[HN Gopher] Uber and Lyft's new road: Fewer drivers, thrifty rid... ___________________________________________________________________ Uber and Lyft's new road: Fewer drivers, thrifty riders and jittery investors Author : elsewhen Score : 168 points Date : 2022-05-28 18:27 UTC (4 hours ago) (HTM) web link (www.wsj.com) (TXT) w3m dump (www.wsj.com) | scarface74 wrote: | Shocker! A product is more popular that is sold below cost and | you actually need to charge more for a product than it costs to | produce? | black_13 wrote: | lumost wrote: | I think we're about to see a lot of tech ideas with questionable | economics come back to earth. When the cost of capital was below | a single digit, "parking" money in a growth bet could vaguely | make sense. After all, someday Uber would figure it out, or get | AVs, or .. something? Better than leaving the money in a .01% | money market for 10 years, or parking the money in something with | no path for growth like industrials. | | This problem isn't restricted to startups however, even big tech | has big expensive forays into questionable markets. Meta is | building something for a few billion a year, Google has hundreds | of strange an unprofitable businesses, and B2B SaaS is full of | startups which may actually just be consultancies. | | A 10-12% cost of capital means that you either need to have a | real plan to turn profit in 3 years or investors won't care. Just | breaking even means an opportunity cost of 30%. | jjfoooo6 wrote: | Three different flavors of big bet. Meta realizing their core | business, while massive, has peaked, loudly reorienting their | business around a dubious moonshot bet. | | Google burning cash in a moonshot division, dubiously betting | that creating startups within Google is easier than outside of | it. | | Uber/Lyft subsidizing customers for a long while to take over | the market, which... pretty much worked? Of the three "big | bets" this seems most promising. Even if the market decreases, | it's not going away, nor is it going back to regional taxi | companies. | lumost wrote: | Its worth considering that 3 is actually quite common within | large companies as well. I can think of a few industries | dominated by big tech that have never turned a profit or even | positive free cash flow. | ghaff wrote: | The thing that actually puzzles me is that in the post- | Kalanick era, Uber didn't more aggressively pivot to | essentially being a taxi company where drivers supply their | own vehicles. You've got a working app--how many people do | you need to maintain/enhance it? Self-driving isn't | happening in an economically interesting time horizon-- | certainly not reliable door-to-door in cities. So raise | prices, cut costs, and have what's a fairly attractive taxi | business for many places. | | Of course, that may not have been what investors wanted to | hear. | bin_bash wrote: | I think you're right. I couldn't imagine using taxis when | traveling for work ever again. Uber sends the receipt | straight into Concur for me. | | Pre-Uber I remember having to get Taxi drivers to write me a | freehand paper receipt to expense. | prasadjoglekar wrote: | Exactly right! An unintended side effect of the artificially | low cost of capital was that labor seemed expensive. All the | long shot ideas that tried to "improve productivity" - whether | by replacing drivers with driverless cars, or robots flipping | burgers are entirely uneconomical when cost of capital goes up. | | Now, capital has become more expensive and labor is also more | expensive. It's a perfect shitstorm for a lot of projects. | websap wrote: | Comparing Meta and Google, to Lyft and Uber isn't an apples to | apples comparison. The former have cash cow businesses and have | captial that they can deploy to find the next $100 billion | dollar business. Its essential for their long term survival to | keep diversifying and reinventing themselves. | halJordan wrote: | I think that's the point. That even these well funded, | relatively sovereign companies will be punished for their | moonshots and that means the future will be devastating for | these magical unicorns. | sfblah wrote: | One wonders what government policies preventing this from | happening are doing to the future. I don't have any way to | objectively measure this, but my general sense is each day | interest rates remain artificially low, the downside | becomes greater. I'd be curious if you know a way to | quantify this effect. | ForHackernews wrote: | Interest rates are not being kept "artificially low": | central banks have already raised rates, and have | signalled that they intend to continue raising rates. | lordnacho wrote: | Let's not forget that this kind of venture also destroys the | business it was meant to disrupt, at least while the venture | money is flowing. | | Uncreative distruction. | | Somehow it seems wrong that people can make enough money to buy | an island without actually making money. | seibelj wrote: | Taxi cabs pre-Uber were awful, at least in the 3 cities I used | them most (NYC, Boston, Vegas). Dirty cars and often | unmaintained. Regularly taken in circuitous routes to raise the | meter charge. "Broken" credit card machine. Very difficult to | find a taxi if you weren't in popular areas. Calling a | dispatcher for a taxi only to wait an hour and have them not | show up. | | Having apps solved all of the above problems. I would give 0% | chance of any similar improvements under the monopolistic | medallion system that exists in the old regime. Uber forced | innovation that was so much better the politicians folded | despite intense lobbying from the old hands. | marcinzm wrote: | That however is why they were cheaper. It seems, from the | article, people don't actually want to pay the premium for | that better level of service. | uxp100 wrote: | Which was cheaper? In my experience, in addition to being | much worse in many ways (love to be called and told my cab | driver is ready to pick me up when I am already boarded and | sitting in a plane, after the dispatcher repeatedly told me | they were 10 minutes away for an hour, and then I managed | to just street hail a cab at 5 am) cabs were also about 50% | more expensive. | | However, my local cab company got an app, it's a piece of | shit, but it shows where the cab is in a map as it comes to | you, which really was the killer feature for Uber/Lyft for | me. So good riddance Uber, you served a purpose for a time, | but normal cabs stepped up their game just a little bit, | and I have basically negative loyalty to you. | marcinzm wrote: | In NYC the call taxi companies were cheaper than | uber/lyft even in the prime discount days of those apps. | Of course the user experience was much worse. | vkou wrote: | In NYC my user experience with Lyft has been much worse | than taxis. | | Cost more, longer waits, cherry on top of a Lyft driver | waiting five minutes on the other