How Uber could end up as Silicon Valley's most spectacular crash(newsweek.com)
newsweek.com
How Uber could end up as Silicon Valley's most spectacular crash
http://www.newsweek.com/uber-turn-silicon-valley-spectacular-crash-563716?rx=us
191 comments
Lyft and Uber have wasted so much time and money. This is the problem with VC money focused on growth. There's no pressure to build anything sustainable, no pressure to build competitive advantages. Arbitrary point to point level 5 self driving is decades away. And even if it came tomorrow, what competitive advantage do these apps have? They are a single Google Maps update from being wiped out. They should've spent past few years using network effects in the same way as Facebook to protect themselves. They should've built loyalty programs like frequent miles. But they completely wasted their opportunity.
Would you happen to be Douglas Rushkoff? He wrote a fantastic book about this.
http://www.rushkoff.com/books/throwing-rocks-at-the-google-b...
http://www.rushkoff.com/books/throwing-rocks-at-the-google-b...
Lyft and Juno will run out of cash by the end of this year and be forced to sell to companies that won't run them at a loss, that Lyft $500 million round they are trying to shop around won't happen (that leak is a bad sign, early Lyft investors are dumping their shares on the secondary market as well) and Uber currently has billions in the bank while Lyft is down to under 1 billion, Uber will raise prices and no new competitors will be able to find any funding at this point
I had no idea Lyft was operating at a loss. My Lift rides are consistently 10% to 20% higher than Uber rides of the same distance and time and they even encourage tipping.
I'm not looking forward to what these companies charge when (or if) they're ever profitable. I already find them expensive, especially Lyft.
I'm not looking forward to what these companies charge when (or if) they're ever profitable. I already find them expensive, especially Lyft.
>I already find them expensive, especially Lyft.
Expensive compared to what exactly?
Expensive compared to what exactly?
Not the person you are replying to, but if I used Uber/Lyft for everything I normally do with a car, it would be more expensive than owning a car for my own exclusive use. Even reasonable cutbacks of trips I don't really need to make if I'm paying per-mile still only get it down to about parity. Uber/Lyft has the extra cost of paying the driver, but also the supposed cost savings of sharing vehicle cost across multiple riders. I would expect it to be slightly cheaper, if it were a sustainable model.
The driver's pay is really what makes it more expensive. These ride sharing companies will only really become sustainable once self driving cars become prevalent. Even if it just allows the car to get to you, and then have you drive it where you need to go.
I'm not sure what other costs they can cut easily.
Unfortunately for them, second and third players entering the market has a huge advantage in terms of less spent on development and exploration, because they had an example to follow. Uber made the way for them, by building the app first, and testing regulators and authorities.
And there is nothing keeping Uber's user base from using competitors instead. They should probably have thought about some kind of reward system. Or anything to make their users invest and want to stay more.
I think they've got big problems. Problems that will be overcome better by their competitors.
I'm not sure what other costs they can cut easily.
Unfortunately for them, second and third players entering the market has a huge advantage in terms of less spent on development and exploration, because they had an example to follow. Uber made the way for them, by building the app first, and testing regulators and authorities.
And there is nothing keeping Uber's user base from using competitors instead. They should probably have thought about some kind of reward system. Or anything to make their users invest and want to stay more.
I think they've got big problems. Problems that will be overcome better by their competitors.
they operated at a $600 million loss in 2016
http://www.businessinsider.com/lyft-lost-600-million-in-2016...
the number will be higher in 2017 as they are expanding internationally (http://www.cnbc.com/2017/01/13/lyft-to-go-global-take-on-ube...), they are primarily still US only while Uber is in most of the world
http://www.businessinsider.com/lyft-lost-600-million-in-2016...
the number will be higher in 2017 as they are expanding internationally (http://www.cnbc.com/2017/01/13/lyft-to-go-global-take-on-ube...), they are primarily still US only while Uber is in most of the world
lyft financials
https://mattermark.com/lyft-financials/
https://mattermark.com/lyft-financials/
> Uber will raise prices and no new competitors will be able to find any funding at this point
Until Uber has self-driving cars, there's nothing to prevent local competitors from running a few subway ads and getting enough iOS installs to keep prices down. And unlike national competitors, which require hundreds of millions of dollars, local competitors can be run on the cheap. So even if Lyft goes bankrupt, I doubt that will have much impact on prices.
Until Uber has self-driving cars, there's nothing to prevent local competitors from running a few subway ads and getting enough iOS installs to keep prices down. And unlike national competitors, which require hundreds of millions of dollars, local competitors can be run on the cheap. So even if Lyft goes bankrupt, I doubt that will have much impact on prices.
Juno is burning 10's of millions trying to compete on low prices and they are still in NY area only, unlikely local competitors will be able to compete at low prices unless they have a huge war chest which will come from rich founders (Juno) or investors (Uber/Lyft/etc.)
Well low is relative. I think GPs point was that Uber can never have a real monopoly because eventually they have to operate profitably. Once the base price of a ride settles competitors can still come eat their lunch. Heck I took a taxi in Seattle for the same price as an Uber but the driver actually knew where I was going and how to navigate in traffic.
Driverless cars would throw a big wench into this however.
Driverless cars would throw a big wench into this however.
And only if Uber is the only one coming up with it. If VW/Mercedes/GM/Ford develop driverless vehicles, anybody can build a service based on it (most likely the manufacturers themselves).
The only chance for Uber to survive is to be the first one in that space. I don't see how that can happen with so many companies in advanced development stages.
The only chance for Uber to survive is to be the first one in that space. I don't see how that can happen with so many companies in advanced development stages.
Is Juno trying to set themselves up to be a national competitor though, or are they trying to stay local? Given that making a basic app to put dots on a map is basically free, I don't see what stops someone from investing a couple million bucks in hopes of getting a small but good return.
yes they are saying they are going to expand nationally for the last 6 months but you can't expand nationally if you are running out of money (check ride sharing forum's where drivers are starting to report sporadic payments from Juno)
Hmmm...there are plenty of assertions here without factual back up. 1) If Lyft has $1B in cash and their board has capped burn at $600M per year, how will they be out of money this year? (http://www.recode.net/2017/1/13/14267926/lyft-growth-revenue...) 2) what source states that the $500M round won't be subscribed? I read they opened it up b/c of inbound demand since they don't need the cash (see point 1)
I'm curious what do you think will happen with Lyft? It sounds like GM wanted to buy them, but they weren't interested in a $5+ billion valuation. Maybe when they run out of money GM will purchase them for a much lower price.
GM will purchase them for around $1-$3 billion and drastically raise prices and fire most of the employees as their public investors will be skeptical and the stock price will take a hit, Uber will be able to raise prices enough to get better economics and atleast IPO at a haircut of their current private valuation
> Uber is cheap only because investor capital subsidizes every ride.
Is that actually legal, in light of [1]?
[1] https://en.wikipedia.org/wiki/Predatory_pricing
Is that actually legal, in light of [1]?
[1] https://en.wikipedia.org/wiki/Predatory_pricing
I've been wondering the same as I'm reading this thread. I like the idea with a new model, especially one that get rids of the concept of taxi medallions, but I have an issue with what is essentially unfair competition.
The bar for predatory pricing is very high, and Uber doesn't hit it: https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
The main issue, as others have pointed out, is that the network effects and barriers to entry with Uber are quite low, so even if they beat Lyft they won't be able to jack up prices well above cost. In Austin, Uber and Lyft left after city voters passed driver fingerprinting requirements, and a flood of new companies entered the market. These new apps and companies had problems at first, but I currently use RideAustin (a non-profit, mind you) frequently, and despite being slightly more expensive than Uber is currently, the experience is pretty much indistinguishable.
The main issue, as others have pointed out, is that the network effects and barriers to entry with Uber are quite low, so even if they beat Lyft they won't be able to jack up prices well above cost. In Austin, Uber and Lyft left after city voters passed driver fingerprinting requirements, and a flood of new companies entered the market. These new apps and companies had problems at first, but I currently use RideAustin (a non-profit, mind you) frequently, and despite being slightly more expensive than Uber is currently, the experience is pretty much indistinguishable.
Such a reactionary comment. I don't think things will be quite as drastic as you claim. Much more interested in how self driving cars play out because that's the real goal they are all chasing. Finding markets and places to apply self driving cars or transportation to reinvent how transportation works globally.
And they don't care if a few dozen or more people die at the hands of their self driving car because all they care about is winning the self car driving war at all and any cost!
Some hacker or a hacker group plz teach uber a lesson in humility and make sure they pay for their sins! This is not how you win and or change the world via deaths of dozens of innocent drivers killed by your self driving unproven cars which you stole from Google.
Their lack of humility.. morals .. ethics is Unbelievable!!!
Some hacker or a hacker group plz teach uber a lesson in humility and make sure they pay for their sins! This is not how you win and or change the world via deaths of dozens of innocent drivers killed by your self driving unproven cars which you stole from Google.
Their lack of humility.. morals .. ethics is Unbelievable!!!
I believe they are profitable in many city venues, their cash outlays have to do with targeting new markets, and moon-shot style projects.
If they want to be profitable, they can pull back on aggressive expansion, and dump the more expensive, less fruitful projects.
If they want to be profitable, they can pull back on aggressive expansion, and dump the more expensive, less fruitful projects.
Didn't make much sense to me they would put money into self driving cars. It works be much more sensible to await a viable commercial solution and then buy it in bulk.
My assumption is that it was merely to juice their valuation.
Presumably they want to at least hold a portfolio of strategic patents.
Why? If you can buy driverless cars from, say, GM, what do the strategic patents get you? If GM, Toyota, Ford, et al all sell them, there's pressure to reduce prices anyway. Lyft's core competence is in hooking people up with drivers, not in building advanced new automation tech. The smart thing to do is double down on it since there's a market and presumably a path to profitability.
Are you assuming these automakers won't compete with Uber directly? I think some automakers are looking to enter the "transportation services" market.
http://www.wsj.com/articles/ford-says-it-will-focus-more-on-...
http://www.wsj.com/articles/ford-says-it-will-focus-more-on-...
> Why? If you can buy driverless cars from, say, GM, what do the strategic patents get you?
Royalties, most likely. Discounts on cars in exchange for licenses. Maybe something to auction off during the bankruptcy process so that investors get a fraction of their money back.
Patents can be the most valuable thing a company has. Google pretty much wound up scooping the patents out of Motorola and selling the rest (you know, the thousands of smart people and hardware and history) for a discount.
Royalties, most likely. Discounts on cars in exchange for licenses. Maybe something to auction off during the bankruptcy process so that investors get a fraction of their money back.
Patents can be the most valuable thing a company has. Google pretty much wound up scooping the patents out of Motorola and selling the rest (you know, the thousands of smart people and hardware and history) for a discount.
No, it makes a lot more sense for Uber to be involved in self driving than maybe anyone else.
Self-driving is a 'near rality' meaning, the tech has progressed to the point wherein we can feasibly see it working at some point. I think it'll take a little longer, but it's basically going to happen.
