It's shocking if you only compare
prices -- or if you only compare the
quality you get for the price.
But there is another critically important component, and it's the economics. And the all-important COSTS are vastly different for Uber/Lyft and for Disney. It goes something like this:
- Vehicle Ownership
- MinnieVan uses new Chevy Traverse SUVs purchased or leased from GM. Sure, they got a great deal -- but still there is significant vehicle acquisition cost to Disney
- Uber/Lyft own NO vehicles. The drivers provide their own vehicles, and all costs associated with them.
- Vehicle Operating Costs
- MinnieVan -- Disney pays for gas, oil, tires and all other maintenance
- Uber/Lyft -- U/L pay for NOTHING. All operating costs of the vehicles are paid by the driver.
- Insurance
- MinnieVan -- Disney pays all insurance costs
- Uber/Lyft -- Driver pays for basic insurance. U/L provide very limited insurance for certain phases of a ride. Uber has a $1,000 deductible. Lyft's deductible is $2,500!
- Driver costs
- MinnieVan drivers are Disney employees. I'm not familiar with their salary and benefits, but whatever they are -- they're paid by Disney
- Uber/Lyft -- U/L have no driver salary or benefit expense.
- Drivers are paid a flat fee for mileage and time, but only when we have a rider in the vehicle.
- The U/L Orlando market pay rates happen to be the lowest in the US. The per-mile rate ($.48 per mile) is substantially below what the IRS says it costs to operate your personal vehicle for business purposes ($.555 per mile).
- With the new "upfront pricing" model being used by both companies, both companies typically now get 25%-60% of the fare you pay. If your fare seems higher than what you used to pay, they're probably getting 40%-60%.
So the cost of doing business is
very much higher for Disney, and at some point they have to start to recover some of those costs. This increase is not the first, and will not be the last.