What Uber didn't share in its latest quarterly report


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Hidden figures.

Through the second quarter of 2018, ended June 30, Uber broke out driver earnings. These numbers were most recently disclosed in a “contra revenue” section of Uber’s income statements. And they were interesting! The company split driver pay into two categories: “net partner earnings” and “partner incentives and misc. payments.” The driver portions of Uber’s reports showed clearly why ride-hailing is such a low-margin business, and why the company would be so eager to move to a driverless model, and keep a greater share of bookings for itself.

But then in the third quarter of 2018, ended Sept. 30, Uber removed its contra revenue section and stopped breaking out driver earnings and incentives. Uber said at the time that it made changes to its third-quarter reporting, including to stop breaking out contra revenue line items, as it moved toward GAAP presentation best practices. They remained absent from the fourth-quarter results Uber shared with investors on Feb. 14 and distributed more widely the next day. It will be interesting whether the US Securities and Exchange Commission feels like these line items on driver wages, which Uber broke out semi-publicly for at least six quarters, need to be disclosed in the company’s IPO prospectus and quarterly reports once it goes public.

Whether these line items matter probably depends on who you ask. You could argue, for example, that even without the contra revenue breakout you can still estimate the share of bookings Uber passes to drivers by deducting revenue the company books from gross bookings. For an investor, that might be all that matters. On the other hand, these numbers could be instructive for drivers seeking more insight into their pay. In the first quarter of 2018, for instance, gross bookings rose 55% from the same period the previous year to $11.3 billion, but overall driver earnings increased by less, 49%, to $8.3 billion. Contra revenue line items also used to tell us how much Uber spent on promotions for riders, which fell on a year-over-year basis in each of the first two quarters of 2018.

The company’s latest results, for the quarter ended Dec. 31, showed slowing growth in both gross bookings and revenue, or what I like to call the upside-down hockey stick:

As Uber’s growth slows, Lyft is pitching investors on its rapid US growth ahead of a public offering expected in the first half of this year, Reuters reported. Lyft plans to tell investors it is approaching 40% market share in the US and has reportedly prepped earnings metrics to highlight this story. These include growth in bookings, total rides per passenger, commission earned from drivers, and the strength of its shared rides service. Not to be outmaneuvered, Uber CEO Dara Khosrowshahi told investors on a call on Feb. 14 that the global Eats food delivery business could soon surpass Lyft in terms of total bookings, a source familiar with the call said.

Criminal incompetence.

I am intrigued by criminals and petty thieves who use shared transit to facilitate their getaways. December: A man in Baltimore stole a cellphone at gunpoint and fled on a Bird electric scooter; a 19-year-old robbed a bank in downtown Austin and hopped on one of Uber’s Jump e-scooters to make his getaway. September: A burglar in Indianapolis used a Bird scooter to make off with a man’s wallet, laptop, and backpack. Earlier this month: A bank robber in a Chicago suburb took a Lyft to the bank, had it wait outside while he did the robbery, and then took the same car to O’Hare airport.

Ride-hail and scooter companies want America using personal cars less, and you know the idea has gone mainstream when even the urban bank robber is choosing shared transit over a private vehicle. You can see how it might appeal to the inexperienced criminal: you do the deed and then ride off into anonymity on an electric scooter, a Butch Cassidy for our modern era of micro-mobility. Except it doesn’t really work that way:

Turning a rental scooter on, as regular users know, requires a rider to use an app that contains their phone number, email address and credit card information. You’ll probably be unsurprised to learn that these are the kinds of personal details that make it easy for police to track down criminals.

Police arrested Luca Mangiarano, 19, and charged him with robbery by threat about a month after his alleged crime in Austin. Detectives, after seeing a Jump scooter used as a getaway vehicle in surveillance footage, sent Uber a search warrant requesting geolocation data and user information. The company provided Mangiarano’s phone number, email address, and credit card number. “This was a learning experience for me and the robbery unit,” Austin police detective Jason Chiappardi told the Washington Post. “We had never had a scooter involved in a robbery.”

It took police less than five hours to find and arrest Jonathan Decorah, 43, after he allegedly robbed a bank in a Chicago suburb of nearly $6,000. Decorah took a Lyft to the Ben Franklin Bank of Illinois around 9:30am on Feb. 9. The Lyft, a white car with a ride-sharing sticker, waited outside while Decorah robbed the bank—it’s unclear if the driver knew what was going on—and then took him to the airport after he hopped back in and updated his trip destination to the United Airlines terminal at O’Hare. On the way, Decorah reportedly asked if there were any Chase banks they could stop at. The driver said no.

Oh and then there is this guy:

ROCHELLE PARK, NJ (Gray News) - A man attempting to burgle a New Jersey home fled when he woke the victims, but he didn't make it far before accidentally getting into a police car instead of the Lyft he had ordered.

These stories border on the absurd, and yet they really happened! Did Mangiarano think Jump wasn’t using the same software he rented the scooter with to track his location? Did Decorah imagine Lyft could be his very own Baby Driver? Shared rides and scooters create an illusion of stealth and anonymity—you may never see the same driver or scooter again—but never forget that they are tracking you. (Related: company-issued Fitbits.) If all our bank robbers traded private vehicles for ride-hail and shared electric scooters, we might never have trouble catching a thief again.

Bounty-less bug hunters.