It represents an existential issue to Uber, it's a huge competitive issues, as well as a massive opportunity.
Uber would be more readily able to lever the tech, than say Google, who has no fleet, and no ability to build cars.
If GM/Ford get the tech going first, then they'll hold that over Uber in a very heavy hand. Also GM/Ford are slow, big companies and may lag the whole way. Tesla, Google, Uber are the 'big players' who could do it fast and well, smaller innovative shops notwithstanding.
Though self driving might be a little expensive, it's definitely not a moonshot, more of a somewhat risky but highly relevant venture.
If Uber could 'get all the pieces right' - and have driverless cars everywhere before GM/Ford got to market in a material way - Uber would be a multi-trillon dollar company. I mean - not only would it wipe out all their competition, increase market a lot just on the basis of price alone ... but it would fundamentally change how people buy/drive/own and use cars.
As risky as it is - the idea of 'driverless ubers' is just too big to ignore. It's worth 100x the market for iPhones.
Something to remember guys - look at the exports for most countries: #1 is cars. Look at family expenditures. After mortgage/rent - it's cars.
Silicon Valley is used to 0.001 cent CPE's or 25 cent click-throughs. That's peanuts compared to transport.
Disrupting cars is 100x bigger than anything the Valley has done before. The numbers are mind blowing.
Now add in trucking/transportation ... it's basically mind-boggling.
So as long as they can afford to pushing the driverless car front and as long as it's not costing them billions and billions a year in R&D, they should be definitely pushing it as their #1 long term strategic priority.
Self-driving is a 'near rality' meaning, the tech has progressed to the point wherein we can feasibly see it working at some point. I think it'll take a little longer, but it's basically going to happen.
It represents an existential issue to Uber, it's a huge competitive issues, as well as a massive opportunity.
Uber would be more readily able to lever the tech, than say Google, who has no fleet, and no ability to build cars.
If GM/Ford get the tech going first, then they'll hold that over Uber in a very heavy hand. Also GM/Ford are slow, big companies and may lag the whole way. Tesla, Google, Uber are the 'big players' who could do it fast and well, smaller innovative shops notwithstanding.
Though self driving might be a little expensive, it's definitely not a moonshot, more of a somewhat risky but highly relevant venture.
If Uber could 'get all the pieces right' - and have driverless cars everywhere before GM/Ford got to market in a material way - Uber would be a multi-trillon dollar company. I mean - not only would it wipe out all their competition, increase market a lot just on the basis of price alone ... but it would fundamentally change how people buy/drive/own and use cars.
As risky as it is - the idea of 'driverless ubers' is just too big to ignore. It's worth 100x the market for iPhones.
Something to remember guys - look at the exports for most countries: #1 is cars. Look at family expenditures. After mortgage/rent - it's cars.
Silicon Valley is used to 0.001 cent CPE's or 25 cent click-throughs. That's peanuts compared to transport.
Disrupting cars is 100x bigger than anything the Valley has done before. The numbers are mind blowing.
Now add in trucking/transportation ... it's basically mind-boggling.
So as long as they can afford to pushing the driverless car front and as long as it's not costing them billions and billions a year in R&D, they should be definitely pushing it as their #1 long term strategic priority.
I guess this is the thinking driving Uber's current valuation. It's a pipe dream. Yes, self-driving is a near reality, and when it becomes feasible, a few quarters later it will be a commodity. It's just software, lots of people working on it, nobody has any secret sauce here. When that happens, what does Uber have? That's right, nothing. Their cars, which aren't equipped for self-driving. And their drivers, who are all going to be out of work. And their customers, who use Uber because it is artificially cheap and have no brand loyalty (widely hated company).
Sure, disrupting transportation is big, but no advantage in sight for Uber there. They only thing they disrupted was traditional taxis on a wave of dumb investor money.
Sure, disrupting transportation is big, but no advantage in sight for Uber there. They only thing they disrupted was traditional taxis on a wave of dumb investor money.
They really can't. Centralized taxi service is a winner-take-all market for at least individual countries.
If uber lays off and decides to get profitable, they risk lyft taking hold because they're the only option in X markets.
On the other hand, up until a few weeks ago it seemed like Uber had enough cash to outlast every competitor, achieve functional monopoly and from there they can charge whatever they want.
If uber lays off and decides to get profitable, they risk lyft taking hold because they're the only option in X markets.
On the other hand, up until a few weeks ago it seemed like Uber had enough cash to outlast every competitor, achieve functional monopoly and from there they can charge whatever they want.
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I don't understand why the media and Silicon Valley seem to be gleefully awaiting the downfall of Uber. If Uber's business model is not financially viable then the free market will take care of that. But promoting the view that their "culture" is "rotten" based on a report from a disgruntled employee, or saying that their employees are being "exploited" based on one video from one driver is sanctimonious and vicious. Why is this necessary? The only answer I can come up with is that there is a political motivation, driven by neo-Marxism and the narrative that capitalism and big business are inherently evil.
I'm an Uber user, and I still love the service and the fiercely competitive way that Uber has transformed what was previously a protected and stagnant industry delivering poor service.
I'm an Uber user, and I still love the service and the fiercely competitive way that Uber has transformed what was previously a protected and stagnant industry delivering poor service.
Blaming this all on ideology is too easy an explanation.
There have been multiple reports by various uber employees (as well as 2 investors according to the OP) of a rotten culture. Add to that the leaks of taking huge losses, and people are seeing a company that isn't profitable and has some disastrous PR.
It doesn't help that the way they approach regulation, and the way they allegedly treat workers match up pretty well. They take an aggressive stance with both.
The narrative here is that a company that was once thought to be great is now showing some significant cracks.
There have been multiple reports by various uber employees (as well as 2 investors according to the OP) of a rotten culture. Add to that the leaks of taking huge losses, and people are seeing a company that isn't profitable and has some disastrous PR.
It doesn't help that the way they approach regulation, and the way they allegedly treat workers match up pretty well. They take an aggressive stance with both.
The narrative here is that a company that was once thought to be great is now showing some significant cracks.
They have also been around long enough that everyone in the industry knows someone who said "great product, shitty place to work", or something to that effect. We all knew there was _something_ a bit off, but didn't have a public, large-scale narrative to get behind.
>The only answer I can come up with is that there is a political motivation, driven by neo-Marxism and the narrative that capitalism and big business are inherently evil.
I agree that that kind of rhetoric is in vogue right now, but Uber is definitely not the hill I'd want to die on in making that point.
I agree that that kind of rhetoric is in vogue right now, but Uber is definitely not the hill I'd want to die on in making that point.
Well, there's the bit where the "free market" has kept valuing Uber at absurd levels despite it being not financially viable. Also that the report from the "disgruntled employee" dovetailed well with what people already knew about the company from word of mouth, and with gender politics issues that have been a problem in SF since forever. Also that the "exploited employee" isn't even an employee, since Uber is fighting like a cornered wolf in court to keep them classified as contractors so that they don't have any of the rights and benefits that they would otherwise be entitled to in a first-world workforce.
I mean, like the article said, Uber has done some great things, and the world will be better in its wake; ride sharing was a thing that needed to be invented, and it needed someone as forceful as Kalanick to be deployed. But if you honestly think that its modus operandi is standard fare, you're the one with the cynical outlook on capitalism and big business.
I mean, like the article said, Uber has done some great things, and the world will be better in its wake; ride sharing was a thing that needed to be invented, and it needed someone as forceful as Kalanick to be deployed. But if you honestly think that its modus operandi is standard fare, you're the one with the cynical outlook on capitalism and big business.
Why am I always reading that Uber is not financially viable? I haven't seen anyone proven this to be true. Take my trip tonight for example. Sunday night, 7pm, 5.17 miles and 16 min ride cost 17$. If you calculate the the cost, gas: about .50$, driver time: at 50$/hr fro 16 min ride is about 13$. The total cost 13.50, Uber gets 3.5$ for my ride. This sounds very good to me.
Uber's business practices have made me ashamed of the tech industry for several years now. Recent developments are just telling me they aren't only screwing drivers but some of their engineers too.
Their competition is also funded by big VCs and/or big corporations, there's no inherent problem with that. Not everyone who thinks Uber is a scumbag company is pushing some fictitious neo-Marxist agenda.
Their competition is also funded by big VCs and/or big corporations, there's no inherent problem with that. Not everyone who thinks Uber is a scumbag company is pushing some fictitious neo-Marxist agenda.
How are they actually screwing their drivers? Are they forcing, misleading or tricking the drivers?
If you believe all the bollocks you hear on HN, then the drivers are but poor helpless farmers who don't understand how complicated things like 'money' works, and who were forced at gun point to buy luxury cars to become a full time Uber drivers.
I will try to help you understand. Two years ago, Peter Sims asked: "Can we trust Uber?"[24]. The answer is no.
There's just way too much awful stuff going on at Uber to ignore all of it or claim everyone's distaste is political. (It's also silly to suggest that all of the media and/or Silicon Valley have the same set of ulterior motives.)
Here's just a sampling of Uber's misconduct. Some of these items cross categories, but I've tried to roughly divide them up.
* Culture problems: The sexual harassment described by your "disgruntled employee" has been backed up and verified by others.[1][19] Its culture has been described as a constant battle between warring factions with managers openly backstabbing and abusing other managers and employees.[7] It hires executives who have ongoing harassment claims against them, then forces same executives to resign unceremoniously.[17] Its culture has been purposefully designed to cause employees to work against each other.[18] It blcoks employees from chatting on anonymous apps.[21]
* Corporate governance problems: It behaves anti-competitively in ways that are dubiously legal in order to sabotage competition.[2] It is also alleged to steal from other companies.[3] Its executives have suggested 'digging up dirt' on journalists in order to silence them, spurring a Congressional inquiry.[8] It offered drivers money to show them paystubs from competitors.[12] It also tries to prevent drivers from driving for any other company, even though it insists said drivers are 'contract employees.'[14] It has been and is being sued by numerous state governments over its business practices.[22]
* Exploiting users and ignoring privacy: It tracks/tracked one-night stands.[9] It collects users' location data in the background when the app is off.[10] It has been subject to FTC complaints over its tracking behaviors.[11] It lures drivers in with promises of big fares, then changes those fares arbitrarily to screw said drivers over and save riders money.[13] It is alleged to have mislead users by showing 'phantom cars' on its app.[16]
* Outright and attempted law-breaking: Uber breaks laws all around the world to enrich itself, including allegedly trying to deceive government officials across the world.[4] It refused to acquire a mandatory permit from the government until faced with public pressure.[5] It refuses to treat its drivers as true employees, even though legally they are considered such in many jurisdictions, and only complies when faced with court orders.[6][20] It attempted to investigate the plaintiffs in a class-action suit against it via methods that may have been illegal.[15]
All of this together helps explain why even Peter Thiel, himself not a particularly sterling gentleman, considers Uber "the most ethically challenged company in Silicon Valley."[23] I am gleefully awaiting Uber's downfall, as you say, because it is a legitimately evil company. Big companies aren't inherently evil. Uber is a big company which happens to be evil. If even a couple of the items in each category are true, Uber is engaging in a variety of illegal and morally unacceptable practices. I don't see how you can suggest, in the face of this much evidence to the contrary, that all of this is purely political.
