The Uber Bubble(braveneweurope.com)
braveneweurope.com
The Uber Bubble
https://braveneweurope.com/hubert-horan-the-uber-bubble-why-is-a-company-that-lost-20-billion-claimed-to-be-successful
555 comments
I don't disagree with your points but let me give you some counterpoints:
1. Taxi services are balkanized;
2. Many tax services don't allow you to order a taxi ahead of time. You have to flag one down (eg NYC). For ordering a car, you need to otherwise deal with an (expensive) car service;
3. Uber made the payment process seamless and I cannot overstate how important this is as a user. I hate dealing with NYC yellow cabs, card readers that don't work (or actually have skimmers) and a stupid touch screen where your minimum tip option is 20%, etc;
4. The ability to rate both drivers and passengers may have its issues but IME it tends to keep passengers on better behaviour and cars in better condition;
5. Taxis have weird edge cases. In NYC, for example, getting a cab at 3-4pm was nigh-on impossible because of the shift change. It also means that drivers near the end of their shift may not take you places too out of the way;
6. Whatever the costs of owning and maintaining a car are, the traditional taxi system has huge taxes in the form of medallion costs and quotas. These costs are directly passed on to consumers;
7. Uber may well have a lot of value in value-added services. They're trying this with Uber Eats, for example. I can't say if these will be successful or not. I've certainly seen cities where I've tried to use Uber Eats only to be told "There are no drivers available". Obviously the drivers haven't signed up because there are plenty on Doordash and Seamless/Grubhub.
8. I see the flexibility for drivers as a huge plus rather than the rigid shift system of being a taxi driver.
9. The barrier to entry as a driver tends to be low because for many people they have a car anyway.
Taxis died because it's a horrible user experience that was propped up by a government-enforced monopoly. Good riddance. I mean I feel bad for NYC taxi drivers who were lured into paying a fortune to buy a medallion before the market crashed, many of whom had limitd English proficiency and were the victims of predatory practices that should be illegal.
1. Taxi services are balkanized;
2. Many tax services don't allow you to order a taxi ahead of time. You have to flag one down (eg NYC). For ordering a car, you need to otherwise deal with an (expensive) car service;
3. Uber made the payment process seamless and I cannot overstate how important this is as a user. I hate dealing with NYC yellow cabs, card readers that don't work (or actually have skimmers) and a stupid touch screen where your minimum tip option is 20%, etc;
4. The ability to rate both drivers and passengers may have its issues but IME it tends to keep passengers on better behaviour and cars in better condition;
5. Taxis have weird edge cases. In NYC, for example, getting a cab at 3-4pm was nigh-on impossible because of the shift change. It also means that drivers near the end of their shift may not take you places too out of the way;
6. Whatever the costs of owning and maintaining a car are, the traditional taxi system has huge taxes in the form of medallion costs and quotas. These costs are directly passed on to consumers;
7. Uber may well have a lot of value in value-added services. They're trying this with Uber Eats, for example. I can't say if these will be successful or not. I've certainly seen cities where I've tried to use Uber Eats only to be told "There are no drivers available". Obviously the drivers haven't signed up because there are plenty on Doordash and Seamless/Grubhub.
8. I see the flexibility for drivers as a huge plus rather than the rigid shift system of being a taxi driver.
9. The barrier to entry as a driver tends to be low because for many people they have a car anyway.
Taxis died because it's a horrible user experience that was propped up by a government-enforced monopoly. Good riddance. I mean I feel bad for NYC taxi drivers who were lured into paying a fortune to buy a medallion before the market crashed, many of whom had limitd English proficiency and were the victims of predatory practices that should be illegal.
> Taxis died because it's a horrible user experience that was propped up by a government-enforced monopoly.
This cannot be understated. Also, as an introvert, negotiating with drivers, especially those that don't drive by the meter was always stressful, I mostly ended up overpaying.
This cannot be understated. Also, as an introvert, negotiating with drivers, especially those that don't drive by the meter was always stressful, I mostly ended up overpaying.
"credit card machine is broken."
Things I don't ever have to hear or put up with ever again #623.
Things I don't ever have to hear or put up with ever again #623.
Definitely agree.
Nowadays I have Uber drivers sit around the corner refusing to show up and calling me to tell me I should cancel so that I have to pay the $5 fine. Sure I can contact support to get that $5 back but it has happened to me so many times there really should be a button for it. It’s hard for me to believe Uber is not aware of this behavior.
Nowadays I have Uber drivers sit around the corner refusing to show up and calling me to tell me I should cancel so that I have to pay the $5 fine. Sure I can contact support to get that $5 back but it has happened to me so many times there really should be a button for it. It’s hard for me to believe Uber is not aware of this behavior.
That's very common in Prague. Uber in Prague is a disaster. About 5% of my rides are probably ending up with having to pay a cancellation fee for a driver who never showed up. Contacting support to resolve this is pain indeed. Most of the Uber rides in Prague are owned by limited liability companies (s r.o.). I guess there's some kind of an alliance between Uber and those local companies.
Another 5-10% or so of my Uber orders in Prague involve driver coming my way then cancelling after 5-10 minutes in the middle, then another driver picking up, and so on. You could be on a 3rd or 4th driver sometimes. Initially I thought this had something to do with traffic jams, but I am now beginning to doubt this, as it happened in mild traffic and off-peak hours as well. It is impossible to trust if Uber will arrive in 10 minutes, 20 minutes or not at all. An Uber ride to the airport is a lottery sometimes.
Finally, arrival times are usually understated. It can be 7 minutes on display but 15 minutes in reality. And this is mostly in Kosire area, about 15 minutes from the center. Whoever is reading this in Uber should really look into their Prague situation.
That being said, I am using Uber extensively in London as well and never have these issues. I also used it in California and never had issues. Uber in Prague is something else, my friends.
Another 5-10% or so of my Uber orders in Prague involve driver coming my way then cancelling after 5-10 minutes in the middle, then another driver picking up, and so on. You could be on a 3rd or 4th driver sometimes. Initially I thought this had something to do with traffic jams, but I am now beginning to doubt this, as it happened in mild traffic and off-peak hours as well. It is impossible to trust if Uber will arrive in 10 minutes, 20 minutes or not at all. An Uber ride to the airport is a lottery sometimes.
Finally, arrival times are usually understated. It can be 7 minutes on display but 15 minutes in reality. And this is mostly in Kosire area, about 15 minutes from the center. Whoever is reading this in Uber should really look into their Prague situation.
That being said, I am using Uber extensively in London as well and never have these issues. I also used it in California and never had issues. Uber in Prague is something else, my friends.
Unfortunately it seems to be getting more like this in London, the cancellations are much more frequent and the fares have skyrocketed in recent years. I guess one positive regardless is that it has forced traditional taxis to modernise, previously their card machines were always “out of order” etc. and many can now be booked via similar apps.
The drivers have definitely learned how to game the system in some cases. I was once at LAX airport and the local drivers had somehow figured out how to create a surge fare that only kicked in after you matched with a driver. The app would offer you the higher price and if you turned it down you’d find that there were no cars available. If you canceled and tried again the lower fare would once again show.
Try Uber in Stambul. The driver will send a message asking where are you going and ask for double the Uber fare or will cancel the order. They don't care about their ratings.
Uber in California and Russia (it's actually Yandex.Taxi for quite some time here) works great.
Uber in California and Russia (it's actually Yandex.Taxi for quite some time here) works great.
Exactly the same experience in Warsaw.
There is some hidden benefit for Uber drivers in creating barriers for the passengers. Also, the platform does not allow downvotes until you get on the car.
There is some hidden benefit for Uber drivers in creating barriers for the passengers. Also, the platform does not allow downvotes until you get on the car.
I don't know about US but in India the process to review cancellation fee doesn't require interacting with support but rather a two click process to state the reason for cancellation. Works quite well and the only time they don't refund is when you do it too often in a short span of time.
Which goes t to show the mass amount of this happening in India. Ilived there in 2017, drivers didn't understand what Pool was and let everyone out at the first stop.
The solution to this is Square, not Uber.
The taxi drivers have Square. They just choose not to use it to avoid the processing fee. Also, cash payers are more likely to round up for a tip.
Then again, the solution to this is not necessarily Uber, but a regulation forcing taxi drivers to provide credit card payment. As far as I remember, these systems allow a default "do you want to tip" option (but I see what you mean, people probably tend to tip more with cash than with credit cards).
Most cities in the US have that regulation. The drivers trivially circumvent that regulation by saying the machine is broken.
Or when they "accidentally" make a wrong turn, or purposefully take a "shortcut" just to take you a longer/slower route to drive up the meter, almost making you late.
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> Taxis died because it's a horrible user experience
And in small cities/towns, getting a taxi was nearly impossible a lot of the times. And if you did get one, you had to have cash. In my 20s I had the personal phone numbers of a couple who ran a car service. I would only ride with them after another taxi home (probably unlicensed) where the driver was drinking smh.
I wonder how many DUIs have been avoided since Uber came about.
People always point out big cities, but forget how abysmal taxis were in small towns.
And in small cities/towns, getting a taxi was nearly impossible a lot of the times. And if you did get one, you had to have cash. In my 20s I had the personal phone numbers of a couple who ran a car service. I would only ride with them after another taxi home (probably unlicensed) where the driver was drinking smh.
I wonder how many DUIs have been avoided since Uber came about.
People always point out big cities, but forget how abysmal taxis were in small towns.
> People always point out big cities, but forget how abysmal taxis were in small towns.
Not just that, but people forget how bad they were in cities prior to the pressure Uber created. The article asks "Why Is a Company That Lost $20 Billion Claimed to Be Successful?" but the answer is obvious. It transformed the industry. It made a big impact on my life. I no longer had to stress about getting a cab home from pretty much anywhere. When traveling, I know I won't get my face ripped off or have an issue with mistranslation. If it were around earlier, I would have likely driven and made some extra cash when I was home from college. No one would hire me for a few weeks or extremely variable schedule so this would have been a great option.
Today's cabs are better behaved but only because people have alternatives.
Not just that, but people forget how bad they were in cities prior to the pressure Uber created. The article asks "Why Is a Company That Lost $20 Billion Claimed to Be Successful?" but the answer is obvious. It transformed the industry. It made a big impact on my life. I no longer had to stress about getting a cab home from pretty much anywhere. When traveling, I know I won't get my face ripped off or have an issue with mistranslation. If it were around earlier, I would have likely driven and made some extra cash when I was home from college. No one would hire me for a few weeks or extremely variable schedule so this would have been a great option.
Today's cabs are better behaved but only because people have alternatives.
How small are we talking? My parents live in a town of ~2-3k, you aren't getting a taxi from there without arranging in advice, app or not.
Or my hometown of ~60k, I can't say availability of app based taxis is better or worse than availability at a taxi rank, though obviously there is the benefit of not having to get to a taxi rank.
The city I live in now of 1 million, app based taxis are a clear win, mainly because most taxi ranks fit ~5-6 taxis max and so at busy times there would be a queue simply because of that fact. That said, you're going to be waiting as long for a pickup at closing time via an app as for someone to show up a rank.
(Extending to app based services in general as actual Uber is a niche player in my country, basically only used by tourists so hard to get rides that aren't going to or from the airport or a couple of tourist hot spots)
Or my hometown of ~60k, I can't say availability of app based taxis is better or worse than availability at a taxi rank, though obviously there is the benefit of not having to get to a taxi rank.
The city I live in now of 1 million, app based taxis are a clear win, mainly because most taxi ranks fit ~5-6 taxis max and so at busy times there would be a queue simply because of that fact. That said, you're going to be waiting as long for a pickup at closing time via an app as for someone to show up a rank.
(Extending to app based services in general as actual Uber is a niche player in my country, basically only used by tourists so hard to get rides that aren't going to or from the airport or a couple of tourist hot spots)
> And in small cities/towns, getting a taxi was nearly impossible a lot of the times.
Not just small cities. I lived in Las Vegas for many years. Try getting a taxi to take you from the airport to the suburbs at 2am. I got hung up on by two taxi services. When I finally got someone to pick me up, I had to wait 30 mins for them to drop off other fares to the Strip before they would take me.
Not just small cities. I lived in Las Vegas for many years. Try getting a taxi to take you from the airport to the suburbs at 2am. I got hung up on by two taxi services. When I finally got someone to pick me up, I had to wait 30 mins for them to drop off other fares to the Strip before they would take me.
Was in a small town recently with a few Uber/ lyft drivers. During peak times there was never a driver available when i tried to get one through the app. I talked to one driver and she said to give her a call next time -- during peak times she turns off the Uber app and drives for whoever calls her.
> And in small cities/towns, getting a taxi was nearly impossible a lot of the times
And in some towns and cities it's now becoming difficult to get an uber, as there are fewer drivers around than there were. And they conveniently drove the local cab firms out of business so you're just generally SoL
And in some towns and cities it's now becoming difficult to get an uber, as there are fewer drivers around than there were. And they conveniently drove the local cab firms out of business so you're just generally SoL
>And in small cities/towns, getting a taxi was nearly impossible a lot of the times.
My experience has been the opposite. In small towns you cannot get use rideshare apps, but you can dial a taxi service. This has been the case in every town of less than 1,000 I've needed a ride in.
My experience has been the opposite. In small towns you cannot get use rideshare apps, but you can dial a taxi service. This has been the case in every town of less than 1,000 I've needed a ride in.
in europe there are many taxi companies that have started to do uber app features and prepayment and all the jazz that make uber so great.
the main issues i have with uber are that it's now almost more expensive than taxis, there's almost no regulation, the drivers are taken advantage of / not making profit and also not getting proper benefits. just because taxis suck doesn't mean uber should replace them.
government should invest in better public transit, more livable and walkable cities, and less car ownership instead of propping up either taxis or uber.
the main issues i have with uber are that it's now almost more expensive than taxis, there's almost no regulation, the drivers are taken advantage of / not making profit and also not getting proper benefits. just because taxis suck doesn't mean uber should replace them.
government should invest in better public transit, more livable and walkable cities, and less car ownership instead of propping up either taxis or uber.
> in europe there are many taxi companies that have started to do uber app features and prepayment and all the jazz that make uber so great
For me this is the real evolution, and what was needed all along. I've used the apps you're talking about in Europe and Asia, and they're great.
> just because taxis suck doesn't mean uber should replace them.
Hear, hear. I don't miss the old taxi model, and Uber/Lyft came in with simple, strong improvements in usability and payments, as users outlined above. But after 12 years, Uber has shown itself to be what it is: an expensive, shitty vampire.
For me this is the real evolution, and what was needed all along. I've used the apps you're talking about in Europe and Asia, and they're great.
> just because taxis suck doesn't mean uber should replace them.
Hear, hear. I don't miss the old taxi model, and Uber/Lyft came in with simple, strong improvements in usability and payments, as users outlined above. But after 12 years, Uber has shown itself to be what it is: an expensive, shitty vampire.
I actually don't get what the differentiating factor is for Lyft, but based on the ads they ran on a podcast I was listening to, it seems to be "Uber, but at least somewhat trying to be socially responsible." If that's a viable niche, tells you something about Uber I guess.
> in europe there are many taxi companies that have started to do uber app features and prepayment and all the jazz that make uber so great.
Yeah, Uber never got a foothold in Germany, but they brought us apps and card payment. Before that, it was cash only.
That said, cabs (both, actual taxis and rentable cars with drivers [0]) also seem to be far better here. The cab companies own the cars, not drivers, they are modern and clean and usually premium brands. Just from what I’m reading about the situation in the USA, it seems to be a clusterfuck, and I know from experience that in South Africa, cabs get you crappy overpriced cars that are almost falling apart while Uber gives you a clean private vehicle.
[0]: I’m not sure if this is a distinction in other countries, taxis are allowed to pick up people, and have some limited public transport rights, e.g. certain streets might be bus and taxi only, while rentable cars (German: Funkmietwagen, Personenmietwagen, or Minicar) can only be ordered in advance and have to follow all rules like a private vehicle. Taxis pay more taxes.
Yeah, Uber never got a foothold in Germany, but they brought us apps and card payment. Before that, it was cash only.
That said, cabs (both, actual taxis and rentable cars with drivers [0]) also seem to be far better here. The cab companies own the cars, not drivers, they are modern and clean and usually premium brands. Just from what I’m reading about the situation in the USA, it seems to be a clusterfuck, and I know from experience that in South Africa, cabs get you crappy overpriced cars that are almost falling apart while Uber gives you a clean private vehicle.
[0]: I’m not sure if this is a distinction in other countries, taxis are allowed to pick up people, and have some limited public transport rights, e.g. certain streets might be bus and taxi only, while rentable cars (German: Funkmietwagen, Personenmietwagen, or Minicar) can only be ordered in advance and have to follow all rules like a private vehicle. Taxis pay more taxes.
> Yeah, Uber never got a foothold in Germany, but they brought us apps and card payment.
Germany also worked hard to cripple Uber. Even its per-existing rules are hostile towards much of the innovation Uber brought to market.
One particularly egregious example is forcing each Uber to "return to garage" between each trip, even if another customer is on its path and requesting a ride. This makes the service considerably more expensive, increases wait times and needlessly burns gas to send cars with no passengers back to their "garage".
To my point of view, it's insane protectionism. In recent weeks, the policy can even be seen as indirectly subsidizing an invasion.
(see: https://www.wired.co.uk/article/uber-ride-hailing-future)
Germany also worked hard to cripple Uber. Even its per-existing rules are hostile towards much of the innovation Uber brought to market.
One particularly egregious example is forcing each Uber to "return to garage" between each trip, even if another customer is on its path and requesting a ride. This makes the service considerably more expensive, increases wait times and needlessly burns gas to send cars with no passengers back to their "garage".
To my point of view, it's insane protectionism. In recent weeks, the policy can even be seen as indirectly subsidizing an invasion.
(see: https://www.wired.co.uk/article/uber-ride-hailing-future)
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> In recent weeks, the policy can even be seen as indirectly subsidizing an invasion.
That seems a bit farfetched. They don't run on natural gas.
That seems a bit farfetched. They don't run on natural gas.
They run on gasoline.
About 98% of oil consumed by Germany is imported. Which country is the largest source?
About 98% of oil consumed by Germany is imported. Which country is the largest source?
Protecting drivers from predatory companies like Uber is a good thing
> drivers are taken advantage of / not making profit and also not getting proper benefits.
I hear people say this all the time. None of those people are Uber drivers.
I can't speak to Europe but that's been my experience in California.
This kind of "we know what's good for you" elitism is that turns people off from the left and why I don't want to be associated with the democratic party despite my voting history.
I hear people say this all the time. None of those people are Uber drivers.
I can't speak to Europe but that's been my experience in California.
This kind of "we know what's good for you" elitism is that turns people off from the left and why I don't want to be associated with the democratic party despite my voting history.
I spoke to Uber drivers last time I was in Miami and they are being squeezed there: ride fees went up as with pretty much anywhere, but they also lowered their share %. So Uber making more money and everyone else is screwed. I can definitely attest to the ride cost hike: what used to be a $10-15 ride from the Airport to the Beach is now $40.
I was getting half-convinced that gig workers were getting shafted, until I talked with a doordash/ubereats driver for twenty minutes. She said she was making significantly more money than she had as a waitress, and was finally getting ahead. At the same time it was more pleasant work and she didn't have to fight about what shifts she could work.
In AZ, both uber/lyft are short of drivers. The gas price meant a lot of drivers couldn't make any money.
Also, god help you if you want a ride more then 10-15 miles...Phoenix is huge, but for some reason, drivers don't seem to like long rides.
Also, god help you if you want a ride more then 10-15 miles...Phoenix is huge, but for some reason, drivers don't seem to like long rides.
are you saying the drivers are too stupid to calculate they are making net money?
that’s quite the (insulting) claim!
that’s quite the (insulting) claim!
That's not what kanbara said.
Most people are bad at calculating financial implications of decisions before them. There are lots of reasons for this (limited finance/math knowledge, impenetrable language in which conditions are layed out...) or actually don't have better options so they can literally be taken advantage of. Some may be even stupid, but there's no need or reason to reach for that as an explanation.
Most people are bad at calculating financial implications of decisions before them. There are lots of reasons for this (limited finance/math knowledge, impenetrable language in which conditions are layed out...) or actually don't have better options so they can literally be taken advantage of. Some may be even stupid, but there's no need or reason to reach for that as an explanation.
> Most people are bad at calculating financial implications of decisions before them.
This is such a horrible take and reeks of nanny state oversight. Millions of small business owners make these decisions all the time. Markets have a way of quickly rooting out those who aren’t making good decisions. Government has proven itself to be far less financially competent.
This is such a horrible take and reeks of nanny state oversight. Millions of small business owners make these decisions all the time. Markets have a way of quickly rooting out those who aren’t making good decisions. Government has proven itself to be far less financially competent.
The implication is partially two fold:
(1) Most business owners ("millions of small business owners"), especially those that are independent LLC owners, do not fully understand the cost implications of their business's financial health. By their very nature, they do not have dedicated financial expertise, typically lack strong accounting principles, etc. My sister, a personal trainer, is a great example of this. I had to explain to her what "writing off" expenses actually meant.
more importantly:
(2) Uber knows this and exploits it.
(1) Most business owners ("millions of small business owners"), especially those that are independent LLC owners, do not fully understand the cost implications of their business's financial health. By their very nature, they do not have dedicated financial expertise, typically lack strong accounting principles, etc. My sister, a personal trainer, is a great example of this. I had to explain to her what "writing off" expenses actually meant.
more importantly:
(2) Uber knows this and exploits it.
I said absolutely nothing about government.
Millions of small business owners, me including, make these kind (and other) mistakes all the time for various reasons. We are all very much fallible and don't go out of business because most of the time our mistakes don't have huge consequences and everyone else makes their own mistakes too.
Millions of small business owners, me including, make these kind (and other) mistakes all the time for various reasons. We are all very much fallible and don't go out of business because most of the time our mistakes don't have huge consequences and everyone else makes their own mistakes too.
Have you ever heard of MLMs? Of which there are thousands of examples around the world? Herbalife, Forever Living Products, Amway, etc.
All based on there being a large chunk of people[1] that don't really understand how money works.
[1] I'd put that number based on anecdata, at least at around 20-30% of the population.
All based on there being a large chunk of people[1] that don't really understand how money works.
[1] I'd put that number based on anecdata, at least at around 20-30% of the population.
This may be true in some cases- lots of drivers -many of who are new immigrants-see this as the quickest way to get a job and don’t realize they have no worker protections like paid sick leave, worker’s compensation, that employees get or the tax implications of being a contractor vs employee
Not insulting at all. I don’t expect someone hard up enough to drive Uber for minimum wage to understand how to calculate depreciation, etc.
They are focused on cash flow.
They are focused on cash flow.
This might apply the first year, but many drivers have driven for many years. Uber isn’t new any more.
Drivers that aren’t able to calculate net depreciation (actually pretty easy and expected if you can afford to buy a car) would not be able to stick around and drive for 5 years.
Drivers that aren’t able to calculate net depreciation (actually pretty easy and expected if you can afford to buy a car) would not be able to stick around and drive for 5 years.
I worked for the owner driver regulator of my country. People would take these jobs that they were making a loss on and not realise and be bankrupt in 6 months
I used Bolt in the EU
The thing with Uber is that in some places it's the best thing ever and in others it's just a complete disaster. Both view points are correct and I have experienced both myself. For example, when travelling, particularly in notoriously dangerous countries where taxis are extremely untrustworthy and often outright dangerous (driver works with gangs who mug or kidnap you - yes that almost happened to me and it happened to a female friend of mine) Uber has been a real superstar. Uber knows about my whereabouts, knows who picks me up, where the driver is driving, who the driver is and so forth. For a criminal that is too much intrusion and therefore Uber drivers are safer than regular cabs. You can verify that the person who drives the car matches the photo of your cabbie, you can check the reg number, you can follow on your phone if they drive the route calculated by Uber and so forth. If anything appears dodgy you never get in or you're out at the next red light.
On the other hand in first world countries and extremely well connected and overpopulated cities like London Uber is more of a disaster. They clog up the streets and create so much more unnecessary traffic. Uber drivers are extremely picky and don't accept rides which are not going from one prime location to another prime location. They are more expensive than black cabs and offer a worse service. In London black cabs are soooo much better, they can drive in bus lanes which Ubers can't do and therefore beat traffic whereas with an Uber you pay more and then it takes you still twice as long to get anywhere. Also black cabs have more space, they have card readers in the back and you can easily hail them down. It's so frustrating with Uber, especially at night when you want to get home from a party or something which is 10-15 mins away from a busy area and then you try to get an Uber and stare for about 20 minutes on your phone where the app makes you believe that you get a driver confirmed in 2 minutes but it keeps changing and nobody accepts. Literally happened to me so often, looking at my phone and it keeps lying to me that a driver is 3 mins away, then 2 mins, then 4 mins, nobody confirming but it also doesn't allow me to cancel after like 10-15 mins which means I'm then stuck waiting. Uber is so shit it pisses me off. If I don't get an Uber in like 2-3 min then I don't want it and just walk down the road and hail down the next cabbie. So much easier in London sometimes. Anyhow... it's very different in different places.
On the other hand in first world countries and extremely well connected and overpopulated cities like London Uber is more of a disaster. They clog up the streets and create so much more unnecessary traffic. Uber drivers are extremely picky and don't accept rides which are not going from one prime location to another prime location. They are more expensive than black cabs and offer a worse service. In London black cabs are soooo much better, they can drive in bus lanes which Ubers can't do and therefore beat traffic whereas with an Uber you pay more and then it takes you still twice as long to get anywhere. Also black cabs have more space, they have card readers in the back and you can easily hail them down. It's so frustrating with Uber, especially at night when you want to get home from a party or something which is 10-15 mins away from a busy area and then you try to get an Uber and stare for about 20 minutes on your phone where the app makes you believe that you get a driver confirmed in 2 minutes but it keeps changing and nobody accepts. Literally happened to me so often, looking at my phone and it keeps lying to me that a driver is 3 mins away, then 2 mins, then 4 mins, nobody confirming but it also doesn't allow me to cancel after like 10-15 mins which means I'm then stuck waiting. Uber is so shit it pisses me off. If I don't get an Uber in like 2-3 min then I don't want it and just walk down the road and hail down the next cabbie. So much easier in London sometimes. Anyhow... it's very different in different places.
I hear you on the London thing - having had quite a few experiences like yours with Uber recently, I’m going to try going back to black cabs. As I mentioned in another post though I think Uber has forced black cabs to up their game and e.g. they all have working card machines now…
I didn’t think the article debated the ‘goodness’ of Uber. I thought they were debating the inflated market cap (valuation) compared to the business model. It’s an old argument- should you value it like a tech company where costs are minute portion of revenue and price/earnings multiples are high 30-100 or as a staffing company where you’ll always only make a small cut of the driver fees- where valuation multiples
Are usually 3-5 times earnings
Most of that is specific to the US. Taxis work in other countries without it being difficult to get one in the middle of the night. And the medallion system is unique to the US I think.
> . Uber made the payment process seamless I've been paying taxi fares with a credit card in an in car payment terminal for twenty years in Scandinavia. If I had a business trip to anywhere in the Nordic countries I never needed to get any cash because everything worked with a card.
> . Uber made the payment process seamless I've been paying taxi fares with a credit card in an in car payment terminal for twenty years in Scandinavia. If I had a business trip to anywhere in the Nordic countries I never needed to get any cash because everything worked with a card.
I have been living in Istanbul for the last month, and it's worse. With any app (Uber or local) actually ordering a cab takes several attempts. Taxi drivers are constantly rude and unhelpful, cancel rides after taking them, and refuse to take you all the way and just drop you off far from your destination if it's uncomfortable to them. And they often try to get you to pay in cash instead of using Uber's payment, and just plainly scam you, when your bill in Uber is 30% higher than what you saw on taxometer when you got out of the car.
All of that — you guessed it, because of medallion-like system. There's a limited amount of taxis for 25 million city, they cannot meet demand, so they don't have to compete for orders and therefore don't care about their rating (and therefore customer service) in the slightest.
I've seen other regional taxi markets disrupted by Uber and similar local apps — and it always made taxi experience so much better and smoother.
All of that — you guessed it, because of medallion-like system. There's a limited amount of taxis for 25 million city, they cannot meet demand, so they don't have to compete for orders and therefore don't care about their rating (and therefore customer service) in the slightest.
I've seen other regional taxi markets disrupted by Uber and similar local apps — and it always made taxi experience so much better and smoother.
That's surely nice, but ultimately inconsequential
What matters in the end is whether Uber can sell the service for more than it costs to provide it. Traditional taxi could do it, Uber cannot
What matters in the end is whether Uber can sell the service for more than it costs to provide it. Traditional taxi could do it, Uber cannot
> That's surely nice, but ultimately inconsequential
This is a great quote to describe engineer-minded approach to user experience and convenience.
This is a great quote to describe engineer-minded approach to user experience and convenience.
Many tax services don't allow you to order a taxi ahead of time. You have to flag one down (eg NYC). For ordering a car, you need to otherwise deal with an (expensive) car service
First this is just inherently wrong. You’ve been able to call and schedule a cab, even in the burbs, since before the internet was a thing.
Second there’s now services like Curb (in NYC) or Flywheel which allow you to use an Uber/Lyft style experience with cabs.
First this is just inherently wrong. You’ve been able to call and schedule a cab, even in the burbs, since before the internet was a thing.
Second there’s now services like Curb (in NYC) or Flywheel which allow you to use an Uber/Lyft style experience with cabs.
> First this is just inherently wrong. You’ve been able to call and schedule a cab, even in the burbs, since before the internet was a thing.
And maybe the driver would show up on time, or maybe they'd see a street hail en route to picking you up and decide to make you wait an extra 40 minutes. Uber drivers cancel, too, of course, but "automatically fall back to a different driver after a cancellation" is a meaningfully different experience.
And maybe the driver would show up on time, or maybe they'd see a street hail en route to picking you up and decide to make you wait an extra 40 minutes. Uber drivers cancel, too, of course, but "automatically fall back to a different driver after a cancellation" is a meaningfully different experience.
> Uber drivers cancel, too, of course,
Or never show up. Twice with uber (I'm not a frequent user, so this is a high percentage) the driver never showed up. The app didn't let me request someone else until a very long timeout (don't remember how long). Good thing I wasn't going to a flight or other time-sensitive trip on those times, but waiting around in the dark in an industrial park, not so fun.
Pre-uber I'd reserve cab rides to a relative remote area and not once was there a delay or missed pickup.
Or never show up. Twice with uber (I'm not a frequent user, so this is a high percentage) the driver never showed up. The app didn't let me request someone else until a very long timeout (don't remember how long). Good thing I wasn't going to a flight or other time-sensitive trip on those times, but waiting around in the dark in an industrial park, not so fun.
Pre-uber I'd reserve cab rides to a relative remote area and not once was there a delay or missed pickup.
> Pre-uber I'd reserve cab rides to a relative remote area and not once was there a delay or missed pickup.
I wish I had your experience. Pre-Uber, I had a 75% cancellation rate with car services to the airport. I live in a suburb about 45 minutes away from the airport. Car services would frequently just not show up. I would call, they’d say to wait and I would get the runaround.
I think it was due to manual scheduling.
Uber is much better in that I don’t think I’ve ever had a cancel when going to the airport. But I’ve had many cancels when using it around town. It’s very frustrating and I wish Uber would do something about it. Lyft seems the same to me.
I wish I had your experience. Pre-Uber, I had a 75% cancellation rate with car services to the airport. I live in a suburb about 45 minutes away from the airport. Car services would frequently just not show up. I would call, they’d say to wait and I would get the runaround.
I think it was due to manual scheduling.
Uber is much better in that I don’t think I’ve ever had a cancel when going to the airport. But I’ve had many cancels when using it around town. It’s very frustrating and I wish Uber would do something about it. Lyft seems the same to me.
Recently happened to me twice in a short span. After I was assigned the driver, the car was just sitting there for ten minutes. Then it suddenly started approaching and it arrived in 5 minutes, there was no traffic.
I believe they were waiting for me to cancel and have me take the penalty, but I was purposefully not giving up this time. Or they just wan to pick and choose their orders and have no way to cancel an unwanted trip.
Another time the driver came and passed me and went to a different location without stopping or answering messages. I was just watching the car get further and further away.
I believe they were waiting for me to cancel and have me take the penalty, but I was purposefully not giving up this time. Or they just wan to pick and choose their orders and have no way to cancel an unwanted trip.
Another time the driver came and passed me and went to a different location without stopping or answering messages. I was just watching the car get further and further away.
And maybe the driver would show up on time, or maybe they'd see a street hail en route to picking you up and decide to make you wait an extra 40 minutes.