side of a long block | away from pickup, and canceling the ride because I | allegedly refused to show up. That I had to talk to CS to | reverse the charge with. | | I took taxis for the rest of my time in NYC, and I can't | see any reason not to keep doing so. | ghaff wrote: | >people don't actually want to pay the premium for that | better level of service | | See air travel in general. | logifail wrote: | >>people don't actually want to pay the premium for that | better level of service | | > See air travel in general. | | At least in Europe, currently having a provider get you | from A to B as per your booking is the key, "premium" / | "better level of service" is completely irrelevant. | | I'm back to booking everything as cheap as possible. If | it's all going to go wrong, I want to have paid peanuts | for it so I can just walk away and not bother having to | try and claim anything back. | ghaff wrote: | I admittedly do relatively few short-haul flights. With | some exceptions, 5 hours is about the floor so I will pay | for more comfort/relaxation. | johnisgood wrote: | In Eastern Europe there is no Uber nor Lyft. Waiting time is | 2-10 minutes on average in a fairly large city. Cars are | definitely not dirty nor unmaintained, they have the | reputation of having cars that are almost new, and so forth. | Prices have increased of course. | scarface74 wrote: | I don't see the problem. The cab companies needed to die. Uber | and Lyft will raise their prices to become affordable - back to | the price of cabs - and still be a lot better than what they | replaced. | cj wrote: | We're killing hundreds (thousands?) of individual cab | companies so that we can consolidate the entirety of the cab | industry into 2 tech conglomerates. I don't see how that's a | win. | scarface74 wrote: | Those cab companies offer worse services and are | monopolistic and the whole medallion system. | | There are plenty of horror stories where minorities can't | get a cab in the middle of NYC. | | https://www.nydailynews.com/new-york/ny-metro-cabbies- | fines-... | | This is not a problem with Uber. | AlexandrB wrote: | I would take hundreds regional monopolies over one global | monopoly any day. At least if you're banned from the taxi | service in Boston you can still catch a cab in New York. | missedthecue wrote: | I think you're underestimating the number of global ride | sharing companies. | soared wrote: | My city didn't have taxis, but we have Lyft and Uber. | ceejayoz wrote: | If you're big enough to be a Lyft and Uber market, you're big | enough for taxis. Outside of NYC they're usually just not | that visible; normal cars, dispatched via phone. | aeturnum wrote: | People are pointing out that Lyft and Uber often brought car | service to towns without taxies and that is true (and good I | suppose). | | But I do not think that's the business we should be sad about | disrupting - Lyft and especially Uber have been fighting hard | against all sorts of public transit systems across the US | because they view them as competitors. It's unclear how | effective they have been, but I also have no love for their | intention - which is to lock the public into their service. | rvz wrote: | Totally unsurprising and still both unprofitable businesses | (Lyft, and Uber) 3 years after IPO. [0] | | [0] https://news.ycombinator.com/item?id=21328967 | munificent wrote: | My favorite feature of Uber and Lyft the last several years is | that it's essentially a crowdsourced way to transfer wealth from | VCs to random users. | | Operating every drive at a loss means the rider and drivers | benefit and the person holding the bag is some VC who apparently | has more money than they know what to do with. Given how many | financial structures today seem to flow in the opposite direction | and skim a little money from everyone to transfer it to the | already-rich, it's nice seeing a system that (completely | unintentionally) flows the other way. | hotpotamus wrote: | I felt the same way until the IPO. | walrus01 wrote: | the drivers don't really benefit that much, because after you | subtract the cost of the purchase of a suitable car, | repairs/maintenance, tires, fuel and so on to calculate the | fully loaded cost per mile of operating a lyft car for several | years, the wage remaining for the driver (after subtracting the | US income tax as a 1099) is often under the minimum wage (and | _far_ under the living wage) in many major metro areas. Using | Seattle as an example and its $15 /hr minimum wage. | WalterBright wrote: | If it didn't work for them, they wouldn't drive. | aetherson wrote: | It's a strong labor market. Nothing stopping lyft drivers | from getting jobs in food service or warehouses or a variety | of other jobs that have few requirements to qualify for. | walrus01 wrote: | I think there's a big reliance on the part of these | employers in recruiting and retaining employees who are | either less literate, less informed, more gullible, or more | servile than the average service industry worker. | black_13 wrote: | AYBABTME wrote: | You don't need a work visa to drive an Uber. | missedthecue wrote: | According to various online calculators, the average | operating cost for a Prius is about $0.11 per mile. Includes | fuel, depreciation, repair, maintenance, etc... | | Uber drivers are doing way better than $0.11 per mile. | ncr100 wrote: | Aaaand the disruption to the faltering regulated Taxi system, | eating that for lunch. | | Travis K is still out there. Doing things. | 1270018080 wrote: | The early VC's cashed out and made billions. Retail investors | are paying for these losses. | mperham wrote: | The VCs made plenty of money in the IPO. It's the shareholders | who are left holding an empty bag. | robertlagrant wrote: | VC funds are constantly being spent like this. The main | unavoidable flow in the other direction is taxes and inflation | from printing money. | | VCs get rich, but they risk a lot of their own money doing so. | native_samples wrote: | VCs are generally not risking their own money these days. | They raise funds from many other people, and sometimes that | includes <gulp> pension funds. | astrange wrote: | Spending your own money is called angel investing. VCs | spend other people's money. | s5300 wrote: | I once had uber x drives (that's what the solo is called | right?) in San Diego going... at least 5 miles. Sorrento | Valley/La Jolla. | | After a month or two I started having rides discounted to | literally as low as $3.12 | | All I could think was that "somebody is definitely losing a lot | of money here & it's not me" | | Was very interesting. I know the driver wouldn't be doing that | if he was making $3 for the trip. | rglullis wrote: | It could also be seen as a very convoluted way to subsidize the | car industry and to stall the push for better public transit. | rzz3 wrote: | I always see people coming back to public transit in | discussions like this, but there seems to be some kind of | fundamental disconnect. Uber/Lyft are for people who don't | have that kind of time. | rglullis wrote: | Today you are one of the lucky 10 thousand: | https://youtu.be/RQY6WGOoYis | tonguez wrote: | the fundamental disconnect is you aren't actually more | important than other people just because you were given | more money | hef19898 wrote: | Drivers work gogs, as in not being employees. Traditional taxi | companies, as shitty as their service might be some places, are | risking of being driven out of business. Legislation has been | ignored. Thebonly ones not holding the bag are the VCs, and | users. Everyone else is. And all that in the pursuit of an | elusive monopoly fuel by cheap, and later dumb, money. Oh yeah, | talking about dumb money, retail investors are holding the bag | as well. | Permit wrote: | > Traditional taxi companies, as shitty as their service | might be some places, are risking of being driven out of | business. | | This is not the downside you think it is. So help me if I | could snap my fingers and make this happen I just might do | it. | gcheong wrote: | But what makes them so awful? Most likely it was the | medallion system that limited competition in the market so | maybe there is a system somewhere in-between that and the | unprofitable ride share systems that work well for | everyone. I just got back from Madrid and taxis were | plentiful and metered with a flat fare to and from the | airport. They all have the same markings so you can tell | they are taxis but there are a variety of vehicles from | Teslas to bare bones stick shifters being used. Uber was | barely a thing there but there was an app called Free Now | that many of the cars had on them. | admax88qqq wrote: | So basically they had Uber but as a different brand. | | If you remove the medallion system, let people drive | their own cars, and coordinate with riders via an app, | you have Uber. | gcheong wrote: | The difference is there is some regulation around it | because they are all metered so everyone is charging the | same rates and I suspect it's a better deal for the | drivers and customers overall. Btw I didn't use the app | once as it was just easier to hail from the street. | Permit wrote: | Off the top of my head: | | - Lying about the debit/credit machine being broken in | order to receive cash. | | - Being unwilling to drive to/from certain neighborhoods. | | - Not turning the meter on in order to take advantage of | people not from the city/country. | | - My (possibly incorrect) perception is that they are | harder to hold to account. I do not always know the | number of the taxi that picked me up and dropped me off. | | - Calling a taxi dispatch does not guarantee one will | arrive. If service is slow you end up in a strange limbo | of "Is that taxi late or have I been abandoned at | 2:30am?" | | There's probably more but those are the ones that spring | to mind based on my personal experiences with taxis. Even | if Uber was only offered as a premium service I would | still order one over a taxi. | princevegeta89 wrote: | Isn't that how a majority of inflated startups work? VC money | moves the bus for a quite a long time and if profitability | can't be figured out, it will come out in the form of layoffs | and downturns. | | Take Doordash for example, every delivery they do with is | powered by VC money. | dasil003 wrote: | DoorDash IPO'ed 18 months ago. | lukifer wrote: | The P2P transportation market is an ideal one for a workers' | cooperative. The fact that Uber and Lyft are running at a loss | (...for now) does not make them any less rent-seeking in their | business model. | | https://drivers.coop/ | | https://ridefair.io/ | itake wrote: | > ideal one for a workers' cooperative | | I am sorry, but there is not way a workers' cooperative can | build a safe product for passenger and drivers. All of the | leading rideshare companies have invested 10s if not 100s of | millions into safety platforms that leverage the latest face | recognition, fraud algorithms, and more to ensure that everyone | can have a safe ride. | | Both passengers and drivers robbed and murdered each before | these investments were made to keep the bad guys off and the | good guys safe. | igorkraw wrote: | ...you know why they need to do that? Because they have an | incentive to let basically anyone join and have an | adversarial relationship. A workers cooperative can be a | faceless organisation, but unlike a company it is also an | _actual_ community, so things like vetting who let in I 'd | much more feasible to do you'd do in a community than in a | "startup family" trying to squeeze their drivers. It could be | as simple as requiring somebody to vouch for you and being | responsible for whatever fuckups you do. | tested23 wrote: | ceeplusplus wrote: | From the jobs page of the first link for a software engineer | position: "The position is salaried up to $72,000 a year | depending on geography. Fixed-term contracts are available." | | Sorry, but you're not buying competitive talent with 72k/year | salary. Uber can squeeze out tons of marginal efficiencies via | better routing/matching, price discrimination, and surge | algorithms. Implementing those algorithms means hiring good | talent, especially in ML. Having a fancy frontend is only 10% | of the picture if you want drivers to have good utilization. | endisneigh wrote: | > edit: and the second link advertises using Postgres, which | will never scale past the size of a single US state | | to be fair depending on the exact implementation details you | probably could do everything you need, including management | using Spanner and BigTable. | hackernewds wrote: | this assumes Uber can only hire silicon valley engineers. | $72k is plenty money in a cheap gas/food/rent no state tax | city like Dallas | ForHackernews wrote: | > which will never scale past the size of a single US state | | People live in a city and take cabs in that city. Build a | city-scale app. For extra credit, add federation APIs to | interoperate with other city-scale worker-owned co-op apps. | | Only a tiny 0.1% of people (including Uber's dumb investors) | think that being able to use the same app in every city on | earth is a killer feature. | endisneigh wrote: | You don't even need multiple apps. Even if a Postgres DB | only scaled to a single city, which is wrong to begin with, | you could shard it per city/state/country pretty easily. | [deleted] | mathgladiator wrote: | I think most of those efficiencies can be done better by a | human dispatcher. The key thing which made Uber take off was | a combination of convenience and better cars. Solve the | convenience and that can take you a far way for many people. | ceeplusplus wrote: | I don't really think humans are better equipped to route | 10-15 cars in a region factoring in drivers' preferences | for direction, pickup and