And by the way? There's much more where this came from. This is just a smattering I could find in 20 minutes.
[1] https://medium.com/@amyvertino/my-name-is-not-amy-i-am-an-ub... [2] http://www.theverge.com/2014/8/26/6067663/this-is-ubers-play... [3] https://www.bloomberg.com/news/articles/2017-02-23/alphabet-... [4] https://www.nytimes.com/2017/03/03/technology/uber-greyball-... [5] https://arstechnica.com/cars/2017/03/uber-rethinks-defiance-... [6] https://techcrunch.com/2015/06/17/uber-drivers-deemed-employ... [7] https://www.nytimes.com/2017/02/22/technology/uber-workplace... [8] http://www.franken.senate.gov/files/letter/141119UberLetter.... [9] http://www.marketplace.org/2014/11/18/business/final-note/ub... [10] https://techcrunch.com/2016/11/28/uber-background-location-d... [11] https://www.theguardian.com/technology/2015/jun/22/uber-ftc-... [12] http://www.thestranger.com/slog/2017/01/27/24830634/uber-is-... [13] https://www.washingtonpost.com/local/trafficandcommuting/som... [14] http://www.recode.net/2016/11/28/13768756/uber-driver-deacti... [15] http://www.theverge.com/2016/7/10/12127638/uber-ergo-investi... [16] https://www.theguardian.com/technology/2015/jul/30/uber-deni... [17] https://www.nytimes.com/2017/02/27/technology/uber-sexual-ha... [18] https://qz.com/918582/uber-is-designed-so-that-for-one-emplo... [19] https://medium.com/@contactkeala/sexism-at-uber-from-female-... [20] http://www.bbc.co.uk/news/business-37802386 [21] http://www.businessinsider.com/uber-blocks-anonymous-chat-ap... [22] http://www.mercurynews.com/2014/12/09/biz-break-san-francisc... [23] http://money.cnn.com/2014/11/18/technology/uber-unethical-pe... [24] https://thoughts.siliconguild.com/can-we-trust-uber-c0e793de...
There's just way too much awful stuff going on at Uber to ignore all of it or claim everyone's distaste is political. (It's also silly to suggest that all of the media and/or Silicon Valley have the same set of ulterior motives.)
Here's just a sampling of Uber's misconduct. Some of these items cross categories, but I've tried to roughly divide them up.
* Culture problems: The sexual harassment described by your "disgruntled employee" has been backed up and verified by others.[1][19] Its culture has been described as a constant battle between warring factions with managers openly backstabbing and abusing other managers and employees.[7] It hires executives who have ongoing harassment claims against them, then forces same executives to resign unceremoniously.[17] Its culture has been purposefully designed to cause employees to work against each other.[18] It blcoks employees from chatting on anonymous apps.[21]
* Corporate governance problems: It behaves anti-competitively in ways that are dubiously legal in order to sabotage competition.[2] It is also alleged to steal from other companies.[3] Its executives have suggested 'digging up dirt' on journalists in order to silence them, spurring a Congressional inquiry.[8] It offered drivers money to show them paystubs from competitors.[12] It also tries to prevent drivers from driving for any other company, even though it insists said drivers are 'contract employees.'[14] It has been and is being sued by numerous state governments over its business practices.[22]
* Exploiting users and ignoring privacy: It tracks/tracked one-night stands.[9] It collects users' location data in the background when the app is off.[10] It has been subject to FTC complaints over its tracking behaviors.[11] It lures drivers in with promises of big fares, then changes those fares arbitrarily to screw said drivers over and save riders money.[13] It is alleged to have mislead users by showing 'phantom cars' on its app.[16]
* Outright and attempted law-breaking: Uber breaks laws all around the world to enrich itself, including allegedly trying to deceive government officials across the world.[4] It refused to acquire a mandatory permit from the government until faced with public pressure.[5] It refuses to treat its drivers as true employees, even though legally they are considered such in many jurisdictions, and only complies when faced with court orders.[6][20] It attempted to investigate the plaintiffs in a class-action suit against it via methods that may have been illegal.[15]
All of this together helps explain why even Peter Thiel, himself not a particularly sterling gentleman, considers Uber "the most ethically challenged company in Silicon Valley."[23] I am gleefully awaiting Uber's downfall, as you say, because it is a legitimately evil company. Big companies aren't inherently evil. Uber is a big company which happens to be evil. If even a couple of the items in each category are true, Uber is engaging in a variety of illegal and morally unacceptable practices. I don't see how you can suggest, in the face of this much evidence to the contrary, that all of this is purely political.
And by the way? There's much more where this came from. This is just a smattering I could find in 20 minutes.
[1] https://medium.com/@amyvertino/my-name-is-not-amy-i-am-an-ub... [2] http://www.theverge.com/2014/8/26/6067663/this-is-ubers-play... [3] https://www.bloomberg.com/news/articles/2017-02-23/alphabet-... [4] https://www.nytimes.com/2017/03/03/technology/uber-greyball-... [5] https://arstechnica.com/cars/2017/03/uber-rethinks-defiance-... [6] https://techcrunch.com/2015/06/17/uber-drivers-deemed-employ... [7] https://www.nytimes.com/2017/02/22/technology/uber-workplace... [8] http://www.franken.senate.gov/files/letter/141119UberLetter.... [9] http://www.marketplace.org/2014/11/18/business/final-note/ub... [10] https://techcrunch.com/2016/11/28/uber-background-location-d... [11] https://www.theguardian.com/technology/2015/jun/22/uber-ftc-... [12] http://www.thestranger.com/slog/2017/01/27/24830634/uber-is-... [13] https://www.washingtonpost.com/local/trafficandcommuting/som... [14] http://www.recode.net/2016/11/28/13768756/uber-driver-deacti... [15] http://www.theverge.com/2016/7/10/12127638/uber-ergo-investi... [16] https://www.theguardian.com/technology/2015/jul/30/uber-deni... [17] https://www.nytimes.com/2017/02/27/technology/uber-sexual-ha... [18] https://qz.com/918582/uber-is-designed-so-that-for-one-emplo... [19] https://medium.com/@contactkeala/sexism-at-uber-from-female-... [20] http://www.bbc.co.uk/news/business-37802386 [21] http://www.businessinsider.com/uber-blocks-anonymous-chat-ap... [22] http://www.mercurynews.com/2014/12/09/biz-break-san-francisc... [23] http://money.cnn.com/2014/11/18/technology/uber-unethical-pe... [24] https://thoughts.siliconguild.com/can-we-trust-uber-c0e793de...
I would discount what Peter Thiel says about Uber, because he is a significant investor in Lyft via the Founders Fund:
http://foundersfund.com/company/lyft/
http://foundersfund.com/company/lyft/
That's fair, and to be fair, Lyft does some scummy stuff, too.
But while he might have ulterior motives, I'm not sure he's wrong.
But while he might have ulterior motives, I'm not sure he's wrong.
The other part is that Uber's internal culture being rotten has not yet impacted their customers. Perhaps it will later on, but at the moment it doesn't seem likely to bring about business failure.
The "one video from one driver" prompted people to look into the driver's claims, and it turns out Uber is squeezing the drivers more.
This was posted here earlier: http://www.businessinsider.com/uber-travis-kalanick-drivers-...
This was posted here earlier: http://www.businessinsider.com/uber-travis-kalanick-drivers-...
> The only answer I can come up with is that there is a political motivation, driven by neo-Marxism and the narrative that capitalism and big business are inherently evil.
I downvoted you because your argument is a false dichotomy (could be true but caused by something else) with no evidence. If you're going to make outlandish claims you need evidence to back it up.
I downvoted you because your argument is a false dichotomy (could be true but caused by something else) with no evidence. If you're going to make outlandish claims you need evidence to back it up.
Consider that the media is a part of the free market, that the free market is not rational, and that this is its way of self-correcting.
Because it drives traffic. Traffic is money.
Most "news" these days, especially tech news, is just tabloids for people who think reading about celebrities is beneath them.
Do you learn anything useful from following these stories? No, but it makes you feel better about your own life and the company you work for. Sure we might be profit-driven megallomaniacs, but at least we're not Uber, right?
Most "news" these days, especially tech news, is just tabloids for people who think reading about celebrities is beneath them.
Do you learn anything useful from following these stories? No, but it makes you feel better about your own life and the company you work for. Sure we might be profit-driven megallomaniacs, but at least we're not Uber, right?
Isn't Uber like a Ponzi scheme in some way? They use investors money to subsidize drivers so that prices are low and they get more users, and with more users they are valued better and get more investors money. When investors money or/and user growth stops, prices go up, people stop using it, and the system collapses (or at least the user base shrinks).
Like Amazon & Tesla?
Some companies just have a much bigger ramp up than others. Amazon has so many markets to build warehousing & logistics in. Uber has so many markets to establish drivers in.
The subsidising of rides makes complete sense; subsidised rides are loss-leaders aimed towards building habits. I haven't seen their data, but it seems like a good plan.
Some companies just have a much bigger ramp up than others. Amazon has so many markets to build warehousing & logistics in. Uber has so many markets to establish drivers in.
The subsidising of rides makes complete sense; subsidised rides are loss-leaders aimed towards building habits. I haven't seen their data, but it seems like a good plan.
Amazon spent capital on building an efficient supply chain based on technology which is a huge entry barrier for any competitor. They did not use VC on exclusively providing any discounts. Uber, on the other hand, is using VC almost entirely on discounts hoping that users will stick around. Their product is essentially an app which has been replicated in every major economy with considerable success.
Agreed, except that it seems quite likely that users stick around. Where else would they go? The options seem to be an Uber competitor or taxis. Is there anything that will motivate Uber customers toward those?
Uber's service is more than just an app. They have operations teams in every market they operate in to onboard drivers, deal with local issues, etc.
Uber's service is more than just an app. They have operations teams in every market they operate in to onboard drivers, deal with local issues, etc.
The main attractive of uber is the price. Many people won't think twice about jumping to a competitor if one shows up that is cheaper than Uber.
How could it be the case that a traditional Uber competitor (eg. Lyft) could be cheaper, though? Only through venture capital. VC aside, Uber have the demand, which gives them the power to squeeze drivers.
Think of it from a driver perspective; if a competitor pays less than Uber and has less demand, why drive with them?
And if you think there will be a competitor capable of out-spending Uber using venture capital, think of it from the perspective of a VC; why pour so much capital into a business so unlikely to succeed against an incumbent when you could put it into the incumbent itself?
I think the primary risk to Uber's business is that of a self-driving competitor being capable of disrupting them; such competitors will have capital already, and will be capable of disruption through all the same ingredients that got Uber to where they are. Those companies would probably work with Uber at least at first, anyway. Uber will be at their mercy every time the contract needs to be renewed.
Think of it from a driver perspective; if a competitor pays less than Uber and has less demand, why drive with them?
