Monday, May 5, 2014

Uber all, it's a competitive market

San Francisco is where the heart of economics has been left for all to observe;
To lure drivers from competitors like Lyft and Sidecar, Uber offers a $500 bonus after they complete just one trip on UberX. Existing Uber drivers can earn $500 if they persuade a driver for a competing ride service to come aboard.
But Uber also must balance market share with profit. It recently raised its commission rate to 20 percent from the 5 percent it set during the winter. In addition, drivers now must pay Uber a $10 a week "mobile subscription fee" for the dedicated smartphone they use.
"The rapid-fire price cuts (Uber made in the winter) clearly show the startup trying to build market share," said Shawndra Hill, a professor of operations and management at the Wharton School at the University of Pennsylvania. As it matures, Uber will focus more on setting prices to increase profit, she said.
Naturally, when the going gets tough;
Ramzi Reguii, who supports his wife and two children driving full time for UberX, said he will net only about $10 an hour after expenses and the new commission rates. He's organizing a protest of UberX drivers for Thursday at the company's San Francisco headquarters and urging drivers to strike that morning by turning off the app.
There oughta be a law!

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