dropoff zone attractiveness to | drivers, and traffic. See this research on human solutions | to the vehicle routing problem: "When comparing the human | performance with the optimal solution and classical | heuristics (nearest neighbor, savings, and sweep), we see | that participants typically perform better than the worst | heuristic and worse than the best heuristic" [1]. All of | these algorithms are pretty naive baselines and you can do | a lot better with actual routing software. And this being a | low margin winner take all business, Uber being slightly | better with algorithms makes it substantially better as an | option compared to the coop. | | Also I think you're underestimating the difficulty of | consistent hiring. You can definitely find a good | dispatcher in NYC, but can you scale that level of skill to | the entire US? | | [1] https://www.sciencedirect.com/science/article/abs/pii/S | 03050... | mathgladiator wrote: | All postgres needs to handle is a large metro area and then | is trivial to shard and scale out. | karaterobot wrote: | I would like to read an explanation for how Uber and Lyft can't | be profitable when taxicab companies can be. | SnowHill9902 wrote: | Overhead. Taxi drivers get a return on their time. Uber needs a | return on payouts which is hard money. | MegaDeKay wrote: | It is in the article: "Uber and Lyft have been a crude | proposition all along: Subsidize unprofitable taxi rides with | venture capital money, claw for market share, and eventually | figure something out that will make such taxi rides profitable | despite the huge corporate structure of well-paid executives | and engineers, a thing traditional taxi companies with already | razor-thin margins didn't have." | karaterobot wrote: | I read the article, but that's not the level of explanation I | want. I want to know how, for example, at the scale Uber and | Lyft are operating at, the salaries of executives and | engineers are more than the efficiencies it seems like they | would gain. On paper, you shouldn't need to add a linear | amount of overhead every time move into a new city: with taxi | companies, you have to add physical buildings, admin, | dispatchers, service personnel, and a bunch of other costs | every time. You'd think Uber and Lyft could be a lot leaner | than taxi companies, even though engineers make more than | dispatchers: why not? | yuliyp wrote: | taxicab companies aren't spending billions of dollars a year on | bubble-inflated tech salaries. | smelendez wrote: | Less overhead. Maybe an office and a garage in a cheap part of | town and a few dispatchers and potentially a mechanic, etc. | | Uber has to maintain its servers and has a massive crew of | white collar workers in expensive cities writing code, | maintaining the servers, designing apps, marketing, lobbying, | litigating, modeling potential business models, etc. | ashalhashim wrote: | Taxicab companies don't have to pay the Bay Area salaries of | engineers, data scientists, MBAs, etc. nor do they have massive | advertising and marketing overhead. | relaunched wrote: | The broker model has a yes out in the transportation industry, | before Uber and Lyft were a twinkle in someones eye. It's a low | margin business and has gained efficiency through tech. Once we | understand that the gross margins are probably 20%, you are | scalping the drivers and no driver can exist successfully living | off brokered rides alone, Uber and Lyft will price like CH | Robinson. | 1vuio0pswjnm7 wrote: | 25. Uber and Lyft Are Out of Ideas, Jacking Up Prices in | Desperation for Profit (vice.com) 127 points by elsewhen 2 | hours ago | flag | hide | 179 comments | | Above is what I saw on the HN front page minutes ago. Then I | started reading the comments thread and suddenly the submitted | article has changed. It is now pointing to WSJ instead of VICE. | | Looks like the original VICE article has even been scrubbed from | HN entirely. | | https://news.ycombinator.com/from?site=vice.com | | Below is the original article. | | https://www.vice.com/en/article/m7vmpb/uber-and-lyft-are-out... | beeboop wrote: | weird | robertlagrant wrote: | > the current business model passes off nearly all of the costs | of actually running a taxi company onto drivers who pay for their | own cars, fuel, and insurance, whereas AVs would have meant both | companies would be paying for those things, but that's a moot | point now | | I know that Vice is a meme these days, but I can't resist. Where | do they think the money is going? Mostly to the fees that are | paid to drivers. If those costs are baked in and they are still | losing money, it's because they're paying the drivers more than | they can afford. They were banking on not having to pay AV | drivers wages, sick leave, pensions, have them go on strike, etc | etc. Just provide customers a good service for an amount these | companies could sustain. | | Now, that was a wild bet for sure, but not a bad one for humanity | to have tried. | woodruffw wrote: | > Now, that was a wild bet for sure, but not a bad one for | humanity to have tried. | | I think there is a _very literal and material_ sense in which | it was a quite bad bet for us to have tried. How many tens | thousands of people skipped medical procedures, lost birthdays | and holidays with loved ones, and didn 't live as well as they | could have because of these companies' cynical abuse of their | labor? | zouhair wrote: | > but not a bad bet | | What was good about it? They could have worked with existing | taxi companies to sell their technology to create a better | market, that would have been a good bet. Betting on making | everything worse and hoping to profit from it was a horrible | bet. | | If they continue what they are doing, I can't wait for them to | crash and burn. | | Fuck the "Gig economy". | alar44 wrote: | They tried that and the big taxi companies weren't | interested. Similar situation to Blockbuster and Netflix. | rossdavidh wrote: | Here's my question: how much will this hurt AWS? Oh, Uber and | Lyft alone won't, of course, even though IIRC their IPO's | revealed staggering AWS bills. But, there are a lot of goofy | ideas out there masquerading as companies, and the VC spigot just | turned off. That spigot was pushing VC money, via a very complex | system of middlemen, to AWS. | | If AWS has half their customers disappear, what does that do to | Amazon's bottom line? | hackernewds wrote: | same for Stripe. and Twilio. and Segment | | b2b companies that coasted on free reign will struggle a ton | hotpotamus wrote: | A lot of those goofy idea companies convinced everyone else | that they should spend nearly unlimited amounts on AWS because | of opex or other reason, and now everyone believes they need to | migrate to cloud as well. Maybe they do, what do I know? I | don't feel a need to contribute to that huge margin that AWS | makes, but based on their growth and the interest