And if you think there will be a competitor capable of out-spending Uber using venture capital, think of it from the perspective of a VC; why pour so much capital into a business so unlikely to succeed against an incumbent when you could put it into the incumbent itself?
I think the primary risk to Uber's business is that of a self-driving competitor being capable of disrupting them; such competitors will have capital already, and will be capable of disruption through all the same ingredients that got Uber to where they are. Those companies would probably work with Uber at least at first, anyway. Uber will be at their mercy every time the contract needs to be renewed.
I think it's probably somewhat cheaper for new competitors to get up and running and operate than it is/was for Uber.
Uber had to spend money to test the waters and figure things out. Competitors can just copy.
Uber had to spend money to test the waters and figure things out. Competitors can just copy.
Sure, no one can compete with Uber now but Uber will eventually run out of VC money to burn and there is no indication that they will be able to maintain their market dominance once they are forced to increase their fares back to a reasonable level.
Both Amazon and Tesla build physical infrastructure to lower their costs in the future. Uber is banking on self-driving cars to save them. The ironic thing though is Uber is racing to spend as much as money as possible before that happens, effectively gaining them nothing more than mindshare. As soon as another company pops up with self-driving vehicles, they can compete with Uber and they haven't wasted $10 billion making everybody hate them.
This seems to be the biggest risk with Uber.
I think they will probably end up working with the first company to have autonomous cars "ready". The big question is what happens next. Will Uber be at the mercy of that supplier every few years as the contact comes up for renewal, or will autonomous cars become so commodity that there will be multiple players competing to be Uber's supplier? Another possibility is an M&A event.
I think they will probably end up working with the first company to have autonomous cars "ready". The big question is what happens next. Will Uber be at the mercy of that supplier every few years as the contact comes up for renewal, or will autonomous cars become so commodity that there will be multiple players competing to be Uber's supplier? Another possibility is an M&A event.
I prefer to think of it as a wealth redistribution plan from the investor class to the upper middle class
One of the very few times in history that there's been such a massive, rapid, worldwide and voluntary transfer of wealth from the very wealthy to the merely well-off.
They are aware of this, the goal is to have a large market share when self driving cars make their business model profitable.
This may not work, but that in no way makes Uber a Ponzi scheme.
This may not work, but that in no way makes Uber a Ponzi scheme.
> self driving cars make their business model profitable
In what way? Will they manufacture their own cars? That seems expensive, and from the past experience of GM and Chrysler Fiat not exactly a money-printing machine. Will they partner with manufacturers and buy their cars to add to Uber fleet? That will be a new expense that was externalised to the driver before, but now affects the company's bottom line. Will they just become a dispatch software licensee like Flywheel? Enterprise buyers tend to squeeze margins and negotiate tough.
What's the scenario where either their top line increases in a massive way or expenses are trimmed way, way down from where they are today?
In what way? Will they manufacture their own cars? That seems expensive, and from the past experience of GM and Chrysler Fiat not exactly a money-printing machine. Will they partner with manufacturers and buy their cars to add to Uber fleet? That will be a new expense that was externalised to the driver before, but now affects the company's bottom line. Will they just become a dispatch software licensee like Flywheel? Enterprise buyers tend to squeeze margins and negotiate tough.
What's the scenario where either their top line increases in a massive way or expenses are trimmed way, way down from where they are today?
Ridesharing is growing year after year, so their top line is growing fast. Self driving cars would remove the biggest expense which is the human driver, so the expenses will drop a lot. Currently it costs $1.50 a mile with a human driver, and should get down to $0.50 without a driver. The lower costs will increase the profit, and way increase the volume of people using Uber.
You're still ignoring the fact that Uber is the middleman here. Uber won't be manufacturing their own vehicles so when self driving takes off why wouldn't a car manufacturer directly offer the same service as Uber? They could undercut Uber and still make a profit because Uber will never be able to buy vehicles for as low as they can manufacture them.
Yes the driver is a big cost factor but so is the vehicle. If you can eliminate the driver and produce the vehicle and parts you will be able to produce and repair cars at rates lower than anyone without the same manufacturing capability.
Yes the driver is a big cost factor but so is the vehicle. If you can eliminate the driver and produce the vehicle and parts you will be able to produce and repair cars at rates lower than anyone without the same manufacturing capability.
> the biggest expense which is the human driver, so the expenses will drop a lot
This only makes sense if Uber driver's net income is pure profit. Instead I hear they have a set of expenses - fuel, insurance, tires, maintenance as well as servicing payments on the car. Some of these Uber is likely to negotiate down, mainly insurance. But some (cleaning, maintenance, parking, car washes, tires) are currently externalised to the driver and will have to be assumed by the company.
This is even before we get into the details of who manufactures the cars and how Uber comes into the possession of the vehicle (lease? outright purchase? purchase backed by a loan? etc.)
This only makes sense if Uber driver's net income is pure profit. Instead I hear they have a set of expenses - fuel, insurance, tires, maintenance as well as servicing payments on the car. Some of these Uber is likely to negotiate down, mainly insurance. But some (cleaning, maintenance, parking, car washes, tires) are currently externalised to the driver and will have to be assumed by the company.
This is even before we get into the details of who manufactures the cars and how Uber comes into the possession of the vehicle (lease? outright purchase? purchase backed by a loan? etc.)
Some people will ALWAYS want to have a driver.
> They are aware of this, the goal is to have a large market share when self driving cars make their business model profitable.
That can't be their goal. Personally I think their goal is to get bought out at a very high price by some sort of car company / conglomerate. If car companies can make their own cars that are also self driving, why wouldn't they just toss up some software and go direct to consumers with them and cut out Uber entirely? Uber has a lead on the software and infrastructure for mapping but they're really pretty awful (I'd argue Apple Maps has surpassed much of what Uber does with mapping and routing at this point).
A car company with self driving cars is going to be able to provider a lower cost per ride while still profiting than Uber ever could unless they start producing their own vehicles.
> that in no way makes Uber a Ponzi scheme.
The parent stated "Isn't Uber like a Ponzi scheme in some way?" and then explained the rationale behind the thought. I think you took some words out of the parent's question when understanding what he or she was asking.
Uber subsidizes car rides using investor money to bring in more users which can make their valuation higher which can then bring in more investor money. Rinse repeat. It's not a ponzi scheme but it certainly has some traits of one and I think parent's question was fair.
That can't be their goal. Personally I think their goal is to get bought out at a very high price by some sort of car company / conglomerate. If car companies can make their own cars that are also self driving, why wouldn't they just toss up some software and go direct to consumers with them and cut out Uber entirely? Uber has a lead on the software and infrastructure for mapping but they're really pretty awful (I'd argue Apple Maps has surpassed much of what Uber does with mapping and routing at this point).
A car company with self driving cars is going to be able to provider a lower cost per ride while still profiting than Uber ever could unless they start producing their own vehicles.
> that in no way makes Uber a Ponzi scheme.
The parent stated "Isn't Uber like a Ponzi scheme in some way?" and then explained the rationale behind the thought. I think you took some words out of the parent's question when understanding what he or she was asking.
Uber subsidizes car rides using investor money to bring in more users which can make their valuation higher which can then bring in more investor money. Rinse repeat. It's not a ponzi scheme but it certainly has some traits of one and I think parent's question was fair.
That's not called a Ponzi scheme, though. It's possibly a type of anti-competitive behaviour, just not that particular type.
It's called "dumping": https://en.wikipedia.org/wiki/Dumping_(pricing_policy)
Probably the most effective economic trickle down.
It somehow reminds me of those advert bars that people used to put on their desktops and be paid to view adverts in the late 90s - early 2000s. There was so much money in online advertising back then that businesses created referral pyramids based on it.
It also reminds me of those daily deal websites like Groupon, which were controversial yet hyped. That was back when there was a lot of money in 'hyper' local services.
Now there's a load of hype in self driving cars, the problem is the technology is probably decades away. It's just the latest hype in a new cycle. Local taxi services will take up the slack once the investment dries up.
It also reminds me of those daily deal websites like Groupon, which were controversial yet hyped. That was back when there was a lot of money in 'hyper' local services.
Now there's a load of hype in self driving cars, the problem is the technology is probably decades away. It's just the latest hype in a new cycle. Local taxi services will take up the slack once the investment dries up.
Way more money is spent advertising online now than in the 90s and early 2000s. The delivery mechanism has simply been optimized and figured out.
A Ponzi scheme involves early investors being paid with the money of later investors. Unless you sell your shares, you're not getting money out of Uber right now. Instead, Uber appears to be as Yglesias famously said of Amazon: "a charitable organization being run by elements of the investment community for the benefit of consumers."
To be fair, you could make a similar argument with a lot of these high-growth VC backed companies.
I found this article (https://www.theinformation.com/how-uber-can-drive-profits) from The Information interesting since the "Uber will get to self-driving cars which makes them profitable" is brought as an argument all the time.
TL;DR is that self-driving cars according to an internal Uber study (according to The Information) would only modestly increase their margins: "Doing without drivers will only increase Uber’s projected long-term net profit margin by as much as 5 percentage points, according to an Uber worker who’s seen internal data projected by that team. That’s in part because of expected municipal regulations on pricing related to autonomous vehicle services, this person said. Another factor is that Uber may have to purchase and maintain its own cars en masse, rather than relying on cars owned by drivers as it does now."
TL;DR is that self-driving cars according to an internal Uber study (according to The Information) would only modestly increase their margins: "Doing without drivers will only increase Uber’s projected long-term net profit margin by as much as 5 percentage points, according to an Uber worker who’s seen internal data projected by that team. That’s in part because of expected municipal regulations on pricing related to autonomous vehicle services, this person said. Another factor is that Uber may have to purchase and maintain its own cars en masse, rather than relying on cars owned by drivers as it does now."
Several folks have analyzed this in depth. The economics of self-driving cars are definitely far from clear:
https://ftalphaville.ft.com/2015/10/20/2142450/do-the-econom...
http://www.nakedcapitalism.com/2017/01/can-uber-ever-deliver...
https://ftalphaville.ft.com/2015/10/20/2142450/do-the-econom...
http://www.nakedcapitalism.com/2017/01/can-uber-ever-deliver...
5% is more than the entire average net margin of some industries.
I hope not. I prefer my car service provider to be ruthless, impersonal, and corporate, not lovey-dovey like the "fist bump and ride in the front seat" people at Lyft. …and there's no way I want to go back to using DC Taxis.
Which may also work against them...
> If Uber stalls, it isn’t going to be saved by a loyal consumer fan base. There is no stickiness to Uber. It has no frequent-rider program. It has no social component. It prevents users from forming bonds with drivers. No one gets a heightened sense of self by identifying as an Uber rider versus some competitor. We’ll stick with Uber as long as it continues to get us where we want to go at a price we like. Someone else comes along with a better service or lower price, we’ll use it.
> If Uber stalls, it isn’t going to be saved by a loyal consumer fan base. There is no stickiness to Uber. It has no frequent-rider program. It has no social component. It prevents users from forming bonds with drivers. No one gets a heightened sense of self by identifying as an Uber rider versus some competitor. We’ll stick with Uber as long as it continues to get us where we want to go at a price we like. Someone else comes along with a better service or lower price, we’ll use it.
