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Uber, lyft and other taxis

Are ride-hailing platforms keeping their drivers honest?

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The rise of digital ride-hailing company Uber and its clashes with traditional taxi services is often cited as one of the classic stories of digital disruption, but is the platform also helping keep passengers from getting ripped off?

That’s the conclusion a group of MIT Sloan and industry researchers arrived at when they examined the levels of moral hazard present in similar trips taken in traditional taxis versus Ubers across New York City.

The researchers—visiting assistant professor of marketing at Washington University in St. Louis, Missouri, and former post-doctoral associate at MIT Sloan Meng Liu; professor Erik Brynjolfsson; and Uber policy economist Jason Dowlatabadi—looked at the extent to which taxi and Uber drivers completing comparable trips through the city deviated from the optimal route and engaged in speeding.

Both behaviors are considered opportunistic in certain situations: detouring extends the length of a distance-metered trip, which boosts the fare—and how fast or slow a driver goes, depending on the conditions of the trip, can have the same effect.

The study used detailed trip-level data to analyze thousands of Uber and taxi rides from two time periods in 2013 and 2016, matching drivers from each service whose trips began and ended around the same time and who ferried customers between similar destinations. That ensured that both drivers would have been subject to the same real-world conditions during the trip.

In 2016, Uber changed its fare calculation system from one that calculates both the driver and rider’s fares at the end of the trip to one that charges the rider an upfront amount on a credit card, with the company paying the driver any differentials for distance and time.

The researchers found that taxi drivers are more likely than Uber drivers to take advantage of a situation that offers opportunities to earn a higher fare by detouring or speeding, and when a taxi driver switched over to driving Uber, their behavior also changed to match the effect.

On trips where the fare is metered by distance, taxi drivers were more likely to detour from the optimal route, extending a trip’s distance by about 7.4 percent on average when traveling to or from an airport. The difference was even larger when the driver knew the passenger was from out of town. Taxi drivers also tend to speed more than Uber drivers, the research found.

Though more likely to follow the optimal route than taxi drivers, Uber drivers do tend to be susceptible to detouring or driving more slowly to extend a metered airport trip when surge multipliers—temporary increases applied to the platform’s fares when rider demand rises—are high, the researchers found.

The speeding behavior, the authors wrote, is typically an attempt to make up the deviation in distance with time, or to stay above slow speeds. Under New York’s taxi regulations, drivers are typically paid $2.50 plus 50 cents per fifth of a mile traveled, but that fare switches to a lower 50 cents per minute rate once they begin driving below 12 miles per hour.

The researchers noted that taxi drivers can actually make more money by alternating between stopping and rocketing forward at 24 miles per hour in traffic.

Both drivers detoured less on short-distance trips in highly saturated markets, where making fast trips benefits drivers by allowing them to pick up new rides more quickly.

“When taxi fares are metered as a two-part tariff, taxi drivers tend to detour on longer routes because the variable part of the fare can justify the detour,” the paper reads. “On the other hand, taxi drivers tend to detour less in short routes, especially in thick markets like Manhattan, because it is in their best interest to take as many trips as possible to exploit the proportionately larger fixed component of the fare.”

For Uber, technology enhances transparency

Part of what helps keep Uber drivers on the literal straight and narrow are the technologies native to the platform, which make the cost for detouring higher than for taxis, the researchers wrote. Those include global positioning technology, user rating and digital feedback systems, and technology-assisted monitoring capabilities, all of which increase market transparency.

Similar technologies are in use by Uber’s main competitors, like Lyft.

“The Uber technology platform and pricing scheme reduce driver moral hazard behavior where taxi moral hazard return is high, but at the same time create other margins for driver moral hazard,” the authors wrote.

Passengers can monitor the route being taken if it is displayed on a smartphone screen, and they can more easily file a complaint or score the driver lower on the app’s rating system if they’re displeased with the service.

As a result of these tech-aided market designs, “the Uber driver’s routing is likely more efficient than that of the comparable taxi driver in situations with high moral hazard payoffs for both drivers,” the authors write.

But those technological aspects that make Uber drivers less prone to moral hazard when taxi rewards for such behavior are high might make them less likely to take a better route in situations where the GPS may not be as accurate as their own traffic knowledge, precisely because riders tend to dislike deviation from the guided routes. Doing so is disincentivized because it can lead to lower ratings, even if the driver-chosen route is the better one.

A platform’s transparency could increase consumer welfare

Liu said the Uber and taxi data offer a prime opportunity to measure the effects of a prevalent platform and how reducing information asymmetry can lead to increased consumer and societal welfare.

“Many, many digital platforms are popping up and gaining market share, so it’s crucially important to understand whether and how, exactly, they lead to enhanced consumer welfare. That is really one of the central questions for us to understand welfare in the digital economy,” Liu said.