from lots of | legacy businesses in moving to the cloud, I wouldn't be too | worried about them. | ajross wrote: | AWS revenue is mostly per usage, not per customer. A handful of | ML plays excepted, all those startups were tiny things with | very little actual resources required. Most of Amazons money | surely comes from giant customers like Netflix and Facebook | (hell, even Uber and Lyft are probably lost in the noise, they | don't stream anything). | moralestapia wrote: | >If AWS has half their customers disappear | | Nah, they're not even 1% of AWS. Plus AWS is profitable AF. | hackernewds wrote: | if 0.01% users are 1% of their revenue, that's a huge | concerning consolidation. AWS IS indeed in this situation | when the full discretionary spending sector struggles. | | AWS might be super high margins, but it does not exist in a | vacuum. AWS cross subsidization powers AMZN retail to be able | to run at a <1% margin. | moralestapia wrote: | Could you elaborate? I don't seem to grasp your point. | | >AWS cross subsidization powers AMZN retail to be able to | run at a <1% margin. | | I've never truly understood that number, how come they have | such low margins where most of the products I see there | have a 10-20% markup (at least) vs. the same product in | classic "offline" retailers (costco, walmart, etc...)? | | "But they send it to your home", yeah but they charge you | for that too. | GoOnThenDoTell wrote: | Of course they need to make money, they cant subsidise everyone | forever | dang wrote: | Url changed from https://www.vice.com/en/article/m7vmpb/uber-and- | lyft-are-out..., which points to this. | jonthepirate wrote: | Former Lyft engineer here. I'm convinced they will go out of | business or sell the scraps to someone... however smart acquirers | like Elon wouldn't go near it. Rideshare sucks. | grej wrote: | If you're arriving at an airport or other high traffic area, you | will almost always get a better price and timelier service by | simply jumping in a standard taxi. I'd say this has been the case | for at least 6-9 months. | ww520 wrote: | The airport taxi hates short hop ride. The taxi drivers got | visibly frustrated and angry after hearing my destination is | not long distance. I just get a Uber/Lyft to avoid the airport | cartel. | mjcohen wrote: | We live 10 minutes from LAX. Taxi drivers get somewhat | annoyed, but we give them $20 and that seems to make them | feel better. | | Also, we have a favorite taxi company we use to get to LAX. | We make reservations a few days in advance, and they have | always showed up on schedule. | throwoutway wrote: | My coworker got yelled at by a taxi driver recently at DCA | airport for this. | brokenodometer wrote: | Which is dumb because DCA is like 10 minutes from downtown, | so I'm not sure why they would expect most travelers to be | headed to the suburbs. | missedthecue wrote: | Well plenty of fliers will live in the DC suburbs. Only | the visitors will be going downtown. | rzz3 wrote: | That may be true, but I'd much rather ride in an Uber or Lyft | with less timely service and a higher price, than in a nasty | yellow Crown Victoria from the dawn of time itself, with that | ugly, rough, stained interior that smells like cigarettes and | vomit. Taxis don't even offer phone chargers or water. | | IMO, Taxis would have long since died as an industry if it | weren't for governments propping them up artificially. | adrr wrote: | The last Uber I rode in was a beat up Prius that smelled like | pee. Uber has lowered their standards. | jeffbee wrote: | I would ride in a professionally-serviced Crown Victoria over | a Prius with bald tires, obviously ruined steering joints, | and no windshield wipers, which is a true and faithful | description of the last Uber I suffered. | trimbo wrote: | Last time I tried taking an Uber from SFO to SF, the quoted | price was $150. | | Taxi downstairs was $40 and was waiting for me to get in. | Didn't smell like vomit. But if it did, I'd roll down the | window and remember I'm saving $110 for a 20 minute ride. | alkonaut wrote: | A taxi for me is a maximum 1-2 years old black typically | German car summoned and paid in an app. | | If your taxi is a monopoly using old cars, where card readers | are "broken" and who don't have apps - it's your taxi that is | broken, not the concept of taxi. Many US and European cities | have bad taxis, but many also have good taxis. | ghaff wrote: | That's not at all my experience in Raleigh in particular. | Walk to the cab line, get in, pay with card. No fussing | around with an app and waiting. | largbae wrote: | That works when you are at the first point in your trip. | Now get that taxi to show up in a timely manner at your | house or the house of someone you visit. | ghaff wrote: | I do usually use Lyft for the return. But I'd have no | trouble using a cab or some car the hotel has contracted | with for going back to the airport. | missedthecue wrote: | By "fussing with an app" you mean about three clicks? | ghaff wrote: | Invariably there's some wait which I don't want. Business | travellers basically want zero friction. | seunosewa wrote: | They'd still exist because there is a demand for the service. | Someone would satisfy the demand. | debaserab2 wrote: | Depends on the airport. Cab services in some cities are very | poor. | neonate wrote: | https://archive.ph/bt3bA | foobaw wrote: | I think we need to stop comparing Uber to Lyft. To me, this is | more of a Lyft problem as Uber has diversified way more. | gsibble wrote: | I've had over 10,000 Uber rides, all black, some SUV since 2011. | I would have no problem if they just focused on the higher end of | the market where there's profit to be made. I never thought their | going down market was a good idea. | hiq wrote: | > I've had over 10,000 Uber rides, all black, some SUV since | 2011 | | 10000/11/365 = 2.5 per day, is this your main means of | transportation? | theHNAcct wrote: | This was always the idea. I remember Jason Calacanis saying on | This Week In Startups months ago that Uber is in growth mode, | eventually when push comes to shove they'll increase the price to | get to profitability and have the market share to stick it out. | efortis wrote: | Increased by how much? | outside1234 wrote: | Uber is just a dumpster fire. I scheduled an airport ride with | them and each driver continuously just kept canceling it when | they saw where it was going. Can't imagine how bad it is for | someone going to a lower level neighborhood. | | Can't count on it anymore - going back to manually calling taxis. | HappyTypist wrote: | I just do not understand how ridesharing cannot turn a profit. | Let's look at unit economics: | | ~25% take rate on a ride ($15 average): $3.75 take | | Payment processing: 2.5% + 30c = $0.68 | | Servers / datacenters: $0.20 (for a margin-sensitive business, | you should be colo'ing your own servers, or using cheap | alternatives