You nailed it in your post. Notice that none of the five drivers mentioned they got a lease through Uber Xchange, which implies none of them are relying on Uber to make their $600 to $800 monthly payment which gets deducted in weekly increments from their Uber checks. The key phrases from your post: Driver 1 and 2: "...retired software engineers...only picked up local fares..." Driver 3: "...young engineer...used Uber to get pocket money..." Driver 4: "...used Uber temporarily...did not interfere with job search at all." Driver 5: "...drove for fun...only when he had time..." Obviously, these five drivers aren't candidates for the Uber Xchange. All five were NOT desperate for money or trying to rely on Uber just to survive, unlike the candidates from Uber Xchange. If they were, then you'd probably have very different responses.
Anyone who is in a desperate situation will have to resolve to desperate measures. It's unfortunate but true. Many are on this message board. In that regard, it's not all that different then TST now is it Joe?
In earlier posts you claimed "$650 a month is a steal for these Uber drivers" and "the lease program is a good idea." Now you're saying it's for people in a "desperate situation" that "have to resolve to desperate measures." I agree that your latest post is more of an accurate assessment of Uber's target market for the Xchange program. However, it's not the same for everyone who approaches the TST model. Many of their live traders (according to TST's own admission) are former professional traders who simply wanted to trade OPM or for those who wanted to improve their "edge" by trading in a structured account setting. There are those who can afford brand new cars that drive for Uber, just as there are those who can afford their own retail accounts but choose to take a combine through TST instead (or as an additional account, as mentioned by TST's audio interviews).
I think the $650 is a steal if they can walk away from the lease if they decide not to drive for Uber anymore. Joe I don't think you realize just how hard it is for some people to get a lease for a car. There are income requirements and credit requirements. Most people can't afford to buy new cars in this situation. Just as most people cannot afford to properly fund a retail trading account and no, 10k is not a properly funded account just as a 5k car is not suitable for Uber. Uber knows their target market is not ex-Goldman employees but rather people who have limited options in life. You need to understand just who these people are. Personally if I drove for Uber and I had a brand new car, I would still rather lease a separate vehicle just for Uber so I don't run my own car into the ground. I really don't understand why you think this is a bad deal. Would it better if they stayed at home and earned no income? Logic tells us if a better opportunity was available, they would take it. Or are you also debating that as well. Honestly I'm not sure what point your trying to make. I agree with you Uber is not a career I would want my kids to shoot for. I don't think it's a good career at all. But neither is flipping burgers at McDees. What do you want these people to do? What can they do?
Although I don't agree $650 is a "steal" I DO agree that Uber Xchange makes it easy for those to get out of the lease lease given the return clause with 2 weeks notice. "Logic tells us if a better opportunity was available, they would take it." Logic says if they take the Uber Xchange lease, they will churn, and Uber Xchange will simply re-lease the car to another driver. The "better opportunity" is to see if they can get into an lease on a car that's already been returned, since that car obviously cannot be sold as new. Thus, the price of the lease should be lower. I'm agreeing with the Bloomberg piece that suggests the terms are predatory, but that doesn't mean people won't take the deal if they face limited choices. There's obviously a huge target market, or the banks wouldn't backstop the deal for $1 billion. It's a guaranteed revenue stream for the banks, as long as there are NEW drivers willing to take the deal on the Uber Xchange terms. Yes, there are income requirements and credit requirements for sure. The Uber Xchange drivers may have tried to obtain a car through the traditional channels before agreeing to the terms for the Xchange. Eventually, they will realize that Uber is a tough gig with heavy churn. We'll soon find out how they're doing since you promised to ask the driver if you happen to come across anyone who leases from the Xchange.
Hertz to rent out its cars to Uber, Lyft drivers Hertz will make rental cars that it's shifting out of service available to Uber and Lyft drivers for weekly rental at around $180. The company says it believes that renting cars to the two biggest ride-sharing startups will be more profitable than selling the vehicles. (Bloomberg)
Caught a ride with Lyft this morning. Driver said he was an artist during the day and drove 10 to 12 hours per night, 6 nights a week. He drove like a bat out of hell, but was careful, and nice. I can't imagine anyone driving their own car that way. You would be down to the rotors in a couple of weeks.
It's good for Hertz, and for consumers of the two ride sharing services. More supply of cars matched with willing drivers paying $180/week equals more competitive fares for consumers. Both Uber and Lyft are paving the way for driverless cars. However, as it's been discussed already, these drivers may still opt for the $180/week deal if they're looking for some income, and have limited options. When the driverless technology is safe enough to market to the masses, the ones losing the income stream will be all of the drivers. From the article: "General Motors Co. took a stake in Lyft and they have said they aim to develop a fleet of self-driving taxis. Fiat Chrysler Automobiles NV, which is supplying minivans to Google’s self-driving car program, has started discussions with Uber on a potential partnership on driverless cars, people familiar with the matter said earlier this month."
Uber is fighting dozens of lawsuits Uber, known for its brash, ultra-competitive culture, is fending off more than 70 lawsuits filed in federal court. So far, Uber has avoided crushing legal losses by shelling out $163 million in settlements. But it has yet to resolve the thorniest question over whether its drivers should be categorized as contractors or employees. (San Jose Mercury News)