Uber and Lyft’s Business Model May Be Dead. Good.
The biggest startups in modern history were built on old-fashioned worker exploitation. Time for an upgrade.
Uber is less a business than a constellation of fantasies. The same goes for Lyft.
Early on, Uber and Lyft positioned themselves as “ridesharing” companies that were a key part of the buzzword-emblazoned “sharing economy.” Uber offered luxury on demand, and Lyft claimed to be a fun, environmentally friendly alternative to taxis. Both sold themselves as efficient and city-friendly and promised to help cut down on miles traveled. That was a fantasy that evaporated before the first pink Lyft mustaches fell off the bumpers. The vast majority of rides turned out to be single-passenger trips, the intent was clearly never to reduce anything, and the startups, in fact, began to contribute seriously to congestion.
The companies promised a new model of work, one that would give rise to a network of part-time drivers, “independent contractors” who were free to come and go as their schedules demanded in between pursuing their true dreams and ambitions. That too was a fantasy. Research has revealed that while a majority of drivers do log part-time shifts, most of the work is actually done by dedicated full-time drivers. As one recent study found, “a majority of the trips are completed by drivers who are committed to and rely on” driving for the platform. (That study also found that 83% of full-time drivers purchased their vehicles to provide taxi services and that 72% of full-time drivers rely on driving as their sole source of income.) The company is staffed by what most people would recognize as “employees,” in other words.
A New ‘Franchise’ Model Could Help Uber and Lyft — but Not Their Drivers
The future of Uber and Lyft might look a lot like FedEx
Uber and Lyft sold themselves to investors as world-beating operations that would capture whole markets and then become profitable at scale. Surprise — pure fantasy. Even after a decade, neither company has managed to turn a profit. The startups sold themselves to cities as creators of good jobs and providers of new…