Fact checking Uber's claims about driver income. Shockingly, they're not true
As I wrote the other day, the traditional taxi industry is going to war with Uber and other ride-sharing start-ups.
Uber's response makes a diplomatic solution approximately as likely as paying $10 for a ride on a rainy New Year's Eve.
As Pando's James Robinson explained yesterday, CEO Travis Kalanick is now portraying his company as engaged in an epic battle for good and evil in which everything is at stake, after which nothing will ever be the same... you've seen this movie before.
"You're changing the way cities work, and that’s fundamentally a third rail," Re/code quotes Kalanick. "We’re in a political campaign, and the candidate is Uber and the opponent is an asshole named Taxi," he continued. “Nobody likes him, he’s not a nice character, but he’s so woven into the political machinery and fabric that a lot of people owe him favors.”
Uber's demand? Nothing short of unconditional surrender. “We have to bring out the truth about how dark and dangerous and evil the taxi side is.”
But for all the attention Kalanick's comments got yesterday, one other aspect of his rhetoric has passed almost unnoticed by the major tech press.
On Tuesday, Uber released a statement claiming that UberX "drivers around the world are seizing Uber’s economic opportunity by building small businesses for community needs long forgotten by the taxi industry: high quality, safe, reliable and affordable transportation options. At its current rate, the Uber platform is generating 20,000 new driver jobs every month. UberX driver partners are small business entrepreneurs demonstrating across the country that being a driver is sustainable and profitable…the median income on UberX is more than $90,000/year/driver in New York and more than $74,000/year/driver in San Francisco."
Amazing. And yet untrue. Some drivers claim they're working for less than minimum wage.
Time magazine points at the weasel words "business income." Which ain't, you know, what you actually get to keep. Uber's "figure excludes many of the costs of running a business, including gas, insurance, parking, maintenance and repairs and the original sale or lease price of the car which can take some hefty bites out of the driver’s take home pay."
"So the truth still lies somewhere in the vast expanse between minimum wage and $90,000, and no doubt is as varied as the businesses being run by the drivers’ themselves."
Uber also claims spectacular revenues: "The Uber platform generates $2.8 billion per year for the U.S. economy, and is growing." But if you follow the supplied link to the "ECONorthwest Analysis May 23, 2014" that supposedly backs up this claim, www.econw.com, you will not find the word "Uber" or any mention of the company's purported $2.8 billion contribution to America's economic wellbeing. The link is merely a front page for a consulting firm.
I also searched ECONorthwest's list of publications. There is nothing on this website about Uber. As far as I can tell, there is no evidence (despite the missing link) to support the $2.8 billion figure. Which isn't surprising, given that the U.S. taxi industry generates an estimated total of $10 billion annually. Uber is growing, but it probably isn't collecting 22% of the national take.
The key is the weasel phrase "generates… for the… economy." This appears to be a stab at what economists call "economic activity," not revenues, but the much larger multiplier effect. Under this deliberately confusing formulation, an Uber driver who buys a cup of coffee at Starbucks has just generated $2.40 for the U.S. economy.
In addition to his desire to take over the world (its city streets anyway), Kalanick may just be running for the post vacated by the late Steve Jobs: smart, wildly grandiose, grandmaster of bluster and bullshit. We'll see if he gets as far.
[Illustration: Brad Jonas for Pando]