Re/code has an eye-opening story today about how the ride-summoning app wars between Uber and Lyft are hurting some of the drivers trying to support themselves on the services.
The article is based on an interview with a San Francisco driver for Uber and Lyft who is identified as Scott G.; it details how the downward pressure on prices caused by the competition has made life tougher for some drivers.
Each company has raised hundreds of millions from venture capital firms to support their efforts. Uber has been active in Boston for some time now and Lyft has been pushing harder here of late (for instance, I spotted a spam post on a friend’s Facebook event this week that offered a free $25 Lyft ride).
Lyft also recently dropped fairs by about 30 percent. To compensate, the company is giving its normal 20 percent fee to drivers. But the lower prices — which brings a Lyft ride into the range of an UberX ride — aren’t welcomed by drivers like Scott G., according to Re/code.
Some of the quotes from the post are especially revealing:
“How much more can these ride-sharing companies keep undercutting each other?” Scott said. “We have a real person performing a function, not a Google automatic car. We have become the functional end of the app.”
Unlike breakthroughs in new technology or apps for your smartphone, services like Lyft and Uber rely on humans — drivers like Scott — to carry out their venture capital-fueled ambitions in this corner of the sharing economy.
“I don’t want to be the butt-end of a VC fantasy, I want to make a living,” he said. “I’m working hard.”
Scott and other drivers say lower prices have indeed increased demand. But Scott said he has observed that because Lyft and Uber are now so cheap, people in San Francisco have started using them differently. “You’re making more but you’re still working harder. After prices were cut, there were more rides and also more shorter rides. That means more travel, more stop and go, more transactions, more wear and tear. My point is, at maximum efficiency, I’m doing worse,” Scott said.