I don't know about DC, but in LA there's nothing lovey-dovey about Lyft. The ride is identical to Uber.
Exact same in DC, where many cars have both Uber and Lyft signs in the window.
Are DC Taxis not "ruthless, impersonal and corporate" enough?
Do you want your car service also to be disrespectful about laws? Disrespectful about women in tech? Disrespectful to privacy?
Is it really a choice between the respectful and the non-respectful of the law?
http://observer.com/2016/05/derailed-by-uber-deposed-new-yor...
http://observer.com/2016/05/derailed-by-uber-deposed-new-yor...
Pretty sure they dropped the fistbump years ago.
gross
I don't get the constant hype around self driving cars. Sure - they will be revolutionary when they get here - but the reality is they are years and years away at best.
We have autopilots for planes, that can effectively take off, fly, and land a plane. We've had that technology for quite a while.
So why is not common place for planes, at least cargo planes with no passengers? Surely companies like UPS, FedEx etc that have a large fleet of cargo planes that fly around the US and the world would have significant cost savings?
Why do we feel a car is easier to autopilot than a plane?
And when the car autopilot technology does get here - why does Uber feel it will benefit them more than Lyft? As soon as it is available - you'll just have Uber style copy cats with "on demand" vehicles? What benefit does Uber have at that point?
We have autopilots for planes, that can effectively take off, fly, and land a plane. We've had that technology for quite a while.
So why is not common place for planes, at least cargo planes with no passengers? Surely companies like UPS, FedEx etc that have a large fleet of cargo planes that fly around the US and the world would have significant cost savings?
Why do we feel a car is easier to autopilot than a plane?
And when the car autopilot technology does get here - why does Uber feel it will benefit them more than Lyft? As soon as it is available - you'll just have Uber style copy cats with "on demand" vehicles? What benefit does Uber have at that point?
> I don't get the constant hype around self driving cars. Sure - they will be revolutionary when they get here - but the reality is they are years and years away at best.
There's a mad dash going on to be first to market on driverless cars. The basic driverless car is already being tested. The only things that need to be done are major debugging and lobbying. ETA: within half a decade if lobbying goes through.
> We have autopilots for planes, that can effectively take off, fly, and land a plane. We've had that technology for quite a while.
This is erroneous and irrelevant.
> So why is not common place for planes, at least cargo planes with no passengers? Surely companies like UPS, FedEx etc that have a large fleet of cargo planes that fly around the US and the world would have significant cost savings?
Planes are significantly harder to pilot than cars. If nothing else, look at the differences between a pilot's license and a driver's. Perhaps driverless cars will pave the way for pilotless planes, but not until safety can be guaranteed.
No one wants another 9/11.
> Why do we feel a car is easier to autopilot than a plane?
There are more necessary controls and procedures in a plane than a car.
> As soon as it is available - you'll just have Uber style copy cats with "on demand" vehicles?
If you're talking about one-offs, then probably not. The reason Uber copycats are failing right now is because of app-population and broadness of coverage. Small biz can't populate their own apps with large competitors still in the picture.
Include that with any licensing fees, barrier to entries, etc. it's highly unlikely. Perhaps if a ride-sharing-app sourcer is made that uses Uber and Lyft APIs, while giving one-offs a chance to be mixed in, we might have a nice free market.
> What benefit does Uber have at that point?
A practically free way to get even more cash.
There's a mad dash going on to be first to market on driverless cars. The basic driverless car is already being tested. The only things that need to be done are major debugging and lobbying. ETA: within half a decade if lobbying goes through.
> We have autopilots for planes, that can effectively take off, fly, and land a plane. We've had that technology for quite a while.
This is erroneous and irrelevant.
> So why is not common place for planes, at least cargo planes with no passengers? Surely companies like UPS, FedEx etc that have a large fleet of cargo planes that fly around the US and the world would have significant cost savings?
Planes are significantly harder to pilot than cars. If nothing else, look at the differences between a pilot's license and a driver's. Perhaps driverless cars will pave the way for pilotless planes, but not until safety can be guaranteed.
No one wants another 9/11.
> Why do we feel a car is easier to autopilot than a plane?
There are more necessary controls and procedures in a plane than a car.
> As soon as it is available - you'll just have Uber style copy cats with "on demand" vehicles?
If you're talking about one-offs, then probably not. The reason Uber copycats are failing right now is because of app-population and broadness of coverage. Small biz can't populate their own apps with large competitors still in the picture.
Include that with any licensing fees, barrier to entries, etc. it's highly unlikely. Perhaps if a ride-sharing-app sourcer is made that uses Uber and Lyft APIs, while giving one-offs a chance to be mixed in, we might have a nice free market.
> What benefit does Uber have at that point?
A practically free way to get even more cash.
> Planes are significantly harder to pilot than cars.
Not true. Planes have more degrees of freedom than cars, which slightly increases the cognitive load on a pilot vs. a driver. But overall, the cognitive load on drivers is significantly higher because planes don't have to worry about hitting anything (except the ground). If you drive your car on the Bonneville Salt Flats and you have the whole place to yourself, the cognitive load of driving a car is easy, and slightly less than the CL of piloting a plane. Building an autopilot for such a car would be easy. But that's not even remotely what real driving is like, and it's why building an autopilot for cars is significantly more difficult than building one for a plane.
Not true. Planes have more degrees of freedom than cars, which slightly increases the cognitive load on a pilot vs. a driver. But overall, the cognitive load on drivers is significantly higher because planes don't have to worry about hitting anything (except the ground). If you drive your car on the Bonneville Salt Flats and you have the whole place to yourself, the cognitive load of driving a car is easy, and slightly less than the CL of piloting a plane. Building an autopilot for such a car would be easy. But that's not even remotely what real driving is like, and it's why building an autopilot for cars is significantly more difficult than building one for a plane.
There are a lot more cars sold (82.8 million in 2014), then planes sold (2331 in 2014), so the cost of the autopilot is distributed over a much larger userbase.
Not to mention that a plane crash is a much, much bigger disaster then a car crash, and that the salary of the pilot is only a small component of the cost of a UPS/Fedex flight, compared to the cost of the driver for Uber.
As for Uber benefitting more then Lyft, it comes down to who gets them on the road in scale first. If Uber is the one who creates the software behind the cars, they dont have to share. Of course the risk is that the car manufacturers will create their own network (Tesla has already indicated this is what they will do).
Not to mention that a plane crash is a much, much bigger disaster then a car crash, and that the salary of the pilot is only a small component of the cost of a UPS/Fedex flight, compared to the cost of the driver for Uber.
As for Uber benefitting more then Lyft, it comes down to who gets them on the road in scale first. If Uber is the one who creates the software behind the cars, they dont have to share. Of course the risk is that the car manufacturers will create their own network (Tesla has already indicated this is what they will do).
The cost of paying pilots is a rounding error compared to the plane, the fuel, the landing fees, and all of the other costs of a UPS cargo flight. It's not worth the regulatory hassle to get rid of them.
In contrast, the cost of paying the Uber driver is more than all the other costs of Uber combined and would truly be a game-changer for their business.
In contrast, the cost of paying the Uber driver is more than all the other costs of Uber combined and would truly be a game-changer for their business.
I'm having trouble believing a high-flying company could really come crashing down over accusations that they are sexist assholes.
"They're a really high-pressure place, there's a lot of vicious corporate politics, and they sometimes treat women badly," could describe a whole lot of companies and institutions.
"They're a really high-pressure place, there's a lot of vicious corporate politics, and they sometimes treat women badly," could describe a whole lot of companies and institutions.
Uber has picked fights with local, regional and federal governments around the world, as well as reporters, other companies, etc. Many of those could potentially lead to litigation but so far haven't, and if anyone has been waiting to sue Uber, this is the optimal time for it.
With the Waymo lawsuit, the internal investigations, cash burning, leaks, disgruntled employees and drivers, a wave of new lawsuits around the country and the world could quickly overwhelm the company, preventing it from doing an IPO or even securing more funding. With the IPO delayed and valuation damaged, more of the best employees will quit, as the long hours and low salaries won't translate into post-IPO fortunes.
With the Waymo lawsuit, the internal investigations, cash burning, leaks, disgruntled employees and drivers, a wave of new lawsuits around the country and the world could quickly overwhelm the company, preventing it from doing an IPO or even securing more funding. With the IPO delayed and valuation damaged, more of the best employees will quit, as the long hours and low salaries won't translate into post-IPO fortunes.
And it seems to be happening already:
https://www.ft.com/content/c6bc4b2c-0012-11e7-8d8e-a5e3738f9...
https://www.ft.com/content/c6bc4b2c-0012-11e7-8d8e-a5e3738f9...
> I'm having trouble believing a high-flying company could really come crashing down over accusations that they are sexist assholes.
There's a nostrum in politics that mud often doesn't stick; until it all sticks at once.
Bad publicity sets a narrative that other journalists follow. Whether because it fits their own thinking, or simply to follow the herd to a higher readership, a run of bad news has a way of reinforcing itself.
Especially if there's a rich vein of old bad news to dig up and recycle.
There's a nostrum in politics that mud often doesn't stick; until it all sticks at once.
Bad publicity sets a narrative that other journalists follow. Whether because it fits their own thinking, or simply to follow the herd to a higher readership, a run of bad news has a way of reinforcing itself.
Especially if there's a rich vein of old bad news to dig up and recycle.
Uber's lock-in is so soft that they ought to be paranoid about any attack on their image.
If that were true, they would be swamped with competitors. In most markets, they only have one significant competitor; Lyft, Grab, previously Didi. (let's not count taxis)
> If that were true, they would be swamped with competitors
Are they not? I hear of tons of ride sharing companies every week almost always in very local areas. Seems like they have a ton of competition everywhere. At least anecdotally that's how it looks to me.
Are they not? I hear of tons of ride sharing companies every week almost always in very local areas. Seems like they have a ton of competition everywhere. At least anecdotally that's how it looks to me.
Are there any examples of cities where Uber operates with multiple viable competitors? I'm aware of cities where it's Uber v Lyft or Uber v Grab, but have yet to hear of any 3-way races.
Groupon is an example of a business that truly had very little competitive barriers. As a result, every second startup was working on a deals site. Even so, in the end, it wasn't even the competitors that brought Groupon down. Groupon brought Groupon down.
Groupon is an example of a business that truly had very little competitive barriers. As a result, every second startup was working on a deals site. Even so, in the end, it wasn't even the competitors that brought Groupon down. Groupon brought Groupon down.
> Are there any examples of cities where Uber operates with multiple viable competitors?
Viable? Not sure. Honestly I just see the signs for various services I've never heard of at or near airports and I rarely remember any of their names nor see them elsewhere.
Viable? Not sure. Honestly I just see the signs for various services I've never heard of at or near airports and I rarely remember any of their names nor see them elsewhere.
Well, not to forget the legal case with Waymo, which might put a stop to all of Uber's self-driving efforts.
It doesn't matter if such descriptions can describe a whole lot of companies and institutions.