Source: https://phys.org/news/2018-09-ride-hailing-platforms-drivers-honest.html

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Uber, lyft and other taxis

Lyft Is Another Step Closer to Driverless Ridesharing

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Ridesharing company Lyft (NASDAQ: LYFT) inched a little bit closer toward self-driving ridesharing last week when it said in a blog post that it’s adding Chrysler Pacifica hybrids to its autonomous vehicle (AV) testing fleet and opening a new self-driving vehicle test facility.

The new facility, located in East Palo Alto, California, will allow the company to increase the number of AV tests it can run. It will also let the company test how the systems do with different road configurations, including intersections, merging lanes, traffic lights, and similar challenges. The company said in the post that the new facility will let Lyft “further accelerate the speed of innovation.”

Lyft says that it’s driving four times more autonomous miles per quarter than it was just six months ago and has about 400 employees worldwide working on self-driving tech. That figure is likely to expand, considering that Lyft has more than 40 autonomous vehicle job openings listed on its website.

In addition to the new facility, Lyft said that it’s adding Pacifica minivans to its AV fleet, which is the same vehicle that Waymo, Alphabet’s self-driving car company, uses for its public self-driving ridesharing project and AV tests. Lyft said that, “The minivan’s size and functionality provide our team with significant flexibility to experiment with the self-driving rideshare experience.”

Why does all this matter for Lyft’s autonomous-vehicle future? Because to have a successful, public self-driving ridesharing fleet in the coming years, Lyft needs to lay the groundwork right now.

Isn’t Lyft already doing AV testing?

Lyft is, of course, already working on AV testing. The company’s original self-driving test facility has been up and running since early 2018. The company also started a partnership with Waymo earlier this year to test autonomous ridesharing. Additionally, Lyft also works with Aptiv, an AV tech company, and together they’ve created “the largest publicly available commercial self-driving program in the country” and have completed more than 75,000 rides through the partnership.

But the recent announcements by Lyft show that the company is taking its AV focus a bit further. The Pacifica minivans have been used by Waymo’s AV ridesharing program in Phoenix for more than a year now, making them a proven choice for shuttling around ride-hailing passengers. Lyft may not be ready to launch a wide-scale autonomous ridesharing service just yet, but testing out these vehicles likely means that it’s moving past earlier stages of AV testing and is now looking at how its next-generation self-driving tech can handle new vehicles.

Why this matters for Lyft

Lyft and other ride-hailing companies, including Uber, are keeping a close eye on self-driving developments and testing out the technologies themselves because it could eventually become an integral part of their business model. Research from Intel predicts that the AV ridesharing market could be worth $3.7 trillion by 2050.

Additionally, as regulations surrounding ridesharing drivers continue to increase, Lyft is likely looking to AVs to eventually replace some human drivers. Just a few months ago, the state of California introduced a bill that could pave the way for independent contractors, including Lyft’s drivers, to be reclassified as employees. If a version of the bill becomes law and other states follow California’s lead, it could significantly increase operating costs for Lyft. That could be bad news for the company, which is unprofitable right now and hoping to be in the black just two years from now.

While Lyft’s announcements may not seem all that significant right now, investors should know that these baby steps moving the company closer to AV ridesharing could have huge results in the coming years. For now, investors should be pleased that Lyft is beefing up its own AV testing. Each move the company makes now means that it’ll be much more ready for a self-driving ridesharing future.

Source www.nasdaq.com

By Chris Neiger

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Uber, lyft and other taxis

Uber fined $650 million by New Jersey over driver classification

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New Jersey is the latest state to say Uber’s drivers should be classified as employees rather than independent contractors. The state’s Department of Labor and Workforce Development said that because of this misclassification, the ride-hailing company owes it roughly $650 million in unemployment taxes and disability insurance, according to Bloomberg Law.

The Department of Labor reportedly has been trying to get unpaid employment taxes from Uber going back as far as 2015, according to documents obtained by Bloomberg Law. It said the company owed the state $523 million in overdue taxes along with another $119 million in interest and penalties for the last four years. Uber disputes these findings.

“We are challenging this preliminary but incorrect determination,” an Uber spokesman said in an email. “Because drivers are independent contractors in New Jersey and elsewhere.”

Driver classification is an issue that government regulators have been taking a closer look at over the past year. California passed a law in September that could require Uber and other on-demand companies to reclassify their drivers as employees instead of independent contractors. The law is set to go into effect Jan. 1. New York, Oregon and Washington state have considered similar legislation.

Uber, Lyft and several other tech companies have vowed to fight the California law, collectively putting more than $90 million behind a ballot initiative that’ll take the issue to voters next November. Many drivers have said this move is a slap in the face as they struggle to earn a living wage.

