Casinos depend on sucker’s bets to make money. These are gambling wagers (bets) where the odds of winning are overly stacked in favor of the house (the casino), and payoffs are few and far between as well as significantly lower than the total wager from the gambler
For example, progressive slot machines with multimillion-dollar jackpots are tempting, but are the worst games in the casino. On these machines, the house advantage ranges from 17% to 27%, which means you lose between $17 to $27 for every $100 you wager in the long run.
It is said that sucker’s bets originated in old west saloons on games of chance where sucker’s bets are often created to lure inexperienced players into betting against large odds, blinded by the offer of “fast money.”
Just read the driver income promises made by Uber in any public relations article or Craig’s List recruiting ad, and they also may seem too good to be true. What these recruiting ads omit is the massive additional regular expenses drivers for Uber will incur just to maintain their jobs. So Uber is built on a classic sucker’s bet, and here is why.
In a recent study called “Your Driving Costs,” AAA (American Automobile Association) calculates the cost of owning and driving the average sedan at 58 cents a mile, while noting large SUVs cost close to 71 cents a mile to operate. When you consider the actual expenses of owning, maintaining and operating vehicles, driving for TNCs is not a winning proposition. Although expenses like gas are down this year, insurance, maintenance, tires, registration and taxes associated with operating vehicles are all way up. Insurance alone is 9% higher compared to 2014 levels.
While the AAA study details ongoing expenses of owning and driving a vehicle for private use, it obviously does not tabulate the additional expenses and risks of driving a vehicle for commercial business activities such as carrying passengers for Uber. When you drive your kids and their friends to school in a carpool, the above costs may apply. But when you drive people for money, many other expenses are heaped on. Local, state and federal governments (the IRS) want their fair share.
Business taxes, commercial insurance, occupational licenses, additional tires, maintenance, fuel and massive additional wear and tear on your vehicle cost real dollars every mile. To get close to your real costs, add in the unpaid driving time it takes to race around town to pick up the next Uber passenger, and additional risks of an accident because you are driving four to five times more miles annually.
So how can Uber promise drivers earnings of $75,000 to $90,000 a year? (Business Insider 5/27/2014)
Many people contend that Uber flat out lies to entice drivers. Others think Uber is banking on the fact that the average person does not analyze expenses versus revenue, profit versus loss, or weighs risk versus reward like experienced entrepreneurs and business owners must do to survive.
Despite PR pronouncements from Uber, what comes out of your wallet as the owner of the vehicle who drives passengers for Uber tells the real story. This is why many consider Uber and TNCs to be huge recruiting organizations disguised as cool technology start-ups that ultimately may prove to be massive Ponzi schemes for investors, who will end up sorry as well. Drivers, you’ve been warned.
|Findings Of The AAA 2015 ‘Your Driving Costs’ Study
|Based on driving 15,000 miles per year
|Cost Per Mile
|Cost Per Year