That’s not how it worked, or works (see Curb). You didn’t schedule a particular cab you call the cab service and the dispatcher sends a cab to you and makes sure they got there. If they didn’t show up you call dispatch back and they call the guy and find out what the hell happened and/or dispatch someone else.
That’s not how it worked, or works (see Curb). You didn’t schedule a particular cab you call the cab service and the dispatcher sends a cab to you and makes sure they got there. If they didn’t show up you call dispatch back and they call the guy and find out what the hell happened and/or dispatch someone else.
That's definitely how it **ing worked, man. I came so close to missing so many damn flights before Uber came around, because I'd book a car the day before and it would just ghost me. I had to aim to get to the airport 4 hours early because half the time I had to reorder a fresh cab and hope for the best.
Cabs had a 45+ minute lead time in the evenings and at night too, when I could order them by phone at all. It was a joke. This was in Seattle/Bellevue, Washington, USA, FWIW
Cabs had a 45+ minute lead time in the evenings and at night too, when I could order them by phone at all. It was a joke. This was in Seattle/Bellevue, Washington, USA, FWIW
It was a big thing for competing cab companies to call each other and schedule bogus pick ups. So much of the time they just disregarded calls until the 3rd or 4th time you call back, then they finally send someone.
I wonder if some new player shouldn't enter the market and start making fake pings with Uber and Lyft. Just entirely fill their system during peak times thus preventing them from operating. Can't be too complicated. And this is just exact type of play their customers love about these companies.
Yeah, I used to drive Sea-Tac airport shuttles, and we routinely rescued people whose taxis just never arrived.
Yeah, my company paid the premium for car service because taxi dispatch was too unreliable.
You’ve clearly never called a cab pre-Uber, or you worked as a dispatcher.
Worse of all not only does the cab company often decide to not show up, if you cancel (such as calling another cab company that does show up or take a bus instead) you get yelled at and cursed to hell for letting them know you are canceling.
Everyone in the system is just an average joe, probably being paid less than they deserve. But the system was terrible and broken.
Worse of all not only does the cab company often decide to not show up, if you cancel (such as calling another cab company that does show up or take a bus instead) you get yelled at and cursed to hell for letting them know you are canceling.
Everyone in the system is just an average joe, probably being paid less than they deserve. But the system was terrible and broken.
> You’ve clearly never called a cab pre-Uber
There might be some variation with things like geography, here.
There might be some variation with things like geography, here.
Yes agreed. Some countries and cities had better taxi service than others. But one of beauties of early day Uber was that I was able to use the same app globally (in the US, Taiwan, and even Chiba) and it used my prexisting saved credit cards even! No fumbling for the local currency, registering a local payment method, or worrying if I am going to be scammed by the driver—just a consistent note global taxi hailing experience.
> That’s not how it worked
It's precisely how it worked everywhere I've lived. What you describe sounds like a low density suburb or smaller town. Yeah, social pressure in those situations still works.
The only time I've seen things work as you describe were small/vacation towns when I was visiting for a wedding or whatnot. The type of places where there are a dozen total cabs for the entire county.
Any major (call it NFL tier) city scheduling a pickup was a laughable joke. You quickly learn when you move to such places the first time you schedule a cab how totally unreliable it is.
Even the overly chatty cabbies would be happy to tell you how much of a scam it was, and go on to describe how every driver but them does X, Y, and Z to avoid taking such calls. This is the sole reason Uber got its foothold in my household.
It's precisely how it worked everywhere I've lived. What you describe sounds like a low density suburb or smaller town. Yeah, social pressure in those situations still works.
The only time I've seen things work as you describe were small/vacation towns when I was visiting for a wedding or whatnot. The type of places where there are a dozen total cabs for the entire county.
Any major (call it NFL tier) city scheduling a pickup was a laughable joke. You quickly learn when you move to such places the first time you schedule a cab how totally unreliable it is.
Even the overly chatty cabbies would be happy to tell you how much of a scam it was, and go on to describe how every driver but them does X, Y, and Z to avoid taking such calls. This is the sole reason Uber got its foothold in my household.
> It's precisely how it worked everywhere I've lived.
Have you lived in NYC? It's not how it worked here prior to Uber. You could call one of the car services and schedule a pickup ahead of time and they'd show up. Of course it wasn't totally necessary, because you could call Northside or Arecibo at 4am and they'd come pick you up at your house within 5 minutes.
Outside of NYC, yeah it was a mess. I remember being at datacenters in New Jersey in the middle of the night to fix some server that went down when I was at the beginning of my career and you'd have to call a bunch of car services to find anyone working at 4am.
Have you lived in NYC? It's not how it worked here prior to Uber. You could call one of the car services and schedule a pickup ahead of time and they'd show up. Of course it wasn't totally necessary, because you could call Northside or Arecibo at 4am and they'd come pick you up at your house within 5 minutes.
Outside of NYC, yeah it was a mess. I remember being at datacenters in New Jersey in the middle of the night to fix some server that went down when I was at the beginning of my career and you'd have to call a bunch of car services to find anyone working at 4am.
Uber didn't win because Yellow Cabs we're a better deal or more consistent.
It's exactly how it worked. Half the time they would either not show up or show up 30+ minutes late.
> That’s not how it worked...
In my experience that's exactly how it worked.
In my experience that's exactly how it worked.
it was announced the other day that Curb is integrating their fleet with Uber's, so calling an Uber can get you a cab
ROFLcopter! Yes, you are correct, you've always been able to call and schedule a cab before the Internet was a thing. What you're leaving out is that it was always a roll of the dice whether that cab would ever show up, with a much higher no-show rate than Uber.
> is a meaningfully different experience.
You know what's a meaningfully different experience? A cab company scheduling a car for you at a specific time, rather that an app starting to look for a car for you a few minutes ahead of time, and coming up with something late or inadequate, something I repeatedly experienced with Uber.
You know what's a meaningfully different experience? A cab company scheduling a car for you at a specific time, rather that an app starting to look for a car for you a few minutes ahead of time, and coming up with something late or inadequate, something I repeatedly experienced with Uber.
In San Francisco (due to what I hope was a uniquely bad system), calling and scheduling a cab was theoretically possible, but in practice unreliable and frustrating. Dispatchers had no way to locate an available cab in any reasonable time, and even cabs that agreed to pick up a call would often not arrive because (I was told) they would pick up hailed rides on the way to a pick-up. I missed many appointments when dispatchers took thirty minutes to tell me that there were no cabs available, or when an agreed cab never turned up.
I don't think this problem is true of every city, but Uber was clearly an improvement on the existing taxi system in San Francisco. (In fact for many years the main topic of conversation between me and cab-drivers was speculating on how the SF cab system could be improved, and we'd often end up inventing something like Uber, or now Curb. I'm pretty sure SF would not have got to a reasonable system without pressure from Uber and Lyft -- it took them many years to get to what we have now.)
I don't think this problem is true of every city, but Uber was clearly an improvement on the existing taxi system in San Francisco. (In fact for many years the main topic of conversation between me and cab-drivers was speculating on how the SF cab system could be improved, and we'd often end up inventing something like Uber, or now Curb. I'm pretty sure SF would not have got to a reasonable system without pressure from Uber and Lyft -- it took them many years to get to what we have now.)
This is not my experience living near Palo Alto. I have had to drive my wife to the airport multiple times because her cab never arrived. Uber/Lyft aren't perfect, but they are 90/10 as opposed to 30/70 for cabs.
> You’ve been able to call and schedule a cab
In some places, e.g. SF, scheduled cabs mostly didn't show (at least pre-uber). They'd send a driver, but the driver would just pick up the first person they found on the street-- A fare in the seat is better than a fare on the street.
I didn't have that experience in the DC area or NYC, so I know it wasn't universal... but in some places uber really was a massive upgrade in terms of transport reliability even though uber drivers do cancel at a disappointingly high rate too.
[DC had it's own issues-- I never had many problems with them beyond them being thoroughly ignorant about the local roads an geography, but my partner frequently got sexist insults from the driver, refusals to take her directions, etc.]
In some places, e.g. SF, scheduled cabs mostly didn't show (at least pre-uber). They'd send a driver, but the driver would just pick up the first person they found on the street-- A fare in the seat is better than a fare on the street.
I didn't have that experience in the DC area or NYC, so I know it wasn't universal... but in some places uber really was a massive upgrade in terms of transport reliability even though uber drivers do cancel at a disappointingly high rate too.
[DC had it's own issues-- I never had many problems with them beyond them being thoroughly ignorant about the local roads an geography, but my partner frequently got sexist insults from the driver, refusals to take her directions, etc.]
These are valid points and good counterpoints to what the article presents.
A lot of the issues you list with nyc cabs could’ve been resolved if yellow cabbies didn’t push livery cabs out of lower Manhattan, or even allowed them in at during shift change hours for instance
5. I don’t think you address issue with cherry picking the price with part timers. Which is I know is the real one, because I realized I did it myself and it’s not very fair. Your answer is more like “what about taxi services, they also have edge cases”
2. But there are also taxi services that allow you too book ahead of time. Many cities in Europe had phone booking of the taxi for specific times at least 20 years ago(not sure about before). The question is why NYC didn’t have it?
But good points! Even if many are specific to New York
But good points! Even if many are specific to New York
I'm not ignoring the cherry-picking issue. I, as a passenger, do not care. Straight up. I consider this supply and demand and market pricing doing what it's supposed to.
The tax medallion system was invented to solve such an oversupply problem. It led to times when it's impossible to get a taxi.
Practically speaking, this just isn't a problem you can solve because you're trying to limit supply. If Uber starts giving preferential treatment to full-time or more "senior" drivers, the part-timers will simply go somewhere else and use another ride-sharing app. If you get Lyft and the other little apps to go along with this scheme, well then it's collusion. The only legal alternative is government regulation and legislation and that's not likely to make anybody happy. You will probably find those that operate a fleet through Uber (and are thus de facto taxi companies) will likely support such measures because it will allow them to exercise greater control and have more predictability over their drivers.
The tax medallion system was invented to solve such an oversupply problem. It led to times when it's impossible to get a taxi.
Practically speaking, this just isn't a problem you can solve because you're trying to limit supply. If Uber starts giving preferential treatment to full-time or more "senior" drivers, the part-timers will simply go somewhere else and use another ride-sharing app. If you get Lyft and the other little apps to go along with this scheme, well then it's collusion. The only legal alternative is government regulation and legislation and that's not likely to make anybody happy. You will probably find those that operate a fleet through Uber (and are thus de facto taxi companies) will likely support such measures because it will allow them to exercise greater control and have more predictability over their drivers.
The problem is surge pricing isn't solving the underlying problem (i.e, undersupply of drivers). Uber recently moved to a model where the driver bonuses are disconnected from the actual surge amount: https://www.washingtonpost.com/technology/2021/06/09/uber-ly...
Presumably if surge was focused on maximizing completed trips, then the goal is to find a price that matches riders to drivers.
In reality, riders are more interested in riding than drivers are in driving (this is how we got into this situation in the first place). You can easily charge 2x surge without killing demand, but supply won't rise by the corresponding amount.
Uber found a way to take advantage of this - fixed bonuses to attract the same amount of supply as before, but now surge is an independent variable that they can fine-tune to demand.
Your ride quality isn't improving with surge pricing, it's just getting more expensive.
Presumably if surge was focused on maximizing completed trips, then the goal is to find a price that matches riders to drivers.
In reality, riders are more interested in riding than drivers are in driving (this is how we got into this situation in the first place). You can easily charge 2x surge without killing demand, but supply won't rise by the corresponding amount.
Uber found a way to take advantage of this - fixed bonuses to attract the same amount of supply as before, but now surge is an independent variable that they can fine-tune to demand.
Your ride quality isn't improving with surge pricing, it's just getting more expensive.
The idea is that Uber (and Lyft) which has issues pushed out another system, which had a different set of issues, more unpleasant to the passenger in the case NYC (I live here and I agree).
I don’t get why cherry picking is a bad thing? If demand is high why not increase drivers? Should we screw over people who need rides instead?
The surge pricing model sounds like a great incentive but it's also very easily exploited. Drivers that would otherwise have chosen to work full time might choose to only work during surges, ultimately reducing the total capacity of the system and increasing prices.
There are also reports of groups of drivers working together to manipulate the surge price in order to increase earnings[0].
[0] https://www.distractify.com/p/uber-surge-pricing-hack
There are also reports of groups of drivers working together to manipulate the surge price in order to increase earnings[0].
[0] https://www.distractify.com/p/uber-surge-pricing-hack
I have absolutely no vested interest in defending Uber, but every time one of these threads pops up I feel compelled to throw cold water on it because this website is so damn obsessed with predicting Uber's doom. I have comments that are 6 years old saying "no, uber is not dying", with a thread full of angry pitchforks sure I am wrong.
Nobody cares if Uber as a whole is more "efficient" as measured by some global measure of dollars invested into the service. They care whether -their- individual lived experience is preferable. The obvious takeaway is that urban residents are happy to pay more money overall on car services, so long as those services provide a higher quality experience. People do not like feeling like the end of a cab ride might result in a game of "pretend the card reader doesn't work", people don't like to feel like their destination is an imposition on the driver who will now sit up front fuming about where you've taken him. People don't like having their sense of decency pitted against each other to win a cab in a reasonable amount of time without rudely upstreaming someone. People don't like waiting outside in the cold. People don't like being surprised by how high the meter is when they get out. People don't like having no recourse when they accidentally leave their phone behind besides calling a rude dispatcher. People like cars with nicely maintained interiors that don't smell weird.
How hard is this to understand? The average ride experience you get in an Uber is better. Uber pioneered that improved customer experience by figuring out a solution (some social, some technical) to the biggest friction points. Uber and Lyft are the 700lb gorillas in the rideshare company space, which absolutely DOES have network effects, despite the facile claim otherwise in the article. This is the basis for thinking these companies have a promising future. It's that simple. The size of the circlejerk predicting that it's all going to fall over tomorrow is so embarrassingly, transparently motivated by _hoping_ that it's going to fall over tomorrow.
Nobody cares if Uber as a whole is more "efficient" as measured by some global measure of dollars invested into the service. They care whether -their- individual lived experience is preferable. The obvious takeaway is that urban residents are happy to pay more money overall on car services, so long as those services provide a higher quality experience. People do not like feeling like the end of a cab ride might result in a game of "pretend the card reader doesn't work", people don't like to feel like their destination is an imposition on the driver who will now sit up front fuming about where you've taken him. People don't like having their sense of decency pitted against each other to win a cab in a reasonable amount of time without rudely upstreaming someone. People don't like waiting outside in the cold. People don't like being surprised by how high the meter is when they get out. People don't like having no recourse when they accidentally leave their phone behind besides calling a rude dispatcher. People like cars with nicely maintained interiors that don't smell weird.
How hard is this to understand? The average ride experience you get in an Uber is better. Uber pioneered that improved customer experience by figuring out a solution (some social, some technical) to the biggest friction points. Uber and Lyft are the 700lb gorillas in the rideshare company space, which absolutely DOES have network effects, despite the facile claim otherwise in the article. This is the basis for thinking these companies have a promising future. It's that simple. The size of the circlejerk predicting that it's all going to fall over tomorrow is so embarrassingly, transparently motivated by _hoping_ that it's going to fall over tomorrow.
The experience is much better as you've mentioned; the question in the article is whether a company needs to exist around making the experience better.
Now that the ideal experience is available, the question is whether people are willing to pay for it.
Right now - it's being paid for (all salaries, etc.) by shareholders as the company runs a massive operating loss.
The question these articles lay out is that - at least in theory - this can't last forever. No one's hoping Uber fails - they're just saying that a company eventually needs to make money, and they don't see a path forward for Uber to do that.
A bank wouldn't keep lending to a borrower that could never pay them back; at some point - without a fundamental change in economics - this situation will happen to Uber.
Now that the ideal experience is available, the question is whether people are willing to pay for it.
Right now - it's being paid for (all salaries, etc.) by shareholders as the company runs a massive operating loss.
The question these articles lay out is that - at least in theory - this can't last forever. No one's hoping Uber fails - they're just saying that a company eventually needs to make money, and they don't see a path forward for Uber to do that.
A bank wouldn't keep lending to a borrower that could never pay them back; at some point - without a fundamental change in economics - this situation will happen to Uber.
Yeah, this is a more nuanced critique that could definitely have teeth.
That said, I'm kind of skeptical that it's really true that shareholders are keeping the whole enterprise afloat? Here I admit I haven't delved deep into their financials, but isn't a big part of their operating loss related to huge R&D spend for self-driving plays, outsized engineering dev teams that might eventually be reduced as the app stabilizes, etc.? It seems like riders have been willing to shell out a lot more money for the experience, which I would imagine leaves plenty of margin. They are essentially a global taxi company with good market position and value added. It seems hard to believe there is no way to operate that company profitably, even if they're not currently achieving it. It's not like they're being strongly pressured to reach profitability either, though, so this isn't a particularly fair litmus test as to whether they're capable.
Anyway, you raise a good point that it -could- be true the Uber model is fundamentally unsustainable. I was reacting some of the hotter revisionist takes you see, where Uber was never a good idea, offers no value over a normal Taxi, is a big brogrammer pyramid scheme, etc.
That said, I'm kind of skeptical that it's really true that shareholders are keeping the whole enterprise afloat? Here I admit I haven't delved deep into their financials, but isn't a big part of their operating loss related to huge R&D spend for self-driving plays, outsized engineering dev teams that might eventually be reduced as the app stabilizes, etc.? It seems like riders have been willing to shell out a lot more money for the experience, which I would imagine leaves plenty of margin. They are essentially a global taxi company with good market position and value added. It seems hard to believe there is no way to operate that company profitably, even if they're not currently achieving it. It's not like they're being strongly pressured to reach profitability either, though, so this isn't a particularly fair litmus test as to whether they're capable.
Anyway, you raise a good point that it -could- be true the Uber model is fundamentally unsustainable. I was reacting some of the hotter revisionist takes you see, where Uber was never a good idea, offers no value over a normal Taxi, is a big brogrammer pyramid scheme, etc.
Excellent commentary on all the other reasons Uber succeeded. One other comment I'd have is that taxi services are spectacular in some places. Get a black cab in London or Tokyo and you're overwhelmingly likely to experience a better ride than Uber can offer. But the list of similar cities is extremely short; it just happens that a lot of these doomsayers live in them.
One also doubts that the guy writing this article ever needed to take a cab anywhere.
One also doubts that the guy writing this article ever needed to take a cab anywhere.
They're an illegal taxi company. The rides are NOT better.
What solutions?
I've just outlined for you a long list of ways in which getting an Uber is superior to hailing a cab. Some of those differences are realized by simply having an app that goes along with the service. Some of them are realized by having a ride-share business model rather than a medallion system with a fleet. Taken collectively, it's a cohesive solution to the problem of "I want to get a ride to Baker St. that doesn't suck". Here are some examples:
- Waiting out in the cold --> Reserve your drive from inside, monitor your driver's position, only step out when they're arriving.
- Driver resents your trip destination --> You declare this ahead of time, and it is accepted by the driver ahead of time. Also, driver rating system discourages people from being rude / guilting you for having a place to go
- Fare was surprisingly high --> You get a quote ahead of time.
- "Credit card machine isn't working" --> Your credit card is already entered in the app, so you don't even have to worry about it. It's charged automatically.
- Car is kind of gross / smells weird --> People use their own, more modern, nicely appointed cars. Drivers have good incentives to take care of the car. Rating system encourages good behavior on both sides (throwing up in an Uber hurts your rating a lot).
On the other side of the coin, Uber's system is solving problems for somebody who wants to earn some cash on the side:
- Reputation system allows you to stand out from the crowd with good service
- No obligations to be on shift - work for as long as you want to. Compatible with having other jobs.
- No need to invest your life savings on a medallion whose only value is to make you one of a sea of undifferentiated, unaccountable yellow cabs
- Don't need to patrol to "find" the riders, so lower downtime
It is a better system. Declaring that it's "NOT" without any backup will not change that. And if you come back saying "so what, local cab services have an app that does all the same stuff now" (now that Uber forced them to to be competitive, that is), then may God have mercy on your soul.
- Waiting out in the cold --> Reserve your drive from inside, monitor your driver's position, only step out when they're arriving.
- Driver resents your trip destination --> You declare this ahead of time, and it is accepted by the driver ahead of time. Also, driver rating system discourages people from being rude / guilting you for having a place to go
- Fare was surprisingly high --> You get a quote ahead of time.
- "Credit card machine isn't working" --> Your credit card is already entered in the app, so you don't even have to worry about it. It's charged automatically.
- Car is kind of gross / smells weird --> People use their own, more modern, nicely appointed cars. Drivers have good incentives to take care of the car. Rating system encourages good behavior on both sides (throwing up in an Uber hurts your rating a lot).
On the other side of the coin, Uber's system is solving problems for somebody who wants to earn some cash on the side:
- Reputation system allows you to stand out from the crowd with good service
- No obligations to be on shift - work for as long as you want to. Compatible with having other jobs.
- No need to invest your life savings on a medallion whose only value is to make you one of a sea of undifferentiated, unaccountable yellow cabs
- Don't need to patrol to "find" the riders, so lower downtime
It is a better system. Declaring that it's "NOT" without any backup will not change that. And if you come back saying "so what, local cab services have an app that does all the same stuff now" (now that Uber forced them to to be competitive, that is), then may God have mercy on your soul.
The person you're responding to provided reasons for their assertions.
> They're an illegal taxi company.
Why do you think that?
> The rides are NOT better.
Why do you think that?
> They're an illegal taxi company.
Why do you think that?
> The rides are NOT better.
Why do you think that?
> Uber charges drivers 25-30 percent
You might be a little low there. In my direct experience as a driver pre-covid, it was close to 50%, and many drivers in the relevant subreddits have reported it frequently being more than that since. Imagine hearing a passenger complain about their $15 fare when you only see $6 of it (out of which you still have to cover your gas usage). 25-30 percent seems reasonable in comparison.
You might be a little low there. In my direct experience as a driver pre-covid, it was close to 50%, and many drivers in the relevant subreddits have reported it frequently being more than that since. Imagine hearing a passenger complain about their $15 fare when you only see $6 of it (out of which you still have to cover your gas usage). 25-30 percent seems reasonable in comparison.
I just ordered a Lyft the other day and was talking to the driver on the way to the airport, he said a common route he drives is from Bozeman (MT) to Big Sky (for the ski tourists), the price is over 150$ on Lyft/Uber, and he ends up getting about 60-70$ from it max.
This type of cut, plus the massive false advertising that Uber/Lyft does via their apps in smaller towns, like telling you that your ride will be booked soon when there are literally no drivers available, have led to me just using prebooked car services when I can now. It costs a bit more, but they are 100% reliable in my experiences, more money is going directly to the drivers, and it supports the local economy.
This type of cut, plus the massive false advertising that Uber/Lyft does via their apps in smaller towns, like telling you that your ride will be booked soon when there are literally no drivers available, have led to me just using prebooked car services when I can now. It costs a bit more, but they are 100% reliable in my experiences, more money is going directly to the drivers, and it supports the local economy.
> like telling you that your ride will be booked soon when there are literally no drivers available
I got burned on this using Lyft to get the airport early in the morning. Scheduled the night before to pick up at 5am the next morning. No one was actually scheduled, and it was just searching endlessly for a driver in the area but there were none! No car services open, I had to call my mother and ask her to take us! I couldn't believe it and I'll never use one again. Only car services for me now, at least for anything that matters.
I got burned on this using Lyft to get the airport early in the morning. Scheduled the night before to pick up at 5am the next morning. No one was actually scheduled, and it was just searching endlessly for a driver in the area but there were none! No car services open, I had to call my mother and ask her to take us! I couldn't believe it and I'll never use one again. Only car services for me now, at least for anything that matters.
Same. The language they use for that feature (on both apps) is extremely misleading, if not just straight up false. They clearly want you to believe that you are guaranteed a ride when you schedule ahead.
That’s not full story though - with incentives Uber cut is much smaller and in many cases drivers actually got more than the customer paid.
That's no longer the case. It was the situation at the beginning, but multiple cab folks have told me that incentives have really reduced in the last four years.
To be fair the last two years were not kind to ride sharing.
I wish people would stop calling it ride sharing, as it implies that one of your buddies is giving you a lift. It's just a marketing term.
Uber and Lyft are (gig economy) cab companies.
Uber and Lyft are (gig economy) cab companies.
Well, shared rides were pretty popular pre-pandemic. Cabs never really did shared rides (at least not legitimately). I pretty much always opted for the shared option whenever I Uber’d or Lyfted.
So how did these work? How did the driver tell where they were coming from and where they were going? And was it worth their time? I can't think sharing your own ride is easy to solve. And no if you add more people when you are professionally driving it is still not ride sharing, it's just bus service at that time.
I think GP is talking about services like Lyft Line where the driver would pick up a second passenger on the way, the route calculated for efficiency.
Yes Lyft Line and Uber Pool. I know Uber pool achieved break even just before the pandemic. It was remarkably cheap and popular in high use areas like major cities. Even if it wasn’t a super profitable product it was a great service that reduced car dependency in America.
True, but the comments were from pre-pandemic times.
I refuse to use Uber but I’ll take Lyft since it is impossible to get an actual taxi anymore.
My last ride I was talking to the driver about someone canceling a $50 fare and her getting it instead which lead to the discovery of her getting $22 of the $48 (minus tip) I was charged.
It amazes me people are still driving for them.
My last ride I was talking to the driver about someone canceling a $50 fare and her getting it instead which lead to the discovery of her getting $22 of the $48 (minus tip) I was charged.
It amazes me people are still driving for them.
I agree that Uber is using VC cash to outcompete more effective businesses. It's not sustainable, but in many cases those businesses were predatory either to their employees or the public. This isn't the case everywhere.
I talked with some ex-cabbie Uber drivers. With cabs, they had to pay back the owner each shift for use of the vehicle and license. About half of the shift would be worked free. If they were new and got weekday graveyard, it was particularly bad. They seemed much happier with Uber. I'm a bit concerned about hard to quantify costs like vehicle wear ultimately making it worse, though.
I talked with some ex-cabbie Uber drivers. With cabs, they had to pay back the owner each shift for use of the vehicle and license. About half of the shift would be worked free. If they were new and got weekday graveyard, it was particularly bad. They seemed much happier with Uber. I'm a bit concerned about hard to quantify costs like vehicle wear ultimately making it worse, though.
In some countries, taxis are so often criminal that tourists are warned to avoid them. In some less extreme places, drivers simply never use the meter and the passengers must negotiate every ride. Uber and its competitors have been wonderful for hailing rides in these places.
I remember areas of Bali where local cabs would threaten and drive away cabs from outside the area, including private-hire ones ordered via app. Their argument was local drivers should be supported, but the cab prices were really high for short rides as a result (because the clientele was foreign tourists, many from Australia and Europe).
Apparently in Mexico it used to be the case 5years ago but nowadays you can't rely on Uber either anymore if you are a woman and you don't want to just be a dead raped corpse the next morning.
Source: mexican gf and her family still living there.
Not sure if the issue comes from Uber not giving out drivers info, drivers blaming someone borrowed their car but not disclosing identity of supposed borrower or police not even asking but it seems to be the true reality.
Also a quick google search shows there are occurences of this in the USA as well. The fact the driver may be charged and found guilty after that sadly do not prevent the crime from happening in the first place.
Source: mexican gf and her family still living there.
Not sure if the issue comes from Uber not giving out drivers info, drivers blaming someone borrowed their car but not disclosing identity of supposed borrower or police not even asking but it seems to be the true reality.
Also a quick google search shows there are occurences of this in the USA as well. The fact the driver may be charged and found guilty after that sadly do not prevent the crime from happening in the first place.
"In Mexico" is really too broad to say what to expect. Cancun, Tijuana, CDMX, and Queretaro, as examples, are going to be vastly different experiences.
Well Cancun is not mx anymore. GF is from Queretaro, which is somewhat considered a safe place. She would not take an Uber alone anymore as she used to do.
Is that like "Miami is the closest foreign city to the US"?
Why would a taxi be any better?
And why shouldn't Uber be forced to be a platform where the drivers can negotiate price with riders? Seems rather bad that Uber is one dictating the pricing and their cut...
I don't want to put myself at the mercy of some asshole who is trying to dicker with me over the price of a ride. I do not want to argue about the price at all; I certainly do not want to argue about it with the person who is shortly going to drive me around. Better for them to direct whatever feelings of greed or disappointment they may have toward the operator of the service than toward me.
Why is it bad that a company sets their price?
With this many billion dollars on the line, one can never be too cynical.
One has to wonder if this has been the endgame all along: driving taxi services out of business, replacing them with a monopoly where consumers pay the same price (or higher) and where drivers are paid less.
I will say that services like Uber have been very beneficial for areas that were previously underserved by traditional taxi companies. But that alone probably doesn't justify this multibillion-dollar wealth transfer operation.
One has to wonder if this has been the endgame all along: driving taxi services out of business, replacing them with a monopoly where consumers pay the same price (or higher) and where drivers are paid less.
I will say that services like Uber have been very beneficial for areas that were previously underserved by traditional taxi companies. But that alone probably doesn't justify this multibillion-dollar wealth transfer operation.
> One has to wonder if this has been the endgame all along: driving taxi services out of business, replacing them with a monopoly where consumers pay the same price (or higher) and where drivers are paid less.
Only works if you manage to get a govt monopoly and exclusive access tot he drivers. If you don't have those two things there's no point in trying to landgrab under cost and price-gouge later.
For something like Uber, I figure a good team might push out a working solution in a month. The barrier to entry is so small, and travellers have literally no brand loyalty, that the minute the price goes too high there'll be someone else trying to get a cut of the (now profitable) business.
Only works if you manage to get a govt monopoly and exclusive access tot he drivers. If you don't have those two things there's no point in trying to landgrab under cost and price-gouge later.
For something like Uber, I figure a good team might push out a working solution in a month. The barrier to entry is so small, and travellers have literally no brand loyalty, that the minute the price goes too high there'll be someone else trying to get a cut of the (now profitable) business.
I think they were hoping for network lock-in. Drivers might carry 2 phones but probably not 3. Riders will check 2-3 apps at most. Incumbents end up in a prisoner's dilemma where raising prices in concert usually pays off and defection is actually costly.
The barrier to entry is not small.
To offer low wait times you need drivers idling ready to pick up customers. Meaning you need to pay drivers in excess of what you will earn from riders. Until you reach critical mass. This is what has lost Uber so much money.
To offer low wait times you need drivers idling ready to pick up customers. Meaning you need to pay drivers in excess of what you will earn from riders. Until you reach critical mass. This is what has lost Uber so much money.
I think you're right to a point. During the period Uber and Lyft pulled out of Austin in protest of its background check ordinance, several other companies sprung up immediately and appeared to thrive until the big boys came back.
The barrier to entry is actually incredibly low, assuming you have a base of people willing to drive already as happened in Austin. You don't need to employ drivers or own cars, or anything else in the physical world that eats up capital. It's literally only an app.
The barrier to entry is actually incredibly low, assuming you have a base of people willing to drive already as happened in Austin. You don't need to employ drivers or own cars, or anything else in the physical world that eats up capital. It's literally only an app.
> To offer low wait times you need drivers idling ready to pick up customers. Meaning you need to pay drivers in excess of what you will earn from riders.
That only matters if:
1. You want a larger geographical coverage
2. You want to push out competitors by undercharging.
Local-area Uber clones sprang up like mushrooms in the night when Uber pulled out of certain cities.
> Until you reach critical mass. This is what has lost Uber so much money.
Uber has lost that much money because they were trying to fend off competition and landgrab by charging less. The minute they have to charge what the trip really costs, then the market is suddenly a profitable one and competitors will come in.
My point was that landgrabbing in this market is pointless because you cannot price-gouge later. If Uber decided to raise their rates to become profitable, local-area equivalents will enter the now-profitable market.
That only matters if:
1. You want a larger geographical coverage
2. You want to push out competitors by undercharging.
Local-area Uber clones sprang up like mushrooms in the night when Uber pulled out of certain cities.
> Until you reach critical mass. This is what has lost Uber so much money.
Uber has lost that much money because they were trying to fend off competition and landgrab by charging less. The minute they have to charge what the trip really costs, then the market is suddenly a profitable one and competitors will come in.
My point was that landgrabbing in this market is pointless because you cannot price-gouge later. If Uber decided to raise their rates to become profitable, local-area equivalents will enter the now-profitable market.
No you should always be cynical and assume the simplest dumbest reason. They didn’t think it through this far. They thought driverless would work. They just did what they thought was best along the way.
(Not to suggest that thinking things through this far out from the beginning is a feasible task)
(Not to suggest that thinking things through this far out from the beginning is a feasible task)
That's the opposite of what I mean by "cynical". That is the charitable view that gives tremendous benefit of the doubt to people who do not deserve it.
