Uber Increasingly Targets Drivers Over 50 In Recruitment Push As Company Reports $1.7 Billion Loss
Uber is increasingly targeting senior citizens for recruitment of their freelance taxi drivers, according to NewYork Times. In July of last year, Uber formed a partnership with Life Reimagined, a subsidiary of the American Association of Retired Persons or AARP, an organization for people over 50 which helps them through life transitions.
As part of the collaboration, Life Reimagined provides Uber with access to AARP’s 1.4 million members through online and in-person workshops. In January alone, Molly Spaeth, a spokeswoman for Uber, said the company had enlisted nearly 600 drivers from its AARP connections.
Uber carried out a survey of its drivers in 2014 and 2015, and results showed that nearly one-fourth were 50 or older.
The 50-and-older workforce is a growing segment, according to an AARP report released last year. One reason for this is many people are leaving the full-time workforce with less money than is required to finance a comfortable standard of living.
Many of those who continue working beyond 65 do so because they would be too poor otherwise, according to a new report from the labor-backed Economic Policy Institute.
The fact is fewer Americans are retiring, and comparatively, senior incomes are closer to working-age incomes in the United States than in other OECD countries because the retirement system puts aside too small a portion of pre-retirement income.
Combined with increased life expectancy and rising standards of health, baby boomers are challenging retirement norms by staying in or returning to the labor market.
Older drivers are also prized because they usually own their own cars, have adequate auto insurance, and, according to insurance statistics, have fewer crashes, thus keeping liability and taxi insurance costs down.
Uber will need all the help it can get in terms of cost cutting and savings, after it was revealed that the company made a huge overall loss in 2015, according to the Information.
Uber reportedly made $498 million in net revenue — the money the company makes after paying drivers — in the third quarter of 2015, exceeding the $495.3 million in revenue it made throughout the whole of 2014.
But Uber also lost $697 million in the third quarter, compared to $671.4 million lost in all of 2014. Overall, the company lost $1.7 billion on $1.2 billion in revenue during the first three quarters of 2015.
These losses come despite Uber taking around 30 percent of a driver’s fares, a cut that is up from 20 percent two years ago. And Uber is gambling that increased ridership and hourly wage guarantees will limit drivers’ earnings decline in the future.
Uber is relying on cheaper rates, more drivers, and greater ride volume to bring profit, but this hasn’t materialized despite Uber’s CEO Travis Kalanick predicting profitability was imminent last September, at a company conference in Las Vegas.
This month Uber also reduced rates by between 10 to 45 percent in 100 cities in North America, the third consecutive year Uber has discounted fares in January.
Although Uber claims these rate cuts are seasonal rather than a permanent pricing strategy, the discounted rates have remained in place in a third of cities over previous years.
Yet Uber continues to overly charge for the basic safety of its ride with a fee that has more than doubled from $1 to $2.50 in certain cities. Uber has justified the rise by claiming that the charge is necessary to pay for drivers’ background checks and safety education.
Lyft, one of Uber’s competitors, has told shareholders it will also lower fares to keep up, writing “With recent price changes from the competition, we need to take action,” in an e-mail to its drivers last week.
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