Uber loses licence to operate in London, will still operate while appealing

Since drivers can't set their own rates, I've always felt the government should regulate the split. Uber's portion should be capped at something like 5%. The marginal cost for them to connect a driver to a rider is close to 0 so even 5% feels very generous.

That's not the job of the government to regulate margins of businesses. If you go by that way, then you might as well regulate every margin of every app store?

A great idea.

At least in the US, they do it all the time. The job of the government is mostly to do what we tell it to do because the government is just people from the community.

That is the governments job.

They aren't regulating an app on the store, they would be in this hypothetical scenario regulating the labor practices of a multinational corporation, which is for sure the job of any government.

I doubt that their margin is much higher than that after factoring in discounts.

Thats what taxation does anyway

Drivers can set their own rates, or at least to the success a bidding process would work. If the rate is to low, don't work. If there was a bidding process I wouldn't be surprised if you saw rates actually drop.

I may be wrong, but I don't think the driver keeps 95% of the fare.

Say we implemented this scenario, can we walk though what would happen next:

- What do you expect would happen to Uber prices?

- How do you expect that change would affect overall demand for the service?

- From there, how do you expect this change of demand (if any) would affect the take-home pay of the drivers?

> What do you expect would happen to Uber prices?

That would depend on how much money Softbank has left to invest. Prices might go up.

> How do you expect that change would affect overall demand for the service?

Uber's great advantage is that the quality of service is better than the alternatives. If drivers can make more money, more drivers might sign up and wait times would drop. A better experience means the service will be used even more.

> From there, how do you expect this change of demand (if any) would affect the take-home pay of the drivers?

There are two parts to this. First Uber should have to make sure no driver ever makes less than minimum wage. If a driver starts the app to announce their availability and has the app running for four hours, they are entitled to a minimum of four hours of pay.

The second part is that I think getting 95% of the fare would mean drivers take-home pay is generally higher than it is today. If Uber wants to make more money by raising the rate, then drivers automatically get a pay increase as well and that seems fair.

The government should (and does) regulate the margins of natural monopolies like utilities where a free market can't operate effectively.

Keep in mind that Uber's revenue was $3.6 billion in the last quarter, but they lost $1.2 billion. I wouldn't be surprised if their margin was negative.

Really the problem is not that Uber gets paid too much, but that drivers are underpaid. I think a minimum wage for drivers is a better solution. In California such a law is currently underway.

I mentioned minimum wage in another comment. If a driver has the app open for four hours, they need to be paid a minimum of four hours of minimum wage.