Uber’s and Lyft’s business models depend on bringing aboard hundreds of thousands of independent contractors, whose labor is typically cheaper than that of employees. That’s because Uber and Lyft drivers supply and maintain their own cars and also pay for their own health care and benefits, such as sick days or overtime pay.New Jersey is the latest state to say Uber’s drivers should be classified as employees rather than independent contractors. The state’s Department of Labor and Workforce Development said that because of this misclassification, the ride-hailing company owes it roughly $650 million in unemployment taxes and disability insurance, according to Bloomberg Law.

The Department of Labor reportedly has been trying to get unpaid employment taxes from Uber going back as far as 2015, according to documents obtained by Bloomberg Law. It said the company owed the state $523 million in overdue taxes along with another $119 million in interest and penalties for the last four years. Uber disputes these findings.

“We are challenging this preliminary but incorrect determination,” an Uber spokesman said in an email. “Because drivers are independent contractors in New Jersey and elsewhere.”

Driver classification is an issue that government regulators have been taking a closer look at over the past year. California passed a law in September that could require Uber and other on-demand companies to reclassify their drivers as employees instead of independent contractors. The law is set to go into effect Jan. 1. New York, Oregon and Washington state have considered similar legislation.

Uber, Lyft and several other tech companies have vowed to fight the California law, collectively putting more than $90 million behind a ballot initiative that’ll take the issue to voters next November. Many drivers have said this move is a slap in the face as they struggle to earn a living wage.

Uber’s and Lyft’s business models depend on bringing aboard hundreds of thousands of independent contractors, whose labor is typically cheaper than that of employees. That’s because Uber and Lyft drivers supply and maintain their own cars and also pay for their own health care and benefits, such as sick days or overtime pay.

 

“New Jersey is sending a message that the state’s labor laws aren’t dictated by corporations,” Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said in a statement. “It’s a stinging rebuke of the architects of the gig economy, and we hope it permeates across other sectors.”

Even if Uber’s drivers were determined to be employees rather than independent contractors, Uber said the $650 million New Jersey tax fine would be too high — particularly if it’s based on what the company has earned in the state. Uber didn’t disclose the revenue it generated in New Jersey over the past four years, but its combined revenue for all the markets where it operated in 2018 was $11.3 billion.

 

 

 

Source www.cnet.com

By Dara Kerr

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Uber, lyft and other taxis

Adams Clinical removes hurdle to clinical trial participation

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How Adams Clinical increased retention and streamlined operations by switching to Uber.

One of the hardest parts of conducting a clinical trial is identifying willing participants. Once a participant is identified, strict qualifications and an often-lengthy time commitment limits who can participate, and a lack of access to transportation can make it difficult for participants to commit to and complete the study. To help improve recruitment and retention rates, Adams Clinical offered taxi rides to their participants. However, this solution became a burden on operational efficiency since taxis were only accessible to participants who lived close by and required the staff to pay at the end of each ride.

Finding the perfect transportation solution with Uber Health

To expand their transportation offering, Adams Clinical became an early beta partner with Uber in 2016. The team started using Uber’s web dashboard to arrange and pay for rides for participants with just a few clicks. Over the three years of this partnership, the switch to Uber Health simplified operational management, while reducing time spent on recruitment with increased retention rates. The easy-to-use Uber Health dashboard tracked all the rides and processed payments from one centralized interface, allowing the staff to arrange rides without the hassle of paying at the end of each trip. This flexibility, plus the extensive reach of Uber driver-partners in the Boston area, provided Adams Clinical with the transportation solution needed to successfully manage their participants in need of rides—which removed the headache from recruiting and retaining their study participants.

The result: Improved retention rates, simplified financial records, and an overall lift in team morale

By teaming with Uber Health, Adams Clinical enjoys a number of key benefits including:

• Expanded Recruitment—Using Uber Health cut down the length of enrollment by providing a larger pool to recruit from, resulting in a 5 to 10 percent reduction in recruitment time over the last two years. 

• Centralized Billing—All rides are charged to one company credit card, which is then processed at the end of each month to streamline the amount of administrative effort required.

• Reliable Service—Each ride is tracked in the dashboard so the team knows when the participant will be arriving to help keep the rest of the study on schedule.

• Improved Retention—In the first two years of the partnership with Uber, Adams Clinical estimated up to 20 percent fewer people dropped out of a trial when transportation was arranged to and from the clinic.

• Financial Accountability—Details for each ride are available in the dashboard, and can be downloaded to a spreadsheet, offering convenient management with trial-specific reporting per participant.

• Easy to Use—Using Uber Health has been easy for both staff and participants, even among populations without smartphones or passengers new to Uber.

 

by Kendall Brown

Source uber.com

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