Is Uber The AMC Model ? Mit Study Says Uber Drivers Make Less Than Min. Wage

[J Grant]

The ONLY thing that makes uber viable is cell phones and text messages, and Siri with Google Maps.

Nothing else new.
Taxi companies can and have done the same thing for years - minus Siri and Google Maps. Back in the 70s taxi cabs had hard wired analog cell phones.
What has changed is that the government and insurance companies allow non-taxi drivers in POVs that are not held to the public transportation laws
to transport the public for a fee, without a taxi license, or government verification of substantial insurance policies.
That's where the real "change" is.
No different than if the government suddenly said, you don't need a certification to be an appraiser. Just a tablet and MLS access, you to can be a uber appraiser.

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Marion, good analogy, but for fed regulated work it won't t happen...- a more apt analogy is if alt /computer products become the norm instead of an appraisal or appraiser assisted evaluation- but UBER drivers might face that if driver less cars are viable in future.

Technology /apps as you note is just a more efficient way of matching drivers and passengers, getting payment. The true genius move of UBER was to note that cars sit idle most of the time, and at least some of the people who own cars might want the opportunity to make $ with them- some just do it for side money, others as a real job but before UBER the opportunity for car owners to make money from the asset they already have did not exist on any large scale.

 

[J Grant]

It is interesting for me to wonder if the AMC dynamic/strategy of of recruiting all (or many) appraisers in a market and forcing them to compete against each other in the digital world is going to start taking over in other/all industries. Good for the consumer, devastating to incomes. Henry Ford was widely considered a genius regarding his strategy of paying his workers a higher wage, which in-turn resulted in more sales of his product. Uber and appraisal illustrate the opposite outcome. I'm not a communist or anything, but there is something to be said about hording too much money in too few hands. I found it interesting our last economic crash occurred directly after a period when gas prices were through the roof, a great example of hording too much money in too few hands. Gas prices have been stable and relatively low for some time and looky-there, our economy is booming. Not a supported conclusion, just an observation.

Please, do not get sucked into this falsehood. UBER /Lyft DOES NOT force its drivers to compete against each other on price !! UBER does not broadcast a passenger needing a ride , and cheapest Uber driver bid gets it !

UBER charges the passengers the same fares in an area for day/time and pays the drivers the same fares in the area. The driver gets matched to the passenger based on distance from passenger/availability, not by offering to the ride to the driver that will do it cheaper than another driver. .

 

[Meandering]

Exactly J,

You’re getting really good at spotting the kool aid lately. Good job

 

[Deleted member 130081]

Please, do not get sucked into this falsehood. UBER /Lyft DOES NOT force its drivers to compete against each other on price !! UBER does not broadcast a passenger needing a ride , and cheapest Uber driver bid gets it !

UBER charges the passengers the same fares in an area for day/time and pays the drivers the same fares in the area. The driver gets matched to the passenger based on distance from passenger/availability, not by offering to the ride to the driver that will do it cheaper than another driver. .

You're right J. Its not a Jonathan Apples to Jonathan Apples comparison. I'm sorry if I didn't spend more time illustrating the details. Appraisers, through digital age technology, are forced to compete with each other on a mass scale, unlike the traditional competition we would face if we all went door to door, one door at a time like we used to, and like most business continue to do today. Taxi services, through digital age technology, are also now forced to compete with other providers on a mass scale, unlike the traditional competition they formerly endured. The similarity is the infusion of technology that has changed the competitive arena in a fundamental and likely adverse way to existing providers, who in each of these cases by coincidence, are heavily regulated.

 

[J Grant]

You're right J. Its not a Jonathan Apples to Jonathan Apples comparison. I'm sorry if I didn't spend more time illustrating the details. Appraisers, through digital age technology, are forced to compete with each other on a mass scale, unlike the traditional competition we would face if we all went door to door, one door at a time like we used to, and like most business continue to do today. Taxi services, through digital age technology, are also now forced to compete with other providers on a mass scale, unlike the traditional competition they formerly endured. The similarity is the infusion of technology that has changed the competitive arena in a fundamental and likely adverse way to existing providers, who in each of these cases by coincidence, are heavily regulated.

There is a vast difference between the two models of AMC and UBER. To address your points,

1) Nobody is forcing appraisers to compete with each other on a " mass scale"..because there is no mass scale of appraisers, it is a limited amount of appraisers and assigned locally. In addition, direct lenders/others use the same technology and do not use it to fee shop for lower . . With an AMC the fee overage they get from paying less goes back to them in profit, that creates fee competition for AMC work, not "technology"..

2A ) An AMC fee shopping is different than a Non AMC (such as private party ) comparing fees of appraisers. , if the private party decides to hire an appraiser with a lower X $ fee, they pay appraiser the X$ fee, they do not keep part of the X$ fee for themselves as profit reward for engaging the cheaper as an AMC does .

3) UBER and Lyft, DO NOT pit drivers against each other to get lower rates nor to choose a lower fee driver for the ride. Go on UBER site and see how they assign, it is by proximity/availability to a passenger and the drivers get paid the same rates in an area at at given time .