In 2017, the concept of “emotional labor” went mildly viral alongside #MeToo. Emotional labor is routine unpaid and unrecognized work, often invisible, and often borne by women. It could be reminding a family member to send a birthday card, nudging a coworker for the third time to schedule a meeting, or being relentlessly optimistic. Writing in Harper Bazaar, Gemma Hartley recalled a time she asked her husband to find a house-cleaning service as a Mother’s Day present:

The gift, for me, was not so much in the cleaning itself but the fact that for once I would not be in charge of the household office work. I would not have to make the calls, get multiple quotes, research and vet each service, arrange payment and schedule the appointment. The real gift I wanted was to be relieved of the emotional labor of a single task that had been nagging at the back of my mind. The clean house would simply be a bonus.

Her husband didn’t do it. He washed the bathroom floors himself, and became hurt and annoyed when Hartley didn’t sufficiently praise his handiwork.

I mention this because emotional labor is a problem in the gig economy too:

Unlike the freelance hackers who sometimes earn real money from reporting security vulnerabilities to tech companies, gig workers who spend hours on the phone with customer service to report glitches on platforms aren’t compensated for their time. The customer support teams that are supposed to facilitate internal communication and quality assurance are often call center workers following scripts, with heavy workloads and little ability to actually resolve the daily issues that gig workers encounter.

“We do troubleshooting for these platforms, and we don’t get compensated for it at all,” Vanessa Bain, an Instacart worker in San Francisco, told BuzzFeed.

One of the realities of platform-mediated work is that companies and their algorithms have almost all of the power, and individual workers have very little. Traditionally workers might address this skewed dynamic through collective bargaining, but because gig companies tend to hire workers as independent contractors, they don’t share the right to form a union afforded to traditional employees. The Independent Drivers Guild in New York City, a group that represents ride-hail drivers but is not a formal union, is a rare example that shows how coordinated campaigns by gig workers can prompt real policy change. One early concession Uber made to the drivers guild was to grant its representatives a regular meeting with local Uber managers. The guild was also instrumental in getting the local city council to pass first-of-its-kind legislation creating minimum wage protection for ride-hail drivers.

But this sort of pseudo-union is rare, leaving most Uber drivers, Instacart shoppers, DoorDash couriers, and the rest of them with relatively few options to address the sort of problems that a company might see as a “glitch” but to a worker can be the difference in making rent. These problems often remain invisible, buried in worker discussion forums, until they surface in the press enough that companies feel obligated to address them. Calling these problems “glitches” or “bugs” also serves to augment the power dynamic; these words downplay the scale of the problem and imply that somehow the technology, and not the company, has erred.

Giving back.

Lyft donated $700,000 for transit in low-income neighborhoods in Oakland, California, a move Oakland mayor Libby Schaaf praised for “undoing the wrongs of the past.” What wrongs? Why, lobbying Oakland officials, along with Uber, to kill a proposed municipal tax of $0.50 per ride that could have generated up to $2.5 million a year:

According to the company and the mayor’s office, Lyft’s grant will pay for a participatory design process for the creation of new parklets and bike share stations, and a bike lending library. It will also provide subsidized local transit passes and Lyft rides in cars and on scooters for qualifying low-income residents in areas of Oakland where transportation infrastructure is chronically underfunded.

But last year, Lyft and Uber lobbied Oakland officials to kill a proposed municipal tax of $0.50 per ride. According to city staff, the tax could have generated up to $2.5m per year when applied to the city’s estimated 13,699 daily Uber and Lyft trips – substantially more than Lyft’s recent donation.

Poor Lyft, can’t it just be seen as kind and generous like it wants? I am reminded of last summer in New York City, when Lyft offered to create a $100 million “hardship fund” to support individual taxi medallion owners in exchange for the city dropping plans to set a wage floor for drivers and cap the number of ride-hail vehicles. The proposal was “summarily rejected” by city council and mayor Bill de Blasio, in a move Lyft VP for public policy Joe Okpaku described to The Verge as “a little bit astonishing.” Of course if you actually ran the rough math, the city’s proposals would have led Lyft to pay something like $45 million a year in additional earnings to its drivers, making the $100 million fund—which Lyft wanted to allocate out over five years and have other ride-hail companies help finance—a serious lowball. Case in point: when the city passed the legislation and implemented it as planned, Lyft sued instead.

This time last year.

Waymo gets ride-hailing permit, WeWork's beer taps dry up, H-E-B buys Favor

Other stuff.

Vietnamese authorities deepen probe of Grab-Uber merger. China’s “gray economy” nearing saturation point. Uber agrees to pay VAT in Egypt. Amazon leads $700 million investment in electric carmaker Rivian. Nissan Leaf is most popular electric car of all time. Connecticut considers minimum pay for Uber and Lyft drivers. Uber sues New York City over ride-hail cap. Bay Area meal-delivery services not dead yet. Handy partners with Crate and Barrel on furniture assembly. Amazon aims for greener deliveries. Walmart farms out grocery delivery to gig companies. Uber Freight asks truckers to rate shipping facilities. Jump scooters land in Nashville. New York subpoenas Airbnb for details on 20,000 apartments. Wayless disengagements. The New Microsoft. Key investors unhappy with SoftBank. Toronto Chair Hurler Turns Herself in After Internet Uproar. Why America’s New Apartment Buildings All Look the Same. This Airbnb Does Not Exist. “We are pivoting to be a more revenue-focused business.”

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Send tips, comments, and tales of criminal incompetence to @alisongriswold on Twitter, or oversharingstuff@gmail.com.