The end game was AI driverless cars. It would solve the economic problem assuming they could get to level 4 in time.
The wealth transfer has been to the passengers though, as this article points out repeatedly Uber isn't earning money.
I was thinking of their employees and technology vendors, as well as any open source projects they contribute to.
The point is that there must be some awfully huge payoff to make burning billions of dollars as an upfront investment worth it.
The point is that there must be some awfully huge payoff to make burning billions of dollars as an upfront investment worth it.
I would gladly “pay” the same price or higher for Uber than for a taxi. A better service should cost more.
Then again, when I’m using Uber it’s either for business travel (someone else’s money) or vacation (not price sensitive).
Then again, when I’m using Uber it’s either for business travel (someone else’s money) or vacation (not price sensitive).
These are all interesting points. However, I recently used Uber Premier twice in Miami, after not using any car service for two years, and the experience was excellent. It was fast, friendly, the car was nice, and I was happy with the price. For my use case, I am happy to pay more to get a better service, but it didn’t really seem that expensive. Both drivers had been doing Uber for a long time, which would be surprising if they were getting ripped off. So, as much as these points are interesting, I’m not sure they fully capture the situation.
Both drivers had been doing Uber for a long time, which would be surprising if they were getting ripped off.
If you need to buy food and put a roof over your child's head, you will put up with a lot of things. Being "ripped off" isn't really part of the equation: You can know you are being ripped off while still realizing this is the best way to provide for your child. Folks aren't working fast food for 20 years because they are getting treated well. Same with Uber drivers.
If you need to buy food and put a roof over your child's head, you will put up with a lot of things. Being "ripped off" isn't really part of the equation: You can know you are being ripped off while still realizing this is the best way to provide for your child. Folks aren't working fast food for 20 years because they are getting treated well. Same with Uber drivers.
> Both drivers had been doing Uber for a long time, which would be surprising if they were getting ripped off
Did you happen to ask if this was their full-time gig, or if they were doing it as supplementary income?
Did you happen to ask if this was their full-time gig, or if they were doing it as supplementary income?
The best Uber I ever got picked up in was a high end Mercedes driven by a bored retiree wanting something to do on weekends.
Clearly that ride was subsidized by a number of things and wasn’t sustainable.
But I don’t expect limo service at taxi rates - and I’ve started noticing that some Ubers have been literal taxis with an Uber and Lyft sticker on them.
Lately I’ve been using shuttle service or just car service.
Clearly that ride was subsidized by a number of things and wasn’t sustainable.
But I don’t expect limo service at taxi rates - and I’ve started noticing that some Ubers have been literal taxis with an Uber and Lyft sticker on them.
Lately I’ve been using shuttle service or just car service.
It's probably a side gig, which is amazing. It means taxi didn't need to be a job all along.
Amazing for whom? Certainly not for the gig workers who don’t get employee benefits and are now sometimes making sub-minimum wage after accounting for gas and deprecation
It’s only because of the US’s ass backwards health care system that people depend on their employee for health care.
> Uber charges drivers 25-30 percent without coming close to covering their actual costs
I mean this is it, right? This is the big one. All these "tech" companies that are not actually selling software taking huge cuts off the top line, this can't be sustainable.
You can own the market for a while, but sooner or later someone is going to come along and disrupt you.
I mean this is it, right? This is the big one. All these "tech" companies that are not actually selling software taking huge cuts off the top line, this can't be sustainable.
You can own the market for a while, but sooner or later someone is going to come along and disrupt you.
> 1. Uber is actually a higher cost/less efficient producer of urban car services than the taxi companies it has driven out of business
This doesn't seem to be true, given that in some countries you have taxi companies providing services through Uber, as well as their own ride hailing platforms.
> 2. Individual Uber drivers with limited capital cannot acquire, finance, maintain and insure vehicles more economically than Yellow Cab
I'm not sure this belief holds any truth as well. I mean, isn't the biggest cost associated with Yellow Cab the taxi medallion, which represents a +$80k additional charge over the vehicle?
This doesn't seem to be true, given that in some countries you have taxi companies providing services through Uber, as well as their own ride hailing platforms.
> 2. Individual Uber drivers with limited capital cannot acquire, finance, maintain and insure vehicles more economically than Yellow Cab
I'm not sure this belief holds any truth as well. I mean, isn't the biggest cost associated with Yellow Cab the taxi medallion, which represents a +$80k additional charge over the vehicle?
It's a one time charge and also can be resold if needed.
> It's a one time charge and also can be resold if needed.
It's a hefty one-time charge that is not required to operate a Uber and thus can baloon the initial investment between 2x and 3x, and at best is capex that you have to tie down. Therefore, how is that an advantage?
It's a hefty one-time charge that is not required to operate a Uber and thus can baloon the initial investment between 2x and 3x, and at best is capex that you have to tie down. Therefore, how is that an advantage?
Good points, but I would add that what Uber is doing now is just carving out a chunk of the market for what is coming in the next few years. Most of your points revolve around human drivers and the gasoline-powered vehicles they own.
The future of Uber is probably a majority of driverless vehicles that are corporately-owned. That is a vastly different model.
The future of Uber is probably a majority of driverless vehicles that are corporately-owned. That is a vastly different model.
> The future of Uber is probably a majority of driverless vehicles that are corporately-owned. That is a vastly different model.
And the future of BP and Shell is cold fusion reactors. Any day now!
And the future of BP and Shell is cold fusion reactors. Any day now!
Or people renting out their own vehicles through Uber
[deleted]
Nice summary. A thought on point #2: (from a total costs perspective) is this still true considering yellow cab drivers still need to acquire, maintain, and insure their personal use vehicle?
Good point. I hear the insurance for the commercial vehicles is much higher, too.
My takeaway is that there is a big reason that the "robotaxi" is still on the leaderboard of VC investment plays.
I'm surprised that Uber/Lyft never tried lowtech self driving: basically have drone operators guide the cars when they are not in use, and then just monitor/track the drivers when they use them.
Then a "sweeper crew" can handle the outliers/stranded cars.
Basically the scooter model but with cars.
I'm surprised that Uber/Lyft never tried lowtech self driving: basically have drone operators guide the cars when they are not in use, and then just monitor/track the drivers when they use them.
Then a "sweeper crew" can handle the outliers/stranded cars.
Basically the scooter model but with cars.
> 1. Uber is actually a higher cost/less efficient producer of urban car services than the taxi companies it has driven out of business
How is its cost/efficiency in the areas where there ARE no taxis? I have nothing but "gut" to back this up but I live in one of the areas where aren't (m)any, and uber/lyft is infinitely more efficient here.
How is its cost/efficiency in the areas where there ARE no taxis? I have nothing but "gut" to back this up but I live in one of the areas where aren't (m)any, and uber/lyft is infinitely more efficient here.
I feel this entire thread has quite missed the point of the question
the way a neutrino passes through a solid object and interacts with
nothing but empty space.
People have talked about microeconomics, gig economies, labour shifting, bad old days, safety, subsidies, licenses.... but we've gotten no closer to understanding;
"Why Is a Company That Lost Billions Claimed to Be Successful?"
To answer this one must ask "What is financialisation?" The short answer is; a system in which the success or failure of a company is of no relevance to its "value". Under financialised logic it is absolutely immaterial whether Twitter, Uber or whatever make a penny. Ever. Or whether any of the stakeholders are served. The rules of traditional business go out the window. All that matters is the stock price of a tradable financial entity (a company) based on brand confidence/perception.
Under that system, Uber is successful so long as the financial market says it is. When it decides it's not successful, it's not. One has to realise that a total detachment of political economics and power has taken place.
People have talked about microeconomics, gig economies, labour shifting, bad old days, safety, subsidies, licenses.... but we've gotten no closer to understanding;
"Why Is a Company That Lost Billions Claimed to Be Successful?"
To answer this one must ask "What is financialisation?" The short answer is; a system in which the success or failure of a company is of no relevance to its "value". Under financialised logic it is absolutely immaterial whether Twitter, Uber or whatever make a penny. Ever. Or whether any of the stakeholders are served. The rules of traditional business go out the window. All that matters is the stock price of a tradable financial entity (a company) based on brand confidence/perception.
Under that system, Uber is successful so long as the financial market says it is. When it decides it's not successful, it's not. One has to realise that a total detachment of political economics and power has taken place.
>Under financialised logic it is absolutely immaterial whether Twitter, Uber or whatever make a penny. Ever. Or whether any of the stakeholders are served. The rules of traditional business go out the window.
What makes you think that shareholders in Twitter or Uber don't care that they'll never make a penny? They're not turning a profit now, but it seems at least somewhat plausible that they'll make money in the future. Under that assumption (ie. future expected earnings), it seems perfectly consistent with "rules of traditional business".
>Under that system, Uber is successful so long as the financial market says it is. When it decides it's not successful, it's not. One has to realise that a total detachment of political economics and power has taken place.
Congratulations. You just discovered "the price of something is what someone is willing to pay for it", not its actual utility.
What makes you think that shareholders in Twitter or Uber don't care that they'll never make a penny? They're not turning a profit now, but it seems at least somewhat plausible that they'll make money in the future. Under that assumption (ie. future expected earnings), it seems perfectly consistent with "rules of traditional business".
>Under that system, Uber is successful so long as the financial market says it is. When it decides it's not successful, it's not. One has to realise that a total detachment of political economics and power has taken place.
Congratulations. You just discovered "the price of something is what someone is willing to pay for it", not its actual utility.
> They're not turning a profit now
Uber turned a profit in 2021Q2. [0] Twitter now has had many profitable quarters. [1] Of course, cumulatively, they are both money-losing, but I think the perception of these businesses as only having a 'plausibility' of making money is perhaps dated.
[0] https://www.macrotrends.net/stocks/charts/UBER/uber-technolo...
[1] https://www.macrotrends.net/stocks/charts/TWTR/twitter/net-i...
Uber turned a profit in 2021Q2. [0] Twitter now has had many profitable quarters. [1] Of course, cumulatively, they are both money-losing, but I think the perception of these businesses as only having a 'plausibility' of making money is perhaps dated.
[0] https://www.macrotrends.net/stocks/charts/UBER/uber-technolo...
[1] https://www.macrotrends.net/stocks/charts/TWTR/twitter/net-i...
"Turning a profit" has almost no meaning, particularly with mark-to-market investments in the mix. More concretely Uber's business has never generated positive cash flow (i.e. taken in more money in a given period than they spent in that same period) and are projecting they will reach that milestone for the first time in Q4 of this year.
When talking about investments, "profit" is generally a synonym for "net income." Of course, many people may disagree on which specific income measure should really be used to represent the general concept of profit, but there are pretty good arguments for net income being that value. Investopedia [0] has an article that discusses the difference; Motley Fool [1] argues it's the same.
If we want to say that positive cash flow is a better measure here, you can argue that, but that wasn't the claim made in the comment I replied to.
[0] https://www.investopedia.com/ask/answers/122414/net-income-s...
[1] https://www.fool.com/the-blueprint/net-income-vs-net-profit/
If we want to say that positive cash flow is a better measure here, you can argue that, but that wasn't the claim made in the comment I replied to.
[0] https://www.investopedia.com/ask/answers/122414/net-income-s...
[1] https://www.fool.com/the-blueprint/net-income-vs-net-profit/
A lot of movie productions infamously do not have positive cash flow. They deduct profits by creating artificial expenses charged by other companies providing services.
If they did have profits they’d get double taxed (once on the company’s profits and then again in payroll taxes if they decide to disburse profits to employees). They’d also have to pay out royalties on profits in some cases.
It’s usually pointless to look at reported profits from growth oriented startups, because if they reported income it means they are not properly reinvesting into growth (hiring engineers, bonuses for engineers, marketing, etc).
It’s much better to look at unit economics. Frankly, if cab companies made it work there’s no reason Uber cannot, and no reason the unit economics for Uber would be negative. It’s not as if Uber et al invented something new. They’ve basically improved almost every aspect of the taxi system it replaced, and done so with software technology so the marginal cost of the improvements is almost $0.
Just because the product is labor driven and low margin doesn’t mean it cannot be profitable. Amazon is a fundamentally low margin business as well (retail). The margins don’t matter so long as it can scale well, and software almost always does.
If they did have profits they’d get double taxed (once on the company’s profits and then again in payroll taxes if they decide to disburse profits to employees). They’d also have to pay out royalties on profits in some cases.
It’s usually pointless to look at reported profits from growth oriented startups, because if they reported income it means they are not properly reinvesting into growth (hiring engineers, bonuses for engineers, marketing, etc).
It’s much better to look at unit economics. Frankly, if cab companies made it work there’s no reason Uber cannot, and no reason the unit economics for Uber would be negative. It’s not as if Uber et al invented something new. They’ve basically improved almost every aspect of the taxi system it replaced, and done so with software technology so the marginal cost of the improvements is almost $0.
Just because the product is labor driven and low margin doesn’t mean it cannot be profitable. Amazon is a fundamentally low margin business as well (retail). The margins don’t matter so long as it can scale well, and software almost always does.
> A lot of movie productions infamously do not have positive cash flow.
This is a nuance of an accounting trick used specifically in Hollywood and isn't relevant to this discussion whatsoever.
> It’s usually pointless to look at reported profits from growth oriented startups
Uber isn't a startup anymore. It's a publicly traded company.
> It’s much better to look at unit economics.
It's not. Unit economics are commonly used to drive an overall cash flow / profitable capability of most startups because their profitability is usually highly irregular when they are subscale. Unit economics are usually a proxy / indicator of gross margin and gross margin is an indicator of operating cash flow and/or net income.
> Just because the product is labor driven and low margin doesn’t mean it cannot be profitable. Amazon is a fundamentally low margin business as well (retail). The margins don’t matter so long as it can scale well,
Generally true, but there's a few things here that are important to consider:
- In most recent years, Amazon has started driving overall profitability via AWS profits which far outsize their retail/ecomm profits.
- What you're referring to specifically is free cash flow. From Bezos: "“When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.” Jeff Bezos is very focused on this “absolute dollar free cash flow metric.” You will see many people talk about Amazon’s focus on “growth” vs. margins, but the right focus is instead absolute dollar fee cash flow."[0]
[0] - https://25iq.com/2014/04/26/a-dozen-things-i-have-learned-fr...
This is a nuance of an accounting trick used specifically in Hollywood and isn't relevant to this discussion whatsoever.
> It’s usually pointless to look at reported profits from growth oriented startups
Uber isn't a startup anymore. It's a publicly traded company.
> It’s much better to look at unit economics.
It's not. Unit economics are commonly used to drive an overall cash flow / profitable capability of most startups because their profitability is usually highly irregular when they are subscale. Unit economics are usually a proxy / indicator of gross margin and gross margin is an indicator of operating cash flow and/or net income.
> Just because the product is labor driven and low margin doesn’t mean it cannot be profitable. Amazon is a fundamentally low margin business as well (retail). The margins don’t matter so long as it can scale well,
Generally true, but there's a few things here that are important to consider:
- In most recent years, Amazon has started driving overall profitability via AWS profits which far outsize their retail/ecomm profits.
- What you're referring to specifically is free cash flow. From Bezos: "“When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.” Jeff Bezos is very focused on this “absolute dollar free cash flow metric.” You will see many people talk about Amazon’s focus on “growth” vs. margins, but the right focus is instead absolute dollar fee cash flow."[0]
[0] - https://25iq.com/2014/04/26/a-dozen-things-i-have-learned-fr...
> Uber isn't a startup anymore. It's a publicly traded company.
THIS
THIS
I don’t get it. Even publicly traded companies try to zero out end of year profits via reinvestment and salary bonuses. If you did not then you accumulate unused cash which if you decide to pay out to employees later gets double taxed.
But in any case Uber’s industries are still highly competitive (ride sharing and food delivery), so there are plenty of ways for them to reinvest profits rather than accumulate a war chest like a company like Apple (which also was able to do partly because of a tax haven country).
Plus if Uber didn’t reinvest profits their hundreds of competitors would do that and get an edge, many of which are smaller private startups
But in any case Uber’s industries are still highly competitive (ride sharing and food delivery), so there are plenty of ways for them to reinvest profits rather than accumulate a war chest like a company like Apple (which also was able to do partly because of a tax haven country).
Plus if Uber didn’t reinvest profits their hundreds of competitors would do that and get an edge, many of which are smaller private startups
> If you did not then you accumulate unused cash which if you decide to pay out to employees later gets double taxed.
This is precisely why you look at a Cash Flow statement.
This is precisely why you look at a Cash Flow statement.
>A lot of movie productions infamously do not have positive cash flow.
You're confusing cash flow with declared income/loss. The shenanigans pulled on shows like "Columbo" and "The Rockford Files", resulted in high-quality, long-successful shows showing "losses" by the studio, are classic examples. Search on "Hollywood Accounting."
You're confusing cash flow with declared income/loss. The shenanigans pulled on shows like "Columbo" and "The Rockford Files", resulted in high-quality, long-successful shows showing "losses" by the studio, are classic examples. Search on "Hollywood Accounting."
Corporations do the same thing via end of year bonuses and dividends. Those things are considered expenses too and can be used to offset income. If Uber is going to get taxed 20% on their excess income for the year or they can give out some bonuses to their employees, incentive bonuses to their drivers, and ramp up their marketing spend, what do you think they'll do?
You can't just declare 0 income. You have to actually spend it to declare 0 income.
You can't just declare 0 income. You have to actually spend it to declare 0 income.
Minor note that dividends are below the net profit line. You can't pay a dividend without profit.
>Uber turned a profit in 2021Q2
Yes, though read this, then do the math.
"Net income attributable to Uber Technologies, Inc. was $1.1 billion, including $272 million in stock-based compensation expense. Net income benefited from unrealized gains of $1.4 billion and $471 million due to the revaluation of Uber’s equity investments in Didi and Aurora, respectively." (Uber 2021Q2)
Yes, though read this, then do the math.
"Net income attributable to Uber Technologies, Inc. was $1.1 billion, including $272 million in stock-based compensation expense. Net income benefited from unrealized gains of $1.4 billion and $471 million due to the revaluation of Uber’s equity investments in Didi and Aurora, respectively." (Uber 2021Q2)
Your citation says they lost money.
You may be looking at "trailing 12 months" -- take a look at the quarterly charts, which do indeed report profits.
They lost over 20 billion dollars and made a meagre profit in one quarter of one year thanks to Uber Eats during the pandemic.
Ah, healthy business.
Ah, healthy business.
So made money on also questionable business on both supply, delivery side. And with actual cost realisation probably also on customer side. Doesn't look too healthy.
> What makes you think that shareholders in Twitter or Uber don't care
that they'll never make a penny?
Who are "they"? Be specific. The shareholders can make a pretty penny while the companies never do. Because they're shareholders, not workers, or customers, or execs, or owners.
> what someone is willing to pay for it", not its actual utility
Pay for what? Please be specific. The service of the company or the value of its share?
You've really answered your own question. The "actual utility" of a share is nothing but it's propensity to go up. Financial markets don't care about anything else. Just don't be the shareholder left holding anything when the music stops.
Who are "they"? Be specific. The shareholders can make a pretty penny while the companies never do. Because they're shareholders, not workers, or customers, or execs, or owners.
> what someone is willing to pay for it", not its actual utility
Pay for what? Please be specific. The service of the company or the value of its share?
You've really answered your own question. The "actual utility" of a share is nothing but it's propensity to go up. Financial markets don't care about anything else. Just don't be the shareholder left holding anything when the music stops.
>Who are "they"? Be specific.
The company.
>The shareholders can make a pretty penny while the companies never do. Because they're shareholders, not workers, or customers, or execs, or owners.
What are you arguing for here? In the first comment the problem seems to be that the company isn't profitable, but in this comment you the problem seems to be the fact that shareholders are making money but the "workers, or customers, or execs, or owners" aren't. Can you lay out your specific claims?
>Pay for what? Please be specific. The service of the company or the value of its share?
The principle applies to all goods/services, but in this case I was talking about the shares in the compayn.
>The "actual utility" of a share is nothing but it's propensity to go up. Financial markets don't care about anything else.
And what do you think that share prices are driven by? Do you think a few men in a smoke filled room arbitrarily set the price, making it go up and up?
The company.
>The shareholders can make a pretty penny while the companies never do. Because they're shareholders, not workers, or customers, or execs, or owners.
What are you arguing for here? In the first comment the problem seems to be that the company isn't profitable, but in this comment you the problem seems to be the fact that shareholders are making money but the "workers, or customers, or execs, or owners" aren't. Can you lay out your specific claims?
>Pay for what? Please be specific. The service of the company or the value of its share?
The principle applies to all goods/services, but in this case I was talking about the shares in the compayn.
>The "actual utility" of a share is nothing but it's propensity to go up. Financial markets don't care about anything else.
And what do you think that share prices are driven by? Do you think a few men in a smoke filled room arbitrarily set the price, making it go up and up?
The way you phrased your opposition made it sound like you think that shareholders care if a company has positive net income. However, the whole point of this discussion is that shareholders have no vested interest in the financials of the company in cases like Uber. There is really no correlation in these companies being more profitable and shareholder wealth. Generally the only money that goes to shareholders from a companies financial performance is dividends anyways, which obviously Uber would never do yet it made people rich.
>The way you phrased your opposition made it sound like you think that shareholders care if a company has positive net income.
Technically that's true, in the sense that at the end of the day, the only thing that matters is what their shares are worth, not how well the company is doing. However, the value that someone else is willing to pay for the shares can be expected to be based on how well the company is expected to do. There are exceptions to this, of course (eg. GME), but for uber it's at least somewhat plausible that their valuations can be justified by the expectation of future earnings. You don't have to agree with this, but a risky investment isn't evidence for "system in which the success or failure of a company is of no relevance to its "value"".
>However, the whole point of this discussion is that shareholders have no vested interest in the financials of the company in cases like Uber. There is really no correlation in these companies being more profitable and shareholder wealth. Generally the only money that goes to shareholders from a companies financial performance is dividends anyways, which obviously Uber would never do yet it made people rich.
The companies are being valued for their future profits.
Technically that's true, in the sense that at the end of the day, the only thing that matters is what their shares are worth, not how well the company is doing. However, the value that someone else is willing to pay for the shares can be expected to be based on how well the company is expected to do. There are exceptions to this, of course (eg. GME), but for uber it's at least somewhat plausible that their valuations can be justified by the expectation of future earnings. You don't have to agree with this, but a risky investment isn't evidence for "system in which the success or failure of a company is of no relevance to its "value"".
>However, the whole point of this discussion is that shareholders have no vested interest in the financials of the company in cases like Uber. There is really no correlation in these companies being more profitable and shareholder wealth. Generally the only money that goes to shareholders from a companies financial performance is dividends anyways, which obviously Uber would never do yet it made people rich.
The companies are being valued for their future profits.
I agree with your first point. I actually figured that we were in agreement here. I was just saying the phrasing of your comment is what triggered the clarifying questions, because I had the same clarifying questions when I first read your comment.
I would have agreed with you on your second statement back in the 90's in regard to companies being valued on their future profits mostly, but that's obviously not true anymore. I think Tesla is the most extreme example of this. You have a car company that has a 200+ p/e ratio and has an order of magnitude higher market cap then many of it competitors that sell more cars. I have heard it all about how they are an energy company or a battery company or a software company, but the reality is shareholders are gambling on Elon, and Tesla because it's popular. Tesla has proven no market that will grow their earnings 100x in the next 10 years that would warrant a risky technical based investment taking into account competitors. Honestly, it's the same as GE saying that in 10 years they will have a nuclear fusion reactor to pump their market cap by 10x putting them in line with Tesla, which is a more plausible scenarios than Tesla actually diminishing their P/E ratio through earnings growth in a meaningful way over that same period of time.
I would have agreed with you on your second statement back in the 90's in regard to companies being valued on their future profits mostly, but that's obviously not true anymore. I think Tesla is the most extreme example of this. You have a car company that has a 200+ p/e ratio and has an order of magnitude higher market cap then many of it competitors that sell more cars. I have heard it all about how they are an energy company or a battery company or a software company, but the reality is shareholders are gambling on Elon, and Tesla because it's popular. Tesla has proven no market that will grow their earnings 100x in the next 10 years that would warrant a risky technical based investment taking into account competitors. Honestly, it's the same as GE saying that in 10 years they will have a nuclear fusion reactor to pump their market cap by 10x putting them in line with Tesla, which is a more plausible scenarios than Tesla actually diminishing their P/E ratio through earnings growth in a meaningful way over that same period of time.
Actually GME is a perfect example of how the future profits expectations keeps stocks grounded in reality, otherwise GME would have kept going up. It was just a few gamblers that put it as high as it went, but ultimately forces brought it back down. Just like gravity, you cannot escape the fundamental forces grounding all objects.
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> What makes you think that shareholders in Twitter or Uber don't care that they'll never make a penny?
Well, do they believe they'll be able to sell their stock for more than they paid it?
Were they caught up in the excitement and bought the stock against better judgement?
Well, do they believe they'll be able to sell their stock for more than they paid it?
Were they caught up in the excitement and bought the stock against better judgement?
I think stakeholders, not shareholders, was intentional. Stakeholders (users, advertisers, whatever) might not be well served by a lack of edit button or whatever, but that’s only very tenuously connected to company value.
Shareholders care that they make their pennies of course. That seems to be (part of) the observation.
(Which as you say isn’t earth shattering but still worth remembering when you start wondering “why the heck is this company worth so much?” Because people think so. That’s all.)
Shareholders care that they make their pennies of course. That seems to be (part of) the observation.
(Which as you say isn’t earth shattering but still worth remembering when you start wondering “why the heck is this company worth so much?” Because people think so. That’s all.)
>Shareholders care that they make their pennies of course. That seems to be (part of) the observation.
I don't get it. The point of a company is to make money for its shareholders. This has been the case forever now, and certainly isn't caused by "financialised logic". I'd be interested to hear what the "rules of traditional business" (which presumably says that the point of a company isn't to make money for its shareholders?) that OP talked about is.
I don't get it. The point of a company is to make money for its shareholders. This has been the case forever now, and certainly isn't caused by "financialised logic". I'd be interested to hear what the "rules of traditional business" (which presumably says that the point of a company isn't to make money for its shareholders?) that OP talked about is.
> The point of a company is to make money for its shareholders
It is from this premise that your other (mis)understandings arise. Returning to the OP question now, what do we mean by "successful"?
It is from this premise that your other (mis)understandings arise. Returning to the OP question now, what do we mean by "successful"?
Here you go;
https://www.youtube.com/watch?v=nGbJYk-x1sc
It took me a while to seek to my mental pointer to this.
Wendy Brown is brilliant. But some caveats to try to encourage people to stay with it; The video is long. It's dry and academic. She's a classic leftie. The "business" under discussion is education.
But hidden within this is one of the most cogent explanations of financialised decorrelation of social and monetary values. (Brown's other writing on political science is also brilliant and worth the effort regardless of your actual personal political position.)
https://www.youtube.com/watch?v=nGbJYk-x1sc
It took me a while to seek to my mental pointer to this.
Wendy Brown is brilliant. But some caveats to try to encourage people to stay with it; The video is long. It's dry and academic. She's a classic leftie. The "business" under discussion is education.
But hidden within this is one of the most cogent explanations of financialised decorrelation of social and monetary values. (Brown's other writing on political science is also brilliant and worth the effort regardless of your actual personal political position.)
[deleted]
> Congratulations. You just discovered "the price of something is what someone is willing to pay for it", not its actual utility.
There's a some truth to this comment, but only some. Your comment also accurately describes a ponzi scheme.
There's a some truth to this comment, but only some. Your comment also accurately describes a ponzi scheme.
So Uber is a Dutch tulip.
This is a brilliant explanation of financialisation.
> To answer this one must ask "What is financialisation?" The short answer is; a system in which the success or failure of a company is of no relevance to its "value".
Nonsense. Granted, with meme stocks, the price of a stock has been decoupled from any underlying notion of value, which is disconcerting (but driven by retail investors/gamblers, not by traditional investors).
But with Uber and many others, it seems reasonable to assume that the investors expect to recoup their money by (ultimately) earning dividends from Uber's successful operation, which is good old traditional finance.
There are two problems left:
1. It is conceivable that some early investors see that no sustainable profits might be possible, but still fund and develop the venture in order to sell it (at a higher valuation) to less sophisticated investors later (that don't see the limitations of the business model so clearly).
2. It is plausible that the entire business model is predicated on the idea of a predatory monopoly, ie driving out competition first and raising prices second.
Those are massive problems that need to be addressed with aggressive regulation, but they are not a consequence of "financialisation".
> Under that system, Uber is successful so long as the financial market says it is.
"The financial market" cannot just arbitrarily "say" what a company is worth (and definitely not in the long run) - there are just too many players.
Nonsense. Granted, with meme stocks, the price of a stock has been decoupled from any underlying notion of value, which is disconcerting (but driven by retail investors/gamblers, not by traditional investors).
But with Uber and many others, it seems reasonable to assume that the investors expect to recoup their money by (ultimately) earning dividends from Uber's successful operation, which is good old traditional finance.
There are two problems left:
1. It is conceivable that some early investors see that no sustainable profits might be possible, but still fund and develop the venture in order to sell it (at a higher valuation) to less sophisticated investors later (that don't see the limitations of the business model so clearly).
2. It is plausible that the entire business model is predicated on the idea of a predatory monopoly, ie driving out competition first and raising prices second.
Those are massive problems that need to be addressed with aggressive regulation, but they are not a consequence of "financialisation".
> Under that system, Uber is successful so long as the financial market says it is.
"The financial market" cannot just arbitrarily "say" what a company is worth (and definitely not in the long run) - there are just too many players.
That’s called speculation.
It’s more like a pyramid scheme: investors require more investors to get a good ROI when profit is irrelevant.
Edit: not=>more
Edit: not=>more
When traveling in India, I foolishly took a cycle rickshaw. It was gross/shameful. A man far less fortunate than I was sweating, working hard, barely getting paid, and breathing horribly polluted New Delhi air while I just sat there.
When Uber started to squeeze its drivers, I again felt just like this. I hated hearing drivers complain about their life problems. I hated doing the math and seeing how little these people were making out of this transaction. I hated feeling like a perpetrator of class division.
The common argument in support of Uber’s poor economics is their superior user experience compared to taxis. However, exploitative industry is a terrible “user experience” for the ethically- or morally-conscious. And that’s just the privileged party’s perspective…
When Uber started to squeeze its drivers, I again felt just like this. I hated hearing drivers complain about their life problems. I hated doing the math and seeing how little these people were making out of this transaction. I hated feeling like a perpetrator of class division.
The common argument in support of Uber’s poor economics is their superior user experience compared to taxis. However, exploitative industry is a terrible “user experience” for the ethically- or morally-conscious. And that’s just the privileged party’s perspective…
I hear what you're saying. A few months ago, a guy, clearly homeless, rang my doorbell and offered to shovel my driveway in exchange for some small amount, I can't remember. It couldn't have been more than ten bucks. I do not need that. I can get it done in about 45 minutes. It felt posh and exploitative. What I realized later is that he was just asking for some dignity. To earn something, to not be a charity case. He wanted to feel like he was offering something worthwhile in exchange.
I've thought about that incident a lot. I too am disgusted by how society is organized. When confronted by my own relative wealth and privilege, I felt gross. But in that exact moment, you can't re-engineer the economy. You have to choose whether or not to be generous while respecting that person's dignity. I can only speak for myself here, but too often I'd rather just not encounter hardship in others at all. This is a bad impulse. The world is a terrible broken place, and it's right to be generous in whatever way someone will accept in that moment.
This reasoning is often used to justify poverty wage jobs--people want to work, so let them--and that's definitely not my take. I think work can impart dignity, there's a certain amount of shitty work that can't be avoided, but you can't feed your children with dignity, so let's pay people a lot more.
I've thought about that incident a lot. I too am disgusted by how society is organized. When confronted by my own relative wealth and privilege, I felt gross. But in that exact moment, you can't re-engineer the economy. You have to choose whether or not to be generous while respecting that person's dignity. I can only speak for myself here, but too often I'd rather just not encounter hardship in others at all. This is a bad impulse. The world is a terrible broken place, and it's right to be generous in whatever way someone will accept in that moment.
This reasoning is often used to justify poverty wage jobs--people want to work, so let them--and that's definitely not my take. I think work can impart dignity, there's a certain amount of shitty work that can't be avoided, but you can't feed your children with dignity, so let's pay people a lot more.
I'm not following this logic -- do you think it would've been better not to take the rickshaw?
You do realise that this man is providing for himself, and perhaps others, by this job?
It seems like your issue was being confronted with the "realities of life" which distressed your sensibilities; and your solution appears to be to hide from these. I dont see this as a moral impulse, but a disgust response.
