A 3-week social experiment

If you have been around the Internet lately, high profile sharing-economy type companies like Uber, Lyft, Instacart etc. should sound pretty familiar to you. This post isn’t about how insane their current valuations are, or about their amazing office-designs, but the one thing that actually helps them run – people who are willing to trade their time for money in the “sharing economy”.

In the increasingly “Uber for everything” world, we have seen everything from on-demand oil changes to in-home massages. We have arrived in the “future”. Today, you can turn on your phone, click on an app, and start working for a monetary return. Empowered by technology that basically does a very fundamental thing that helps markets run – connect demand with supply, instantaneously. Out of curiosity, I ran a 3-week social experiment where I signed up to drive for Lyft (giving someone a ride), Postmates (delivering food) and Instacart (delivering groceries) to (i) figure out how much one can actually make (ii) understand the last-mile customer experience in the “sharing economy”.

Everyone loves numbers, so let’s start with numbers:

Charts charts charts

Charts charts charts

Some brief conclusions (Again, these insights are specific to Austin in the month of October, and only represents one possible interpretation of reality):

  • It is difficult to breach the $25/hr barrier that most of these companies tout as an hourly minimum
  • Services that allow for the customers to tip is generally a better option to work for as there is potential for greater upside (note: Uber does not have a tip function)
  • If you consider cost of gas, the actual hourly wage could be 10-15% lower

Random notes: (i) The $44.22 average total hourly wage is the result of a supply acquisition promo which Lyft is currently offering in certain cities across the US. Use this promo code to be eligible for between $500-$1000 bonus(depending on your city) after giving 50 rides in the first 30 days! (ii) Instacartv2 is their latest revision to their payout structure which raises the average hourly wage by about $8

Money aside, the experience of working for these “sharing economy” companies is actually quite interesting. Through the 3-weeks, I got to interact with many customers that use these services. I now understand who they are, why they use these apps and basically how technology has improved lives (… in some cases solved first-world-problems). Here is a brief description of each of them:

Lyft

lyft-ridesharing

By far my favorite of the three, Lyft users are generally super friendly and are looking to interact with you (and not their smartphones) during their ride. It is common belief that Uber users tend to see their drivers as just a cab driver, while Lyft users tend to view the entire ecosystem as more of a community. From my limited experience, I tend to agree! Over the course of the Lyft rides I gave, I managed to learn about a range of topics including how to publish a book (from a novelist), the burlesque scene in Austin (from a, well, Burlesque dancer), how to detect skin cancer (from a dermatologist), how transgenders get their names changed in the eyes of the law (from a UT Law student), things to consider before applying to an MBA program (from a first year MBA student)… Beyond learning about the most random things (did I mention that the Burlesque dancer was specifically educating me about the plus-sized Burlesque scene, which is very, very interesting to say the least), you are also likely to start to discover nook and crannies of your own city – unknown restaurants, hidden bars, new neighborhoods etc…

Most importantly though, it is the use case for ride-sharing. Ride sharing does the critical thing of unlocking supply of available transportation at an affordable rate for others. In the case of a recent Lyft ride I gave to someone with a leg injury, we figured that in the world before Uber/Lyft, his only alternative was to take exorbitant taxi rides to get from work/school-home and vice versa.

Instacart

1200_20x_20630_20Instacart_20Share_20Banner_202

While Instacart sucked at compensating well, the interesting thing was the use-case for having groceries delivered to a customer. I cannot imagine paying money for someone to do my groceries and deliver them to me; I love grocery shopping, and I guess I have time that I can dedicate to this particular activity. However, through interactions with end-users, I guess I figured out that there are clearly others who disagree, and here are the various reasons why:

  1. Too busy – This applies especially to moms who have to take care of their young children, and going to get groceries could be a complete nightmare. Moms represent a sizable portion of the userbase.
  2. Too difficult – This applies to folks with disabilities/mobility challenges. When I delivered a bag of groceries to an old lady in a wheelchair, I had the AH-HA moment that made me believe in the power of technology again
  3. Too far – This generally applies to distance, especially for folks such as college students who do not own cars. The state of public transportation in the US is pretty dismal, and here is the gap that needs to be filled. The other interesting case is where a family who lives three hours away in Houston decided to order groceries for their daughter who goes to college in Austin to make sure that she was eating right. All this empowered by technology.

Of course, there are cases of the wealthy folks who are just too lazy, and can pay anyone to do anything for them. Story – I actually delivered a bag of toilet cleaning materials to a housecleaner for her to clean this huge mansion. So basically the owner on-demanded toilet cleaning materials to his cleaner, to clean his house.

Postmates

postmates

Postmates provides the highest potential for compensation because generally users tip very well based on typical food-delivery type rates. So if they ordered $50 worth of food, they are likely to leave the Postmate with a $5-10 tip, on top of the delivery fee. However, the Postmates service is very much your typical food delivery service, helping to unlock more revenue for restaurants who do not offer delivery. The craziest thing I found out is… COLLEGE STUDENTS forking out $20 for a sandwich ($10 sandwich, $10 delivery) delivered to their door.

Conclusion

What a learning experience! Of course, I got to walk away with some extra $$$ (especially with the Lyft promo which again rewards an additional $500-$1000 bonus after you give 50 rides within the first 30 days using this promo code), which will come in useful towards our next big travel adventure in Cuba. Most importantly though, I came to appreciate a little more of the world around me, learned random factoids and trivia about the people of my city, understood the challenges of hour-wage workers (+ how important tips are) and came to appreciate the helpful side (and in some cases… obnoxious users) of the Uber-for-everything world.

