ShmoopTube

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Finance Allah shmoop What are the economics of uber Ah

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uber you've seen it The little you thing there Yeah

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that designates it's an uber driver car Well from pretty

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much nowhere in two thousand eight Uber today is a

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big uber German for all over or everywhere so there

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are two flows of economics to this now enormous company

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One flow is about extra dough coming into their drivers

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on a given trip a driver collects eighteen dollars forty

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cents from the trip Uber gets twenty five per cent

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of that money or four dollars sixty cents in this

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instance anyway and the driver pockets the rest It was

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a nine mile trip It cost the driver about a

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dollar in gasoline and maybe figure another dollar in wear

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and tear and insurance and maintenance and occasional vomit clean

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up and well on that two dollars of expense The

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driver then keeps eleven dollars eighty cents for her time

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in gross profit Not a bad gig Getting three of

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those rides in an hour and it sure beats flipping

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burgers So that's one set of economics It's contractor work

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for the drivers who by the way as contractors can

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tax deduct a meaningful part of the cost of operating

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their car Since it qualifies as a business expense it's

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legit So then what about the four dollars sixty cents

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too Hoover What was uber's expenses Toe Earn that four

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sixty Well uber is basically a giant billing system at

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art They track and bill and clear in calendar drive

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units and make everything look all nice and pretty on

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a spreadsheet So there was a big fixed cost to

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initially build that giant database to track all of the

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driving events But then once the database was built well

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not a lot of expenses continue to Maine Chainat Uber

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also had to recruit tons and tons and tons of

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drivers like in a lot of cities That's their pinch

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point They can't get enough human beings who need or

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want the extra dough to just you know be around

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quickly enough so that uber demand er's get serviced quickly

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enough in that local area such that they don't either

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Goto lift their hated comm editor of Uber for God

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forbid call one of these yellow things Taxi That's what

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it was What recruiting drivers who are a legal be

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non convicted violent felons and see not suffering from extreme

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halitosis or B o is not easy There's a whole

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background checking process and all kinds of loitering and human

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resource ing and other stuff that has to go into

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this human filtration system All right well what other expenses

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Well insurance is a biggie Never know when a driver

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is gonna decide to take a shortcut through the Chicago

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River there Then there's government regulation that keeps hitting him

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or at least the threat thereof Read Mohr Lawyer Bills

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Yeah so yeah a lot of elements to noodle here

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But overall uber is doing just fine for itself In

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fact weed you know have to give them five stars

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