Re:In Video, Uber CEO Argues with Driver Over Falling Fares
by praneshp on Tuesday February 28, 2017 @06:35PM
(#13759360)
Im not disagreeing, can you explain why (or point me to reading material)? If customers aren't traveling business, won't the airline company either have to give away seats or keep them empty?
Re:In Video, Uber CEO Argues with Driver Over Falling Fares
by metafunctor on Tuesday February 28, 2017 @07:29PM
(#13759754)
Uber is the plane, and drivers are the seats.
Uber works so that each seat (or pair, or row of seats) is operated by a single driver, mostly at their own personal risk – with the operator of the plane controlling a lot of the equation.
Normal airlines assume an aggregate risk of the entire demographic and seasonalities of air travel. If customers suddenly stop traveling business, the airline can do something about it (lower prices, improve service, better marketing, and so on). With the Uber model, there's not so much a single driver can do, but they carry a lot of the risk.
You are right that some drivers going bankrupt is how the market would correct, but forcing them to take uberx fares at below cost is a dreadful idea and definitely not free market economics. If anything, it's like a govt regulation that requires businesses to do some stuff below cost to still be in the game.