The fact that they can become the P.R-lightning rod for "everything bad about SV-VC culture" means they will have to actively campaign harder to recruit top notch talents.
HR is arguably the most important asset a company has to continuously acquire & grow, and it'd be highly disadvantageous to have to fight such an active & growing negative reputation in an already fierce market for talent.
The fact that they can become the P.R-lightning rod for "everything bad about SV-VC culture" means they will have to actively campaign harder to recruit top notch talents.
HR is arguably the most important asset a company has to continuously acquire & grow, and it'd be highly disadvantageous to have to fight such an active & growing negative reputation in an already fierce market for talent.
I think about this a lot.
We live in a time where some of the most ridiculous services are being subsidized big time by VC cash, and I should be enjoying it while it lasts. From cheap rides to the airport, food delivery, laundry service, etc... soak it up now.
We live in a time where some of the most ridiculous services are being subsidized big time by VC cash, and I should be enjoying it while it lasts. From cheap rides to the airport, food delivery, laundry service, etc... soak it up now.
This entire thread seems to be missing the fact that during this period of us soaking it up, all legitimate competitors can't compete and will either disappear or suffer greatly.
Agreed.
Also, this is nothing new. Consumers got the same bennies in 1999. I remember getting a bunch of $1 DVDs from some Amazon wannabe (can't remember the name now). They were trying to buy customers by subsidizing DVD sales. It didn't work. The strategy was great for my college dorm DVD collection. Not so great for their VC's ROI though.
I can't provide you with exact sources, but I recall the same thing happening in Mexican indigenous villages with coca cola. Coca cola would subsidise the drink so that it is much cheaper than local drinks. Villagers give up their local drinks for coca cola. Once it has a monopoly, coca cola raises the prices. Villagers are unable to get back to their local drinks which no one makes anymore, and keep buying Coke.
These kind of things generally happen over many years, and you generally take it as one of the good things in life. Unfortunately before you know it, you are already paying top dollars, you have a multinational making huge margins on your back, and not many ways to get out of it.
These kind of things generally happen over many years, and you generally take it as one of the good things in life. Unfortunately before you know it, you are already paying top dollars, you have a multinational making huge margins on your back, and not many ways to get out of it.
No.
If you know and realize that it is only convenient because of VC subsidies, you know enough not to use those services since it won't be sustainable.
I try to understand each business model I support with revenue. If it's only setup to enable growth, I pass.
If you know and realize that it is only convenient because of VC subsidies, you know enough not to use those services since it won't be sustainable.
I try to understand each business model I support with revenue. If it's only setup to enable growth, I pass.
If a billionaire wants to subsidize food and taxis for me then I'm more than happy to take it
Even if you know that using said VC money bankrupts whole families the world over?
I don't think it's morally wrong to take a cheap taxi ride subsidized by speculators. I don't care if the model is sustainable since I get all my value immediately in return for the fare.
The way Uber treats its people is a separate issue.
The way Uber treats its people is a separate issue.
I think there can still be a moral component, if you know that they are enacting and perpetrating a vicious cycle that will lead to the depletion of public transit:
http://www.slate.com/articles/business/metropolis/2016/12/ci...
http://www.slate.com/articles/business/metropolis/2016/12/ci...
What about the opportunity cost of driving more sustainable competition (whether that's better taxis, direct competitors, or public transit) out of business? Uber doesn't exist in a vacuum.
That's an interesting point. In the long term I think there will always be a need for the service so when a loss leader goes out of business someone will step up.
Public transit has existed alongside taxis for hundreds of years. Uber won't kill transit.
Public transit has existed alongside taxis for hundreds of years. Uber won't kill transit.
> The way Uber treats its people is a separate issue.
Why should that be the case? If you know one part of company X is against your interest, why support revenue of said company at all then?
Why should that be the case? If you know one part of company X is against your interest, why support revenue of said company at all then?
You misunderstand. I don't use uber because of their people policies. I would use them if they treated people better. And I would enjoy the subsidy.
Exactly. Other than the moral-environmental issue of the subsidy encouraging me to take more short trips, thus increasing my footprint...
Use them while they are subsidized, then bail quickly. Maximize for your self interest.
You treat your consumption as an investment? That's kind of silly.
Travis Kalanick is a poster boy for bad behavior but this article is self exploiting trash.
First Uber is close to break even in the US and Latin America. They've also stemmed their losses in China with the merger with Didi.
http://fortune.com/2016/02/18/uber-profitable-us/
https://www.bloomberg.com/news/articles/2016-05-31/uber-s-fa...
The story they should have written is how Uber is going to hire with all this bad publicity? Any 'A' players are going to demand outrageous compensation to work for them now.
As for Travis himself he needs to send a plane for Jerry Colonna, startup coach to the stars ASAP.
First Uber is close to break even in the US and Latin America. They've also stemmed their losses in China with the merger with Didi.
http://fortune.com/2016/02/18/uber-profitable-us/
https://www.bloomberg.com/news/articles/2016-05-31/uber-s-fa...
The story they should have written is how Uber is going to hire with all this bad publicity? Any 'A' players are going to demand outrageous compensation to work for them now.
As for Travis himself he needs to send a plane for Jerry Colonna, startup coach to the stars ASAP.
Here's why Uber will succeed:
- Nobody who lives in a market that Uber serves will ever be willing to go back to the old way of calling a taxi dispatch line by phone, waiting on hold, and being told the cab will arrive in "five to thirty minutes". Seriously. Think about this.
- Nobody used to Uber will want to waste time taking out a credit card and swiping it through a dirty slot or handing it to a driver only to wait several minutes for it to finally go through.
- Compared to the average Uber vehicle, most taxis are filthy and full of all sorts of odors.
- The taxi/livery industry is simply too used to enjoying a monopoly business to be able to fix itself.
Uber has already won, and all these stories about Uber's culture, Uber's approach to dealing with regulators, etc., are one last attempt by those who dislike Uber to gang up on it and do it harm.
Taxi and livery services, medallions, and all the corruption that goes with them are on the way out. The stories we should be reading would be about immigrants scammed by Taxi companies working in violation of medallion laws, or about the cost of an NYC medallion that keeps non-rich people from making money driving.
I don't think Uber's prices are subsidized enough that if the subsidy went away demand would be significantly altered.
Simply having an intelligent app tell drivers where to expect fares and allowing easy booking and payment ads significant value to every ride that far outweighs the small dollar subsidy Uber invests to try to win market share.
I personally use Uber far more often than I would ever take a Taxi, largely because of the incredible convenience that the app offers and the high quality of the service.
While Uber's culture could probably use some improvement, it's irritating to see everyone piling on and trying to harm one of the firms that has done the most to democratize labor and empower individuals.
- Nobody who lives in a market that Uber serves will ever be willing to go back to the old way of calling a taxi dispatch line by phone, waiting on hold, and being told the cab will arrive in "five to thirty minutes". Seriously. Think about this.
- Nobody used to Uber will want to waste time taking out a credit card and swiping it through a dirty slot or handing it to a driver only to wait several minutes for it to finally go through.
- Compared to the average Uber vehicle, most taxis are filthy and full of all sorts of odors.
- The taxi/livery industry is simply too used to enjoying a monopoly business to be able to fix itself.
Uber has already won, and all these stories about Uber's culture, Uber's approach to dealing with regulators, etc., are one last attempt by those who dislike Uber to gang up on it and do it harm.
Taxi and livery services, medallions, and all the corruption that goes with them are on the way out. The stories we should be reading would be about immigrants scammed by Taxi companies working in violation of medallion laws, or about the cost of an NYC medallion that keeps non-rich people from making money driving.
I don't think Uber's prices are subsidized enough that if the subsidy went away demand would be significantly altered.
Simply having an intelligent app tell drivers where to expect fares and allowing easy booking and payment ads significant value to every ride that far outweighs the small dollar subsidy Uber invests to try to win market share.
I personally use Uber far more often than I would ever take a Taxi, largely because of the incredible convenience that the app offers and the high quality of the service.
While Uber's culture could probably use some improvement, it's irritating to see everyone piling on and trying to harm one of the firms that has done the most to democratize labor and empower individuals.
The problem is that all or most of the key points for why "Uber has already won" have already been replicated by competitors.
Just for-instance, Boston Metrocab has had a functioning app since at least 2012.
It: 1) Does the same ride-hailing as Uber, in the same way, with real-time GPS locations of your cab. 2) Did not, last time I checked, did auto-pay the way uber does. Is this a hard-to-replicate feature? 3) Are reasonably clean. I find BMC cabs about as clean as Uber; NYC cabs dirtier. 4) Circular reasoning. "Taxis can't do better because they can't do better."
Really, only point 2 is valid, and it's been replicated by other competitors (e.g., Lyft).
So what's Uber's moat?
Oh, yes, unsustainably low prices.
Just for-instance, Boston Metrocab has had a functioning app since at least 2012.
It: 1) Does the same ride-hailing as Uber, in the same way, with real-time GPS locations of your cab. 2) Did not, last time I checked, did auto-pay the way uber does. Is this a hard-to-replicate feature? 3) Are reasonably clean. I find BMC cabs about as clean as Uber; NYC cabs dirtier. 4) Circular reasoning. "Taxis can't do better because they can't do better."
Really, only point 2 is valid, and it's been replicated by other competitors (e.g., Lyft).
So what's Uber's moat?
Oh, yes, unsustainably low prices.
Uber should cost more than a regular taxi considering the service.
When I travel to a city Uber is available. When I travel to a suburban location near a city, Uber is available. There are dozens of different small-time cab companies and regional livery companies none of whom have an app, so they must either hire too few drivers and become overbooked or have drivers sit idle.
The last few times I've tried to book a black car they have been sold out. The time before that the car that showed up had no seatbelts, the driver seemed drunk, and my female companion was seriously creeped out by the experience.
Uber creates a regional market and lets anyone compete. If you drive to the city every day for a normal 9 to 5 job, you can pick up a fare on the way in and on the way home and likely offset most of the monthly car payment. There is just no way to compare traditional taxi/livery with what Uber offers.
One time my Uber driver was griping about how he'd bought his Cadillac before Uber launched and did not make enough money to justify the purchase, since few Uber riders opted for the premium vehicle option.
While this is too bad for him, it shows how misaligned the black car industry was. He thought he had to buy an $80K car in order to make money, but he could have bought a $20K car. For many other people, Uber has made this choice obvious and they can now save or invest that other $60K however they choose (or not be slaves to the debt for that extra few years).
Keep in mind too that Uber was forced to include Taxis in its app for years, essentially training the entire industry how to be modern. In a fair competition Uber would have won handily in its first year or two in business.
But it is the supreme unfairness of the competition that drives Uber's valuation. It's not every day that someone walks in and overturns a massive, corrupt industry on a worldwide scale.
I'm proud to have heard Travis speak at Startup School a few years ago, and I think that we should all try not to forget just how incredible Uber's achievement has been and how many peoples' lives have been made significantly better by Uber's existence.
https://www.youtube.com/watch?v=rQ6GoY2_Ujw
When I travel to a city Uber is available. When I travel to a suburban location near a city, Uber is available. There are dozens of different small-time cab companies and regional livery companies none of whom have an app, so they must either hire too few drivers and become overbooked or have drivers sit idle.