If you wished to do anything, tip.
You do realise that this man is providing for himself, and perhaps others, by this job?
It seems like your issue was being confronted with the "realities of life" which distressed your sensibilities; and your solution appears to be to hide from these. I dont see this as a moral impulse, but a disgust response.
If you wished to do anything, tip.
Imagine making the same argument for 7 year old chimney sweeps in Victorian England, and the flaw in your argument becomes more obvious.
OP choses not to hire underpaid and overworked labour because it's wrong, even if doing so would provide temporary relief.
OP choses not to hire underpaid and overworked labour because it's wrong, even if doing so would provide temporary relief.
> Imagine making the same argument for 7 year old chimney sweeps in Victorian England, and the flaw in your argument becomes more obvious.
It doesn't make it any more obvious to me. That 7 year old Victorian chimney sweep still has to eat. If society doesn't have the infrastructure to take care of them, then the other alternative is to starve, possibly to death.
Refusing to hire these workers only makes things better if doing so also results in a real pressure to provide said infrastructure. It seems unlikely that would be the case both with the chimney sweep and the rickshaw cyclist (at least in the short term).
It doesn't make it any more obvious to me. That 7 year old Victorian chimney sweep still has to eat. If society doesn't have the infrastructure to take care of them, then the other alternative is to starve, possibly to death.
Refusing to hire these workers only makes things better if doing so also results in a real pressure to provide said infrastructure. It seems unlikely that would be the case both with the chimney sweep and the rickshaw cyclist (at least in the short term).
> That 7 year old Victorian chimney sweep still has to eat. If society doesn't have the infrastructure to take care of them, then the other alternative is to starve, possibly to death.
Yet we no longer have 7 year old chimney sweeps. Refusing to hire one now is one part of the process that changes society so that the missing infrastructure that you mentioned gets provided for future potential 7 year old chimney sweeps.
Yet we no longer have 7 year old chimney sweeps. Refusing to hire one now is one part of the process that changes society so that the missing infrastructure that you mentioned gets provided for future potential 7 year old chimney sweeps.
I dont think refusing to hire chimney sweep children had anything at all to do with the end of child labour. I can't even really comprehend this world view very well, though it is common.
Child labour ended around the time it wasnt needed, as did all phases of economic labour division (slavery, child labour, gendered labour, etc.).
In economic conditions which require poor quality labour, all you can do is decide whether you punish the poor or not. By refusing their labour, you're punishing them -- as much as refusing an oppressed minority work, on the grounds that their oppression exists.
A very bizarre thought, which I can only imagine stems from some misperceived impression of one's own importance, and confusing the emotional instinct to recoil from poverty with the moral impulse to do something about it.
Child labour ended around the time it wasnt needed, as did all phases of economic labour division (slavery, child labour, gendered labour, etc.).
In economic conditions which require poor quality labour, all you can do is decide whether you punish the poor or not. By refusing their labour, you're punishing them -- as much as refusing an oppressed minority work, on the grounds that their oppression exists.
A very bizarre thought, which I can only imagine stems from some misperceived impression of one's own importance, and confusing the emotional instinct to recoil from poverty with the moral impulse to do something about it.
> Child labour ended around the time it wasnt needed
It ended in England in part because of social pressure and subsequent Parliamentary inquiries [0]
> as did all phases of economic labour division (slavery, ...)
If it ended when it was no longer needed, what do you suppose the second bloodiest war in US history [1] was about?
> A very bizarre thought, which I can only imagine stems from some misperceived impression of one's own importance
Alright then, have a great day.
[0] https://www.bl.uk/romantics-and-victorians/articles/child-la... [1] https://en.wikipedia.org/wiki/United_States_military_casualt...
It ended in England in part because of social pressure and subsequent Parliamentary inquiries [0]
> as did all phases of economic labour division (slavery, ...)
If it ended when it was no longer needed, what do you suppose the second bloodiest war in US history [1] was about?
> A very bizarre thought, which I can only imagine stems from some misperceived impression of one's own importance
Alright then, have a great day.
[0] https://www.bl.uk/romantics-and-victorians/articles/child-la... [1] https://en.wikipedia.org/wiki/United_States_military_casualt...
So, slavery has existed for almost all of human history, and ended (yes, with a catalyst) during the height of the industrial revolution (when automation replaced the need for slave labour).
The american civil war wasnt the end of slavery, Britain ended slavery when as the controlling empire of the world, it made it illegal. It did so, in part, because it couldn't compete with slave-states on their export costs, had no significant dependence on slave labour, and was the heart of the new industrialisation which largely obsoleted it anyway.
France, which owned Haiti, did depend on slave labour -- and despite the French revolution which basically said all the "nice political stuff" --- they still couldn't end slavery. Initially they tried, but as soon as they realised Haiti was a cash cow, suddenly freedom became a French idea.
The US civil war was the american manifestation of those new economic conditions.
All of these systems: slavery, child labour, gendered division of labour -- etc. existed for basically all of human history; and still exist for large numbers of people today.
There were political events at the time of their obsolescence which were costly, sure -- as there will inevitably be when economic systems are obsoleted. The US south wasn't going to be able to compete on impoverished slave labour for very long.
I'm not exactly sure how you think history or economics works, but it has nothing to do with some self-righteous middle class people turning their noses up at chimney sweeps.
The american civil war wasnt the end of slavery, Britain ended slavery when as the controlling empire of the world, it made it illegal. It did so, in part, because it couldn't compete with slave-states on their export costs, had no significant dependence on slave labour, and was the heart of the new industrialisation which largely obsoleted it anyway.
France, which owned Haiti, did depend on slave labour -- and despite the French revolution which basically said all the "nice political stuff" --- they still couldn't end slavery. Initially they tried, but as soon as they realised Haiti was a cash cow, suddenly freedom became a French idea.
The US civil war was the american manifestation of those new economic conditions.
All of these systems: slavery, child labour, gendered division of labour -- etc. existed for basically all of human history; and still exist for large numbers of people today.
There were political events at the time of their obsolescence which were costly, sure -- as there will inevitably be when economic systems are obsoleted. The US south wasn't going to be able to compete on impoverished slave labour for very long.
I'm not exactly sure how you think history or economics works, but it has nothing to do with some self-righteous middle class people turning their noses up at chimney sweeps.
I would call that an extraordinary claim.
> Imagine making the same argument for 7 year old chimney sweeps in Victorian England
That's quite an extreme example you got there, but as a former child worker myself I feel qualified to push back. I did hard physical labor at a warehouse at the age of 13. [1] This was a key opportunity in my life. With the money I earned from this hard labor I bought my first computer that helped solidify my computer science career. I could then spend a lot more time [2] on computer contract work, which meant I moved up the class system significantly with my finances.
So whenever I hear of these think of the children arguments, I think back to my own origins and how these protections are also mechanisms for preserving class hierarchy and making sure that children of less well off parents don't make any progress during their earlier years. To force the children to accept the lifestyle and means of their parents as a reality of their own lives.
That said, normalizing full time working instead of school isn't great either. I personally only worked summers (3 months of school break where I'm from) and so working didn't impede my school education. Thus I think better child labor laws would allow working when it doesn't interrupt school work. Unfortunately the child labor laws that I encounter are always blanket statements based on age.
--
[1] The local child working laws didn't allow this back then already. I was lucky enough to be matched with a warehouse manager who didn't care too much about child working laws.
[2] I had already started my computer contracting work before I ever got my first computer. I used public computers to do this work, e.g. a public free internet point at the local hospital. Not ideal and very limited usage time, but when there aren't other options it's great.
That's quite an extreme example you got there, but as a former child worker myself I feel qualified to push back. I did hard physical labor at a warehouse at the age of 13. [1] This was a key opportunity in my life. With the money I earned from this hard labor I bought my first computer that helped solidify my computer science career. I could then spend a lot more time [2] on computer contract work, which meant I moved up the class system significantly with my finances.
So whenever I hear of these think of the children arguments, I think back to my own origins and how these protections are also mechanisms for preserving class hierarchy and making sure that children of less well off parents don't make any progress during their earlier years. To force the children to accept the lifestyle and means of their parents as a reality of their own lives.
That said, normalizing full time working instead of school isn't great either. I personally only worked summers (3 months of school break where I'm from) and so working didn't impede my school education. Thus I think better child labor laws would allow working when it doesn't interrupt school work. Unfortunately the child labor laws that I encounter are always blanket statements based on age.
--
[1] The local child working laws didn't allow this back then already. I was lucky enough to be matched with a warehouse manager who didn't care too much about child working laws.
[2] I had already started my computer contracting work before I ever got my first computer. I used public computers to do this work, e.g. a public free internet point at the local hospital. Not ideal and very limited usage time, but when there aren't other options it's great.
From a certain POV, most great people in tech engaged in a lot of child labour. However, we should be careful with such an argument.
Yes, high walls (like minimum wage, child labour laws, etc.) prevent the most extremely poor from competing with everyone else. Those are probably worth building though, if social welfare programs exist.
The natural tendency of competitive processes is to throw away all values in pursuit of the win; in the end, someone has to set a floor.
Yes, high walls (like minimum wage, child labour laws, etc.) prevent the most extremely poor from competing with everyone else. Those are probably worth building though, if social welfare programs exist.
The natural tendency of competitive processes is to throw away all values in pursuit of the win; in the end, someone has to set a floor.
You think that taxi driver was being paid more fairly? Often they just drove for medallion owners and rented the time. The economics would have been at best same, if not worse since there was probably little oversight since it was a bunch of small cab operators.
I used to live in Latin America and I would avoid hiring shoe-shiner kids in spite of them following me each day. I thought it was sad to see these kids working at such an early age and thought hiring them would be me exploiting them. In hindsight I should’ve just hired them, they need the money. it’s horrible people live in poverty and have to work such jobs, but IMO hiring them helps them more than not hiring them.
I think an additional problem with kids in developing countries is that hiring them (for shoe shining, lawn mowing, ...) gives them an incentive to drop out of school. They might make some extra money in the short term, but lose an education and higher earning potential long term. It's not trivial, certainly for an outsider, to judge what the right course of action is.
No, hiring them to shine your shoes would not have helped, it only perpetuates the system. What is needed is a social change that eliminates the need. Sadly this sometimes only happens when the oppressed party suffers enough to elicit real sympathetic action or in extreme cases an uprising.
As you didn't hire them, presumably your shoes didn't need shining so they were not really performing a necessary function anyway. This suggests that the system continues to exist partly because some people like the idea of paying a pittance to someone to perform a menial job simply because it makes them feel good or superior instead of donating that money to an effort to eliminate the poverty in question.
As you didn't hire them, presumably your shoes didn't need shining so they were not really performing a necessary function anyway. This suggests that the system continues to exist partly because some people like the idea of paying a pittance to someone to perform a menial job simply because it makes them feel good or superior instead of donating that money to an effort to eliminate the poverty in question.
>No, hiring them to shine your shoes would not have helped, it only perpetuates the system. What is needed is a social change that eliminates the need.
While you're right that the system needs to change, giving the shoeshine boy a peso might be the best help that someone in GP's position could have given.
Their life is still terrible, but at least they're not hungry for a night.
>Sadly this sometimes only happens when the oppressed party suffers enough to elicit real sympathetic action or in extreme cases an uprising.
That's really dark, man, and I don't think it's true. Plenty of groups have won their rights without being deliberately ground into the dirt by another section of society.
>This suggests that the system continues to exist partly because some people like the idea of paying a pittance to someone to perform a menial job simply because it makes them feel good or superior
I run a retail business, and much of what we sell is like this. Even for things that have utility (e.g. a washing machine), the price you'd pay at a retail store is often (but not always) significantly higher than the value of the good itself sold on, say, Facebook Marketplace. A "$2000 washing machine" is often just a $600 washing machine plus $1400 worth of making the customer feel special.
You can say this is wrong or wasteful, but it's part of human nature and exists across all cultures.
>donating that money to an effort to eliminate the poverty in question.
Steve Hughes argues against this better than I ever could:
https://www.youtube.com/watch?v=Qm6kl17HH9s
While you're right that the system needs to change, giving the shoeshine boy a peso might be the best help that someone in GP's position could have given.
Their life is still terrible, but at least they're not hungry for a night.
>Sadly this sometimes only happens when the oppressed party suffers enough to elicit real sympathetic action or in extreme cases an uprising.
That's really dark, man, and I don't think it's true. Plenty of groups have won their rights without being deliberately ground into the dirt by another section of society.
>This suggests that the system continues to exist partly because some people like the idea of paying a pittance to someone to perform a menial job simply because it makes them feel good or superior
I run a retail business, and much of what we sell is like this. Even for things that have utility (e.g. a washing machine), the price you'd pay at a retail store is often (but not always) significantly higher than the value of the good itself sold on, say, Facebook Marketplace. A "$2000 washing machine" is often just a $600 washing machine plus $1400 worth of making the customer feel special.
You can say this is wrong or wasteful, but it's part of human nature and exists across all cultures.
>donating that money to an effort to eliminate the poverty in question.
Steve Hughes argues against this better than I ever could:
https://www.youtube.com/watch?v=Qm6kl17HH9s
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If they weren't shining shoes for money, they'd be straight begging or stealing. So what should we do with the homeless who only beg for money? Tell them to get a real job? It doesn't work like this, at least not in countries which are less developed. Here we can't create millions of entry-level jobs for people who mostly don't have any type of formal education overnight.
Seeing kids work is not right by our standards but people have to eat. Luckily I hardly ever see that here. But I see a lot of people that are willing to work, even if the job is unnecessary by your definition: Cleaning windscreens, carrying bags, singing or other artistic presentations, selling candy or water...
I give them money, they are part of this society and most of the time they did not choose this route. I would like to do more but unfortunately my time is very limited.
Seeing kids work is not right by our standards but people have to eat. Luckily I hardly ever see that here. But I see a lot of people that are willing to work, even if the job is unnecessary by your definition: Cleaning windscreens, carrying bags, singing or other artistic presentations, selling candy or water...
I give them money, they are part of this society and most of the time they did not choose this route. I would like to do more but unfortunately my time is very limited.
I have used Uber a lot in Brazil and you can clearly perceive the deindustrialization of the country and the consolidation of large retail chains from the conversations with the drivers.
You get lots of people who had small businesses, sometimes even engineers and economists.
The last one I talked to had had a small machining shop.
You get lots of people who had small businesses, sometimes even engineers and economists.
The last one I talked to had had a small machining shop.
Just make a tip. Problem solved.
The real magic of Uber is that it allows drivers to convert the depreciation of their car into cash at a time and schedule of their own choosing. For the reasons discussed in the story, this may still technically be a net negative in the long term compared to driving a regular cab fulltime, but a) drivers find it far preferable to/cheaper than alternatives like payday loans, and b) many Uber drivers have multiple jobs and are not in a position to drive regular cab shifts.
You are 100% correct. This is the magic
There are people who want to make a positive return on their time + vehicle depreciation. But they are on the open market competing against people who are in a cash crunch and happy to have a net negative return on the same, as long as it temporarily allows them to convert depreciation into cash.
This is why drivers will always lose in the long term. They are racing against each other to the bottom.
I've also had Uber drivers who don't need the money at all - they just like talking to new people and are bored on a Saturday night. This of course drives the price down further. These are often the ones with a very nice car.
As other sibling comments have mentioned, many Uber drivers have no idea that this is what their gig is doing - converting depreciation into cash flow in a net-negative way. Maybe Uber's marketing style to drivers needs to be amended by law?
There are people who want to make a positive return on their time + vehicle depreciation. But they are on the open market competing against people who are in a cash crunch and happy to have a net negative return on the same, as long as it temporarily allows them to convert depreciation into cash.
This is why drivers will always lose in the long term. They are racing against each other to the bottom.
I've also had Uber drivers who don't need the money at all - they just like talking to new people and are bored on a Saturday night. This of course drives the price down further. These are often the ones with a very nice car.
As other sibling comments have mentioned, many Uber drivers have no idea that this is what their gig is doing - converting depreciation into cash flow in a net-negative way. Maybe Uber's marketing style to drivers needs to be amended by law?
That's because depreciation is a paper loss. If you're an average person you're not selling your car for a new one for at least 7-8 years after you buy it. By that time it's worth very little of its original cost anyways. The only actual cost incurred by the driver is repairs and maintenance, which is nowhere near the cost of depreciation on the car. In effect, the depreciation schedule changes, but on the time scales of your average person the net result after 7-8 years of ownership is the same total depreciation. For corporate owners who have to report depreciation as a loss this schedule is not great, but for individuals it's not a real loss.
Mileage driven depreciation is a real loss until the car is fairly old: More miles directly reduces the price you can get selling the used car. Uber won't accept drivers driving old beaters where that curve has flatted out.
According to KBB a 2010 Toyota Prius (just selected as an example) only has a price estimate differential of $3000 between 100k miles and 400k miles. Even if you bump that up to 5k for a newer car, it's still insubstantial compared to the overall depreciation on the car from its new value of ~$25k to a 8-year used value of 3-6k. That 20k extra depreciation is not recognized by individuals but is by corporate owners.
Except for having to change tires, oil and brake pads earlier, and also having to deal with more mechanical issues due to sheer mileage.
Those are all maintenance and repair expenses, which GP mentioned.
I suspect that few Uber drivers have the time or ability to fully plot out depreciation costs, and instead do a simple “tank of gas + X hours = cash”. After all you end up with the same car afterwards, right?
Taking advantage of people who don’t work it out for themselves is despicable at best, highly immoral at worst.
Taking advantage of people who don’t work it out for themselves is despicable at best, highly immoral at worst.
Maybe Uber could be forced to display Total Cost of Ownership numbers for the car (per mile driven), and contrast with the revenue the drivers obtain. Make it fancy and throw in average and marginal cost. The data should be readily available for most cars, from sites such as Edmunds etc.
The missing part of this jigsaw is that not everyone is _simultaneously_ seeking to _temporarily_ convert depreciation into cash. with enough market players, such a microsystem can sustain itself
There could be an equilibrium where players are net positive.
But given the housing shortage, how expensive everything is, and how many people are raising children paycheck to paycheck, I just don't see how we'd be arriving at such an equilibrium in the US.
Maybe in some rich Northern European country.
But given the housing shortage, how expensive everything is, and how many people are raising children paycheck to paycheck, I just don't see how we'd be arriving at such an equilibrium in the US.
Maybe in some rich Northern European country.
Perhaps the society just should make it easier for the destitute to find appropriate means to support themselves?
People act as if the fact that some people who are bored on a Saturday night are ready to give a cheap ride is a problem. It seems like it an absolute good and totally not a problem and should not be “fixed”.
People act as if the fact that some people who are bored on a Saturday night are ready to give a cheap ride is a problem. It seems like it an absolute good and totally not a problem and should not be “fixed”.
But while there are poorer people driving for Uber, etc., the existence of dilettante drivers is very much a problem for those poorer drivers.
It's like special offers in shops; for someone like me who has spare money and plenty of storage space they are great, but for someone genuinely poor they are often unusable either because they don't have the cash at that moment or because they have nowhere to store it.
It's expensive to be poor. See https://wiki.lspace.org/Vimes_Boots_Index
You are right of course that fixing the poverty is the right thing to do.
It's like special offers in shops; for someone like me who has spare money and plenty of storage space they are great, but for someone genuinely poor they are often unusable either because they don't have the cash at that moment or because they have nowhere to store it.
It's expensive to be poor. See https://wiki.lspace.org/Vimes_Boots_Index
You are right of course that fixing the poverty is the right thing to do.
This line of argument reminds me of the news stories encouraging retirees to come back to work during the "labour shortage". The problem isn't that bored people are helping out, it's that by doing so they negatively affect the people that are reliant on carrying out that labour to keep themselves fed and sheltered.
For perspective, try imagining that some well off retired ex-$your_job walks up to your boss and offers to replace you for free, working the same hours because they're bored.
For perspective, try imagining that some well off retired ex-$your_job walks up to your boss and offers to replace you for free, working the same hours because they're bored.
I’m not at all saying bored people should not be allowed to drive for Uber for fun.
I’m saying the marketing to drivers needs to change. Uber pretend it’s some great paying gig and markets hard like this. It deceives people who have no idea how to do depreciation calculations
I’m saying the marketing to drivers needs to change. Uber pretend it’s some great paying gig and markets hard like this. It deceives people who have no idea how to do depreciation calculations
Have you driven a cab before? Do you know for north america at least, the standard model is drivers are independent contractors and rent out the cars or the medallion license from medallion owners? Many medallion owners are not drivers themselves. Taxi companies are generally a collection of licenses, car rental, some branding and advertising and dispatch services. The angry taxi people you see protesting Uber or equivalents are more like the Canadian trucker convoy people who own their trucks than the actual typical poor long haul truck driver who doesn't own their truck.
Also whats worse about the taxi model is you often are paying on a monthly basis to rent the car, so every month you are something like $3000 in the hole and you have to keep on grinding hard before you could break even and then start making money for yourself. It's hard to take a vacation unless you want to take a month long one with no pay, which for most people who are doing the taxi gig, is not financially tenable.
Being a taxi driver SUCKS. At least Uber is an improvement because the fee system is done as you make money and you have way more flexibility as a result.
Everyone is upset that low end relatively unskilled labor pay & life sucks in general, and being upset with Uber is just one facet of it. Amazon warehouse workers & some restaurant workers are another group. In the past the media obsession was walmart workers and immigrant farm workers, which you don't hear about that much anymore but life still sucks for them.
Activists try to shove the responsibility of making the low-end labor life better onto the company that hires them, while ignoring what the real problem is the low-end labor life sucks in general, and if you made amazon and walmart and everyone else that is visible disappear, it's still gonna suck, because the problem isn't those companies per say, it's the entire global situation of being a low end laborer, and it's a situation that is properly covered by government than any specific company.
Governments don't want to pay for it although, especially in America, which is why you see this kind of focus especially in the USA, where they make employers create something approximating universal healthcare, benefits, etc vs collecting it through an equivalent tax and making it a universally provided benefit set. If it was truly a government responsibility, it could go multiple ways, such as reducing the cost of living by not making housing an investment asset and more a consumer good / capital business cost like in Japan and changing food regulations to heavily tax obesogenic & carcinogenic products, so the total national healthcare expenditure of the nation goes down and so on.
Also whats worse about the taxi model is you often are paying on a monthly basis to rent the car, so every month you are something like $3000 in the hole and you have to keep on grinding hard before you could break even and then start making money for yourself. It's hard to take a vacation unless you want to take a month long one with no pay, which for most people who are doing the taxi gig, is not financially tenable.
Being a taxi driver SUCKS. At least Uber is an improvement because the fee system is done as you make money and you have way more flexibility as a result.
Everyone is upset that low end relatively unskilled labor pay & life sucks in general, and being upset with Uber is just one facet of it. Amazon warehouse workers & some restaurant workers are another group. In the past the media obsession was walmart workers and immigrant farm workers, which you don't hear about that much anymore but life still sucks for them.
Activists try to shove the responsibility of making the low-end labor life better onto the company that hires them, while ignoring what the real problem is the low-end labor life sucks in general, and if you made amazon and walmart and everyone else that is visible disappear, it's still gonna suck, because the problem isn't those companies per say, it's the entire global situation of being a low end laborer, and it's a situation that is properly covered by government than any specific company.
Governments don't want to pay for it although, especially in America, which is why you see this kind of focus especially in the USA, where they make employers create something approximating universal healthcare, benefits, etc vs collecting it through an equivalent tax and making it a universally provided benefit set. If it was truly a government responsibility, it could go multiple ways, such as reducing the cost of living by not making housing an investment asset and more a consumer good / capital business cost like in Japan and changing food regulations to heavily tax obesogenic & carcinogenic products, so the total national healthcare expenditure of the nation goes down and so on.
> Being a taxi driver SUCKS. At least Uber is an improvement
I would be curious to hear stories of former cab drivers who chose to drive for Uber instead because they found it an improvement. I don't feel like I've heard any stories like that, but it must be a thing a lot of people have done if you are right it's an improvement, right? I feel like I've only heard stories of cab drivers complaining that Uber has destroyed their business, which is nevertheless still preferable to driving for uber.
Yes, I know some people are locked into driving a cab because of previous locked in investment etc. But some people aren't, if uber is really an improvement we should be able to find lots of people who chose to move from driving a cab to driving for uber?
I would be curious to hear stories of former cab drivers who chose to drive for Uber instead because they found it an improvement. I don't feel like I've heard any stories like that, but it must be a thing a lot of people have done if you are right it's an improvement, right? I feel like I've only heard stories of cab drivers complaining that Uber has destroyed their business, which is nevertheless still preferable to driving for uber.
Yes, I know some people are locked into driving a cab because of previous locked in investment etc. But some people aren't, if uber is really an improvement we should be able to find lots of people who chose to move from driving a cab to driving for uber?
Yes, I think we're actually on the same side of the argument here. TL;DR of what I was trying to say is that Uber may be exploiting drivers, but it's still meaningfully better for them than the alternatives.
> Uber may be exploiting drivers, but it's still meaningfully better for them than the alternatives.
That’s how exploitation works! You take someone who has few/no other options and leverage that fact to get them to agree to an unfair deal.
That’s how exploitation works! You take someone who has few/no other options and leverage that fact to get them to agree to an unfair deal.
It’s more than converting depreciation to cash, it’s borrowing against deferred maintenance. It’s the $800 tires and the $500 tie rod that they will need in a year that they aren’t even thinking about today. I guess they will just have to drive a lot that month to cover it.
I think people drastically overestimate the depreciation from mileage. When you go to sell your car in 15 years the difference between 150k and 300k miles is maybe a couple grand. You're taking about a few cents per hour.
The amount (and cost!) of maintenance to get a car to last 15 years is going to vary significantly based on how much it is driven
I think uber has a rule in my country where the vehicle has to b seven years or newer.
I would be curious to see independent citations of these claims.
This is hardly an original insight: https://www.wsj.com/articles/how-uber-makes-its-drivers-pay-...
And WSJ's survey (above) indicates that many Uber drivers are not actually aware that this is where the money is effectively coming from.
And WSJ's survey (above) indicates that many Uber drivers are not actually aware that this is where the money is effectively coming from.
“ And WSJ's survey (above) indicates that many Uber drivers are not actually aware that this is where the money is effectively coming from”
Which is another way of saying that they don’t understand the economics enough to know they’re accepting a bad deal?
Which is another way of saying that they don’t understand the economics enough to know they’re accepting a bad deal?
Yes, basically. And it's certainly not in Uber's interest to help them understand.
Talk with the driver few times? I never had a Uber driver who said they would rather have a normal job. 500+ rides.
I have several friends and aquaintances who drive for uber (and lyft, etc), who are barely scraping by, and are doing it out of desperation, not because they prefer it to other available jobs that are more "normal".
They are driving for Uber because they can't find/get/keep such a job. Of course everyone driving for uber is doing so because it's the best thing they can find, they wouldn't prefer a job that pays them even less. But the people I know doing it don't love it or prefer it to a "normal" job, they just do it cause it's available and they need to pay the rent.
They are driving for Uber because they can't find/get/keep such a job. Of course everyone driving for uber is doing so because it's the best thing they can find, they wouldn't prefer a job that pays them even less. But the people I know doing it don't love it or prefer it to a "normal" job, they just do it cause it's available and they need to pay the rent.
I have a good friend, ex-Navy submariner, and highly competent industrial technician. He's been driving for Doordash since 2019 now, because he just can't ever make it work with any kind of management in a typical corporate or small-business environment. I'm sure he'd be much more productive as a consultant, in his field of expertise if there were an app for that, but for him, the gig-econonmy, accepting all its down sides, is the preferable way to earn money. I've found it really interesting, that he would accept 2-4x pay reduction, just to be relieved of certain areas of responsibility and accountability.
another Deliverator.
Selection bias…
Survivorship bias, which is a subtype of selection bias, is what I was contemplating along those lines.
https://en.m.wikipedia.org/wiki/Survivorship_bias
Now if I could somehow know whether I have any biases I should be aware of, I’d greatly appreciate that information, Steve.
https://en.m.wikipedia.org/wiki/Survivorship_bias
Now if I could somehow know whether I have any biases I should be aware of, I’d greatly appreciate that information, Steve.
Yup, this selection bias is also survivorship bias.
So non-uber drivers don't want to be uber drivers and uber drivers want to be uber drivers? Or what? There was practically nothing else in common between each driver other than their desire to continue working with Uber as they do now. Where's the bias? 500+ rides (probably significantly more bcs I have two accounts) are large enough sample.
The selection consists solely of current Uber drivers, excluding all drivers who chose to stop and take an alternative job. As well, drivers in the act of driving are less likely to admit that they do not want to be doing what they are currently doing, due to cognitive dissonance.
Additionally, there likely exists a framing bias along with a false dichotomy, if they were asked whether they’d rather Uber or take a “normal job”. There are of course plenty of alternatives that are not “normal jobs” (whatever that is exactly).
Anyways, anecdotally, I’ve had drivers who were not happy with Uber and continued only out of lack of current options or plain inertia.
Additionally, there likely exists a framing bias along with a false dichotomy, if they were asked whether they’d rather Uber or take a “normal job”. There are of course plenty of alternatives that are not “normal jobs” (whatever that is exactly).
Anyways, anecdotally, I’ve had drivers who were not happy with Uber and continued only out of lack of current options or plain inertia.
As someone whose virtual in-game company has grown so much that I lost track how much things cost and how much money I am actually making. I would argue it is very common. This is in a game where there are already turn key spreadsheets that tell you how much profit you are theoretically getting per day. The problem is that your "pipelines" are long and you may end up stock piling stuff for two weeks buying at one price and selling another.
I doubt most Uber drivers are whipping out a spreadsheet and pondering for 3 hours before they commit to the job. That is how much time I spend before I build a new base and lots of those were canceled before they got build.
I doubt most Uber drivers are whipping out a spreadsheet and pondering for 3 hours before they commit to the job. That is how much time I spend before I build a new base and lots of those were canceled before they got build.
Uber as a business is a massive loss, but consumers still _chose_ Uber over taxis because the process of getting and riding in a car is a million times more transparent than a taxi ever was. You can see what car and what driver are picking you up, what route they're going to take, and how much it will cost. Taxis failed because they failed to modernize.
One of the nice things about ridesharing is that, at least in some cities, taxis have started modernizing. I've been using Curb in Philadelphia, and it's significantly cheaper when Uber/Lyft have surge pricing. Otherwise, it's usually a little more expensive, but the drivers are more reliable so it's sometimes worth paying a few extra bucks.
I've had Uber drivers accept my ride, then drive away from me, refuse calls, and not cancel the ride (expecting me to do it, so they avoid getting dinged, I guess) on multiple occasions. One time I ended up walking to my destination and saw the driver cancelled it after 2 hours. Uber, of course, doesn't have a way to report this behavior.
The UI still isn't as perfect as Uber's, but it's good enough for me. Pretty similar to Uber without any bells or whistles. It wouldn't be convenient for me to hail taxis without an app.
I've had Uber drivers accept my ride, then drive away from me, refuse calls, and not cancel the ride (expecting me to do it, so they avoid getting dinged, I guess) on multiple occasions. One time I ended up walking to my destination and saw the driver cancelled it after 2 hours. Uber, of course, doesn't have a way to report this behavior.
The UI still isn't as perfect as Uber's, but it's good enough for me. Pretty similar to Uber without any bells or whistles. It wouldn't be convenient for me to hail taxis without an app.
I have to tell the taxi driver to turn the damn meter on every time without fail. It's ridiculous. I don't know how someone more vulnerable could possibly use taxis since it's basically attempted robbery every time you enter one. Hopefully Uber/Lift win and Taxis die. For the sake of the disabled, women and children at least. I wouldn't even mind if Uber cost more.
What's the scam there? Do they not turn on the meter and then beg for payment at the end of the ride?
Yep. They'll say "it's $80" and to which you need to ask "where does it say that on the meter?".
At that point it's an intimidation game as the Taxi driver will blatantly demand money for the ride they didn't have the meter on for. It's not fun. It's also happened almost every time i've taken a Taxi in the past 5 years. I think the people who still take Taxis are the vulnerable who don't have phones so they get scammed badly :(
At that point it's an intimidation game as the Taxi driver will blatantly demand money for the ride they didn't have the meter on for. It's not fun. It's also happened almost every time i've taken a Taxi in the past 5 years. I think the people who still take Taxis are the vulnerable who don't have phones so they get scammed badly :(
Exactly, and when you're an American and you're in a cab in America that's the best case scenario -- you can probably avoid paying it with enough effort.
When this happened to me in Vietnam is was a pretty ugly situation. I'm not new to world travel, but the driver had the whole con down to an art (dubious toll fees, relationships with local law enforcement, etc) This was just before Uber came to Vietnam and I would never use a local taxi driver again regardless of cost.