Lifehacks – Free food from Tech start-ups

Let’s face it, this whole start-up revolution is great. Now, you can have shavers sent to your mailbox monthly, 1-hour groceries brought to your doorstep, cleaners at the tap of a button, a licensed masseur throwing down a deep-tissue rub in your apartment on-demand… the list goes on.

I shall ignore the philosophical debate of whether such “innovation” is worth the incessant pursuit, or if we humans are just running out of ways to be productive and have to resort to building the next “uber for anything”. Well, first-world-problems do exist, and if solving one helps you make a profit, I guess why not? I am personally guilty of attempting to solve one of them myself in Singapore, gladly.

Venture Capital money is awesome. It is BIG, it is FREE and as a potential customer you have the right to make full use of this money, if you know how to work the system. Whether it is a free ride with Uber or free ride with Lyft (or free rideS depending on how creative you are in gaming the system), 2-hr home cleanings at subsidised rates of less than $10 an hour, or a bunch of free food delivered to your doorstep.

Yes, free food.

I am a huge fan of the bunch of new start-ups seeking to solve a very specific problem in the market – folks who long to make their own meals, but cannot afford the time to pick out different recipes and go grocery shopping for the unique items. Enter these start-ups, with the common tag line of “helping you get more lazy” “helping you eat and live better”. Here’s how it works in a nutshell:

Screen Shot 2015-09-24 at 7.07.48 PM

Most of all, I am a huge fan because they feed me for free. Back to VC money… one way of acquiring customers in a very competitive market is to put the product in your customers hand at a reduced cost, or no cost at all. This is exactly where the following start-ups come into the picture. They want to give you free food and recipes, at least for the first order. Let the millions of VC dollars do the job, think about it as the cash-rich Wall-street type companies doing good, by subsidising your first experience with these products. Well, if you do it in a disciplined fashion, you are guaranteed a month’s worth of free groceries (1 week each for the 4 companies below) delivered to your doorstep. By disciplined I mean, be very disciplined. The critical thing to do is to turn off the deliveries for the subsequent weeks after your first order (they will be turned on automatically for sure), and cancel your subscription after receiving your first order. Cancelling a subscription is not easy, as there will never be a direct link for you to do that; most of the time, you will need to email customer support to cancel your subscription. Hey, for a month’s worth of free/subsidised groceries with cool recipes and “feel good” photos sent to your doorstep, why not?

Of course, after you have tried the product, don’t be lazy. Google recipes, create shopping lists, go to the grocery store and live like a normal human being. Do not be fooled by these beautiful high-dev perfectly positioned photos, you are not eating photos.

Plated

Plated

Blue Apron

Blue Apron

Green Chef

Green Chef

Hello Fresh

Hello Fresh

Do you have more start-up hacks to share?

I get fascinated by technology, again.

I must admit, sometimes I get annoyed by technology. In recent years, fascinating apps like Uber and AirBnB were created to plug huge gaps in the market, but do we really need another app to connect me to someone who would do my laundry?

I have yet to get on the Twitter bandwagon, and Lysia calls me a tech-dinosaur for refusing to use Snapchat as well. Mostly because I noticed how I unknowingly allowed Facebook to integrate itself into my life, and that I could really avoid racking up more daily “screen-time” by staying away from both Twitter and Snapchat.

… and then I came across Periscope, which was bought by Twitter for a reported $100 million earlier this year. (granted, I am a few months late but hey I spent the bulk of Spring in a country called Tajikistan where getting updated on the latest apps were probably the last thing in my daily priority list, which included figuring out how to stay warm without heating.)

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After downloading Periscope last night, I decided to explore the app “for a few minutes”, but ending spending an entire hour on it. A shady description of Periscope could read like such “twitter meets chat roulette”, or the layman description as quoted on Periscope “discovering the world through someone else’s eyes”. Here’s a detailed description of the app on Wired. The UI is fascinating, because the first thing you see is a giant world map, with live feeds buzzing from countries all over – Brazil, Russia, Indonesia, Saudi Arabia… You have the ability to “teleport” to another country, right there, through the lenses of someone else’s smartphone. #mindblown

Granted, many of the feeds were completely random nonsense – this one guy was just reading out user comments for a good 10 minutes, another was petting her cat, and you can imagine other potential abuses of Periscope (go figure). But it also has the ability for folks to broadcast live events from concerts, to World Cup matches, the Olympics, and the list goes on. Last night I watched a morning prayer session take place in Indonesia, and because the smartphone is often recorded from a very “intimate” point of view, I literally felt like I was there, except I was lying on my bed in Austin, TX. Just a couple of minutes ago I witnessed the Dalai Lama celebrate his birthday at the Global Compassion Summit, LIVE! It is one thing to see video footage retrospectively through the TV, Youtube etc., but a whole other experience to witness it live; and wow, we can do it on our smartphones. How awesome is it that we live in the 21st century!

Another beautiful use-case of Periscope is for the aspiring polyglots out there. One of the first continents I zoomed into when I opened the app was South America. I was immediately getting live feeds of people “periscoping” in Spanish, and exchanging comments with the community in Spanish. It was a great resource for learning, as you start “interacting” with native speakers, listening to the language through the voyeuristic use of the app. Brownie points for interesting live feeds, including a random guy that taught me that Rosario, where he was periscoping from, is the birth-place of the legendary Messi.

I plan to Periscope my Capoeira class tonight, and hope to see how the community responds!