The last few times I've tried to book a black car they have been sold out. The time before that the car that showed up had no seatbelts, the driver seemed drunk, and my female companion was seriously creeped out by the experience.
Uber creates a regional market and lets anyone compete. If you drive to the city every day for a normal 9 to 5 job, you can pick up a fare on the way in and on the way home and likely offset most of the monthly car payment. There is just no way to compare traditional taxi/livery with what Uber offers.
One time my Uber driver was griping about how he'd bought his Cadillac before Uber launched and did not make enough money to justify the purchase, since few Uber riders opted for the premium vehicle option.
While this is too bad for him, it shows how misaligned the black car industry was. He thought he had to buy an $80K car in order to make money, but he could have bought a $20K car. For many other people, Uber has made this choice obvious and they can now save or invest that other $60K however they choose (or not be slaves to the debt for that extra few years).
Keep in mind too that Uber was forced to include Taxis in its app for years, essentially training the entire industry how to be modern. In a fair competition Uber would have won handily in its first year or two in business.
But it is the supreme unfairness of the competition that drives Uber's valuation. It's not every day that someone walks in and overturns a massive, corrupt industry on a worldwide scale.
I'm proud to have heard Travis speak at Startup School a few years ago, and I think that we should all try not to forget just how incredible Uber's achievement has been and how many peoples' lives have been made significantly better by Uber's existence.
https://www.youtube.com/watch?v=rQ6GoY2_Ujw
> Nobody who lives in a market that Uber serves will ever be willing to go back to the old way of calling a taxi dispatch line by phone, waiting on hold, and being told the cab will arrive in "five to thirty minutes". Seriously. Think about this.
In New York, every taxi is now hailable from a smartphone app that shows me the current locations of nearby taxis and reliably gets me one in 3-5 minutes from most places in the city.
> Nobody used to Uber will want to waste time taking out a credit card and swiping it through a dirty slot or handing it to a driver only to wait several minutes for it to finally go through.
Even if I don't hail a taxi from the app, the screen inside the car shows a code that I can use to associate my app's payment account after I get in the car. (Also, the real problem here is drivers claiming the credit card machine broke, but that's stopped happening.)
> Compared to the average Uber vehicle, most taxis are filthy and full of all sorts of odors.
You need to clarify what market you're in. Not NYC, surely.
> The taxi/livery industry is simply too used to enjoying a monopoly business to be able to fix itself.
It fixed itself in NYC, and if it can fix itself there it can fix itself anywhere.
Seriously. I do credit Uber and Lyft with making the taxi industry realize that they're doing things wrong and have an easily-eatable lunch, but they're figuring things out. I'm more curious about places (like the college town I grew up in) that have Uber service but barely any taxi service.
In New York, every taxi is now hailable from a smartphone app that shows me the current locations of nearby taxis and reliably gets me one in 3-5 minutes from most places in the city.
> Nobody used to Uber will want to waste time taking out a credit card and swiping it through a dirty slot or handing it to a driver only to wait several minutes for it to finally go through.
Even if I don't hail a taxi from the app, the screen inside the car shows a code that I can use to associate my app's payment account after I get in the car. (Also, the real problem here is drivers claiming the credit card machine broke, but that's stopped happening.)
> Compared to the average Uber vehicle, most taxis are filthy and full of all sorts of odors.
You need to clarify what market you're in. Not NYC, surely.
> The taxi/livery industry is simply too used to enjoying a monopoly business to be able to fix itself.
It fixed itself in NYC, and if it can fix itself there it can fix itself anywhere.
Seriously. I do credit Uber and Lyft with making the taxi industry realize that they're doing things wrong and have an easily-eatable lunch, but they're figuring things out. I'm more curious about places (like the college town I grew up in) that have Uber service but barely any taxi service.
seriously? NYC has one of the best taxi networks prior to uber. Try taking a taxi in the bay area to understand a truly dysfunctional taxi system.
I attempted to use a similar system to the one you described in vancouver where there is no ride sharing it basically failed to work at all and I had to resort to the old "call a taxi company and wait indiscriminate amount of minutes." At least their credit card systems worked which as you said is a common issue in taxis here too (I have several times had a mexican standoff with taxi drivers here until their machines magically started working).
I attempted to use a similar system to the one you described in vancouver where there is no ride sharing it basically failed to work at all and I had to resort to the old "call a taxi company and wait indiscriminate amount of minutes." At least their credit card systems worked which as you said is a common issue in taxis here too (I have several times had a mexican standoff with taxi drivers here until their machines magically started working).
> Try taking a taxi in the bay area to understand a truly dysfunctional taxi system.
Absolutely true. And it's worth noting that Gavin Newsom got his start in politics as SF Taxi Commissioner.
It's hard to estimate the scale of under-the-table dealings or the amount of money taxi companies skimmed from the system before Uber came in and imposed order.
Uber essentially provided oxygen in a market that had been strangled for so long by corrupt public/private deals.
Absolutely true. And it's worth noting that Gavin Newsom got his start in politics as SF Taxi Commissioner.
It's hard to estimate the scale of under-the-table dealings or the amount of money taxi companies skimmed from the system before Uber came in and imposed order.
Uber essentially provided oxygen in a market that had been strangled for so long by corrupt public/private deals.
Oh yeah, the Bay Area was miserable when I lived there ~5 years ago. Has it truly not gotten better since then?
Download ARROW App for NYC Taxi Service
Download ARRO app for NYC Taxi service
I'm not a native NYer, but when I have been there this has not been the case. FWIW, everything that the original commenter mentioned is true of Boston and the Bay Area in my experience.
> You need to clarify what market you're in. Not NYC, surely.
As a New Yorker, what? Every Uber car over ever been in has been far far cleaner and nicer. There isn't even a close comparison.
As a New Yorker, what? Every Uber car over ever been in has been far far cleaner and nicer. There isn't even a close comparison.
Exactly. NYC cabs are not only extremely uncomfortable (the worst are the Ford Explorers with zero leg room.
The advertisement video loop is also a major detractor.
Typical NYC cab rides involve the driver exchanging heated language with other drivers, rude gestures, etc., and drivers frequently pretend to be naive about the best way to get from point A to point B.
Climate control systems in cabs are usually broken, and there's a thin film of human oil covering every surface.
The advertisement video loop is also a major detractor.
Typical NYC cab rides involve the driver exchanging heated language with other drivers, rude gestures, etc., and drivers frequently pretend to be naive about the best way to get from point A to point B.
Climate control systems in cabs are usually broken, and there's a thin film of human oil covering every surface.
And I've never been given a bottle of water in a cab.
Taxis are already making their own apps now in an effort to compete against uber. Medallions licences and other restrictions are gone out the window when cities allowed uber to keep doing business. Whatever monopoly they had is gone. For all the terrible things uber is, they sure disrupted the ride industry.
If you're selling $5 bills for $2, funded by venture capital, are you really disrupting the dollar bill industry?
I mean, you are, in the dictionary sense of disrupting - you're messing it up. But in the Silicon Valley sense, this disruption is going to last right until the money runs out and then disappear without a trace. Uber will be a cautionary tale along the lines of Kozmo or Pets.com.
I mean, you are, in the dictionary sense of disrupting - you're messing it up. But in the Silicon Valley sense, this disruption is going to last right until the money runs out and then disappear without a trace. Uber will be a cautionary tale along the lines of Kozmo or Pets.com.
taxis have apps now. Payments are handled before I step in the car. Common destinations are saved. ETAs are live. The entire Uber experience is now the defacto experience.
Yeah I'd call that disrupted. If they don't survive it IDGAF.
Yeah I'd call that disrupted. If they don't survive it IDGAF.
I see it more that Uber-LIKE services have won, whether or not that's Uber specifically or a myriad of similar companies. E.g. in Northern Thailand there is both Uber and the local version called Grab, which is way better than Uber
[deleted]
You had me at "5 to 30 minutes"
Those of us who have been around a while remember the black sheep of past technology eras. I always like to sum (+/-)happiness/person * num people affected by the technology]. It usually outweighs the dramatized negative points covered in the press.
I think this sentence really captures the customer's mindset with regards to Uber: "We’ll stick with Uber as long as it continues to get us where we want to go at a price we like."
As long as this argument above is true, I don't see Uber dying.
As long as this argument above is true, I don't see Uber dying.
If they are really posting huge losses, they might need to hike prices.
Besides, #deleteuber shows that bad PR has at least a marginal effect.
Besides, #deleteuber shows that bad PR has at least a marginal effect.
They could hike prices and as long as they were equal to, less than, or even slightly above their competition, that would probably not cause much customer churn. The more interesting way for them to hike prices would be by rolling out upfront pricing everywhere. Consumers may not notice the slight price upticks if they happen gradually enough.
In any case, they may not need to hike prices on customers. They could just increase their share from drivers. This may cause driver churn which would affect supply, but they have their ride liquidity algorithm (surge pricing) to take care of that.
The bad PR will definitely be a pain for them, but doesn't seem likely to affect their longer term success.
In any case, they may not need to hike prices on customers. They could just increase their share from drivers. This may cause driver churn which would affect supply, but they have their ride liquidity algorithm (surge pricing) to take care of that.
The bad PR will definitely be a pain for them, but doesn't seem likely to affect their longer term success.
the main problem is the unit economics that don't work for Uber or Lyft, if the subsidies stop they will be the same price or more than Taxis.
i will basically never get into a taxi again unless it is passing by and stops for me just as i need it. the price difference, if there is one, will not be a compelling reason to switch back.
Yeah, but they beat taxis on service. Ubers are computer dispatched, on-time, and give me pre-ride fare calculation. When pooling they give me guaranteed arrival times. I'm not going to use some half-assed taxi service for the same price, because I don't need the agita.
Whatever their company culture problems, I have found the service superb.
Whatever their company culture problems, I have found the service superb.
then they are a premium car service again, one that people would gladly pay for.
just no 50b valuations
just no 50b valuations
I wouldn't pay for it. I (and most of the US) don't have the money to blow $50 each way to the airport for a vacation. Assuming Uber/Lyft on both ends, that's $200 in airport transportation which is nearly the cost of the airfare to fly a thousand miles round trip.
You don't know much about London. $100 fares from Heathrow to z1 are pretty normal.
Why would you take a taxi that far? Heathrow has plenty of public transport services.
Most people aren't rich enough to live in or visit London that frequently.
Well it's not like a taxi is free in comparison.
[deleted]
The unit economics work at a much, much smaller market size.
My main concern, as a potential founder, is that once Uber goes "pop" or Snap goes "fsssss", there will be the inevitable catastrophic lurch in the financial hivemind.
The purses will snap shut all at once, for good and ill. Contractions are no respecter of potential.
I'd really like to get in before last call.
The purses will snap shut all at once, for good and ill. Contractions are no respecter of potential.
I'd really like to get in before last call.