Everyone in this thread who defends the airport cabbie cartels of the world must have not actually spent a lot of time around them.
When this happened to me in Vietnam is was a pretty ugly situation. I'm not new to world travel, but the driver had the whole con down to an art (dubious toll fees, relationships with local law enforcement, etc) This was just before Uber came to Vietnam and I would never use a local taxi driver again regardless of cost.
Everyone in this thread who defends the airport cabbie cartels of the world must have not actually spent a lot of time around them.
> beg for payment
Not every rider is confident enough to flat out refuse to pay, walk away with 'lol your problem now', and to deal with the more aggressive kind of drivers.
Not every rider is confident enough to flat out refuse to pay, walk away with 'lol your problem now', and to deal with the more aggressive kind of drivers.
They'll say the meter isn't working and offer a fixed rate that's usually way higher than what you should be paying. It's illegal in many jurisdictions for precisely this reason.
But then you have places where some rides e.g. rides to the airport, have automatic fixed rates and you don't know if the driver is scamming you or not.
It's remarkable how bad many businesses and government regulators are at asking the question "Is this behavior indistinguishable from a scam?"
It's remarkable how bad many businesses and government regulators are at asking the question "Is this behavior indistinguishable from a scam?"
100%. Will never catch cabs in NYC because they never comply with any local regulation (e.g. none of them were wearing masks at the height of the pandemic), they always overcharge, they often discriminate against you as a customer based on what you look like/where you're going/etc, they always expect 20-25% tip, even if they've done a terrible service, etc.
And you have nothing you can do to fight any of this, other than to just... not use them.
So that's what I do, and instead use an Uber.
And you have nothing you can do to fight any of this, other than to just... not use them.
So that's what I do, and instead use an Uber.
I take yellow cabs in NYC all the time and if the service isn't perfect, I don't tip a cent. If they drive well, are polite, and don't try to scam me (the biggest one), I'll tip a couple dollars.
If they try to tell me the meter's broken I just plainly say "I know you're lying, you can turn it on or I'll get out." Then I'll pay them what it says on the meter, to the cent, and say have a nice day. What are they going to do, assault me for not tipping?
A 25% tip for a bad cab ride is a joke, I don't really care what they "expect". This is NYC, there are literally thousands of available jobs in this city right now. If someone isn't pleased with their wage as a taxi driver, I'd happily point them towards any of the dozens of businesses in my neighbourhood with a Hiring sign in the window.
If they try to tell me the meter's broken I just plainly say "I know you're lying, you can turn it on or I'll get out." Then I'll pay them what it says on the meter, to the cent, and say have a nice day. What are they going to do, assault me for not tipping?
A 25% tip for a bad cab ride is a joke, I don't really care what they "expect". This is NYC, there are literally thousands of available jobs in this city right now. If someone isn't pleased with their wage as a taxi driver, I'd happily point them towards any of the dozens of businesses in my neighbourhood with a Hiring sign in the window.
In the UK the black cabs and other taxi services have rolled out similar apps. Uber prices have gone up to the point that a cab is often enough the same price if not cheaper. Never mind that black cab drivers know optimal routes by heart while Uber drivers are often just following phone navigation and getting lost.
Im glad to hear Uber/Lyft/Ride Sharing App pricing has matched that of cabs in London. In New York it was close (at least pre-COVID). I took would always opt for a yellow cab at those crazy prices (making sure that the meter was on, unless I negotiated a price). I'm not sure what cabbies in New York must pass but Definitely in places like London where cabbies must pass but hearing a little about "the knowledge" [1] for London cab licensing, and experiencing their true professionalism, I only wish that a similar test could be administered to anyone professionally driving any vehicle in the city must take.
[1] https://www.thesun.co.uk/news/3307245/the-knowledge-taxi-tes...
[1] https://www.thesun.co.uk/news/3307245/the-knowledge-taxi-tes...
Uber losing money on a ride should be expected to make it a more attractive option than close equivalents that do not lose money.
Exactly. If they were opaque, uncomfortable, and free, they would still "win" (by losing.)
Here in India a common problem with Uber is that drivers will first ask you about your destination and then decide if it is worth their effort to pick you up from your current location and then drop you at the destination. For most parts this leads to a situation where you have to book 5 or 6 rides till you get a driver who is willing to pick you up. And there are tons of places where no driver will pick or drop you. I am from New Delhi, but I have seen the same issue in most Indian cities with uber or ola service.
Drivers will not cancel a ride and expect you to take a hit in terms of cancellation charges. Now if you have a lot of time, you can wait for the 10-15 or so minutes it takes for uber to cancel your ride and then restart the process. I have spent upto 1 hour to not get a ride on many occasions and this was for a ride to a location where uber drivers will not object to normally and for a pick up location that is also within the areas blessed by uber drivers.
In addition to this, there is a growing list of scams specific to uber and its local competitor ola. e.g. a driver will come near you, start a trip and then drive around w/o you for a while and end the trip. Or the driver will ask you to cancel the ride and pay the money in cash. In some cases the driver will only take a trip if you are paying in cash, as that directly goes into their wallets. Uber and Ola have put in a system where they ask you to enter a OTP for some of the rides, which fixes some of the scams.
Here uber has to use a registered commercial vehicle driven by a driver with a commercial driving license, so there is no concept of someone driving an uber part time. When they started, they subsidized rides heavily and encouraged drivers to buy cars on loans. Now uber has withdrawn all the subsidies and most drivers are stuck with a car and a loan that they
In many cities, uber also gives you a service where traditional metered auto rikshaws (they are metered like taxis, but cheaper 3 wheeler vehicles similar to tuk tuks). These typically seem to work better as you get the auto rikshaw at the regular metered price w/o having to deal with auto rikshaw drivers who would want extra fees over the meter if you hailed them using traditional methods.
For my airport transfers, I have defaulted to the local taxi service that had served me well before uber and which continues to give prompt service. They are more expensive, but they are also stress free. And a missed flight is just not worth the headache for the Uber experience.
Uber has killed taxi services in many cities and the replacement has been worse. Now uber drivers and taxi drivers are both complaining of the low pay and bad business.
Drivers will not cancel a ride and expect you to take a hit in terms of cancellation charges. Now if you have a lot of time, you can wait for the 10-15 or so minutes it takes for uber to cancel your ride and then restart the process. I have spent upto 1 hour to not get a ride on many occasions and this was for a ride to a location where uber drivers will not object to normally and for a pick up location that is also within the areas blessed by uber drivers.
In addition to this, there is a growing list of scams specific to uber and its local competitor ola. e.g. a driver will come near you, start a trip and then drive around w/o you for a while and end the trip. Or the driver will ask you to cancel the ride and pay the money in cash. In some cases the driver will only take a trip if you are paying in cash, as that directly goes into their wallets. Uber and Ola have put in a system where they ask you to enter a OTP for some of the rides, which fixes some of the scams.
Here uber has to use a registered commercial vehicle driven by a driver with a commercial driving license, so there is no concept of someone driving an uber part time. When they started, they subsidized rides heavily and encouraged drivers to buy cars on loans. Now uber has withdrawn all the subsidies and most drivers are stuck with a car and a loan that they
In many cities, uber also gives you a service where traditional metered auto rikshaws (they are metered like taxis, but cheaper 3 wheeler vehicles similar to tuk tuks). These typically seem to work better as you get the auto rikshaw at the regular metered price w/o having to deal with auto rikshaw drivers who would want extra fees over the meter if you hailed them using traditional methods.
For my airport transfers, I have defaulted to the local taxi service that had served me well before uber and which continues to give prompt service. They are more expensive, but they are also stress free. And a missed flight is just not worth the headache for the Uber experience.
Uber has killed taxi services in many cities and the replacement has been worse. Now uber drivers and taxi drivers are both complaining of the low pay and bad business.
I don't know if this is true in all cases. In some countries, Taxi apps showed up before Uber, a few of them enabling negotiating the cost beforehand, and Uber still managed to capture a lot of the market.
Sure, those apps might have been a reaction to Uber in other countries, but the fact they were widespread (and sometimes with a great UX) didn't prevent Uber from arriving late but pretty much winning.
Sure, those apps might have been a reaction to Uber in other countries, but the fact they were widespread (and sometimes with a great UX) didn't prevent Uber from arriving late but pretty much winning.
Taxi services in my city already had apps that showed the price and car location, along with online payment well before Uber was allowed to operate.
Uber bought it's way into the market here by losing more money than any reasonable business would be able to afford. Now it's more expensive than the services it displaced and still losing money hand over fist.
Uber bought it's way into the market here by losing more money than any reasonable business would be able to afford. Now it's more expensive than the services it displaced and still losing money hand over fist.
This software aspect is entirely orthogonal to the "drivers use their own car" aspect. In other countries, you have good old taxi companies providing the experience you describe.
Do people actually claim Uber is a successful business?
In the UK, none of the original companies that built the railroads still exist. Many of the railway companies were never particularly profitable and the railway boom was a stock market bubble. Lots of them were fraudulent or poorly run. Eventually they all either went out of business, or amalgamated and ultimately got nationalised.
Nevertheless, they proved the railway as a viable technology and built infrastructure that still exists and is used today (Ship of Theseus caveat). Were they successful as profit making businesses? Ultimately no. However society benefited greatly in the long run from their existence, even though we've all forgotten their names.
I can't see Uber as a company surviving the next few decades, but without them the taxi experience would likely still be as horrific as it was in the 90s.
In the UK, none of the original companies that built the railroads still exist. Many of the railway companies were never particularly profitable and the railway boom was a stock market bubble. Lots of them were fraudulent or poorly run. Eventually they all either went out of business, or amalgamated and ultimately got nationalised.
Nevertheless, they proved the railway as a viable technology and built infrastructure that still exists and is used today (Ship of Theseus caveat). Were they successful as profit making businesses? Ultimately no. However society benefited greatly in the long run from their existence, even though we've all forgotten their names.
I can't see Uber as a company surviving the next few decades, but without them the taxi experience would likely still be as horrific as it was in the 90s.
An interesting perspective, but I think the key difference is that Uber has built no lasting infrastructure. I do agree that Uber has improved the taxi/private vehicle transport industry in essentially every market it entered. In London (UK) for example, taxis were previously mainly used by tourists, the rich, or the very drunk. Uber changed this completely, making it accessible for many more people.
If Uber disappears I’m not sure what a follow-up company can build on top of? The only lasting impact I can see is that Uber popularised “gig work” so that future companies and even Lyft, DoorDash, etc. had an easier time to roll out the same model.
If Uber disappears I’m not sure what a follow-up company can build on top of? The only lasting impact I can see is that Uber popularised “gig work” so that future companies and even Lyft, DoorDash, etc. had an easier time to roll out the same model.
The infrastructure they built is:
1. the concept of ride sharing as it works today. If they disappear tomorrow a follow up company can build a more or less identical service based on that invention.
2. A large digital infrastructure. All those servers and the knowledge required to run it is about as unlikely to just "disappear" as the railway tracks in England.
I suppose it's hard to see what the future will hold, but at least in London there's Gett and Freenow, and a lot of the traditional players like Addy Lee now have apps of varying quality. As you point out, stuff like Deliveroo might not have existed without Uber.
Not quite the same as metal rails running up the country I agree, but I think in hindsight Uber will be remembered as a significant innovation. Think Napster.
Not quite the same as metal rails running up the country I agree, but I think in hindsight Uber will be remembered as a significant innovation. Think Napster.
Well if I’m thinking Napster then first to mind is Spotify and Apple music, both of which are profitable and here to stay. But even if Uber gets mismanaged and driven into the ground Lyft or one of the other competitors would take over with more or less the same product.
> Uber has built no lasting infrastructure
They wrote themselves into the California constitution, now that's infrastructure for any business to envy!
They wrote themselves into the California constitution, now that's infrastructure for any business to envy!
uber let the cat out of the bag… this model might not exist forever, but maybe it’ll last long enough for someone else to capitalize on its ghost
Uber’s model is basically the same as the cab/taxi model, but likely much more efficient due to software. That business model (hiring private drivers for point to point public transit) has been profitably working for over a century now.
Also keep in mind Taxis, unlike buses and trains, are usually not even subsidized, which lends even more credence to the business model.
Also keep in mind Taxis, unlike buses and trains, are usually not even subsidized, which lends even more credence to the business model.
"basically the same" yet uber did have a transformative effect, in some countries taxi systems were very hostile and disorganized, and uber has raised the standard significantly... they've created a certain expectation
My point is that if Taxi’s were profitable essentially being a worse Uber, then it makes the argument that Uber is in a bubble industry seem ludicrous, which it is.
ah ok, thanks for clarifying... I guess the bubble might be the pricing model? it has been artificially too cheap to support the labor for a while. Early on I was commuting to work for only a couple dollars more than public transportation.
If Uber can’t turn a profit then how did cab companies (essentially Uber but with a worse product, no software efficiencies, and bad UX) turn a profit for over a century?
Because in a lot of locations, they had regulatory capture that ensure their success.
Even if you subscribe to this belief that somehow artificial conditions allow for taxis to exist, you have to start wondering maybe they have a good reason to exist since taxis are pretty much universally available everywhere you go. Even in their previous crappy form, they were ubiquitous like cockroaches. If literally every city in the world adopted this form of regulatory capture, maybe Uber et al can benefit from the same thing, except with a better non-cockroach like UX.
There is also good kind of regulatory capture. Like controlling supply ofc, annoying during night when bars closes, but also on other hand ensuring that someone is there to provide service at night during weekday. Or even capping the prices. And then having enforcement by cancelling licenses if proven wrongdoings where to happen.
System could function... And it did in some countries, apart from supply issues at most popular times. It was bit expensive, but driver's time or vehicles aren't cheap in expensive to live countries...
System could function... And it did in some countries, apart from supply issues at most popular times. It was bit expensive, but driver's time or vehicles aren't cheap in expensive to live countries...
> I can't see Uber as a company surviving the next few decades, but without them the taxi experience would likely still be as horrific as it was in the 90s.
100% this. Uber made "Uber" a solved problem, so spinning off clones became cheap and easy.
100% this. Uber made "Uber" a solved problem, so spinning off clones became cheap and easy.
Usually markets consolidate, rather than fragment, especially in the software industry. We actually had more Uber competitors early on (Sidecar et al) and that died off. Most uber competitors are now just regional ones, with geographically segregated markets.
Surviving a “few decades” sounds like a successful business in anyones eyes.
> Oracle founder Larry Ellison noted that Uber’s app was less sophisticated than something his cat could have developed.
That is the equivalent of "I could build that in a weekend" that you often hear from inexperienced devs that have no idea what they're talking about.
In fact, we had the perfect experiment in Austin, TX, where a couple years ago the city essentially voted to kick out Uber and Lyft (required fingerprinting of drivers) before the state legislature passed a law overruling the city. There were lots of competitors that flooded in to fill the vacuum. They ranged from "barely if even functional" to "OK". I was even a big fan of Ride Austin because it was a nonprofit, but I'm not going to pretend its apps were anywhere close to Uber and Lyft's.
That is the equivalent of "I could build that in a weekend" that you often hear from inexperienced devs that have no idea what they're talking about.
In fact, we had the perfect experiment in Austin, TX, where a couple years ago the city essentially voted to kick out Uber and Lyft (required fingerprinting of drivers) before the state legislature passed a law overruling the city. There were lots of competitors that flooded in to fill the vacuum. They ranged from "barely if even functional" to "OK". I was even a big fan of Ride Austin because it was a nonprofit, but I'm not going to pretend its apps were anywhere close to Uber and Lyft's.
Uber used to have a much simpler app 6-7 years ago. I worked on a product that copied uber and gave whitelabelled uber like apps to taxi operators and other services that required similar functionality.
But even then, we found that the app was hiding a lot of complexity under that simple interface. The uber app of 2022 shows a UI that is a least 10x as complex and hides even more behind that interface.
Something as simple as how uber is able to show you car location in near real time on the screen requires a fair bit of engineering effort to get right at Uber's level of scale.
But even then, we found that the app was hiding a lot of complexity under that simple interface. The uber app of 2022 shows a UI that is a least 10x as complex and hides even more behind that interface.
Something as simple as how uber is able to show you car location in near real time on the screen requires a fair bit of engineering effort to get right at Uber's level of scale.
Didn't I read somewhere that all of Uber's complexity is in making it work correctly in every jurisdiction that it works in?
That's a link I'd be willing to spend some time reading. Please?
By the measure of growth and market penetration, Uber has been successful.
By the measure of establishing a globally operating business that employs thousands of people, Uber has been successful (mostly).
By the measure of establishing a profitable business we might argue that they likely will never achieve that.
If you look at their SEA competitors who already earlier on introduced financial debt as a tool to create merchant stickiness (to phrase it kindly), their fall from grace was much harsher.
By the measure of establishing a globally operating business that employs thousands of people, Uber has been successful (mostly).
By the measure of establishing a profitable business we might argue that they likely will never achieve that.
If you look at their SEA competitors who already earlier on introduced financial debt as a tool to create merchant stickiness (to phrase it kindly), their fall from grace was much harsher.
> employs thousands of people
You made me wonder how many people are actually employed by Uber. I thought thousands sounded like a lot for what they do.
First Google result - 29,000 employees. That blows me away. It sounds like Uber itself is ready for disruption.
You made me wonder how many people are actually employed by Uber. I thought thousands sounded like a lot for what they do.
First Google result - 29,000 employees. That blows me away. It sounds like Uber itself is ready for disruption.
I've been trying to figure this out for the last few months..
Uber isn't THAT complicated on the technical side. The driver/rider matchmaking is simpler than algorithmic trading code I've worked on, and I'm happy to take 1% on a trade in that space, yet Uber and Lyft are helping themselves to 30% or more.
I was personally thinking it'd be great to offer an Uber competitor that aims for complete transparency with no frills, like the Craigslist to Uber's Amazon/Ebay. Maybe charge $5 + 5% for matchmaking the rider with the driver if they use the app for payment, or free if the passenger pays with cash. I've heard a lot of horror stories about Lyft charging riders surge prices while paying normal prices to drivers, various apps stealing tips, etc.
I haven't tossed my MacBook into my carpet bag and run back to my hometown just yet, though, since I assumed there must be some good reason this hasn't already been done. Maybe it costs Uber $500 to background check and onboard a driver, or they eat 10% in credit card chargebacks, or something else I don't understand since I'm just a code monkey
Uber isn't THAT complicated on the technical side. The driver/rider matchmaking is simpler than algorithmic trading code I've worked on, and I'm happy to take 1% on a trade in that space, yet Uber and Lyft are helping themselves to 30% or more.
I was personally thinking it'd be great to offer an Uber competitor that aims for complete transparency with no frills, like the Craigslist to Uber's Amazon/Ebay. Maybe charge $5 + 5% for matchmaking the rider with the driver if they use the app for payment, or free if the passenger pays with cash. I've heard a lot of horror stories about Lyft charging riders surge prices while paying normal prices to drivers, various apps stealing tips, etc.
I haven't tossed my MacBook into my carpet bag and run back to my hometown just yet, though, since I assumed there must be some good reason this hasn't already been done. Maybe it costs Uber $500 to background check and onboard a driver, or they eat 10% in credit card chargebacks, or something else I don't understand since I'm just a code monkey
The complexity is not the depth of the problem, but rather the scope. Matchmaking — while complicated — is a very small subset of the domain. Pricing, demand forecasting, routing, payments, etc. are all equally important on the pax side. Similarly, there are many teams needed to support the overall ecosystem for things like driver onboarding, compliance, and support.
Also comparing a 1% return to a 30% charge isn’t exactly fair. Fixed costs like background checks aside, chargebacks, fraud, insurance, support claims, incentives among others warrant the markup
Also comparing a 1% return to a 30% charge isn’t exactly fair. Fixed costs like background checks aside, chargebacks, fraud, insurance, support claims, incentives among others warrant the markup
I could be completely clueless here, but it looks to me like a lot of the Lyft/Uber/etc cut is going to:
1) Overpaid, wasteful software engineering (no offense to us). Like someone here said, there are a lot of cheap software solutions out there to handle this stuff
2) R&D into crazy moonshot ideas
3) Advertising
4) Making a completely opaque techno-dystopian game out of people's livelihoods in order to manipulate drivers into working harder for less money and riders into paying less up front and as much as possible in the long run
If I'm right, I'd ideally like to completely destroy this market for good. Fragment it into a separate crappy home-made app for each city that you find out about via a poster on the wall in the airport when you land. I'm hoping that with enough transparency and flexibility, riders and drivers would keep each other in check and come to a happy and sustainable middle ground without making any VCs rich
(Or maybe Uber/Lyft are operating on a level of efficiency that would make my half-baked idea look like a joke. Ain't nobody disrupting Amazon or Apple from their basement any time soon)
1) Overpaid, wasteful software engineering (no offense to us). Like someone here said, there are a lot of cheap software solutions out there to handle this stuff
2) R&D into crazy moonshot ideas
3) Advertising
4) Making a completely opaque techno-dystopian game out of people's livelihoods in order to manipulate drivers into working harder for less money and riders into paying less up front and as much as possible in the long run
If I'm right, I'd ideally like to completely destroy this market for good. Fragment it into a separate crappy home-made app for each city that you find out about via a poster on the wall in the airport when you land. I'm hoping that with enough transparency and flexibility, riders and drivers would keep each other in check and come to a happy and sustainable middle ground without making any VCs rich
(Or maybe Uber/Lyft are operating on a level of efficiency that would make my half-baked idea look like a joke. Ain't nobody disrupting Amazon or Apple from their basement any time soon)
> 2) R&D into crazy moonshot ideas
Self-driving cars is not such a moonshot at this point, and indeed may be the only way they reach profitability (still a while off, though, and Lidars need to come down in price)
Self-driving cars is not such a moonshot at this point, and indeed may be the only way they reach profitability (still a while off, though, and Lidars need to come down in price)
The one thing that might make it harder to figure out the scale is that literally every market (city, state, country) has different regulations and that is not simple to manage.
Regulations that they, at least initially, mostly ignored until they started to become banned in many jurisdictions.
You wouldn’t be the first. You can buy software and set up a ride sharing service very quickly. EverTransit is one, but there are others as well.
Uber is being disrupted by for example Bolt, which is their frugal Estonian competitor. An example close to me is that Uber essentially already lost the Swedish taxi market. They had a couple of years as the the top dog making everyone install an app but due to the huge overhead got undercut.
This is a market with a completely unregulated taxi sector as long as you follow the base regulations. Maybe sometimes a bit archaic but I could finance a car and start driving within a month.
From what I've heard the only way to make a profit is to be a business owning about 50 cars which are staffed 24/7 and on top owning your own service workshops. It's extremely cutthroat.
This is a market with a completely unregulated taxi sector as long as you follow the base regulations. Maybe sometimes a bit archaic but I could finance a car and start driving within a month.
From what I've heard the only way to make a profit is to be a business owning about 50 cars which are staffed 24/7 and on top owning your own service workshops. It's extremely cutthroat.
> An example close to me is that Uber essentially already lost the Swedish taxi market.
One thing that happened in Sweden though is that every single large taxi company made their own app with a big nice button for "I want a car, here, now", connected payment methods, and real-time tracking of the car you ordered.
So for me as a consumer, I can either press the button in a taxi app, and typically get a nice Mercedes or similar, with taxi plates, with a licensed taxi driver, properly insured, connected to a real taxi company with customer service representatives that I can call if anything goes wrong.
Or, I can press the button in Uber, pay the same money, but get a dude in his Toyota. Oh, and if the dude doesn't like me as a customer, he can downvote me, which results in me getting worse service in the future.
Say what you want, but at least the Swedish taxi companies out-competed Uber fair and square, instead of either giving up, or resorting to shitty political games to get Uber banned.
One thing that happened in Sweden though is that every single large taxi company made their own app with a big nice button for "I want a car, here, now", connected payment methods, and real-time tracking of the car you ordered.
So for me as a consumer, I can either press the button in a taxi app, and typically get a nice Mercedes or similar, with taxi plates, with a licensed taxi driver, properly insured, connected to a real taxi company with customer service representatives that I can call if anything goes wrong.
Or, I can press the button in Uber, pay the same money, but get a dude in his Toyota. Oh, and if the dude doesn't like me as a customer, he can downvote me, which results in me getting worse service in the future.
Say what you want, but at least the Swedish taxi companies out-competed Uber fair and square, instead of either giving up, or resorting to shitty political games to get Uber banned.
> So for me as a consumer, I can either press the button in a taxi app, and typically get a nice Mercedes or similar, with taxi plates, with a licensed taxi driver, properly insured, connected to a real taxi company with customer service representatives that I can call
if anything goes wrong.
> Or, I can press the button in Uber, pay the same money, but get a dude in his Toyota. Oh, and if the dude doesn't like me as a customer, he can downvote me, which results in me getting worse service in the future.
Just to be precise, the dude in a Toyota will also be a licensed driver with taxi plates with their stuff in order, although exactly to the limit of the legal requirements.
They've just realized that in general very few customers care if the car is a new Mercedes or a new Kia hybrid. The only thing which matters is the cost at the time of pressing the button.
> Or, I can press the button in Uber, pay the same money, but get a dude in his Toyota. Oh, and if the dude doesn't like me as a customer, he can downvote me, which results in me getting worse service in the future.
Just to be precise, the dude in a Toyota will also be a licensed driver with taxi plates with their stuff in order, although exactly to the limit of the legal requirements.
They've just realized that in general very few customers care if the car is a new Mercedes or a new Kia hybrid. The only thing which matters is the cost at the time of pressing the button.
Yeah if you do the math you end up realizing you need to run the cars like airlines run planes - damn near continuously. Idle time is non paid time, and you need to keep everything moving.
The real advantage of self driving taxis isn’t going to be the self driving, it’s going to be the 24 hour/day shifts they can pull.
The real advantage of self driving taxis isn’t going to be the self driving, it’s going to be the 24 hour/day shifts they can pull.
That doesn't really work for taxis. No matter how much you want to distribute rides across the whole day, no discount is going to be able to get people to commute to work at midnight - most of your rides will happen around 9am and 5pm. So many taxis will have to spend a good chunk of the day idle. With self-driving taxis, at least you're not paying human drivers for some of this idle time (which Uber doesn't either AFAIK, but traditional taxis do).
This is in contrast to air travel, where with the right discounts you can get people to fly at inconvenient times of day.
This is in contrast to air travel, where with the right discounts you can get people to fly at inconvenient times of day.
I think most of rides by volume will be around weekend and special holidays. But even then limited 2h-4h slots, around bar opening and closing times. Having enough supply for these peaks will be impossible to make work.
When Uber and Lyft left Austin briefly to protest the driver background check requirement, it took no time at all for a bunch of alternatives to pop up.
What are some? (Not doubting, just curious)
In Russia and some other countries there are cheaper competitors. In Phuket (circa 5 years ago) there were way worse replacements. Thailand had managed to keep Uber out of the tourist areas for many years with their local taxi cartel.
In Russia and some other countries there are cheaper competitors. In Phuket (circa 5 years ago) there were way worse replacements. Thailand had managed to keep Uber out of the tourist areas for many years with their local taxi cartel.
Uber has always struck me as something of an engineer's sandbox. They hire too many engineers who build (and re-build) over-engineered solutions, and who are paid a lot. They have thousands of microservices for example.
> By the measure of establishing a profitable business we might argue that they likely will never achieve that.
A "profitable business" was what we'd call a business, back in the day. Companies weren't able to last 5-10 years of losses.
A "profitable business" was what we'd call a business, back in the day. Companies weren't able to last 5-10 years of losses.
I would argue that they only survived their post IPO valuation because stock markets have been artificially propped up.
Interestingly only 25% of shareholders are retail vs 75% institutional.
>> Uber was not pursuing more liberal entry and pricing rules but working to effectively nullify any form of governmental oversight. This meant eliminating the public’s right to establish standards for market competition, safety, insurance, driver licensing, vehicle maintenance, or obligations to provide services to all people and neighborhoods in a city.
Former cab driver here. I was astonished and disgusted by exactly this set of issues when Uber emerged. Taxi drivers had to take tests, undergo frequent safety checks, random stops. We had to take calls in all neighborhoods while on shift. And driving was a full time job. There was no surge pricing. Meanwhile, when Uber came out, I remember everyone in the general public hating on taxis as being too expensive, or dirty or old fashioned or something. People didn't understand what they were trading away, or that they were only temporarily getting something for nothing.
Pre-Uber, (and pre smart phone) I had the idea of building an SMS based service that would distribute pickup requests to drivers who paid a small fee for it. The trouble was, that would have been illegal, because it ran afoul of decades of regulation around how calls were fairly dispatched and who could dispatch them. Uber just came and broke all the laws for consumer protection and got away with it, through a combination of threats and bribery of local officials.
Former cab driver here. I was astonished and disgusted by exactly this set of issues when Uber emerged. Taxi drivers had to take tests, undergo frequent safety checks, random stops. We had to take calls in all neighborhoods while on shift. And driving was a full time job. There was no surge pricing. Meanwhile, when Uber came out, I remember everyone in the general public hating on taxis as being too expensive, or dirty or old fashioned or something. People didn't understand what they were trading away, or that they were only temporarily getting something for nothing.
Pre-Uber, (and pre smart phone) I had the idea of building an SMS based service that would distribute pickup requests to drivers who paid a small fee for it. The trouble was, that would have been illegal, because it ran afoul of decades of regulation around how calls were fairly dispatched and who could dispatch them. Uber just came and broke all the laws for consumer protection and got away with it, through a combination of threats and bribery of local officials.
Only in hacker news do you find people who think the taxi industry is some bastion of freedom and some poor victim of Uber.
Does no one know how the taxi industry works and the insane levels of corruption involved? Most taxi drivers start their shift IN DEBT, every single shift. They owe the taxi company $100 at the beginning of their shift to rent the taxi and then have to work to pay off this debt every shift. Once they have earned it they can keep whatever money they earn. If they need to stop working in the middle of the shift, they are net negative.
They need to pay for their own gas, they need to clean the taxi, and if someone pukes in their car they have to clean it themselves.
There is no vacation pay, they have no freedom at all.
Most Uber drivers are happy. That’s a fact. I dare you to ask your next driver. I just took 2 Ubers today and they were happy. My second driver told me he felt lucky because he had Uber to fall back on during the pandemic. You get a small number of professional drivers who want to destroy uber and journalists that want to as well so you get completely slanted articles like this. Somehow Lyft is the hero and Uber is the bad guy, when both do exactly the same things.
The simple fact is Uber provides a great service and most drivers are happy. In terms of investment, post-IPO it has been largely dead money but the idea is never going away.
Taxi companies are not the heros here. They were even more predatory than anything claimed here about Uber which are mostly twists or flat out lies.
Does no one know how the taxi industry works and the insane levels of corruption involved? Most taxi drivers start their shift IN DEBT, every single shift. They owe the taxi company $100 at the beginning of their shift to rent the taxi and then have to work to pay off this debt every shift. Once they have earned it they can keep whatever money they earn. If they need to stop working in the middle of the shift, they are net negative.
They need to pay for their own gas, they need to clean the taxi, and if someone pukes in their car they have to clean it themselves.
There is no vacation pay, they have no freedom at all.
Most Uber drivers are happy. That’s a fact. I dare you to ask your next driver. I just took 2 Ubers today and they were happy. My second driver told me he felt lucky because he had Uber to fall back on during the pandemic. You get a small number of professional drivers who want to destroy uber and journalists that want to as well so you get completely slanted articles like this. Somehow Lyft is the hero and Uber is the bad guy, when both do exactly the same things.
The simple fact is Uber provides a great service and most drivers are happy. In terms of investment, post-IPO it has been largely dead money but the idea is never going away.
Taxi companies are not the heros here. They were even more predatory than anything claimed here about Uber which are mostly twists or flat out lies.
I haven't seen many people defending the cab industry, which is clearly broken in many markets, including mine. I get that you hate cab companies. I do, too.
However, I'm just not sure that I like Uber any better. Most of the issues you describe with taxi drivers apply to Uber drivers as well.
As for your happiness metric, I'm not so sure about what you call facts. Asking your driver isn't going to provide useful data.
One type of dysfunctional business just got replaced with another.
However, I'm just not sure that I like Uber any better. Most of the issues you describe with taxi drivers apply to Uber drivers as well.
As for your happiness metric, I'm not so sure about what you call facts. Asking your driver isn't going to provide useful data.
One type of dysfunctional business just got replaced with another.
The vast majority of Uber drivers are part time by choice. You don’t have that option with taxi driving. One driver I had would wake up early and drive people to the airport before work and that helped him pay off his car sooner. Uber is extremely flexible and the engagement model isn’t predatory. You make money from your first trip and everything is clearly spelled out. You can even work for Lyft and Uber at the same time.