like OVH/Hertzner) | | Customer support: Automate as much as possible (auto refunds up | to a certain point; for lost items, connect directly to driver); | assume 1 in 50 rides require manual human support with a $3 cost | = $0.06 support cost per ride | | Fraud/refunds: Assume a 2% fraud rate that cannot be reclaimed; | thus $0.30 cost for fraud. Refunds for things like driver | purposefully took a longer route can be clawed from the driver. | | Gross COGS: $1.24 | | Gross profit: $2.51 | | What am I missing?? Marketing? Fuck marketing when you can't turn | a profit. Everyone knows about Uber or Lyft already, you need to | turn a profit, not waste $30 per CAC. | dsr_ wrote: | You're missing roughly 30,000 employees to run a service that, | at steady state, probably needs about 30 software developers | and a few hundred second or third level customer support folks, | with first level being handled by outsourced local-language | companies. | | And then there's Uber self-driving. Uber AI; Uber electric | airplanes. Uber freight, Uber restaurant delivery, Uber grocery | delivery, Uber this and Uber that. Oh, and Uber scooters. | deeptote wrote: | oldgregg wrote: | hope they disinfect between rentals | dang wrote: | Please don't do this here. | polote wrote: | The Uber app alone would probably need much more than 30 | developers, see here : | https://news.ycombinator.com/item?id=25376346 | michaelt wrote: | A lot of that is optional complexity, though. | | Uber eats? Scooter integration? Mass transit support? | Scheduled rides? Commuter cards? If you were building the | app with 30 developers you'd simply not bother with those | features. | shukantpal wrote: | Why are you ignoring the regional differences & the other | stuff listed above those points in that post? | missedthecue wrote: | Companies like eBay have a global footprint and | send/receive money in dozens of countries. eBay has apps | for all devices and a website. | | Uber has 3x the headcount as eBay. | true_religion wrote: | eBay can get away with relying on third parties for | advertising, selling, and transporting goods. They are | just an online marketplace. | | Uber has to market themselves which needs local | expertise, if nothing else to liaise with a local PR | firm. Then they need local legal expertise to actually | operate in the country (eBay transactions happen online, | and the transport agency hired by the seller figures out | how to get the package to its destination). Uber then has | to have maps for every country it operates in, as well as | change their standards to match local expectations. | michaelt wrote: | I will agree that 'receipts' is part of the core product | and should be retained. I didn't mention it because I'm | sure we can agree it's within the capabilities of a | 30-person team! | | I ignored the other stuff because I don't know WTF | "pickup special cases" or "on-trip experience business | logic" or "growth features" are. So I'm not informed | enough to guarantee they aren't part of the core product | offering - although you can probably guess my intuition | on the matter. | faeriechangling wrote: | I can only see giving up on Uber Eats as being foolhardy, | that is a profitable business with a solid business case, | yet lacking those other features would not really cause | me to prefer traditional taxicabs telephone dispatch over | using an app. | | There's legitimately a reasonable argument that Uber | rides has a worse business case than Uber Eats. If I were | in Uber's shoes I would be clinging onto both. | 2OEH8eoCRo0 wrote: | That's interesting. Because of the aggressive expansion | from VC money they now have too much bloat making it more | difficult to be profitable. | hyperbovine wrote: | Just like Twitter is one guy hacking on RoR for two days... | we've heard this old canard before. | redisman wrote: | It's just some text on the web! And they wonder why | software engineers are bad at estimates | onlyrealcuzzo wrote: | IIUC, Uber employs 2000 engineers. I'm not sure how that's | only 6% of the company. | | If you're looking to trim fat - surprisingly - there might be | better opportunities outside of engineering. | paulcole wrote: | > What am I missing? | | Don't forget about lawyers, compliance, lobbying, lawsuits, | etc., etc. It's also likely your assumptions are very wrong. | Just think about what will happen when people figure out you | auto-refund everything below a certain point. | | > Fuck marketing | | Possibly the bravest thing ever said on HN. | criddell wrote: | Uber has a compliance department? | seydor wrote: | But then Uber wouldn't be a Tech Company, they would be another | lowly profitable company. | hackernewds wrote: | driver cost is a lot more than $3.75. you think really drivers | are working for 75% of a $10 ride per active hour? they're | publicly measured to make 4x that | hyperhopper wrote: | He said Uber is taking 3.75. that means the driver is getting | 11.25. | | You flipped the values. The driver is making a bunch, and | that's per ride, not per hour | boatsie wrote: | You're missing very large categories like G&A, R&D etc but just | look at their most recent SEC 10K or 10Q filings and you can | see where the money goes. | hyperhopper wrote: | I don't think he's missing that. Why does an app to connect | drivers to passengers that's been around for a decade need | R&D? | | Now this is not about self driving or whatever else, it's | about a ride hailing app. The point is there is no reason | ride hailing can't be profitable. | | Now, using any company to prop up r&d and investor hype for a | moonshot, that's a whole other idea... | tyingq wrote: | From Uber's Q2/2022 report: Revenue | 6854 Cost of Revenue 4026 | Operations and Support 574 Sales and Marketing | 1263 Research and Development 587 General and | Administrative 632 Depreciation & Amortization 254 | Total Costs 7336 | pid-1 wrote: | What does Cost of Revenue means? | [deleted] | [deleted] | tyingq wrote: | Mostly the payments to drivers. | kristjansson wrote: | Sales and marketing should be labeled price discrimination. | It's all incentives to match driver earnings and rider costs | to respective minima (maxima). | fishtoaster wrote: | I wonder (and am too lazy too try to find out) what portion | of sales and marketing is driver-focused. One could maybe | argue (as the grandparent did) that they should be spending | less on rider marketing, but marketing to get drivers in the | door seems pretty important. Dunno what their driver churn | rate is, but keeping the pool of drivers large is critical | for their service. | jelling wrote: | Bingo. Andrew Chen, formerly of Uber, says exactly that in | his excellent new book The Cold Start problem. The driver | side is the hard side of the market and must be constantly | tended. | redisman wrote: | Interesting because the taxi business had all that | figured out already. It was a profitable business