4) UBER displacing the Taxi industry has no parallel with AMC's. An AMC changed nothing about existing / expanding the work available to appraisers. In AMC ,existing clients got free of cost service with AMC getting profit from a % back of dollars from what appraiser gets paid.. The AMC analogy would be as if a Third party firewall inserted between existing Taxi drivers and dispatch and took an additional cut of a driver's fare .

UBER instead offered an alternative to the Taxi Industry. It offered rides in private cars to passengers by creating a "ride sharing " service, (at rates less than cabs due to a different business model ) while at same time expanding a new opportunity to people who own cars who if they choose, can earn additional $ using their car to drive for UBER. Driving from point A to point B is a low skill endeavor, opening up earning opportunity to millions of people.

These people now can earn an additional income source due to the creation of UBER . Wheres with an AMC, a limited number of high skill set professionals, (appraisers) are doing the same work they did before, for the same clients, but earning ( typically) less money per order. .

 

[J Grant]

If technology is game changer in appraisal business it is because technology allows computer derived or computer assisted valuations or reviews. Technology is not the cause of creating a third party business that skims fees from appraiser pay to generate their profit.

 

[George Hatch]

The AMC business (and the fee shop business) both existed long before the internet came along. What technology and the HVCC did was to aggregate the marketplace and move the business away from the Door-to-Door sales model where you were cold calling on buyers and selling in onesies and twosies, to the Warehouse Superstore model where all the vendors in your region who sell the same widget you do are wholesaling those widgets in bulk to the Costco/SamsClub operators.

That's what the technology has enabled - bulk purchasing. You're getting less because your competition AND YOU are all willing to do the work for less as the alternative to not working at all. If you dropped out of the market your buyers would have that many fewer alternative vendors to choose from and your competition would be a little better off. And vice versa. If more of your competition drops out then your clients would have fewer alternatives to the point where they wouldn't be in a position to give you the "if you won't do it we'll find someone else who will" ultimatum.

The tech is now enabling the clients to get more appraisals done with fewer heads, so that's going to extend their leverage over fees. I'm sorry to say that the more of the desktops that get used the more pressure your competition will be under to compete for the ever-shrinking 1004 pie. Unfortunately, much of that competition will occur on the basis of fee.

 

[J Grant]

The AMC business (and the fee shop business) both existed long before the internet came along. What technology and the HVCC did was to aggregate the marketplace and move the business away from the Door-to-Door sales model where you were cold calling on buyers and selling in onesies and twosies, to the Warehouse Superstore model where all the vendors in your region who sell the same widget you do are wholesaling those widgets in bulk to the Costco/SamsClub operators.

That's what the technology has enabled - bulk purchasing. You're getting less because your competition AND YOU are all willing to do the work for less as the alternative to not working at all. If you dropped out of the market your competition would be a little better off, and vice versa.

I am well aware the AMC business ( which is not a fee shop) existed before internet. They were mostly called title management companies then and managed appraisals as a sideline for their title business, typically taking a very modest sum from appraisal fee such as 10% (I did fee work for one back in the day). These management companies kept that same business model after the internet, in fact nothing changed until the HVCC. Stop the spin that it was the the internet changed ordering, and lowered fees from AMC's it was the prohibition against direct loan officer able to order that changed it.

The Internet is a communication tool , it does not force people to behave in a certain way. Using the same internet, VA and direct order lenders DO NOT keep a fee profit for themselves from what is paid to appraisers, while an AMC does. Does the "internet" tell an AMC to keep a fee split from appraiser as profit rather than charging a lender for the service? I think not.

Is there a way to stop a false comparison to appraisals and "widgets", which can be mass produced in the millions, enabling their suppliers to charge less? An AMC is a fee skimming model, period. Stop comparing it to suppliers that actually produce something and can do so on a mass scale. If I dropped out of the market would do nothing for my competition on fee since I main work for direct order lenders with two "flat fee" AMC ordering depts for their lenders in the mix.

A profession such as appraisals should not need to starve people out to a severe under supply in order to stop fee skimming. An under supply creates problems of its own such as timely servicing to orders and availability of competent people to do the work. With same availability/supply of appraisers in regions, the clients paying C and R ordering direct pay a very different rate than AMC's, so supply and demand has little to do with fees paid for lender work , when profit back from the fee is off the table..

I am curious why you refuse to acknowledge the profit back to AMC as the cause of lower fees for AMC work rather than the "internet", and why you think appraiser attrition is the answer rather than eliminating the profit from fee skimming model for third party assignment and going to a cost plus or similar model .

 

[djd09]

Criminals make a lot of money using the three cup and a ball trick.

Funny how technology is not reducing the cost of the USPAP book, MLS, or appraisal forms.

 

[Meandering]

Criminals make a lot of money using the three cup and a ball trick.

Funny how technology is not reducing the cost of the USPAP book, MLS, or appraisal forms.