideshare and delivery drivers have been earning, on average, less than the award rate for the lowest grade of driver by the time they've paid all the expenses to run their own vehicle. The increasing cost of fuel and rising interest rates (which affect all variable-rate loans) don't help them either. Nor does only getting paid for driving one direction (travel between drop-offs and pick-ups is entirely on them).
And this is assuming everything goes well. In 2019, a Trade Workers Union and Rideshare Driver Co-Operative survey of over 1,100 ride-share drivers across multiple apps "shows high rates of harassment and assault, low pay, high expenses and lack of consultation on changes that affect drivers' earnings and safety," the TWU said in a statement.
In June 2022 Uber came to an agreement with the TWU. One aspect of this was better conditions like an independent umpire to help resolve any disputes. Another was a floor on earnings intended to prevent apps from competing on price to exploit these contract workers further.
Meanwhile, in 2022 another app showed up in Australia, attempting to make things fairer. But fairer for whom?
inDrive (previously called inDriver elsewhere) has a business model of consumers directly deciding how badly they're going to try and exploit drivers in quieter periods. Those same customers must surely get to realise just how badly when demand is high and nobody contemplates picking them up.
As such, I have spotted a litany of issues with the inDrive ad that I keep seeing.
First up, the couple in the ad want to be picked up from the airport. That's more expensive no matter the mode of transport.
Secondly, demand will clearly be high at that time, for obvious reasons.
Thirdly, the road network to and from the airport in question is also bad enough to discourage anyone with a motor vehicle from going anywhere near the place.
Fourthly, they want to go somewhere that is also on the train network, clearly in the daytime when - under normal circumstances - there will be many rail services running.
And fifthly, their destination is the "city centre", which is also likely to be congested (increasing the travel time, thus also making it even more likely that their low offer, if accepted, is going to be quite exploitative).
So I ask again. Fairer for whom?