I'm pretty sure they will continue to invest, hopefully more wisely though. They want to grow their money, so they need to invest to do that. The "lurch" should control the ballooning valuations of these startups.
I'd like that, but in my experience, markets tend to be big-bang control systems.
as a tech worker this is my concern as well. A contraction of the tech market due to funding drying up is bad for all tech employees...
I asked this question a while back and I'll ask it again. Why is Kalanick still in charge?
Uber = Groupon v2?
Webvan seems like a more apt comparison. Some of Uber's antics remind me of the way Webvan used to act.
I remember seeing one of their delivery people pull up and park in a red zone right in front of a cop. The cop told him he couldn't park there. His response, "Are you going to tow me?" was answered with "no, but..." and before the cop could finish, the driver had walked away. The cop dutifully wrote out the ticket.
Uber's scale is a lot larger, but the two feel much more similar than either does to Groupon. Groupon was much more a gimmick product that used high-pressure sales tactics to get small businesses into situations they weren't prepared for with dubious benefit. Once word got around and people realized that its benefit to businesses was much more limited than they promised, they got a lot smaller. But Groupon wasn't really burning VC cash to subsidize a legitimately-useful service the way that Uber and Webvan are/did.
I remember seeing one of their delivery people pull up and park in a red zone right in front of a cop. The cop told him he couldn't park there. His response, "Are you going to tow me?" was answered with "no, but..." and before the cop could finish, the driver had walked away. The cop dutifully wrote out the ticket.
Uber's scale is a lot larger, but the two feel much more similar than either does to Groupon. Groupon was much more a gimmick product that used high-pressure sales tactics to get small businesses into situations they weren't prepared for with dubious benefit. Once word got around and people realized that its benefit to businesses was much more limited than they promised, they got a lot smaller. But Groupon wasn't really burning VC cash to subsidize a legitimately-useful service the way that Uber and Webvan are/did.
> I remember seeing one of their delivery people pull up and park in a red zone right in front of a cop. The cop told him he couldn't park there. His response, "Are you going to tow me?" was answered with "no, but..." and before the cop could finish, the driver had walked away. The cop dutifully wrote out the ticket.
I like the concept of an 'economic' crime for these kinds of situations. The idea is that when a misdemeanor has the normal penalty aimed at deterring private usage but was committed for commercial reasons, the penalty is massively increased.
This way, you prevent situations where it makes financial sense to park in front of a fire hydrant and just eat the fines.
I like the concept of an 'economic' crime for these kinds of situations. The idea is that when a misdemeanor has the normal penalty aimed at deterring private usage but was committed for commercial reasons, the penalty is massively increased.
This way, you prevent situations where it makes financial sense to park in front of a fire hydrant and just eat the fines.
I totally agree, I've mentioned in earlier threads that it seems to me that Uber is Groupon v2 having its Zenefits moment
https://news.ycombinator.com/item?id=13788642
https://news.ycombinator.com/item?id=13585025
I've also been calling for this...
"Ridesharing" as we know is it going to crash https://news.ycombinator.com/item?id=13762242
Their valuation got so far ahead of itself that priced into it is global domination. Now that it clearly is not a global monopoly, there's nowhere to go but down. Everyday one of their employees goes to work is a day wasted where they could have been vesting at a company which is not horribly over valued.
Disclaimer: Former Lyft engineer / stockholder here (2014-2016)
"Ridesharing" as we know is it going to crash https://news.ycombinator.com/item?id=13762242
Their valuation got so far ahead of itself that priced into it is global domination. Now that it clearly is not a global monopoly, there's nowhere to go but down. Everyday one of their employees goes to work is a day wasted where they could have been vesting at a company which is not horribly over valued.
Disclaimer: Former Lyft engineer / stockholder here (2014-2016)
Uber might be the new Webvan https://en.wikipedia.org/wiki/Webvan
Evidence suggests that this market is changing rapidly. I have seen graphs on paid ride figures being pretty even over time, whereas standard taxi figures appear to almost universally be dropping in quantity. Might not a longer term perspective change a lot of this speculation?
Putting aside the driverless car thing for a moment, can't we at least agree for the next 3-5 years people are going to continue to require taxi-like transportation services?
Uber needs to be hacked and destroyed to finally teach its founders humility, morality and ethics. He isn't going to change until he meets rock bottom!!!
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Uber was an interesting idea brilliantly executed with billions and billions of other people's money that in the end has no chance of ever being profitable. Like Twitter, it's an indispensable product that nonetheless doesn't make money and in the end making money is what real businesses do.
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I guess Unicorns are actually a myth and don't really exist.
Greyball looks like a cut and dry case of obstruction of justice. I predict there will be jail time.
The saving grace for Uber will be self-driving cars. Uber is a race against time to keep up the VC-subsidies until self driving is feasible. They don't need to make all routes self-driving, only some routes in some cities, to make the unit economics favorable and profitable. This logic holds true even if self-driving requires a large upfront fixed cost investment, as that cost can be amortized over time.
It's kind of funny to consider how long this debate has been going on and the self-driving cars excuse as merely the latest iteration of it:
http://www.bradford-delong.com/2016/12/must-read-there-is-a-...
To quote Tom Slee from the comment above:
- Uber has a nice business as a status product (Uber Black Car ~ 2010)
- Uber Black may not be profitable, but Uber will displace taxis and be hugely profitable because of technology-driven efficiencies (UberX: 2014-2015)
- UberX may not be profitable, but UberPool will lead to new efficiencies in mass transit (2015-2016)
- UberX may not be profitable, but Uber is a logistics company and will rewrite the rules of delivery (UberEats, various speculative stories, 2013-2015)
- UberPool may not be profitable, but when Uber displaces car ownership the scale of the market will make it profitable (2016)
- Uber with drivers may not be profitable, but driverless cars will make Uber profitable (2014-)
- Driverless cars may not be profitable, but Uber is looking into flying vehicles (2016)
To quote Tom Slee from the comment above:
- Uber has a nice business as a status product (Uber Black Car ~ 2010)
- Uber Black may not be profitable, but Uber will displace taxis and be hugely profitable because of technology-driven efficiencies (UberX: 2014-2015)
- UberX may not be profitable, but UberPool will lead to new efficiencies in mass transit (2015-2016)
- UberX may not be profitable, but Uber is a logistics company and will rewrite the rules of delivery (UberEats, various speculative stories, 2013-2015)
- UberPool may not be profitable, but when Uber displaces car ownership the scale of the market will make it profitable (2016)
- Uber with drivers may not be profitable, but driverless cars will make Uber profitable (2014-)
- Driverless cars may not be profitable, but Uber is looking into flying vehicles (2016)
Self-driving cars provide no economic moat whatsoever.
1. There will be several wellsprings of that technology, all them with deeper capital pools than Uber.
Google is now running $5 billion of profit per quarter, nearly $7 billion in pre-tax profit. In any given year they overtake Uber's entire investment capital to this point.
Meanwhile the major car companies have hundreds of billions of dollars of collective revenue and possibly more than a trillion dollars of existing, largely fully-depreciated capital and equipment. A century of brand recognition and loyalty, with entire families swearing they'll only buy a particular maker's vehicles.
2. There is no lockin whatsoever.
Expect "AirBnB for self-driving cars" that disintermediates Uber entirely. When anyone can buy a car, expect them to rent it out at uneconomically low rates because they don't realise it's uneconomical. Meanwhile every livery company replaces their drivers too.
Or expect "Google Ride" / "Amazon Woosh" / "Facebook Gimme A Lift" to enter the market, leveraging their particular strengths.
Or subscription services, a la GE's engine-hours concept[0] or NetJets fractional ownership. All you want is a Fiat Funmobile 2-3 hours in peak and a Toyota Tyke-Transporter on weekends. Most of the time you have to buy both. No longer.
[0] In fact, Cadillac are already trialling this.
1. There will be several wellsprings of that technology, all them with deeper capital pools than Uber.
Google is now running $5 billion of profit per quarter, nearly $7 billion in pre-tax profit. In any given year they overtake Uber's entire investment capital to this point.
Meanwhile the major car companies have hundreds of billions of dollars of collective revenue and possibly more than a trillion dollars of existing, largely fully-depreciated capital and equipment. A century of brand recognition and loyalty, with entire families swearing they'll only buy a particular maker's vehicles.
2. There is no lockin whatsoever.
Expect "AirBnB for self-driving cars" that disintermediates Uber entirely. When anyone can buy a car, expect them to rent it out at uneconomically low rates because they don't realise it's uneconomical. Meanwhile every livery company replaces their drivers too.
Or expect "Google Ride" / "Amazon Woosh" / "Facebook Gimme A Lift" to enter the market, leveraging their particular strengths.
Or subscription services, a la GE's engine-hours concept[0] or NetJets fractional ownership. All you want is a Fiat Funmobile 2-3 hours in peak and a Toyota Tyke-Transporter on weekends. Most of the time you have to buy both. No longer.
[0] In fact, Cadillac are already trialling this.
While I'm in the camp that thinks self-driving cars will be viable for many routes soon, I'm not in the camp that thinks they will be viable enough soon enough for Uber.
Once fleets of self-driving taxis are available, what advantage does Uber hold over some new company that just buys their taxis without having to sink any R&D costs?
I thought we already had theranos
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As an Uber employee, yes we are going through a rough patch and we are doing a lot of bloodletting right now internally, but as a company I think we will emerge much better and much more impassioned. If you saw the numbers we see, you wouldn't be so quick to predict our death. And no, I'm not going to leak anything, go ask NYT who seems to have their own personal leak, whom I hope gets caught and fired.
In terms of self-driving cars I'm not holding my breath. I think that's a decade away at least, the only reason why Uber cares is because if we don't have a foothold in that race, it's an existential problem for us. But all it will take is one terrible self-driving car tragedy to push back all research by 20 years due. I really hope something like that never happens but with all these players doing self-driving cars who can tell what will happen in the future.
In terms of self-driving cars I'm not holding my breath. I think that's a decade away at least, the only reason why Uber cares is because if we don't have a foothold in that race, it's an existential problem for us. But all it will take is one terrible self-driving car tragedy to push back all research by 20 years due. I really hope something like that never happens but with all these players doing self-driving cars who can tell what will happen in the future.
> As an Uber employee,
Yes, we know, since you almost always use this account to do PR for Uber.
Yes, we know, since you almost always use this account to do PR for Uber.
Wow, thought you were exaggerating but all his comments are "as an uber employee" spins, or comments downvoted to oblivion that have been redacted. Is there any guidance from HN on corporate spin (aka shill) accounts, or could this just be considered an overly enthusiastic employees legit opinion?
This is a ridiculous statement. Would you prefer I don't announce myself as an Uber employee when talking about Uber?
IPO? They'd have to publish audited financial statements with GAAP numbers, which are almost certain to be worse than the leaked numbers. They'd take a big haircut on valuation, which the existing investors would not like. (Who has voting rights in Uber, anyway?)
Uber will probably run out of money and be picked up cheaply by some buyer of distressed companies, which will raise rates and cut it back to a profitable operation.