and | drivers stuck around for decades. Does Uber have too much | overhead to ever be profitable? | airstrike wrote: | Didn't drive stick around because they dropped thousands | on medallions? | mattzito wrote: | Depends on the city/locale. In NYC most drivers don't own | their medallions, they drive shifts for someone else's | medallion. | | In fact I've had a lot of conversations with Uber and | taxi drivers who started as taxi drivers, switched to | Uber when the bonuses were lucrative, and then some of | them switched back because they liked the predictability | of a fixed shift and not being ordered around by a | machine. Others felt exactly the opposite. | frankfrankfrank wrote: | From what I've come to understand you are right on the | money. All these "sharing economy" models rely heavily on | churn and burn like many other less than solid business | models like MLM. | | I would love to see the breakdown of drivers and their | immigration status, because from what I can gather, what is | happening here is not any different than in the past of | America's history where the whole business model relies on | the exploitation of "immigrant" labor that knows no better | and is easily exploited, aka their unrealized labor value | is converted into profit, or better states, benefits and | riches for the executives. | mjevans wrote: | Slash Sales and Marketing by 50% and they'd be profitable. | josefx wrote: | If I remember correctly they spend a lot of money on | marketing campaigns against any law that could hurt their | business model. So slashing marketing might actually hurt | them even more. | underwater wrote: | Sales and marketing affect revenues, you know. | tomrod wrote: | Typically not enough to offset 50% of budget once the | brand is known. | endisneigh wrote: | based off what? | mjevans wrote: | At this point who hasn't heard of Uber? | | They only need some occasional reminders that might be | targeted at the few people that haven't used or heard of | friends or family using an Uber before. | onion2k wrote: | _At this point who hasn 't heard of Uber?_ | | Marketing is as much about keeping your customers from | going to rival providers as it is about finding new | customers. If you don't want people to leave you need to | remind them why you're better than the exciting new | company that's spending VC money to take your market | share. | lordnacho wrote: | Couldn't you say the same for Coca Cola? Yet I'm fairly | sure that maintenance budget is fairly big. | treis wrote: | Coke is somewhat of an impulse purchase. At least it | needs to be in your mind to buy it at the grocery store. | | Conversely, I'm not going to take an Uber ride tomorrow | because they showed me an ad today. When I need to get | somewhere I'll look at my options and choose the best. So | long as Uber meets the minimum level of me being aware of | it then theyre good. | bombcar wrote: | Coke (and Pepsi) marketing is mainly concerned with | affirming that drinking soda makes you sexy and keeping | restaurants et al from changing their supplier. | robertlagrant wrote: | "Marketing is crucial" is the most important marketing | message. | onlyrealcuzzo wrote: | Marketing is not what you think it means. | | It's a clever way to disguise their unit economics to look | better. | | Their marketing budget is mostly going to pay drivers. | | Put another way - you could be saying - why not pay drivers | EVEN less? Well, they're paying them the least they can | already. You can be sure of that. | | If they did actually paid the drivers more and not disguise | it as marketing - then their unit economics wouldn't look | good - and when the business as a whole doesn't look good | either - that's not a good look. | frankfrankfrank wrote: | They can't, that "S&M" is heavily focused on getting low | information drivers into the service by smoke and mirrors | about how wonderful it is to drive for them. They have to | keep the rate of influx of new drivers at least above the | rate of people realizing what a bad deal it is for them, | aka churn. | tyingq wrote: | Fyi, should say Q1/22, the report from March/22. | thraway3837 wrote: | christophilus wrote: | I've been in the industry for 20 years. Colo or even running | your own datacenters. Makes sense at their size. | dang wrote: | Please don't cross into personal attack in comments. Making | substantive points without swipes is essential to the kind of | forum we're hoping to have here. | | https://news.ycombinator.com/newsguidelines.html | astrange wrote: | Uber doesn't make money. The bigger their enterprise is the | less money they make. They should be firing anyone who says | they need more complicated systems to scale when the idea | could run on a PC under their desk. | rdxm wrote: | tonyhb wrote: | Uber's take can average ~45% depending on the day: | https://missionlocal.org/2021/07/as-rideshare-prices-skyrock... | | I agree and am not quite sure where it's going (other than | software). | throwoutway wrote: | They have nearly 30,000 employees, mostly SDEs from what I | understand. Its been discussed (and rationalized) here, but I | still don't understand how that many are necessary. I read | somewhere else that their engineering tend to need to rewrite | their software every two years to keep up with the scale, so | maybe they need them? it still seems insane to me. | | Lyft only has 4500 employees | ProjectBarks wrote: | Uber has 3500 ish engineers. Then a huge amount of | operations personal. | | Best source I could find: | https://www.themuse.com/profiles/uber/team/engineering | mathgladiator wrote: | This blows my mind. I used to use Uber a bunch, and I | built relationships with drivers such that I could just | text them and get a ride at a certain time for a | discount. | | Ultimately, I wonder if Uber is prime to be disrupted if | drivers got together and funded a few engineers to build | a city-scale service for the hailing and payment aspect. | nobody9999 wrote: | >Ultimately, I wonder if Uber is prime to be disrupted if | drivers got together and funded a few engineers to build | a city-scale service for the hailing and payment aspect. | | Apparently a whole bunch of folks are trying to do just | that. | | I was going to provide just one example, but a web | search[0] shows a whole bunch of these efforts in a | variety of locales. As such, I just provided the web | search results here. | | [0] https://html.duckduckgo.com/html?q=ride%20share%20coo | perativ... | dopidopHN wrote: | 2 city unions did that in France. In marseille and Lyon. | | Last time I tried the Lyon app it was barebone and not | really up to par with Uber by a large margin. But still. | nerdponx wrote: | My impression is that this is what the Curb and Arro apps | were supposed to be. I don't know anybody who uses them. | rzz3 wrote: | You're missing the cost of engineering, for one thing. Also | "host Uber at OVH" isn't remotely