Flexibility is the key for most drivers. Is every driver happy? No. Is every google software engineer happy? No. Some would accuse google of being predatory but just because some people say that doesn’t make it real. Go ask most of the drivers and you will see that it’s a part time job to them and for what it is it’s fine. They don’t look to it like some career and they shouldn’t.
Flexibility is the key for most drivers. Is every driver happy? No. Is every google software engineer happy? No. Some would accuse google of being predatory but just because some people say that doesn’t make it real. Go ask most of the drivers and you will see that it’s a part time job to them and for what it is it’s fine. They don’t look to it like some career and they shouldn’t.
I wonder if the Uber drivers aren't lying, so they get better ratings. Would seem logical, after all making customer feel bad might affect their rating and in future their income. So I would call the unreliable source in context...
Uber and Lyft definitely expanded the market though. I went from taking cabs very rarely to using them as part of the normal fabric of city life.
Of all the SV bubbles, I feel Uber actually delivers incredible social value.
In what way? Having read several of the comments here from various angles, I can't imagine what you mean.
Having existed pre and post Uber, in my country (Australia), here are my thoughts:
Ordering an Uber is far, far quicker and easier than getting a taxi.
Getting an Uber is still far cheaper. In the old days, if you were traveling after 10pm, you’d very often be charged up to $10 from before you’d even closed the door.
That lead to taxis feeling like luxury vehicles. Catching an Uber seems so mundane by comparison.
Ordering an Uber is far, far quicker and easier than getting a taxi.
Getting an Uber is still far cheaper. In the old days, if you were traveling after 10pm, you’d very often be charged up to $10 from before you’d even closed the door.
That lead to taxis feeling like luxury vehicles. Catching an Uber seems so mundane by comparison.
(2019) - This is the first in a series of three articles from the end of 2019
Yeah, I'm pretty sure they did actually have a small operating profit Q421.
They didn’t. They only had a “profit” once you backed out over a dozen expenses - including stock based compensation.
Indeed, their burn rate seems to be improving:
https://www.macrotrends.net/stocks/charts/UBER/uber-technolo...
We'll see if it keeps up, I guess.
https://www.macrotrends.net/stocks/charts/UBER/uber-technolo...
We'll see if it keeps up, I guess.
Like many people here, I share the negative sentiment towards yellow taxis. It's simply a sordid experience. Arguing with the drivers to not get figuratively (and actually on one occasion in NYC) robbed, trying to convince drivers that where you're going is worth their time, the rudeness you endure, the list is just endless...
As long as taxi drivers resist any improvements to their behavior, companies like Uber will pop up to serve those who can pay for it. I, for one, am fortunate enough that I can pay for it and would continue to use Uber over taxis even if it costs 2x. I cannot overstate how much I hate taxis.
The biggest success of Uber, for me, has been that they raised the bar and showed everyone that this experience can be better.
As long as taxi drivers resist any improvements to their behavior, companies like Uber will pop up to serve those who can pay for it. I, for one, am fortunate enough that I can pay for it and would continue to use Uber over taxis even if it costs 2x. I cannot overstate how much I hate taxis.
The biggest success of Uber, for me, has been that they raised the bar and showed everyone that this experience can be better.
I can't disagree with most of that, but honestly in non-major cities the experience of getting an Uber is just like 10x nicer than the experience of getting a cab. If nothing else they made things way more convenient.
Forget the economics for a minute . Uber Lyft changed the way we pay for rides and rate drivers. Uber used online payment and GPS to create a simple app that works. I no longer have to worry about payment since I prepay. Cars are owned by the individual so they are cleaner inside. I can summon one from a distance and I can pinpoint the exact pickup Spot. I once called a taxi dispatcher and I felt berated. It's the user experience, probably something mr. Oracle should look into.
All of which have been replicated by my local taxi app
The main driver for the ascension of Uber is that everybody hates taxis and taxi drivers. I don't care if it's more expensive or not, I don't want to deal ever again with taxi drivers that are not accountable for their bad service.
I always thought Uber Pool was their main advantage over traditional cabs that couldnt coordinate sharing rides with multiple users. It was an actual productivity gain, like the article complains about them not having.
I remember getting across SF for 3 bucks. I think it only shut down because of covid, so if they restart the program it could make them more interesting than paying for the whole route.
I remember getting across SF for 3 bucks. I think it only shut down because of covid, so if they restart the program it could make them more interesting than paying for the whole route.
Wow this brought back some memories! Its interesting thinking back to a time when riding in a Prius with 3 other strangers seemed perfectly normal haha.
Version without broken images: https://www.promarket.org/2019/11/20/the-uber-bubble-why-is-...
In NYC Uber has struck an agreement with the city to allow taxi cabs on its app as a service provider.
NYC (and other cities) have begun to use Curb (an Uber/Lyft like app for local taxis) but I've found it to be far worse than Uber and often even using Curb, traveling in or to any borough that isn't Manhattan is always a frustrating experience - I often have to give directions to the driver. Far from the frictionless experience that Uber does provide and ensure.
Uber resisted this for a long time in favor of bulldozing over local taxi companies to make their platform dominant and a near monopoly but I hope Uber ends up as a generalized service that any independent driver or taxi company can use in their own fleet.
NYC (and other cities) have begun to use Curb (an Uber/Lyft like app for local taxis) but I've found it to be far worse than Uber and often even using Curb, traveling in or to any borough that isn't Manhattan is always a frustrating experience - I often have to give directions to the driver. Far from the frictionless experience that Uber does provide and ensure.
Uber resisted this for a long time in favor of bulldozing over local taxi companies to make their platform dominant and a near monopoly but I hope Uber ends up as a generalized service that any independent driver or taxi company can use in their own fleet.
Anecdotally, the only time I ever tried taking a taxi, the driver immediately tried to scam me by charging $40 for a trip that really should have been $20 at max. At least with Uber/Lyft, you know the exact price going in.
It depends, in South Africa Uber basically created the personal taxi market all by itself, prior to Uber very very few people utilised personal taxi's. The big selling point being safety with car and driver being vetted.
Edit: Without a doubt many of my friends and family would have never have stepped foot in a personal taxi in their lives prior to the advent of Uber.
Edit: Without a doubt many of my friends and family would have never have stepped foot in a personal taxi in their lives prior to the advent of Uber.
You’re right but I’m not sure it’s going to last. Also in SA having spent a year out of the country. The condition of the cars is worrying. I think many of the drivers initially bought/financed new cars and now that they’re out of service plan they don’t prioritize maintaining them at the same level.
All the complains in this thread seem like they can be solved by Uber easily, mainly by allowing drivers to set their price by themselves.
Taxies in my country are so bad, it feels like you are asking them for a favor by using their service, not to mention they pick and choose if they wanna take you or no based on how profitable for them it is.
Taxies in my country are so bad, it feels like you are asking them for a favor by using their service, not to mention they pick and choose if they wanna take you or no based on how profitable for them it is.
That defeats the selling point of Uber, you don’t just get a ride in one tap knowing how much you’ll end up paying anymore, unless you’re cool paying whatever the driver feels like they should be paid. Maybe I’m misunderstanding the idea though.
I think the idea is you’d put up your trip and what you’re willing to pay, and drivers would “bid” on it (the app may do a bunch of this automatically for you, the driver could set rates etc) and then match you with the “best” offer.
You enter A to B, you choose the driver based on what you wanna pay.
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Feels to me like there's some pretty big leaps being made in the assertions. Just one example:
>Taxi demand is sociologically bipolar; 35 percent of users have incomes over $100,000 and 55 percent have incomes under $40,000. Thus, on Saturday night wealthier people out for a night on the town compete for service with night shift workers who do not have transit options.
Huge non-sequitur. It seems to be a reasonable assumption that high-income people will use rideshare for nights out, but how do we know night shift workers do not have other transit options? Or that night shift workers use rideshare/taxis at all? I think even for wealthy people it would be pretty crazy to rely on a taxi as their default commute option on a consistent basis, it is just way too expensive.
>Taxi demand is sociologically bipolar; 35 percent of users have incomes over $100,000 and 55 percent have incomes under $40,000. Thus, on Saturday night wealthier people out for a night on the town compete for service with night shift workers who do not have transit options.
Huge non-sequitur. It seems to be a reasonable assumption that high-income people will use rideshare for nights out, but how do we know night shift workers do not have other transit options? Or that night shift workers use rideshare/taxis at all? I think even for wealthy people it would be pretty crazy to rely on a taxi as their default commute option on a consistent basis, it is just way too expensive.
My younger son had a job before he had his license. We spent around $300-$400 a month on Uber for him. That was still cheaper than a used car + insurance for an 18 year old male. My son is a big dude and we couldn’t buy him a little beater. Heck my parents paid $500/month on me in 1991 for a $10K low end Ford + car insurance.
If my old Ford with 150K+ miles got to the point where it wasn’t worth getting fixed, I wouldn’t buy another car. I did without a car for a year when I gave my car to my older son who doesn’t live with us. I work remotely. When I needed to go some place local, I would take Uber often. I rented a car for a weekend every three months to go home to see my parents,
I had groceries delivered. Admittedly we did have one car. But my wife was usually busy during the day. I see no purpose for having a car just to sit in the garage most of the time. Uber is cheaper.
If my old Ford with 150K+ miles got to the point where it wasn’t worth getting fixed, I wouldn’t buy another car. I did without a car for a year when I gave my car to my older son who doesn’t live with us. I work remotely. When I needed to go some place local, I would take Uber often. I rented a car for a weekend every three months to go home to see my parents,
I had groceries delivered. Admittedly we did have one car. But my wife was usually busy during the day. I see no purpose for having a car just to sit in the garage most of the time. Uber is cheaper.
About the same time that Uber launched I tried to launch a similar startup except that it was purely a dispatch service. Our plan was not to have any cars, but rather to just provide centralized dispatch for cab companies. The economics were win-win for everyone but we couldn't get a single cab company to sign on with us because each one was happy with its little fiefdom that was blissfully free of competition. The result was universally terrible UX. So regardless of whether or not Uber is actually better than what it displaced IMHO it's a net win simply for having displaced the old ossified cab companies. Maybe Uber will be swept away and replaced with something better, maybe it won't, but at least now we have a shot.
For those of you interested in parts 2 and 3 there's links to all three parts here: https://braveneweurope.com/tag/hubert-horan
>"Uber is actually a higher cost/less efficient producer of urban car services than the taxi companies it has driven out of business; individual Uber drivers with limited capital cannot acquire, finance, maintain and insure vehicles more economically than Yellow Cab"
Ironically enough Uber recently announced a partnership with yellow cabs in NYC whereby you can order taxis via the Uber app[1].
[1] https://www.nytimes.com/2022/03/24/business/uber-new-york-ta...
Ironically enough Uber recently announced a partnership with yellow cabs in NYC whereby you can order taxis via the Uber app[1].
[1] https://www.nytimes.com/2022/03/24/business/uber-new-york-ta...
They did. You can also order them via Curb. Yellow cabs in NYC are often much less expensive than Uber. A recent trip I took via cab cost $29 plus tip. Uber wanted $76 plus tip for the same trip. It wasn't raining and there was no major event going on I was aware of. I hailed a cab in under a minute.
I don't disagree with many of the points argued in this article (and the subsequent two articles).
An interesting piece of anecdotal evidence, I recently had a conversation with a Yellow Cab (or similar) driver in NYC who switched back to a cab from Uber. He pays, if I recall correctly, $900 per week to the taxi company and after that is able to keep all wages and tips. His $900 is owed regardless of the amount of fares he receives. Despite this, he still felt this was a better deal than Uber after doing both. So it doesn't appear that the cab cartel is some sort of myth, as the author seems to imply.
An interesting piece of anecdotal evidence, I recently had a conversation with a Yellow Cab (or similar) driver in NYC who switched back to a cab from Uber. He pays, if I recall correctly, $900 per week to the taxi company and after that is able to keep all wages and tips. His $900 is owed regardless of the amount of fares he receives. Despite this, he still felt this was a better deal than Uber after doing both. So it doesn't appear that the cab cartel is some sort of myth, as the author seems to imply.
I worked on the long term forecasting team as engineering support. Uber is laughably unprofitable. They spend thousands of dollars per rider signup and way, way more per driver signup due to all of the perks.
I worked there for a year and vowed never to work for a big tech company again. Sold my shares right as it was announced they got stung in the UK. It's a dying company.
Won't say much more than that. I've been harassed a few times now for talking about it.
I worked there for a year and vowed never to work for a big tech company again. Sold my shares right as it was announced they got stung in the UK. It's a dying company.
Won't say much more than that. I've been harassed a few times now for talking about it.
Uber has mostly been a disaster for me personally. Of the 6 times I've attempted to use the service for either travel or food delivery, 4 times I failed to get a driver on time even though I live in the DFW metro area. I've never EVER had that happen with Doordash. They've screwed up my order or missed picking up product but they never straight up just made me wait for 2.5 hours before giving up.
Here is an issue I do not see anyone else mentioning.
There is no way to contact them for unusual problems. You either have the chatbot solve your issue or you are f**ed.
In my city, for some reason there is a location that is wrongly labeled as the railway station. There is nothing there, just residential blocks. Yet when searching, this option is always ahead of the real railway station. Triped me up several times already.
There is no way to contact them for unusual problems. You either have the chatbot solve your issue or you are f**ed.
In my city, for some reason there is a location that is wrongly labeled as the railway station. There is nothing there, just residential blocks. Yet when searching, this option is always ahead of the real railway station. Triped me up several times already.
Why are there so many competitors in the delivery/taxi type services, but in the short term rental industry Airbnb seems to be mostly unchallenged?
I would've expected to see a lot of VC money being thrown there as well, but I'm only seeing Airbnb raising their fees and actually making a profit.
I would've expected to see a lot of VC money being thrown there as well, but I'm only seeing Airbnb raising their fees and actually making a profit.
The history of AirBnB is very different in term of the market it entered.
1. Taxies had government enforced monopolies. Vacation rentals had practically 0 regulation.
2. The vacation rental market that already undergone a VC backed "freemarket" consolidation into a single global provider. HomeAway owned effectively everything with VRBO/VacationRentals.com/bedandbreakfast.com/abritel/stayz, etc. With "kept opposition" like flipkey and the ever present craiglist to prevent anti-trust.
----
So Taxi services have gone through these stages during Uber's life.
1. Inefficient government enforced monopoly and resulting near universally hated service
2. Defacto de-regulation (via effective non-enforcement)
3. Provider proliferation and price/economics discovery << We are still somewhere around here and step 4.
4. Market consolidation
----
Whereas AirBnB entered a market that was already at step 4.
4. Market Consolidation (HomeAway was still actively buying players that weren't flipkey during Airbnb's ascent and thus preventing proliferation.)
5. Opened new markets for urban rentals forced the larger consolidated industry players to support the same (which they did, and that makes a big difference in proliferation.)
6. Follow-on effect by driving hotel construction and driving long-term rentals up << We are here.
----
It's the difference between breaking up terrible government monopolies (Uber) and AirBnB dominating and expanding into an unregulated industry that already had large and relatively nimble players.
If anything Brian Sharples and the board at HomeAway quite obviously shot themselves in the foot moving too slowly due to "innovators dilemma" around subscription vs demand pricing (and other concerns) and they left an avenue of attack open for Airbnb to get sufficient momentum w/ urban properties to steal their customer base (the homeowners) using the demand side as a cudgel.
1. Taxies had government enforced monopolies. Vacation rentals had practically 0 regulation.
2. The vacation rental market that already undergone a VC backed "freemarket" consolidation into a single global provider. HomeAway owned effectively everything with VRBO/VacationRentals.com/bedandbreakfast.com/abritel/stayz, etc. With "kept opposition" like flipkey and the ever present craiglist to prevent anti-trust.
----
So Taxi services have gone through these stages during Uber's life.
1. Inefficient government enforced monopoly and resulting near universally hated service
2. Defacto de-regulation (via effective non-enforcement)
3. Provider proliferation and price/economics discovery << We are still somewhere around here and step 4.
4. Market consolidation
----
Whereas AirBnB entered a market that was already at step 4.
4. Market Consolidation (HomeAway was still actively buying players that weren't flipkey during Airbnb's ascent and thus preventing proliferation.)
5. Opened new markets for urban rentals forced the larger consolidated industry players to support the same (which they did, and that makes a big difference in proliferation.)
6. Follow-on effect by driving hotel construction and driving long-term rentals up << We are here.
----
It's the difference between breaking up terrible government monopolies (Uber) and AirBnB dominating and expanding into an unregulated industry that already had large and relatively nimble players.
If anything Brian Sharples and the board at HomeAway quite obviously shot themselves in the foot moving too slowly due to "innovators dilemma" around subscription vs demand pricing (and other concerns) and they left an avenue of attack open for Airbnb to get sufficient momentum w/ urban properties to steal their customer base (the homeowners) using the demand side as a cudgel.
> So Taxi services have gone through these stages ... Defacto de-regulation (via effective non-enforcement)
Could you talk a bit more about that part? I'm glad that Uber exists, but I don't understand how they got around the "government enforced monopoly" you mentioned. Why didn't the local taxi companies go to their city government and get Uber shut down as soon as Uber starting operating in their city? Wouldn't the city government be far more receptive to the local taxi company than to an upstart 1000 miles away? Did Uber spend a fortune to fight this city by city in court? If someone told me Uber's business plan 13 years ago, I would have said it'd be shut down instantly by the local regulators.
Could you talk a bit more about that part? I'm glad that Uber exists, but I don't understand how they got around the "government enforced monopoly" you mentioned. Why didn't the local taxi companies go to their city government and get Uber shut down as soon as Uber starting operating in their city? Wouldn't the city government be far more receptive to the local taxi company than to an upstart 1000 miles away? Did Uber spend a fortune to fight this city by city in court? If someone told me Uber's business plan 13 years ago, I would have said it'd be shut down instantly by the local regulators.
That's a whole long post and what approach was taken varied from place to place, google "uber greyball" to see how uber prevented enforcement attempts... but really it came down to mass civil disobedience by drivers and riders to not comply with local taxi laws that brought about political change.
For example, in some cities like Austin, TX when Lyft first came to town (at effectively the same time as Uber) their interface showed the fare as technically an optional donation and Lyft guaranteed the driver reimbursement.
Austin was one of the few places in the US that for a short period successfully stopped use of lyft and uber but the city was over ruled by the state.
For example, in some cities like Austin, TX when Lyft first came to town (at effectively the same time as Uber) their interface showed the fare as technically an optional donation and Lyft guaranteed the driver reimbursement.
Austin was one of the few places in the US that for a short period successfully stopped use of lyft and uber but the city was over ruled by the state.
Because when you book a car or ask for food to be delivered of it does not happen you just cancel the transaction and book another one, perhaps on another app. There is not much risk associated to this transaction and this favour the apparition of « competitors » doing the exact same thing.
When you are renting a flat in another town, or country, sometimes weeks or months in advance, the risk is much higher. If upon arrival you discover you have been scammed it has a much higher impact than a delayed meal. This favour a single actor that you can trust (however bad is Airbnb, image what it would like if you had to trust a local actor in a country that you have never been, acting without respecting the regulations…).
This makes the dynamics of those two types of marketplace completely different.
When you are renting a flat in another town, or country, sometimes weeks or months in advance, the risk is much higher. If upon arrival you discover you have been scammed it has a much higher impact than a delayed meal. This favour a single actor that you can trust (however bad is Airbnb, image what it would like if you had to trust a local actor in a country that you have never been, acting without respecting the regulations…).
This makes the dynamics of those two types of marketplace completely different.
Because if a food delivery company messes up I’m out dinner. An Uber competitor messes up in our a ride or have an uncomfortable half hour.
But an Airbnb competitor messes up and maybe I have lice or worse. So the brand is worth more in that case.
And they’re constrained on both ends by hotels also.
But an Airbnb competitor messes up and maybe I have lice or worse. So the brand is worth more in that case.
And they’re constrained on both ends by hotels also.
I very rarely see Airbnb that's any better than what I can find on booking and it's more expensive. Not a huge sample size, but that was true in London, Paris, Berlin and few Polish cities.
At least for Tahoe, VRBO and AirBnB have similar selection and interfaces.
Isn’t booking.com up there as well in that field?
I see VRBO (Vacation Rentals by Owner) ads frequently.
They also expatriate profits from economies, and are probably using international tax minimisation methods.
> They also expatriate profits from economies
All non-local trade does this.
> probably using international tax minimisation methods.
All companies and individuals make some effort to minimize their tax liabilities.
All non-local trade does this.
> probably using international tax minimisation methods.
All companies and individuals make some effort to minimize their tax liabilities.
Most non local trade which expropriates profits is exchanging goods or fintech. Uber is providing a service which almost exclusively before this was a semi or wholly regulated utility function, largely operated by onshore companies and often driver collectives.
Philosophically I suspect we don't agree about tax, or utility functions or Uber. If you think it's a normal company I don't think you read the article. It's not.
Philosophically I suspect we don't agree about tax, or utility functions or Uber. If you think it's a normal company I don't think you read the article. It's not.
Why isn't it illegal to disrupt a market by undercutting the competition in a long-term structural way?
What makes it worse is that money is pumped into it like a ponzi scheme (first investors cash, last investors are left with the bubble), which should be illegal in itself.
What makes it worse is that money is pumped into it like a ponzi scheme (first investors cash, last investors are left with the bubble), which should be illegal in itself.
According to https://en.wikipedia.org/wiki/Dumping_(pricing_policy), it only seems to be banned if you're doing it as a country.
>What makes it worse is that money is pumped into it like a ponzi scheme (first investors cash, last investors are left with the bubble), which should be illegal in itself.
IANAL, but part of what makes a ponzi scheme illegal is that there's deception involved (ie. you're taking money for investors and saying that you'll use it to invest in the business, but really you're paying out yourself/other investors). There's nothing illegal about starting a crappy business, paying yourself and/or others (either through salaries or selling your shares), as long you're transparent about it and go through the proper channels (eg. board approval).
>What makes it worse is that money is pumped into it like a ponzi scheme (first investors cash, last investors are left with the bubble), which should be illegal in itself.
IANAL, but part of what makes a ponzi scheme illegal is that there's deception involved (ie. you're taking money for investors and saying that you'll use it to invest in the business, but really you're paying out yourself/other investors). There's nothing illegal about starting a crappy business, paying yourself and/or others (either through salaries or selling your shares), as long you're transparent about it and go through the proper channels (eg. board approval).
> IANAL, but part of what makes a ponzi scheme illegal is that there's deception involved (ie. you're taking money for investors and saying that you'll use it to invest in the business, but really you're paying out yourself/other investors).
You're taking investor money, and inflate the bubble. And you prevent the bubble from popping by using the investor money to subsidize rides. Part of the deception is that the true price of a ride is higher in reality.
You're taking investor money, and inflate the bubble. And you prevent the bubble from popping by using the investor money to subsidize rides. Part of the deception is that the true price of a ride is higher in reality.
>You're taking investor money, and inflate the bubble.
What counts as "inflating the bubble"? Are you just referring to share prices going up? Taking investor money and spending it on advertising arguably counts as "inflating the bubble" as well. Should that be banned as well?
>And you prevent the bubble from popping by using the investor money to subsidize rides. Part of the deception is that the true price of a ride is higher in reality.
It seems plausible that consumers were deceived about "the truce price of a ride", but it seems hard to believe that uber investors didn't know.
What counts as "inflating the bubble"? Are you just referring to share prices going up? Taking investor money and spending it on advertising arguably counts as "inflating the bubble" as well. Should that be banned as well?
>And you prevent the bubble from popping by using the investor money to subsidize rides. Part of the deception is that the true price of a ride is higher in reality.
It seems plausible that consumers were deceived about "the truce price of a ride", but it seems hard to believe that uber investors didn't know.
> Why isn't it illegal to disrupt a market by undercutting the competition in a long-term structural way?
Because you can actually do what the competitor does for cheaper. It sounds like you’re arguing against companies being more efficient than others, which is strange.
If you’re saying companies shouldn’t be able to operate at a loss while competitors don’t, you’re arguing against companies that invest in improvements as well, which is also strange.
How would you structure the law in a way that allows better companies who invest in more efficient systems to win?
Because you can actually do what the competitor does for cheaper. It sounds like you’re arguing against companies being more efficient than others, which is strange.
If you’re saying companies shouldn’t be able to operate at a loss while competitors don’t, you’re arguing against companies that invest in improvements as well, which is also strange.
How would you structure the law in a way that allows better companies who invest in more efficient systems to win?
It's perfectly possible to back out the expenses that go into future improvements and ask if a company is selling a product at a loss.
I haven't looked at the data lately, but not that long ago except in a few of the most established markets uber was paying drivers more than they were charging customers. This should be a violation of dumping laws-- but the laws are not enforced against large and highly aggressive entities.
I haven't looked at the data lately, but not that long ago except in a few of the most established markets uber was paying drivers more than they were charging customers. This should be a violation of dumping laws-- but the laws are not enforced against large and highly aggressive entities.
How would you go about enforcing the alternative? Force companies to charge the same as the their competitors? And how would you evaluate if the undercut is sustainable or not?
This legislation already exists. Predatory underpricing has been a known problem for century, and is already built into antitrust laws.
The thing is that it's not generally illegal in its own right - it just forms a component of a potential antitrust case case which could result in the breakup of a company in conjunction with other anti-competitive or monopolistic behaviour.
But the precedent is there. A company destroying its competition by operating at a loss and surviving entirely by virtue of external capital injection surely falls at the very least under the spirit if not the letter of antitrust laws.
The thing is that it's not generally illegal in its own right - it just forms a component of a potential antitrust case case which could result in the breakup of a company in conjunction with other anti-competitive or monopolistic behaviour.
But the precedent is there. A company destroying its competition by operating at a loss and surviving entirely by virtue of external capital injection surely falls at the very least under the spirit if not the letter of antitrust laws.
Show the numbers. Your incentive programs can't be more than your profits in a single market. That is the price you charge must be higher than the price it takes to pay for what you provide. Some things could be ignored in calculation like capital investments, operating cost and development costs.
It isn't about Uber at all though is it?
The entire SV model is basically Uber. i.e. Can you VC fund something loss making long enough so that it corners the market somehow / gains some other crushing advantage.
Unfortunately everyone and their dog is focused on the first part on that strategy. 9 times out of 10 no natural crushing advantage shows up so the SaaS gets under pressure and raises prices and then proceeds to circle the drain.
Crucially thought that isn't an indictement of the model. For good ideas lose money then win big is a valid strategy. Just needs a crystal ball
The entire SV model is basically Uber. i.e. Can you VC fund something loss making long enough so that it corners the market somehow / gains some other crushing advantage.
Unfortunately everyone and their dog is focused on the first part on that strategy. 9 times out of 10 no natural crushing advantage shows up so the SaaS gets under pressure and raises prices and then proceeds to circle the drain.
Crucially thought that isn't an indictement of the model. For good ideas lose money then win big is a valid strategy. Just needs a crystal ball
> Can you VC fund something loss making long enough so that it corners the market somehow / gains some other crushing advantage.
This is Uber's model. This is not every VC-funded company's model.
Google was a money-loser for quite some time, but each additional search gave positive returns. There's just so much other fixed-cost overhead that you really need to expand the business massively so that you can "make it up in volume". This is the most common "tech startup" model - very high startup and fixed cost which takes years to build a large enough customer base to overcome.
As far as I understand it, Uber for many years lost more money with each additional trip. This is the "selling $10 bills for $5" model. Which certainly lets you grow your market and hope for a future where you have pricing power and can raise prices. This is your "crushing advantage" model.
This is Uber's model. This is not every VC-funded company's model.
Google was a money-loser for quite some time, but each additional search gave positive returns. There's just so much other fixed-cost overhead that you really need to expand the business massively so that you can "make it up in volume". This is the most common "tech startup" model - very high startup and fixed cost which takes years to build a large enough customer base to overcome.
As far as I understand it, Uber for many years lost more money with each additional trip. This is the "selling $10 bills for $5" model. Which certainly lets you grow your market and hope for a future where you have pricing power and can raise prices. This is your "crushing advantage" model.
Google was a money-loser for quite some time
No. Google was incorporated in 1998, profitable in 2001, and the IPO was in 2004. Total investment pre-IPO was about $25 million.
No. Google was incorporated in 1998, profitable in 2001, and the IPO was in 2004. Total investment pre-IPO was about $25 million.
Out of all five of the largest tech companies - Facebook, Apple, Amazon, Microsoft and Google. Only Amazon ran at a loss for any significant amount of time before IPOing.
It was very obvious that Amazon wasn't unprofitable in any real sense. They only raised $100m, and they kept growing.
The difference with Amazon is that they have a very capital-intensive business, and when these grow very quickly then the accounting is basically useless (you see this with some ecomm companies, in some countries the market literally does not understand operating leverage in these businesses...so the business will build a new warehouse, the stock will drop 75%, top-line is growing 50%/year, and then the stock 10x when operating leverage comes through).
I think profitability is a sign that your business works. The "first-mover" advantage is way, way, way overstated. Investing is growth is great, but some businesses are clearly investing in growth that is unprofitable (one interesting example here is NFLX, they generate a profit in accounting terms but it is pretty clear that their business is either not profitable or taking on massive risk for marginal profit).
The difference with Amazon is that they have a very capital-intensive business, and when these grow very quickly then the accounting is basically useless (you see this with some ecomm companies, in some countries the market literally does not understand operating leverage in these businesses...so the business will build a new warehouse, the stock will drop 75%, top-line is growing 50%/year, and then the stock 10x when operating leverage comes through).
I think profitability is a sign that your business works. The "first-mover" advantage is way, way, way overstated. Investing is growth is great, but some businesses are clearly investing in growth that is unprofitable (one interesting example here is NFLX, they generate a profit in accounting terms but it is pretty clear that their business is either not profitable or taking on massive risk for marginal profit).
I can’t find it now. But I can swear I read that Amazon was lucky enough to get a line of credit right before the dot com bust.
But Amazon wasn’t profitable. It used cash flow from the time it received money from customers and paid suppliers to grow.
But Amazon wasn’t profitable. It used cash flow from the time it received money from customers and paid suppliers to grow.
It's more likely they get a monopoly and use that to leverage a "natural" market.
For Uber, that's the taxi industry and they're only got an edge by ignoring all manner of regulation.
For Uber, that's the taxi industry and they're only got an edge by ignoring all manner of regulation.
How could Uber possibly be described as a monopoly when they have multiple competitions in every market they operate in?
I was refining the posters "natural" language.
The VCs fund these projects are going after monopolies, not some capitalist delusion about "best" outcomes.
It's clarifying: Facebook isn't the "best" social platform, it simply became big enough to box out competition.
This is why corporations are allowed to operate at a loss.
The VCs fund these projects are going after monopolies, not some capitalist delusion about "best" outcomes.
It's clarifying: Facebook isn't the "best" social platform, it simply became big enough to box out competition.
This is why corporations are allowed to operate at a loss.
A more egalitarian Uber/DoorDash/Lyft/etc. where all players in the market benefit and the company solely exists to provide value lives rent free in my head. In the practical reality however, the idea seems somewhat intractable.
It's considered a huge success because it returned a ton of money to shareholders
I find it hard to believe any article that describes taxi services as "efficient but undercapitalizes". Does the author remember the experience of trying to find a cab if you weren't in a downtown area already?
Pretty sure he means cost efficient—as in the cab companies had optimized the cost structure of their business by negotiating large orders for fleet vehicles, insurance, etc., which should be more efficient than asking the same number of Uber drivers to do it independently.
Has anyone actually verified the numbers? Per my calculation, per hour cost of running a car in US is about $17. Minimum wage is $15/hr. In my experience, Uber/Lyft charges comfortably so the drivers earn above minimum wage. I have in fact met few drivers who owns multiple cars “Ubering” around because it is profitable to them. This has also been previously verified by Forbes when they compared full time Uber drivers income with taxi driver income and concluded that Uber drivers often earned 20% or more.
The article makes bold claims that Uber is killing “efficient” taxi companies using capital but presents no real data. In reality, taxi companies have much larger overhead because large chunk of revenue simply goes into medalian owner’s pockets purely as passive income. Additionally, they need to have staff for recruiting, maintainence, legal, radio etc. There is NO theaoratical reason why app based taxi company cannot beat traditional taxi company just on efficiency.
The article makes bold claims that Uber is killing “efficient” taxi companies using capital but presents no real data. In reality, taxi companies have much larger overhead because large chunk of revenue simply goes into medalian owner’s pockets purely as passive income. Additionally, they need to have staff for recruiting, maintainence, legal, radio etc. There is NO theaoratical reason why app based taxi company cannot beat traditional taxi company just on efficiency.
