[HN Gopher] The Uber Bubble: Why Is a Company That Lost Billions...
___________________________________________________________________
The Uber Bubble: Why Is a Company That Lost Billions Claimed to Be
Successful?
Author : maxerickson
Score : 91 points
Date : 2022-04-17 21:21 UTC (1 hours ago)
(HTM) web link (braveneweurope.com)
(TXT) w3m dump (braveneweurope.com)
| Closi wrote:
| 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.
| MBCook wrote:
| > 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.
| lhorie wrote:
| > 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.
| JumpCrisscross wrote:
| > _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.)
|
| Keep in mind that Uber is profitable in some markets, _e.g._
| New York.
| jsemrau wrote:
| 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.
| oblio wrote:
| > 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.
| criddell wrote:
| > 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.
| Gwypaas wrote:
| 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.
| thematrixturtle wrote:
| 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/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.
| acchow wrote:
| 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?
| avs733 wrote:
| I would be curious to see independent citations of these
| claims.
| emteycz wrote:
| Talk with the driver few times? I never had a Uber driver who
| said they would rather have a normal job. 500+ rides.
| justinpowers wrote:
| Selection bias...
| emteycz wrote:
| 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.
| vt240 wrote:
| 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 it's 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.
| thematrixturtle wrote:
| 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.
| novok wrote:
| 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.
| thematrixturtle wrote:
| 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.
| Havoc wrote:
| 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
| acchow wrote:
| > 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.
| Animats wrote:
| _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.
| cyanydeez wrote:
| 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.
| AmericanChopper wrote:
| How could Uber possibly be described as a monopoly when they
| have multiple competitions in every market they operate in?
| Ferrari911 wrote:
| The company as a whole is successful. The shareholders were not
| successful, at least those who put money in post 2015 [0]
|
| [0]https://craft.co/uber/funding-rounds
| anon84827820 wrote:
| inamberclad wrote:
| 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.
| danamit wrote:
| 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.
| presentation wrote:
| 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.
| [deleted]
| Barrin92 wrote:
| 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.
| rzz3 wrote:
| 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).
| taxicabjesus wrote:
| 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.
| dylkil wrote:
| > 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
| darth_avocado wrote:
| 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.
| wefarrell wrote:
| 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.
| taylorhou wrote:
| 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).
| brendoelfrendo wrote:
| 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.
| 1over137 wrote:
| >having to actually call someone on a phone
|
| The horror!
| scarface74 wrote:
| 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?
| Mountain_Skies wrote:
| 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.
| RicoElectrico wrote:
| 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.
|
| Similarly, 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.
| PaulHoule wrote:
| 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 (in Montreal I would ride the
| 747 bus to/from the Trudeau airport unless it was crazy late
| or early, I'd take the bus to downtown LA and then the subway
| to Hollywood, etc.) it's been rare for me to ride an Taxi or
| Uber. 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.
| systemvoltage wrote:
| You forgot safety. I can't recall how many times I've come
| close to an accident by Taxi drivers.
|
| Fuck them. These people were the most unsafe drivers on the
| road.
| MrStonedOne wrote:
| NikolaNovak wrote:
| 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.
| barry-cotter wrote:
| 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.
| tmnvix wrote:
| 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.
| 1270018080 wrote:
| 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.
| scoopertrooper wrote:
| 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.
| imtringued wrote:
| 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.
| menzoic wrote:
| 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.
| ISL wrote:
| 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.
| JumpCrisscross wrote:
| > _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.
| anyfoo wrote:
| 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.
| JumpCrisscross wrote:
| > _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.)
| anyfoo wrote:
| > 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... Why people would
| regularly trust their transporting, and also associated
| safety, to untrained people who downloaded an app escapes
| me.
| thematrixturtle wrote:
| 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).
| anyfoo wrote:
| 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.
| JumpCrisscross wrote:
| 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.
| BobbyJo wrote:
| > 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.
| JumpCrisscross wrote:
| > _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.
| BobbyJo wrote:
| ...those are all technical problems, no?
| sbarre wrote:
| 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.
| [deleted]
| colinmorelli wrote:
| 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.
| sbarre wrote:
| 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.
| Sebguer wrote:
| You just described a bunch of advantages that would still
| exist if they simply licensed their tech to taxi
| companies.
| novok wrote:
| Taxi have been able to go onto Uber for a very long time
| now. But they don't do so willingly most of the time.
| colinmorelli wrote:
| 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."
| thr0wawayf00 wrote:
| > 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.
| rubicon33 wrote:
| 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.
| sbarre wrote:
| > 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...
| JumpCrisscross wrote:
| > _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.
| sbarre wrote:
| 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.
| JumpCrisscross wrote:
| > _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_.
| Sebguer wrote:
| 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.
| vgel wrote:
| 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.
| Sebguer wrote:
| 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.
| yywwbbn wrote:
| 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
| imtringued wrote:
| 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.
| menzoic wrote:
| >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.
| scarface74 wrote:
| Why do you take it as a fact that the legacy taxi companies
| were better?
| mupuff1234 wrote:
| 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.
| Znafon wrote:
| 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.
| akmarinov wrote:
| Isn't booking.com up there as well in that field?
| erik_seaberg wrote:
| I see VRBO (Vacation Rentals by Owner) ads frequently.
| ggm wrote:
| They also expatriate profits from economies, and are probably
| using international tax minimisation methods.
| yesenadam wrote:
| (2019) - _This is the first in a series of three articles from
| the end of 2019_
| tootie wrote:
| Yeah, I'm pretty sure they did actually have a small operating
| profit Q421.
| westcort wrote:
| My key takeaways:
|
| 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
| ttcbj wrote:
| 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.
| sbarre wrote:
| > 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?
| Animats wrote:
| _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.
| Supermancho wrote:
| Slavery is not a trade you choose to practice. Not sure how
| this is constructive.
| neojebfkekeej wrote:
| Slavery has redefined itself into newer forms. One such
| manifestation is in the form of worker exploitation.
| ohyoutravel wrote:
| 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]
| lurquer wrote:
| 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.
| belter wrote:
| 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".
| yywwbbn wrote:
| But it's still not profitable, unlike slavery which was
| extremely profitable. So how can it be more effective?
| mistrial9 wrote:
| "slavery" is a relationship with gravitational pull for the
| ages; less a literal, particular configuration IMHO
| naoqj wrote:
| If you can freely change the meaning of words then they may
| as well have no meaning at all.
| catlifeonmars wrote:
| Only if we don't all agree on the new meaning :)
| belter wrote:
| Animats did not claim it's Slavery, it claimed it's more
| cost-effective than Slavery.
| pessimizer wrote:
| 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.
| aetherson wrote:
| 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?
| golergka wrote:
| 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.
| Skunkleton wrote:
| > So much more cost-effective than slavery.
|
| The point is that it's not slavery, its cheaper.
| belter wrote:
| 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...
| [deleted]
___________________________________________________________________
(page generated 2022-04-17 23:00 UTC)