I know someone who does bike delivery in a densely populated city.
I don't know how uber works really or how they distribute money, but according to him you're not paid an hourly wage every hour.
For example because there is so much competition among drivers, you can go hours without an order assigned to you. even in big/densely populated urban centers. and I think the guaranteed hourly rate thing only applies in specific circumstances. there is no way he is putting in even an 80% work day unless he waited for orders literally all his waking hours.
and then from the money you are actually paid, you have to deduct all the costs for maintenance and so on. from back of the envelope calculations my buddy actually makes much less than minimum wage.
I try to convince him from time to time to just get regular other jobs and point out he will quickly make a lot more money. but frankly he is in a hole and cant see outside perspectives. as you can imagine he's big into crypto as well, trying to day trade that shit with his measly capital not realizing he would make 4 times the money flipping burgers in mcdonalds a couple hours a week.
but we're not that close so it's not my place to give him a kick in the ass. however he's probably a good example of the kind of ignorance and lack of education / perspective that uber can easily exploit.
I don't know how uber works really or how they distribute money, but according to him you're not paid an hourly wage every hour.
For example because there is so much competition among drivers, you can go hours without an order assigned to you. even in big/densely populated urban centers. and I think the guaranteed hourly rate thing only applies in specific circumstances. there is no way he is putting in even an 80% work day unless he waited for orders literally all his waking hours.
and then from the money you are actually paid, you have to deduct all the costs for maintenance and so on. from back of the envelope calculations my buddy actually makes much less than minimum wage.
I try to convince him from time to time to just get regular other jobs and point out he will quickly make a lot more money. but frankly he is in a hole and cant see outside perspectives. as you can imagine he's big into crypto as well, trying to day trade that shit with his measly capital not realizing he would make 4 times the money flipping burgers in mcdonalds a couple hours a week.
but we're not that close so it's not my place to give him a kick in the ass. however he's probably a good example of the kind of ignorance and lack of education / perspective that uber can easily exploit.
My feeling has been for a while they are betting on self driving cars. When that becomes a reality - their cost structure will change dramatically.
They perhaps were for some time, but both Uber and Lyft sold off their autonomous vehicle divisions a few years back. It makes more sense for an established car manufacturer to develop this as they already have the infrastructure to scale this and not require Uber to work on just software/hardware and rely on licensing or contractual agreements with car makers.
They’ve probably both realized it’s a very difficult task to go beyond simple routes and that it’s not a viable investment for a non-profitable company that’s burning through investor money trying to establish a monopoly.
They’ve probably both realized it’s a very difficult task to go beyond simple routes and that it’s not a viable investment for a non-profitable company that’s burning through investor money trying to establish a monopoly.
Great article and great website. Really worth looking at all the other articles. Thanks!
The piece is exactly right. Uber is effectively an instrument to shift economic gains from labour to capital by atomizing the workforce. From a macroeconomic perspective this is terrible because turning taxi firms into countless of one man businesses provides no efficiency gains, it's basically reverse economic development.
There is a version of Uber that actually makes sense. As a lean SaaS company that sells its software to ordinary taxi companies, takes a cut and makes a profit. Which is basically how they operate in Spain because Spanish law has not tolerated Ubers attempts to capture markets.
There is a version of Uber that actually makes sense. As a lean SaaS company that sells its software to ordinary taxi companies, takes a cut and makes a profit. Which is basically how they operate in Spain because Spanish law has not tolerated Ubers attempts to capture markets.
Despite all of the negatives, many of which I agree with, the legacy taxi industry really sucked for riders. Riding in a taxi feels dirty to me, to be honest. Old, ugly cars that never seem well maintained, having to actually call someone on a phone and tell them where to pick you up, often not accepting Apple Pay, Android Pay, credit cards. Rude drivers with no rating system to disincentivize it…
It’s sad that Uber seemingly made such bad business decisions and ultimately has not been successful as a business. However, the “disruption” was widely successful. Hell, they even became a verb.
Personally, even as a customer, I strongly prefer Lyft (but I’d never take a Taxi unless I was somehow forced to).
It’s sad that Uber seemingly made such bad business decisions and ultimately has not been successful as a business. However, the “disruption” was widely successful. Hell, they even became a verb.
Personally, even as a customer, I strongly prefer Lyft (but I’d never take a Taxi unless I was somehow forced to).
In most places I've been to, traditional taxis has a captive market and no effective competition due to limited licenses. Drivers were frequently rude, dangerous, and bitterly resentful if you weren't the exact type of ride they happened to look for. Cars were poorly maintained from outside to inside. Calling them would give you a "we'll be there between 5 and 45 minutes, please stay outside in the rain and wait for them" (actual situation that happened frequently in Ottawa or Toronto). They refused to take credit cards, and would cancel the meter after starting so they wouldn't be tracked. Experience was awful from start to finish.
So my sympathy toward old model is negative.
And then there's the whole medallion business in many parts of North America, which is crazy to explain to outsiders - basically, licensed which nominally cost $150 - $1500 (depending on the city), would go for upwards of 450k on secondary market. People would buy loans and invest in them as primary retirement. When city decided to open up the market, people who invested all their money in an extremely speculative irrational market took to streets... And hired thugs to trash uber hq.
So my sympathy toward previous model is negative.
That being said, I agree that exploitation of gig economy is bad. I just feel people have a lot more choice to be or not to be an uber driver for me to fully understand their plight.
So my sympathy toward old model is negative.
And then there's the whole medallion business in many parts of North America, which is crazy to explain to outsiders - basically, licensed which nominally cost $150 - $1500 (depending on the city), would go for upwards of 450k on secondary market. People would buy loans and invest in them as primary retirement. When city decided to open up the market, people who invested all their money in an extremely speculative irrational market took to streets... And hired thugs to trash uber hq.
So my sympathy toward previous model is negative.
That being said, I agree that exploitation of gig economy is bad. I just feel people have a lot more choice to be or not to be an uber driver for me to fully understand their plight.
Legacy taxis were and still are a more expensive and inefficient business. Outside of airports and maybe cities like New York, hailing a taxi was a terrible experience.
The scale of Uber despite their shitty business model, allows them to have a lot more drivers constantly on the road than traditional companies. This allows for an quicker availability of a cab at a moment’s notice. Anyone remember leaving a party before Uber, calling a cab and then awkwardly sitting around at the host’s place for another half hour?
This also means a generational behavior change where more people use Uber, which in turn allows more continuous business for the driver and a cheaper ride for the consumer.
Uber can charge more (which they are doing now), fix their driver pay and still provide a cheaper and more convenient experience for the users.
The scale of Uber despite their shitty business model, allows them to have a lot more drivers constantly on the road than traditional companies. This allows for an quicker availability of a cab at a moment’s notice. Anyone remember leaving a party before Uber, calling a cab and then awkwardly sitting around at the host’s place for another half hour?
This also means a generational behavior change where more people use Uber, which in turn allows more continuous business for the driver and a cheaper ride for the consumer.
Uber can charge more (which they are doing now), fix their driver pay and still provide a cheaper and more convenient experience for the users.
Even in NYC hailing a taxi was a terrible experience if you were a minority or were traveling outside of Manhattan or North of 125th.
Or during special events.
I remember one Super Bowl weekend trying to get home via cab from Tribeca after the game was over.
Looking down West Broadway, you could see multiple groups of people at each intersection with their arms up trying to get the first cab to go by.
Or during just times in general. When I first moved to NYC, I was my normal polite self when people would say "I hailed it first" and let them take the cab. After the fourth or fifth time this happened with cabs I was 90% I had hailed first, I realized you had to pretend to be some alpha male and shout "Get the F away from my cab!" in order to guarantee you got in the cab.
I don't know if anyone keeps stats on this but I would bet money that the number of fights in NYC due to the above must have gone down once Uber became common.
I remember one Super Bowl weekend trying to get home via cab from Tribeca after the game was over.
Looking down West Broadway, you could see multiple groups of people at each intersection with their arms up trying to get the first cab to go by.
Or during just times in general. When I first moved to NYC, I was my normal polite self when people would say "I hailed it first" and let them take the cab. After the fourth or fifth time this happened with cabs I was 90% I had hailed first, I realized you had to pretend to be some alpha male and shout "Get the F away from my cab!" in order to guarantee you got in the cab.
I don't know if anyone keeps stats on this but I would bet money that the number of fights in NYC due to the above must have gone down once Uber became common.
Not in NYC, but I've seen cab drivers auctioning rides by asking "who will pay more" after some events. At airports I've definitely had my share of drivers asking multiple passengers where they're going so they could go to the most advantageous location. Both were obviously illegal in the cities I was.
Remembering those, I can definitely see why everyone started using Uber.
Remembering those, I can definitely see why everyone started using Uber.
You also have to discard the "customer is always right" mindset when using taxis in NYC.
It is notoriously difficult to convince a taxi to take you cross-town. The few times I succeeded... it was a mistake, a miserable experience and it would have been faster to walk.
Conceptually it would be nice to just be able to get a taxi from point A to point B, no questions asked, and sometimes when a driver doesn't want to do it it comes down to racism or profit, but other times it's because you're asking to do something that isn't actually a good idea.
It is notoriously difficult to convince a taxi to take you cross-town. The few times I succeeded... it was a mistake, a miserable experience and it would have been faster to walk.
Conceptually it would be nice to just be able to get a taxi from point A to point B, no questions asked, and sometimes when a driver doesn't want to do it it comes down to racism or profit, but other times it's because you're asking to do something that isn't actually a good idea.
The big taxi company I drove for was at the top of the food chain in the Phoenix, Arizona area because the cars were clean, cabs usually showed up promptly, and if there was a problem you could deal with the company and they'd look into your complaint.
The company started switching out to the Prius a few years before I started driving for them in 2012. My first few leases were for old Crown Victorias, because I couldn't show up early enough to get in line for a prius (some drivers refused to drive the Crown Victorias, for various reasons).
The company had economy of scale in their fleet operations that was hard to beat: mechanics who knew the Prius like the back of their hand, boneyards (for parts), connections in the automotive industry.
They couldn't compete with people willing to wear out their personal cars giving 'rides' for peanuts. The company eventually sold off their fleet of priuses and their taxi yards, and refocused on the other businesses (app-dispatched medical transportation, etc). The Company tried to build their own dispatch phone app. But it didn't work especially well - I think they eventually decided to cut their losses.
VIP Taxi and Yellowcab are still doing okay, but I hardly ever see the green prius taxis anymore.
The company started switching out to the Prius a few years before I started driving for them in 2012. My first few leases were for old Crown Victorias, because I couldn't show up early enough to get in line for a prius (some drivers refused to drive the Crown Victorias, for various reasons).
The company had economy of scale in their fleet operations that was hard to beat: mechanics who knew the Prius like the back of their hand, boneyards (for parts), connections in the automotive industry.
They couldn't compete with people willing to wear out their personal cars giving 'rides' for peanuts. The company eventually sold off their fleet of priuses and their taxi yards, and refocused on the other businesses (app-dispatched medical transportation, etc). The Company tried to build their own dispatch phone app. But it didn't work especially well - I think they eventually decided to cut their losses.
VIP Taxi and Yellowcab are still doing okay, but I hardly ever see the green prius taxis anymore.
The ease of the Uber app is and was key above everything else - which might be enough to keep them operating when they finally have to raise prices to where they should be.
Or they just switch to a SaaS model. Much leaner operations and solves at least some of the friction issues that traditional taxi service has.
Then there's one aspect of their business model that the article missed (Maybe it will be covered in part 2 or 3) which is self-driving. Apart from monopoly power, this seemed like the other exit to profitability. I'm just not sure if those efforts were little more than lip service to placate investors or an honest attempt (probably a bit of both) it seems like the rapid progress of a few years ago has plateaued and that exit has mostly closed.
Then there's one aspect of their business model that the article missed (Maybe it will be covered in part 2 or 3) which is self-driving. Apart from monopoly power, this seemed like the other exit to profitability. I'm just not sure if those efforts were little more than lip service to placate investors or an honest attempt (probably a bit of both) it seems like the rapid progress of a few years ago has plateaued and that exit has mostly closed.
At risk of sounding like Margaret Thatcher I'd say that the Taxi industry was politically organized to get a good deal for itself but that the riders were not organized and had no voice.
Uber bypassed that and certainly got lower prices and better service for riders; however the old business was sustainable and the new one isn't.
Between growing up in the suburbs in a family that thought it was poor, living on a farm where a car is necessary, and having a public transport habit it's been rare for me to ride an Taxi or Uber. (in Montreal I would ride the 747 bus to/from the Trudeau airport unless it was crazy late or early, I'd take the express bus from LAX to downtown LA and then the subway to Hollywood, etc.) Often I haven't had a cell phone so I usually wind up flagging a taxi or ordering a taxi on the web or over Skype and I don't complain about the service or price.
Uber bypassed that and certainly got lower prices and better service for riders; however the old business was sustainable and the new one isn't.
Between growing up in the suburbs in a family that thought it was poor, living on a farm where a car is necessary, and having a public transport habit it's been rare for me to ride an Taxi or Uber. (in Montreal I would ride the 747 bus to/from the Trudeau airport unless it was crazy late or early, I'd take the express bus from LAX to downtown LA and then the subway to Hollywood, etc.) Often I haven't had a cell phone so I usually wind up flagging a taxi or ordering a taxi on the web or over Skype and I don't complain about the service or price.
Taxis at least were so terrible that a complete disaster of a business could disrupt them by just being marginally less awful. I don’t know if they have improved.
what's crazy is in this day and age, you'd think uber/lyft are available in most markets but last week, I had to go to Baton Rouge (LSU with 50k students is based there) and I was relegated to a beat up, cigarette smelling, local taxi because no uber/lyft's were available at the airport (due to storms and delayed flights).
I flew to Hartfort, CT (BDL, actually in the rather distant suburb of Windsor Locks CT) last year, and my flight was delayed to about 10:30pm; I almost didn't get an Uber because the market simply doesn't for the drivers to stick around that late. There were other delayed flights coming in after mine, closer to midnight; my driver said quite plainly that those folks would have to figure something else out, because all the rideshare drivers in the parking lot were heading home for the night.
All this to say, I should have prepared better and I don't know what I expected. We take the "always on" nature of these services for granted, but that's not how the world works outside of the major metros.
All this to say, I should have prepared better and I don't know what I expected. We take the "always on" nature of these services for granted, but that's not how the world works outside of the major metros.
>I almost didn't get an Uber because the market simply doesn't for the drivers to stick around that late.
The market does, but it is bad PR for Uber to offer sufficiently high surge pricing to attract drivers. So Uber makes the choice to simply not offer a driver $400 for what would normally be a $40 car ride, even though $400 would get someone on the road to drive you somewhere.
It makes no sense that people complain about surge pricing.
The market does, but it is bad PR for Uber to offer sufficiently high surge pricing to attract drivers. So Uber makes the choice to simply not offer a driver $400 for what would normally be a $40 car ride, even though $400 would get someone on the road to drive you somewhere.
It makes no sense that people complain about surge pricing.
And in well regulated market there would be supply even at that time. Maybe not sufficient, but still guaranteed supply. But oh well people didn't want that... Too bad for them for getting what they wanted.
> Old, ugly cars that never seem well maintained
maybe in US or UK but in europe taxis are kept to a high standard, albeit way more expensive
maybe in US or UK but in europe taxis are kept to a high standard, albeit way more expensive
Given how large the US is, and how large Europe is, I doubt your statement. I can certainly find plenty of well maintained taxis in the US, I bet I can find plenty of beat up taxis in Europe.
Not to mention the rent seeking behavior of the industry.
You forgot safety. I can’t recall how many times I’ve come close to an accident by Taxi drivers.
Fuck them. These people are the most unsafe drivers on the road.
Fuck them. These people are the most unsafe drivers on the road.
I live in lower Manhattan now, and my unconscious mental model for navigating the streets as a ped/biker includes a pretty large coefficient on is_yellowcab. They're complete menaces.
Yep, I think this is universal. I was in China a few years ago and the dude was playing tetris with one hand on his cell phone and driving in the emergency lane at the same time.
Uber/Lyft/Didi/Ola is amazing. I really don't give a shit about these asshole taxi drivers and their union/monopoly grip. Glad it is wiped out.
Uber/Lyft/Didi/Ola is amazing. I really don't give a shit about these asshole taxi drivers and their union/monopoly grip. Glad it is wiped out.
My experience has been the opposite, with Uber drivers displaying -- on average -- poorer driving skills than taxi drivers.
(Probably location-specific.)
(Probably location-specific.)
>having to actually call someone on a phone
The horror!
The horror!
You'd think it's a joke but it's like a 2nd or 3rd time that my brother ordered a pizza by phone and got a wrong one. Sure the girl who takes order is absent-minded or hard of hearing. And similarly sounding pizza names don't help. We like their pizzas and try to cut out the middle-man, but our colleagues who order from there suggested we just use Pyszne.pl (i.e. Takeaway.com).
Also, many times we tried to order food to office at work, we just got a busy line.
Doing transactional stuff by phone has horrible UX.
Also, many times we tried to order food to office at work, we just got a busy line.
Doing transactional stuff by phone has horrible UX.
I ordered from a local bagel shop and also got missing items multiple times.
I finally went in and spoke to a manager who said: "Yeah, you order via Seamless/Grubhub, it shows up on a screen and then someone hand writes down your order."
This conversation happened a few weeks ago. It blew my mind that they didn't have a printer etc for this kind of thing.
Goes to show that the "future is here, just not evenly distributed" is 100% true.
I finally went in and spoke to a manager who said: "Yeah, you order via Seamless/Grubhub, it shows up on a screen and then someone hand writes down your order."
This conversation happened a few weeks ago. It blew my mind that they didn't have a printer etc for this kind of thing.
Goes to show that the "future is here, just not evenly distributed" is 100% true.
That's valid but also hear this out: the local app in my country, called Rappi, gets things wrong so often I wonder how they do it. I mean, it's written, yet restaurants often send you whatever. And let's not talk about the times the delivery person is completely clueless about my location, and you can just see them circling cluelessly on the map while you desperately send them messages trying to orient them.
My point is: mishaps happen whether by phone or app.
My point is: mishaps happen whether by phone or app.
The issue isn't social anxiety or anything like that, it's the taxi company dispatch systems are typically run by people who are both bad at their job and hate you for making them pick up the phone.
So you think it is better to have to call someone and then figure out your location in a strange system than clicking on a button, your phone knowing where you and the driver are?
"Can you say that again?" "How do you spell that?" "Is that B for book or P for penny?" "Sorry can you repeat the line is bad"
> Uber is effectively an instrument to shift economic gains from labour to capital by atomizing the workforce.
This is the entire gig economy/sharing economy in a nutshell. The platform puts most of the financial risk on the labor side (drivers owning the cars if you're driving Uber, owning the house if you're Airbnb'ing it, etc.) and simply taking a cut of each transaction. The platform owns nothing, the workers have very few rights, and the company has complete control of the market. This is VC utopia right here.
The next financial crisis is gonna show us just how fragile this system is, whenever that is.
This is the entire gig economy/sharing economy in a nutshell. The platform puts most of the financial risk on the labor side (drivers owning the cars if you're driving Uber, owning the house if you're Airbnb'ing it, etc.) and simply taking a cut of each transaction. The platform owns nothing, the workers have very few rights, and the company has complete control of the market. This is VC utopia right here.
The next financial crisis is gonna show us just how fragile this system is, whenever that is.
> The next financial crisis is gonna show us just how fragile this system is, whenever that is.
For now, a lot of the gig economy (but not all of it) is focused on non-essential services (food or other delivery, vacation rentals, private car rentals, etc), so in a time of crisis people can just stop using those services.
It will suck for the workers but even in a non-gig model that same problem would occur, although there would be more safety nets like unions and insurance ...
What worries me is if essential services start getting "gigged out" in a similar manner, that would be problematic..
Easy to say that would never happen, but "private citizens operating unregulated hotels/taxis" seemed impossible/illegal just a decade ago...
For now, a lot of the gig economy (but not all of it) is focused on non-essential services (food or other delivery, vacation rentals, private car rentals, etc), so in a time of crisis people can just stop using those services.
It will suck for the workers but even in a non-gig model that same problem would occur, although there would be more safety nets like unions and insurance ...
What worries me is if essential services start getting "gigged out" in a similar manner, that would be problematic..
Easy to say that would never happen, but "private citizens operating unregulated hotels/taxis" seemed impossible/illegal just a decade ago...
> but "private citizens operating unregulated hotels/taxis" seemed impossible/illegal just a decade ago
Every city has had gypsy cabs and Craigslist hotels since forever.
Every city has had gypsy cabs and Craigslist hotels since forever.
1) Gypsy is a slur
2) Both of those things were / are illegal and operated relatively underground, which is exactly the point of the person you're responding to.
2) Both of those things were / are illegal and operated relatively underground, which is exactly the point of the person you're responding to.
>Gypsy is a slur
Wow. Someone should probably let the creators of "Big Fat Gypsy Weddings" know this! And all the people that participated in the show. And all of the Travellers that watched it.
Wow. Someone should probably let the creators of "Big Fat Gypsy Weddings" know this! And all the people that participated in the show. And all of the Travellers that watched it.
It’s in the process of being removed from names. For example, the moth: https://www.ksmu.org/2022-04-18/a-common-moth-pest-had-a-slu...
Well, it's true the meaning of the word has evolved into a slur. At least some of the people who used to be called gypsies in English don't want to be called that.
As for shows, didn't Netflix's "Gypsy" take flak for the name?
As for shows, didn't Netflix's "Gypsy" take flak for the name?
>Well, it's true the meaning of the word has evolved into a slur.
Is it, though, or is it one of those words like "Indian" (referring to an American Indian, not someone from the country of India) that people say is a slur but is not considered offensive at all by the community it supposedly degrades (and in fact, refusing to use it in their company will get you strange looks more than anything else).
See also: my username for a similar "slur".
>As for shows, didn't Netflix's "Gypsy" take flak for the name?
Based on its Wikipedia page (especially in the "talk" page), it looks like it was mainly just a single author generating righteous outrage to get clicks.
Is it, though, or is it one of those words like "Indian" (referring to an American Indian, not someone from the country of India) that people say is a slur but is not considered offensive at all by the community it supposedly degrades (and in fact, refusing to use it in their company will get you strange looks more than anything else).
See also: my username for a similar "slur".
>As for shows, didn't Netflix's "Gypsy" take flak for the name?
Based on its Wikipedia page (especially in the "talk" page), it looks like it was mainly just a single author generating righteous outrage to get clicks.
Hm. It seems you're right. Well, I stand corrected.
Sure but that's not what I'm talking about and you know it. I mean large well-known and easily accessible versions of those.
> that's not what I'm talking about and you know it. I mean large well-known and easily accessible versions of those
Not particularly.
They existed at a small scale. Always. Smartphones let them knit together. That scale produced efficiencies. Authorities tried to clamp down but consumers loved them and policy adapted. The path from point A to point B looks linear and altogether unsurprising, albeit ex post facto.
Not particularly.
They existed at a small scale. Always. Smartphones let them knit together. That scale produced efficiencies. Authorities tried to clamp down but consumers loved them and policy adapted. The path from point A to point B looks linear and altogether unsurprising, albeit ex post facto.
> Easy to say that would never happen, but "private citizens operating unregulated hotels/taxis" seemed impossible/illegal just a decade ago...
I think a lot of it was making it "cool". These things definitely existed in the past and you could avail yourself of them if you knew where to look but these were seen as seedy and lesser than calling a real taxi/car service and staying in a "real hotel. Somehow making it an "app" from a "tech company" really changes customer perceptions.
> if essential services start getting "gigged out" in a similar manner, that would be problematic..
Just have Uber drivers carry a gun, handcuffs, a fire extinguisher and a first aid kit in the trunk. Now they can shift from taxi driver to cop to firefighter to paramedic at a moment's notice. Maybe an LED light bar/siren combo they can quickly attach to the roof of the car with magnets when they switch to emergency responder mode. It'll be a hell of a lot cheaper too, they won't have all those silly pensions and unions and stuff.
I think a lot of it was making it "cool". These things definitely existed in the past and you could avail yourself of them if you knew where to look but these were seen as seedy and lesser than calling a real taxi/car service and staying in a "real hotel. Somehow making it an "app" from a "tech company" really changes customer perceptions.
> if essential services start getting "gigged out" in a similar manner, that would be problematic..
Just have Uber drivers carry a gun, handcuffs, a fire extinguisher and a first aid kit in the trunk. Now they can shift from taxi driver to cop to firefighter to paramedic at a moment's notice. Maybe an LED light bar/siren combo they can quickly attach to the roof of the car with magnets when they switch to emergency responder mode. It'll be a hell of a lot cheaper too, they won't have all those silly pensions and unions and stuff.
It's easy to think of Uber as a non-essential service, but it's not really -- it's started to get its tendrils into a lot of places. E.g. https://qz.com/1971558/uber-plans-to-play-a-bigger-role-in-p... -- Uber is being baked into public transit plans as a viable last-mile option.
Essential services are already effectively being 'gigged out'. Travel nurses and EMTs being employed by staffing agencies rather than the hospitals, Amazon's entire delivery end is almost entirely driven by third party contractors, and in general a lot of employment relationships that would have once been owned by a company are now abstracted to vendors solely as a way to reduce margin.
>The platform puts most of the financial risk on the labor side (drivers owning the cars if you're driving Uber, owning the house if you're Airbnb'ing it, etc.)
Actually people already owned the cars and already owned their houses. How is that a financial risk? These platforms allow people to use their existing resources to make money. That's efficiency gains.
If anyone decides to acquire new vehicles or properties to use on these platforms it's because it's profitable due to the large demand driven by these companies pouring billions into customer acquisition and customer relations/support for them.
Actually people already owned the cars and already owned their houses. How is that a financial risk? These platforms allow people to use their existing resources to make money. That's efficiency gains.
If anyone decides to acquire new vehicles or properties to use on these platforms it's because it's profitable due to the large demand driven by these companies pouring billions into customer acquisition and customer relations/support for them.
That’s how it started out - but people began purchasing for use in Uber and then driver rates started dropping, but car payments didn’t.
> If anyone decides to acquire new vehicles or properties to use on these platforms it's because it's profitable
I don't know why you would make that assumption. See https://www.wsj.com/articles/how-uber-makes-its-drivers-pay-...
> Most Uber drivers seem unaware of how their job costs them when it comes to the value of their cars.
Someone needs money for groceries. A bank will lend them money for a car but not groceries. They use Uber as an inefficient means to turn said loan into cash for groceries.
There's no reason to assume that Uber drivers have priced out devaluation and/or have the long term in mind.
I don't know why you would make that assumption. See https://www.wsj.com/articles/how-uber-makes-its-drivers-pay-...
> Most Uber drivers seem unaware of how their job costs them when it comes to the value of their cars.
Someone needs money for groceries. A bank will lend them money for a car but not groceries. They use Uber as an inefficient means to turn said loan into cash for groceries.
There's no reason to assume that Uber drivers have priced out devaluation and/or have the long term in mind.
And with all this power these companies still somehow never manage to become profitable. It seem to that the consumer is benefiting the most in this situation because both the VC and labor keep having to subsidize him
It's kind of absurd. These companies are trying to build a moat in an industry with very little barrier to entry and regional compartmentalization. The only thing Uber has going for it is the network effect of being available across multiple cities and countries.
How much of this "never manage to become profitable" is tricks in accounting? Would investors continue to give money after due diligence looking into the books show this constant loss and say "yes, take my money!"?
I think it's time to forgo this idea that investors do any due diligence anymore. They just look at price going up and someone hyping it going up further and jump on the train, thinking they can sell it for more later... And then justifying the price by some far future market dominance and magic tech actually coming real, see Uber and Tesla... Or even with social media companies like Twitter to actually turn decent profit...
> The platform puts most of the financial risk on the labor side and simply taking a cut of each transaction.
This is "intermediation". They are not "simply" taking their cut, the platform gets the task of finding the customers and lending their brand to the workers, as well as doing some quality assurance for the customers.
Done right, this is incredibly useful for both sides and creates a lot of wealth. Done wrong it destroys markets.
This is "intermediation". They are not "simply" taking their cut, the platform gets the task of finding the customers and lending their brand to the workers, as well as doing some quality assurance for the customers.
Done right, this is incredibly useful for both sides and creates a lot of wealth. Done wrong it destroys markets.
Right when millennials are starting to feel some stability and save some money, right THEN is when the financial crisis will hit. Just wait and see.
> a lean SaaS company that sells Uber's software as a service to ordinary taxi companies, takes a cut and makes a profit
This destroys a lot of value. Most taxi companies suck for reasons independent of their tech stack. (The fact that they’re better post-Uber shouldn’t obscure the effect of that competitive pressure.) Moreover, having a transport app that works in most countries is a value add for such a service’s most-profitable customers. Finally, the claim that taxi companies treat their drivers better than Uber applies in some markets, but it doesn’t in most, e.g. New York and New Delhi.
Uber isn’t profitable as a company, but they’re profitable in some (and a growing number of) markets. There is a recurring set of Uber hot takes that get recycled every few months that ignores this.
This destroys a lot of value. Most taxi companies suck for reasons independent of their tech stack. (The fact that they’re better post-Uber shouldn’t obscure the effect of that competitive pressure.) Moreover, having a transport app that works in most countries is a value add for such a service’s most-profitable customers. Finally, the claim that taxi companies treat their drivers better than Uber applies in some markets, but it doesn’t in most, e.g. New York and New Delhi.
Uber isn’t profitable as a company, but they’re profitable in some (and a growing number of) markets. There is a recurring set of Uber hot takes that get recycled every few months that ignores this.
They really, really don't suck in Germany. Taxis there are mostly clean, comfortable Mercedes (E-Class usually, Mercedes has a long history and special contracts for that), and Taxi drivers are massively trained. Up until recently, part of the extensive examination was being quizzed about how to get to obscure streets (and remember that Germany does not have a grid system like in the US). That has been abolished, because with ubiquitous GPS it's not necessary anymore, but the other strict requirements stayed.
Uber has nothing on that.
Uber has nothing on that.
> Uber has nothing on that
Travel extensively in Germany. I can hail Uber from an app that works in Frankfurt, Paris and New York. Uber is often cheaper. And it is far more ubiquitous, particularly outside the major metropolitan areas.
I still take taxis e.g. from the airport, but pretending there is convenience parity in all situations is false. (Agree that Frankfurt and London cabbies are good.)
Travel extensively in Germany. I can hail Uber from an app that works in Frankfurt, Paris and New York. Uber is often cheaper. And it is far more ubiquitous, particularly outside the major metropolitan areas.
I still take taxis e.g. from the airport, but pretending there is convenience parity in all situations is false. (Agree that Frankfurt and London cabbies are good.)
> I can hail Uber from an app that works in Frankfurt, Paris and New York.
That matters to travelers (and skewed towards business travelers, too), i.e. people who visit only for a short time, but not much to anyone else.
> And it is far more ubiquitous, particularly outside the major metropolitan areas.
Not my experience. I can be far outside the city and call (through the App nowadays) a taxi and I know it's going to be there and reliable. Uber was hit and miss, tends to cancel suddenly etc... I don't think I've ever had a german taxi cancel on me, in decades. If something happened to impede my assigned Taxi, the driver would contact the central and they'd dispatch another one.
Uber does not have a proper "central". They only have an app and dispatch servers, no humans to sort things out to guarantee service.
> Uber is often cheaper.
And you get what you pay for... A german taxi gives you trained people and dedicated, specially maintained cars.
That matters to travelers (and skewed towards business travelers, too), i.e. people who visit only for a short time, but not much to anyone else.
> And it is far more ubiquitous, particularly outside the major metropolitan areas.
Not my experience. I can be far outside the city and call (through the App nowadays) a taxi and I know it's going to be there and reliable. Uber was hit and miss, tends to cancel suddenly etc... I don't think I've ever had a german taxi cancel on me, in decades. If something happened to impede my assigned Taxi, the driver would contact the central and they'd dispatch another one.
Uber does not have a proper "central". They only have an app and dispatch servers, no humans to sort things out to guarantee service.
> Uber is often cheaper.
And you get what you pay for... A german taxi gives you trained people and dedicated, specially maintained cars.
Travelers hail a disproportionate amount of taxis. Living in a walkable European city with good public transport, approximately the only times I use taxis or Uber are when I'm going to/from the airport/train station and have luggage, or when it's a business trip and I can expense it (and even then I opt for trains when I can).
And the parent commenter mentioned that they usually get a taxi from the airport at least (because it's right there I guess, there are strict special regulations about how german taxis wait at the airport to make things go smoothly), so... Another other reason to take one is when you're so far outside and at a time of day that public transport is spotty.
In markets like Frankfurt and London, Uber has a tougher time competing. Totally agreed. It still has niches. And most taxi markets aren’t filled with lovely, knowledgeable, ambitious drivers.
Fair, I was only offering the perspective from Germany.
> This destroys most of the value. Most taxi companies suck for reasons independent of their tech stack.
None of which Uber fixes? Uber is a tech company. Arguing that it's better than taxis for non-technical reasons is a bit absurd.
None of which Uber fixes? Uber is a tech company. Arguing that it's better than taxis for non-technical reasons is a bit absurd.
Uber shifts the relationship from rider <-> taxi company, to rider <-> Uber. This places a significant responsibility on Uber to create a high quality rider experience. If you book a car and the driver doesn't show up repeatedly, Uber will remove that driver.
Uber also fields customer service, meaning you're not trying to call into a one man shop to argue for a refund with whoever happened to pick up your ride that day. You're talking with Uber.
Some cities, such as NYC, have created their own structure around taxis, but in many cities it's a complete guess as to the quality of service you'll get when you call a local cab company.
This is the exact same playbook as Doordash, Seamless, Taskrabbit, Airbnb, or any of the other gig economy platforms. They're vastly more than just software. They're certainly different from software provided to independent operators, though individual people can come to their own determination of whether or not that is "better."
Uber also fields customer service, meaning you're not trying to call into a one man shop to argue for a refund with whoever happened to pick up your ride that day. You're talking with Uber.
Some cities, such as NYC, have created their own structure around taxis, but in many cities it's a complete guess as to the quality of service you'll get when you call a local cab company.
This is the exact same playbook as Doordash, Seamless, Taskrabbit, Airbnb, or any of the other gig economy platforms. They're vastly more than just software. They're certainly different from software provided to independent operators, though individual people can come to their own determination of whether or not that is "better."
> None of which Uber fixes?
Did you hail or call taxis before Uber? The simple ability to see where your car is while en route was game changing. Add to that ratings, embedded payment (“credit card reader broken”) and dynamic pricing and you have a dramatically better experience.
Did you hail or call taxis before Uber? The simple ability to see where your car is while en route was game changing. Add to that ratings, embedded payment (“credit card reader broken”) and dynamic pricing and you have a dramatically better experience.
Balance that against the fact that most taxi drivers know the city by heart, including where there is construction, habitual traffic jam, and transit congestion..
I'll take a better drive-to-destination experience over being able to stare at my phone watching a car inch closer to me, or saving a few dollars when I need to get somewhere.
A lot of part-time Uber drivers, especially in big cities, come in from the suburbs to get fares in the city - where they are not familiar with their surroundings - and just blindly follow the directions on their GPS.
In my anecdotal experience over the last 10 years, I've had plenty of experiences with Uber drivers either not knowing the proper way to get somewhere, or naively driving into avoidable traffic jams, or just getting stuck behind a bus or streetcar and not understanding when/how to get past it.
This very rarely happens with taxi drivers - to the point where sometimes they can be a bit scary in traffic, so there is a counterpoint here too.
I'll take a better drive-to-destination experience over being able to stare at my phone watching a car inch closer to me, or saving a few dollars when I need to get somewhere.
A lot of part-time Uber drivers, especially in big cities, come in from the suburbs to get fares in the city - where they are not familiar with their surroundings - and just blindly follow the directions on their GPS.
In my anecdotal experience over the last 10 years, I've had plenty of experiences with Uber drivers either not knowing the proper way to get somewhere, or naively driving into avoidable traffic jams, or just getting stuck behind a bus or streetcar and not understanding when/how to get past it.
This very rarely happens with taxi drivers - to the point where sometimes they can be a bit scary in traffic, so there is a counterpoint here too.
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Interesting angle. My experience (in NYC) has been that while taxis most certainly have better knowledge of the city, Uber is by far more reliable in just getting me there. This is because of the key difference of Uber knowing exactly where I'm going in advance, and relaying turn-by-turn directions to the driver. Most of the time, the taxi driver knows the address or cross streets I'm going to. But when they don't, it's painful. I've never even been asked in a Lyft/Uber, though.
Yeah where I live (Toronto) the turn-by-turn is the problem often. There's no adjustment for traffic or temporary closures, and combined with part-time drivers not knowing what roads should be avoided at certain times of day, and you can end up taking way too long getting somewhere.
In fact I used to see a lot of Uber drivers switch out to Waze for directions once you're in the car, since that was probably better.
In fact I used to see a lot of Uber drivers switch out to Waze for directions once you're in the car, since that was probably better.
What incentives taxi drivers to do an excellent job. There are not ratings for drivers and they can take you on a more expensive route if they sense that you aren’t from that area.
Uber tells drivers the route to take and has access to Waze esque data to help ensure drivers take an optimal route.
Uber tells drivers the route to take and has access to Waze esque data to help ensure drivers take an optimal route.
...those are all technical problems, no?
This completely neglects the enormous gains to consumers of having cabs that (1) will actually show up if booked ahead of time (2) don’t discriminate by race/ethnicity (3) don’t take the long way round (4) always take cards instead of the machine being “broken” (5) will pick up and drop you off anywhere.
Uber and their competitors are and were 100x better at getting drivers to follow the rules taxis were always meant to follow than their regulators ever were.
Uber and their competitors are and were 100x better at getting drivers to follow the rules taxis were always meant to follow than their regulators ever were.
I have had Uber drivers fail to show up multiple times. They appear to be heading to the pickup point but then park some distance away and just wait. It's very frustrating. I've never had that experience with a taxi service.
It's nothing to do with my Uber rating. I've since learned that it has something to do with a scam involving short/undesirable trips and cancellation fees.
It's nothing to do with my Uber rating. I've since learned that it has something to do with a scam involving short/undesirable trips and cancellation fees.
As a customer I don't care about economic theory. What I care about is that I take out my mobile, press a couple of buttons and I know the price and time of pick up. This is innovation. Before über nobody was doing this. This has been a huge efficiency gain. The service is safe and reliable and trackable. This really has nothing to do with employees vs contractors. If the government legislated that uber drivers had to be treated as employees, the innovation that uber brought to the market would not disappear. Might be a bit more expensive but we would not be going back to hailing random taxis on the street or calling numbers and negotiating with call centres.
There's massive efficiency gains. The countless one man businesses have no overhead side from owning a car they already have. They don't need to do anything else besides install and run an app. No need for marketing, managing payment systems, customer acquisition...etc Millions of drivers globally have the business side of things taken care of by a single company. Fragmentation across tens of thousands of taxi companies is inefficient.
In the US many neighborhoods and entire cities didn't have access to reliable taxis or any taxi at all. There's significantly more coverage with Uber and ride sharing in general. The same is probably true of other countries.
In the US many neighborhoods and entire cities didn't have access to reliable taxis or any taxi at all. There's significantly more coverage with Uber and ride sharing in general. The same is probably true of other countries.
Almost every useful scalable service ends up shifting economic gains from labor to capital. And consumers benefit from it, because as a very rough economic rule of thumb, the more value that flows to labor the less efficient the service is and the higher price consumers pay.
From a customer POV taxis were horrible, full-stop, and Uber/Lyft are fantastic. I can actually get a reliable, safe ride almost anywhere now, and that was impossible before (ever been held up by a gypsy cabbie because yellow cabs won't go to certain parts of NYC? Not fun...).
From a customer POV taxis were horrible, full-stop, and Uber/Lyft are fantastic. I can actually get a reliable, safe ride almost anywhere now, and that was impossible before (ever been held up by a gypsy cabbie because yellow cabs won't go to certain parts of NYC? Not fun...).
> And consumers benefit from it
As a consumer, I don't want to pay for unfair work practices.
Taxis may have been horrible, taking rides with people who are systematically exploited is even more horrible.
As a consumer, I don't want to pay for unfair work practices.
Taxis may have been horrible, taking rides with people who are systematically exploited is even more horrible.
I'm sorry...drivers are making a choice, they are not as naive as you seem to think they are and they have infinite other options for unskilled labor if it's really that "unfair", but most of those options pay less per hour - yes, they don't put as many miles on people's cars, but that's a tradeoff for getting cash now, which is often what people want. I delivered pizzas as a college kid, and made 1/3 of what Uber drivers make while driving the same amount, even accounting for inflation.
"Systematically exploited" is a really paternalistic view.
"Systematically exploited" is a really paternalistic view.
As if taxi drivers weren’t exploited when they had to rent medallions.
But if you don’t want to support “exploited workers”, are you willing to give up all electronics?
But if you don’t want to support “exploited workers”, are you willing to give up all electronics?
Perhaps, another option would be for the government to help establish a drivers-cooperative app. An app where all the profits collected had to distributed back to the drivers or invested in the common infrastructure to maintain, promote, and improve the app.
The drivers could also agree amongst themselves as to matters such as working conditions and minimum pay.
Uber and others could still exist, but they'd be at a disadvantage because they'd be ploughing billions into nonsense like self-driving blimps or whatever.
The drivers could also agree amongst themselves as to matters such as working conditions and minimum pay.
Uber and others could still exist, but they'd be at a disadvantage because they'd be ploughing billions into nonsense like self-driving blimps or whatever.
“The government” is what caused the taxi system to be such a mess.
It also built the city streets those Taxis and Ubers cruise around on. What's your point?
I am a bit confused here. This is a money losing company. Yes there has been some shift from labor to capital recently but overall investors are losing money here.
But it's not like people are necessarily worse off by choosing to drive for Uber. The thing is that for a lot of drivers, Uber is complementary income on top of a primary, inflexible income source. AFAIK, there's nothing else other than gig economy that lets someone supplement income piecemeal.
If you think in terms of socio-economic mobility, isn't the ability to squeeze extra earning opportunities in between other responsibilities a good thing?
Also, Uber has shown that it isn't 100% effective at "exploiting" its market. Last year, a lot of drivers were taking home 6 digit gross income due to driver shortages and the ability to opt into stupidly long work weeks. That's pretty significant for what is effectively a unskilled job.
If you think in terms of socio-economic mobility, isn't the ability to squeeze extra earning opportunities in between other responsibilities a good thing?
Also, Uber has shown that it isn't 100% effective at "exploiting" its market. Last year, a lot of drivers were taking home 6 digit gross income due to driver shortages and the ability to opt into stupidly long work weeks. That's pretty significant for what is effectively a unskilled job.
> But it's not like people are necessarily worse off by choosing to drive for Uber.
I'm reminded of the video of the Uber driver confronting Kalanick during a ride because the driver had been encouraged to buy a high end car by Uber in order to participate in Uber Black[0]. After he bought the car, Uber started lowering the rates on Uber Black, which resulted in less income for the drivers.
That guy sounded like he was worse off by choosing to drive for Uber and taking their own advice.
0: https://www.youtube.com/watch?v=vW50dnWVfGU
I'm reminded of the video of the Uber driver confronting Kalanick during a ride because the driver had been encouraged to buy a high end car by Uber in order to participate in Uber Black[0]. After he bought the car, Uber started lowering the rates on Uber Black, which resulted in less income for the drivers.
That guy sounded like he was worse off by choosing to drive for Uber and taking their own advice.
0: https://www.youtube.com/watch?v=vW50dnWVfGU
I mean, the whole premise of gig economy is you need to do your homework because you're an independent contractor. A lot of drivers on YouTube will tell you that you have work smart, do your own math, etc.
Obviously the Kalanick incident made news because of how viral the scenario was, but the reality is that there's a lot of variability and for every person complaining that more drivers on the road equate less per-driver demand, there's another five drivers quietly making extra cash after their day jobs.
Obviously the Kalanick incident made news because of how viral the scenario was, but the reality is that there's a lot of variability and for every person complaining that more drivers on the road equate less per-driver demand, there's another five drivers quietly making extra cash after their day jobs.
> Last year, a lot of drivers were taking home 6 digit gross income due to driver shortages. That's pretty significant for what is effectively a unskilled job.
Source needed. Might just as well be a publicity stunt by Uber.
Source needed. Might just as well be a publicity stunt by Uber.
One source is just an acquaintance of mine. A couple of others are people on youtube. Mind you, the caveat is these people worked 50+ hours per week. If you want something that looks less anecdotal, google "uber salary". Glassdoor lists a range from 18k-93k/yr.
Is that the take home after all cost, maintenance, depreciation and so on?
It's gross income, so no. For my acquaintance it was still better net income than the job he had been laid off from (we're talking a difference of more than 2x), the trade-off is that the income boost comes from opting into putting long hours. He was able to use the extra income to pay off some debt, FWIW.
If you're interested, some of the YouTube videos go into the earnings breakdown and take home amount after setting aside a maintenance fund.
If you're interested, some of the YouTube videos go into the earnings breakdown and take home amount after setting aside a maintenance fund.
> Uber is effectively an instrument to shift economic gains from labour to capital
But if the company is losing money, there are no economic gains; there are economic losses. Who is taking the losses?
But if the company is losing money, there are no economic gains; there are economic losses. Who is taking the losses?
Uber adds more value to the rider than a balkanized taxi environment. No matter where you are, it is likely to work and work in a familiar way.
Why do you take it as a fact that the legacy taxi companies were better?
where did you learn this?
Let me preface by saying I hate capitalism.
But how did capital win in this arrangement? They lost billions. They're down 25% since IPO a few years ago.
But how did capital win in this arrangement? They lost billions. They're down 25% since IPO a few years ago.
Easy answer - They are still experiencing rapid revenue growth, they have a clear path to profitability with a simple monetization strategy, and have dominated the market in many territories.
> they have a clear path to profitability
What is it? The problem I see is that there’s zero switching cost. It’s like buying salt at the supermarket. It’s all the same. They have nothing to differentiate them except their brand.
Sure they can charge a little more because of that. National brands charge a bit more than generic. But you can’t raise prices 50+% and hope people will just stick with you so that you aren’t losing money hand over fist and will only _slowly_ circle the drain.
It feels like Uber’s model was a really good one if you’re operating under the assumption that no one else could ever compete. As soon as a competitor came along they seem to have been screwed. The only play left was to pump more money in and hopes that somehow it magically worked out.
What is it? The problem I see is that there’s zero switching cost. It’s like buying salt at the supermarket. It’s all the same. They have nothing to differentiate them except their brand.
Sure they can charge a little more because of that. National brands charge a bit more than generic. But you can’t raise prices 50+% and hope people will just stick with you so that you aren’t losing money hand over fist and will only _slowly_ circle the drain.
It feels like Uber’s model was a really good one if you’re operating under the assumption that no one else could ever compete. As soon as a competitor came along they seem to have been screwed. The only play left was to pump more money in and hopes that somehow it magically worked out.
> It’s like buying salt at the supermarket. It’s all the same
You can say the same about Coca-cola or McDonalds though. They have a ton of competition and are most certainly not dead. I don't really buy the argument that competition is all that problematic for Uber. Worst comes to worst, taxis made money, so IMHO there's no reason to believe Uber couldn't settle at doing what taxis did in terms of profitability, at a bare minimum.
You can say the same about Coca-cola or McDonalds though. They have a ton of competition and are most certainly not dead. I don't really buy the argument that competition is all that problematic for Uber. Worst comes to worst, taxis made money, so IMHO there's no reason to believe Uber couldn't settle at doing what taxis did in terms of profitability, at a bare minimum.
Coke vs Pepsi are different. Same basic category (cola soft drink) but they taste different. Same with McDonalds vs Burger King. There are differences, you’re buying different products in the same category.
But if I take Lyft, Uber, or use a taxi app it’s all the sane in the end. Start at point A, get out at point B.
It may be a different car. One driver may be better. The only REAL difference is the price. In fact we know a lot of drivers drive for multiple services, so your experience may literally be identical!
But if I take Lyft, Uber, or use a taxi app it’s all the sane in the end. Start at point A, get out at point B.
It may be a different car. One driver may be better. The only REAL difference is the price. In fact we know a lot of drivers drive for multiple services, so your experience may literally be identical!
> Coke vs Pepsi are different. Same basic category (cola soft drink) but they taste different
There was a study that actually concluded most people can't tell the difference between Coke and Pepsi. And there are similar examples across many product lines: Sprite vs 7up, Dasani vs Aquafina, etc. All of these beverage companies are similar, and cost of switching between brands for colas or bottled water is zero. So why aren't we talking about how COKE is oh so bad of a stock to own? IMHO, it's because switching cost isn't zero, and things like market dominance and brand play a non-zero role.
My point is mostly that COKE doesn't need to monopolize the market to be profitable, and neither does Jarritos, and that similarly, there's no reason to think Uber requires global scale to be profitable when taxis were doing just fine before.
There was a study that actually concluded most people can't tell the difference between Coke and Pepsi. And there are similar examples across many product lines: Sprite vs 7up, Dasani vs Aquafina, etc. All of these beverage companies are similar, and cost of switching between brands for colas or bottled water is zero. So why aren't we talking about how COKE is oh so bad of a stock to own? IMHO, it's because switching cost isn't zero, and things like market dominance and brand play a non-zero role.
My point is mostly that COKE doesn't need to monopolize the market to be profitable, and neither does Jarritos, and that similarly, there's no reason to think Uber requires global scale to be profitable when taxis were doing just fine before.
But could either of those raise their prices by 25-50% and still keep their market share? Probably not. They are different from Uber that they are making money and have for very long time... While remaining price competitive compared to other players on market. Uber can't afford that in long run.
thats not true, Coke and McDonalds have barriers to entry - supply chains, buildings etc. Even if you're saying the taste of the food is not unique. Uber has no products/supply chains except for their app, its just randos signing up on the internet and driving with their own car. There are three local apps competing with Uber, and fairly successfully.
I was referring to the barrier of entry for the consumer, not the producer.
I think we may be in agreement.
I think we may be in agreement.
> Zero switching cost
In principle then it should also be a cakewalk to replace platforms like Facebook.
The real advantage the first established player has is the network effect - without that you have a catch 22 of needing drivers before passengers can use your service, and needing passengers/customers to encourage drivers to sign up and use the app. Similarly a new Facebook has to get everyone on it before anyone wants to be on it.
Lyft has a fraction of Ubers revenue, and in a lot of territories Uber doesn’t have any competition (eg here in the UK it is just Uber and traditional firms).
In principle then it should also be a cakewalk to replace platforms like Facebook.
The real advantage the first established player has is the network effect - without that you have a catch 22 of needing drivers before passengers can use your service, and needing passengers/customers to encourage drivers to sign up and use the app. Similarly a new Facebook has to get everyone on it before anyone wants to be on it.
Lyft has a fraction of Ubers revenue, and in a lot of territories Uber doesn’t have any competition (eg here in the UK it is just Uber and traditional firms).
> there’s zero switching cost
Finding an app, installing it, entering your card details and then hailing are switching costs. When I travel, I sometimes try the local app. I usually just use Uber. (In America I default to Lyft, in New York Revel.)
Keep in mind that Uber is profitable in some markets, e.g. New York.
Finding an app, installing it, entering your card details and then hailing are switching costs. When I travel, I sometimes try the local app. I usually just use Uber. (In America I default to Lyft, in New York Revel.)
Keep in mind that Uber is profitable in some markets, e.g. New York.
You don’t have to enter your card details. Since they are selling physical goods, they can (and do) use Apple Pay and your credit card is already in your phone.
Just to clarify;
Apple Pay - standard credit card processing rates
In-app purchases: 30% cut goes to Apple.
Just to clarify;
Apple Pay - standard credit card processing rates
In-app purchases: 30% cut goes to Apple.
OK. It’s a four minute process.
It’s not like switching from Xbox to PlayStation or Windows to Mac or something. You don’t have to throw away something of value that you purchased and buy something else expensive.
You can go back-and-forth between the apps.
It’s not like switching from Xbox to PlayStation or Windows to Mac or something. You don’t have to throw away something of value that you purchased and buy something else expensive.
You can go back-and-forth between the apps.
My take: Uber is a libertarian economic crowbar.
All of its backers, all of its investors, imagine an Uber world where no individual matters except themselves.
They wilfully break laws expecting to be able to overturn them before they are punished; they destroy markets knowing that the regulation will have to adapt to allow them to continue.
The Uberisation of everything is the tech sector's most disgraceful product.
All of its backers, all of its investors, imagine an Uber world where no individual matters except themselves.
They wilfully break laws expecting to be able to overturn them before they are punished; they destroy markets knowing that the regulation will have to adapt to allow them to continue.
The Uberisation of everything is the tech sector's most disgraceful product.
This article is 3+ years old
No 2019 tag in the title?
Just want to provide taxi service context from "a lesser (known) place" - Łódź, Poland:
1. You can't hail a cab that's in traffic
It's illegal for them to stop randomly.
2. Cabs have dedicated "TAXI" spots
I _believe_ the city designates them - well marked space along curb. There any taxi company cabs can queue and wait for "off street pickup". Like at LAX, just smaller and spread over the city (not necessarily evenly).
3. Every taxi company prefer you to order the cab earlier
You can do it old-school via a voice call, or via an app, or via an SMS or... I'm not even sure, I speak the language so I just call. You can order a cab for tomorrow, for the middle of the night etc. And they _will not ask_ you about the destination, only about the pickup point - which contrary to point 1 can be literally anywhere a car can stop without blocking traffic (i.e. a road in the middle of nowhere).
4. For an ordered ride the dispatcher do care
It's the major part of their job for you to get your cab at the place and on the time agreed. I find it insulting if the cab isn't _earlier_ than the agreed time. Cab being late more than couple of minutes is very rare.
5. For an ordered ride you do get some cab info
My favorite company sends an SMS with not only the car description and cab number (well visible), but also a link to a very simple but "data only" web-app that shows where the cab is, updating about once a minute. So like Uber, but simpler and way more reliable (ever seen your Uber driver get magically teleported way back than they were a second ago? ...prediction gone wrong).
6. Pay cash, card and others
As per 3 you'll be asked your destination only ever when you're already in the cab, and by the driver - so I have no idea if any prepaid options are available, but then again to me taxi is like a haircut or a restaurant meal - a service where prepayment is just a bad incentive for the provider.
7. It's like a restaurant meal
I had cases where I was going for a train (so tight schedule), but the cab driver got rather unlucky with the choice of route and time was running out... they offered to go lower over the metered number, because hey they are people too, and that's as much as they have power to do. I decline, not their fault (and a decade of experience of building in buffers for long-range travel means "I'm always fine").
I believe most if not all of the above applies across all Polish cities and taxi companies. I have used Uber in Poland only exactly twice, and many times abroad, with most trips in the USA. Compared to my Łódź, Poland taxi experience Uber is mostly "meh" - and it's very unreliable for anything with a schedule.
1. You can't hail a cab that's in traffic
It's illegal for them to stop randomly.
2. Cabs have dedicated "TAXI" spots
I _believe_ the city designates them - well marked space along curb. There any taxi company cabs can queue and wait for "off street pickup". Like at LAX, just smaller and spread over the city (not necessarily evenly).
3. Every taxi company prefer you to order the cab earlier
You can do it old-school via a voice call, or via an app, or via an SMS or... I'm not even sure, I speak the language so I just call. You can order a cab for tomorrow, for the middle of the night etc. And they _will not ask_ you about the destination, only about the pickup point - which contrary to point 1 can be literally anywhere a car can stop without blocking traffic (i.e. a road in the middle of nowhere).
4. For an ordered ride the dispatcher do care
It's the major part of their job for you to get your cab at the place and on the time agreed. I find it insulting if the cab isn't _earlier_ than the agreed time. Cab being late more than couple of minutes is very rare.
5. For an ordered ride you do get some cab info
My favorite company sends an SMS with not only the car description and cab number (well visible), but also a link to a very simple but "data only" web-app that shows where the cab is, updating about once a minute. So like Uber, but simpler and way more reliable (ever seen your Uber driver get magically teleported way back than they were a second ago? ...prediction gone wrong).
6. Pay cash, card and others
As per 3 you'll be asked your destination only ever when you're already in the cab, and by the driver - so I have no idea if any prepaid options are available, but then again to me taxi is like a haircut or a restaurant meal - a service where prepayment is just a bad incentive for the provider.
7. It's like a restaurant meal
I had cases where I was going for a train (so tight schedule), but the cab driver got rather unlucky with the choice of route and time was running out... they offered to go lower over the metered number, because hey they are people too, and that's as much as they have power to do. I decline, not their fault (and a decade of experience of building in buffers for long-range travel means "I'm always fine").
I believe most if not all of the above applies across all Polish cities and taxi companies. I have used Uber in Poland only exactly twice, and many times abroad, with most trips in the USA. Compared to my Łódź, Poland taxi experience Uber is mostly "meh" - and it's very unreliable for anything with a schedule.
I wonder if there are similar problems with airbnb.
I've read from people complaining that their airbnb was cancelled.
The problem with new age entrepreneurship and startups is that their interests intersects with either libertarian or conservative politics.
We want to think the silicon valley holds progressive values, but it's not entirely true.
I've read from people complaining that their airbnb was cancelled.
The problem with new age entrepreneurship and startups is that their interests intersects with either libertarian or conservative politics.
We want to think the silicon valley holds progressive values, but it's not entirely true.
It's successful because success only requires you accomplish what you set out to do. If you steal money from a bank and get away with it, you were successful.
Uber’s margin gains have not come from efficiency improvements but from its ability to unilaterally cut driver compensation by 40 percent since 2016.
So much more cost-effective than slavery.
So much more cost-effective than slavery.
Actions possible, when the market is divided between just two companies. Hopefully, some kind of regulatory body, will investigate if there is no collusion.
"Market share of the leading ride-hailing companies in the United States from September 2017 to July 2021"
https://www.statista.com/statistics/910704/market-share-of-r...
"...For years, drivers have seen their earnings decrease despite putting in longer and longer hours behind the wheel. Earnings are decreasing because Uber and Lyft keep changing the rates - keeping prices the same for passengers, lowering pay for drivers and pocketing the difference...As Uber and Lyft continue to make more, drivers continue to make less..."
https://www.coworker.org/petitions/uber-lyft-reverse-the-rat...
"Market share of the leading ride-hailing companies in the United States from September 2017 to July 2021"
https://www.statista.com/statistics/910704/market-share-of-r...
"...For years, drivers have seen their earnings decrease despite putting in longer and longer hours behind the wheel. Earnings are decreasing because Uber and Lyft keep changing the rates - keeping prices the same for passengers, lowering pay for drivers and pocketing the difference...As Uber and Lyft continue to make more, drivers continue to make less..."
https://www.coworker.org/petitions/uber-lyft-reverse-the-rat...
Slavery is not a trade you choose to practice. Not sure how this is constructive.
"slavery" is a relationship with gravitational pull for the ages; less a literal, particular configuration IMHO
If you call working for uber "slavery", what do you call what african-americans were subjected to in southern US up to the 19th century? "super-slavery"?
If you can freely change the meaning of words then they may as well have no meaning at all.
Only if we don’t all agree on the new meaning :)
Animats did not claim it's Slavery, it claimed it's more cost-effective than Slavery.
Slavery is not a trade you choose to have practiced on you, it is a trade you choose to practice.
And as a slave, you always have a choice. It's not cost effective to monitor and restrain you well enough to keep you from killing yourself indefinitely. Lacking others, plenty of slaves have chosen and do choose this option. Same as if all physical work turns into piece/gig-work. You can choose to do it, or you can choose to starve.
And as a slave, you always have a choice. It's not cost effective to monitor and restrain you well enough to keep you from killing yourself indefinitely. Lacking others, plenty of slaves have chosen and do choose this option. Same as if all physical work turns into piece/gig-work. You can choose to do it, or you can choose to starve.
Or, you know, as a gig or piece worker, you can choose to do something else, which as it turns out is not a choice a slave enjoys.
Do you feel kind of dirty suggesting that a slave can just choose to kill himself and comparing that to Barcelona cab drivers? If you don't, why not?
Do you feel kind of dirty suggesting that a slave can just choose to kill himself and comparing that to Barcelona cab drivers? If you don't, why not?
> as a gig or piece worker, you can choose to do something else
Not if every other job is gig and piecework.
> Do you feel kind of dirty suggesting that a slave can just choose to kill himself and comparing that to Barcelona cab drivers? If you don't, why not?
No, because choice is a word that means something. You're doing the common rationalization that there are always choices in employment, so while any particular employment can be arbitrarily bad, it's not slavery. I'm pointing out that slaves also have bad choices.
Not if every other job is gig and piecework.
> Do you feel kind of dirty suggesting that a slave can just choose to kill himself and comparing that to Barcelona cab drivers? If you don't, why not?
No, because choice is a word that means something. You're doing the common rationalization that there are always choices in employment, so while any particular employment can be arbitrarily bad, it's not slavery. I'm pointing out that slaves also have bad choices.
I mean, among other things, Spain has a social safety net for people who don't work at all.
There are obviously shitty jobs in the world. There are obviously people whose choices do not include, you know, the ideal of material well-being plus fulfilling days. It is certainly a defensible position that the world owes it to people in that position to try to make their choices better.
Conflating those things to slavery makes you fundamentally an unserious person.
There are obviously shitty jobs in the world. There are obviously people whose choices do not include, you know, the ideal of material well-being plus fulfilling days. It is certainly a defensible position that the world owes it to people in that position to try to make their choices better.
Conflating those things to slavery makes you fundamentally an unserious person.
Slavery has redefined itself into newer forms. One such manifestation is in the form of worker exploitation.
I am interested to hear your reasoning on this. To me, thinking through it, I see some potential commonalities but the sine qua non of being owned as property fails. Is the argument that people have to work in general to survive, and it is the fact that they have to work what renders them as a “modern slave?” I hope not because that seems facile.
[deleted]
Words don’t redefine themselves.
Describing low-paying jobs as “slavery” is a metaphor. Saying “certain aspects of X are like Y” does not mean Y ‘is’ X.
But, of course, that is often why rhetoricians use metaphors and similes… to dupe and confuse people into a false equivalence.
There are slaves in this world… diluting the meaning of the word to include Uber drivers does not help them.
Describing low-paying jobs as “slavery” is a metaphor. Saying “certain aspects of X are like Y” does not mean Y ‘is’ X.
But, of course, that is often why rhetoricians use metaphors and similes… to dupe and confuse people into a false equivalence.
There are slaves in this world… diluting the meaning of the word to include Uber drivers does not help them.
That is not the argument. The argument is that Uber business model is more cost-effective than Slavery. (And without trying to sound insensitive here)...the "slave owner" still bears the costs of his "slaves".
But it’s still not profitable, unlike slavery which was extremely profitable. So how can it be more effective?
"Slave owners" did not have high AWS bills, Stock Based compensation, Sales and Marketing and so on...
"Uber Technologies Operating Expenses 2017-2021 | UBER"
https://www.macrotrends.net/stocks/charts/UBER/uber-technolo....
"Uber Announces Results for Fourth Quarter and Full Year 2021"
https://investor.uber.com/news-events/news/press-release-det...
"Uber Technologies Operating Expenses 2017-2021 | UBER"
https://www.macrotrends.net/stocks/charts/UBER/uber-technolo....
"Uber Announces Results for Fourth Quarter and Full Year 2021"
https://investor.uber.com/news-events/news/press-release-det...
[deleted]
[deleted]
Unless you're able to show how Uber used violence or threats of violence to force drivers to work, it's not slavery.
Even if it was the only employer on the driver labour market, it still would not be slavery — but it's not even that. In almost any labour market that Uber operates in, it has competition.
Even if it was the only employer on the driver labour market, it still would not be slavery — but it's not even that. In almost any labour market that Uber operates in, it has competition.
> So much more cost-effective than slavery.
The point is that it's not slavery, its cheaper.
The point is that it's not slavery, its cheaper.
1. Uber is actually a higher cost/less efficient producer of urban car services than the taxi companies it has driven out of business
2. Individual Uber drivers with limited capital cannot acquire, finance, maintain and insure vehicles more economically than Yellow Cab
3. Expenses other than drivers, vehicles, and fuel account for 15 percent of traditional taxi costs but Uber charges drivers 25-30 percent without coming close to covering their actual costs
4. Uber’s surge pricing does not improve efficiency, it simply prices those night shift workers out of the market
5. And as Uber has demonstrated, unlimited taxi market entry can lead to ruinous overcapacity and can allow part-timers to cherry-pick the peak revenue that full-time drivers depend on to cover their costs
6. Uber’s investors knew that it needed raw political power to accelerate growth, and to maintain its hoped-for dominance
7. Uber’s major strategic breakthrough was to treat business development as an entirely political process, using techniques that had proven successful in partisan political settings
8. All of Uber’s early popularity and rapid revenue and valuation growth are explained by the billions in predatory investor subsidies needed to drive those more efficient (but poorly capitalized) incumbents into bankruptcy
9. That [early popularity] allowed [Uber] to pursue more stratospheric valuations by exploiting anticompetitive market power and rent-extraction and buying out any potential competitive threats