realistic. | onlyrealcuzzo wrote: | For a simplified version of the app with arguably no worse | user experience, it's not THAT farfetched. | | Uber has an absurd amount of logging & analytics. | | If the app was simply drop a pin, get a ride - it wouldn't be | that crazy. | | Uber has 3.9M drivers world wide. There's probably very | rarely more than 1M drivers active at any time. Probably less | than 300k people looking for a ride at the vast majority of | times. | | Assuming you can update the driver's location 1 time per | minute - that's ~1.5B requests per day - less than 25k | requests per second (including user bookings). | | That's like ~2TB of bandwidth per day. That's less than $200 | per day. Almost everyone spends more than 5% of their cloud | bill on bandwidth. Meaning, the rest of a drastically | simplified (but nearly equally useful) Uber _could_ run for | ~$4000 per day in server expenses. | | That's a $1.4M / year data center. Uber has revenues of | >$11B. | | They _could_ be making a lot of money. They just aren 't | because they're spending AT LEAST 50x more on servers and | product engineering than they NEED to. | | They paid for growth for a long time. They have a monopoly | now. There's not a lot of growth left to get. At some point | the axe will come down. | | Lyft is even worse. They're ~1/3rd the size. | frankfrankfrank wrote: | It's also a denial strategy. The bleeding edge that also | forces your competitors out of the market because they | cannot get past the network effect and name recognition | hurdle is worth its weight in gold. | | Most people will say they're going to get an Uber, even if | they end up having to use Lyft, no? Ubers, as well as | others', expressed strategy has long been not only first | mover, but also monopolization of all aspects of their | space, expressly anti-competitive. Part of that is not only | being the leader, first to mind, but also draining the | enemy/competitor's resources and undermining their efforts | to even challenge you. It's a total market domination | strategy that shouldn't even be allowed, but they've also | paid off politicians and captured government in other ways | too, so don't expect anything from there either. There used | to be other ride sharing services, I don't even know if | they exist anymore, but even before the Great | Monopolization, aka COVID, they were barely scraping by on | crumbs in a few local markets while the likes of Uber | worked in basically every market, especially in the high | spending business travel and entertainment segments. | joneholland wrote: | ForHackernews wrote: | I'll build you a better, leaner, Uber-clone for the low | low bargain price of a mere billion dollars. VCs PM for | term sheets. | throw10920 wrote: | Comments like _this_ , boring and dismissive and with | absolutely no effort put into them (often responding to | one that _does_ have a lot of effort in it), are _not_ | big HN energy and don 't belong here. Zero value. | onlyrealcuzzo wrote: | It's a horrible business - why would I even want to enter | it? And if I was insane and did, why would anyone use my | Uber app? | | Uber is a monopoly that already has all the drivers and | spent $10B+ to aquire them - plus all the riders - | they're already trained to open that app - already have | it downloaded. No one can compete with that without | spending $1B+ - at which point - you'd need a 50% margin | for years just to return the value. Maybe I'm uncreative, | but I cannot think of a worse business to enter. | | It's equally amusing to me that you seem to assume Uber | is efficient just because it's a public company. | | Sure, GE and IBM don't waste money either. | mathgladiator wrote: | It is a terrible business at large scale. | | A smaller and leaner model could work at small scale by | focusing on via drivers focusing on their returns with | word of mouth marketing. | | If you use Uber a bunch, then it is a great way for good | drivers to get repeat business privately. A simple | platform which is driver-friendly which focused on the | whale customers (like myself when I was spending $500/mo+ | for commuting) could squeeze the Uber even more. When I | started working with a few drivers via text, I was able | to save money whilst the driver made more money | nathanvanfleet wrote: | Surely you don't think a modern and complex app requires | just a single API endpoint that triggers once a minute? And | that it's that simple a thing for the driver/ passenger? | onlyrealcuzzo wrote: | Surely you don't think there's another endpoint that's | getting hit an order of magnitude more to change the | point? | | Multiply by 3 for redundancy & availability. Multiply by | 3 for other endpoints. You're not even 10x... | | And this was not Uber as it exists. This is a simplified | version of Uber that gives the user a nearly equal | experience. | GauntletWizard wrote: | You're way overoptimistic in your expenses calculation - | Maintaining a "real-time" app is 100x more complex than | that. | | 100x, bringing their opex to hundreds of millions on | billions of revenue. They should still be able to cut the | fat and actually turn a handy profit, but they won't. | onlyrealcuzzo wrote: | No one needs real-time (above 1 minute) driver locations. | | Riders never see the driver's location before booking. | | Uber doesn't need the exact location to get a decent | match. | | And anyway - they send the ride to several drivers and | the lowest / first bidder wins. | edmundsauto wrote: | What is the set of information that makes you say this? | Because I would put money that Uber's data team has run | an experiment with lower realtime status updates | (realtime is expensive, these companies aren't filled | with idiots, they test things). And based on that, I | think it's reasonable to assume that critical metrics are | negatively impacted by not having realtime updates. | | So I'm curious if you have any knowledge, or if what you | are saying is "I don't need realtime", or perhaps more | charitably, "I can't imagine realtime being valuable to | users". I push back on the 2nd, and I strong push back on | the idea that someone with can reach the conclusion that | Uber is wasting money on things that don't drive user | value. | | Unless, of course, you work/worked there and worked on | these projects, and saw firsthand that Uber decided to | waste a bunch of money internally. | lumost wrote: | In a major metro like Boston 1 minute further down the | road could mean a 5 minute longer wait. I think your | point stands however with 6x traffic increase to once | every 10 seconds. | onlyrealcuzzo wrote: | You only need to update the location if the driver is | moving. IIUC, most drivers are stagnant while they wait | for rides. | | They're in the business of saving gas. Not cruising | around idly while they wait for a ride. | | Sure - some drivers are finishing a trip nearby. But you | know the route they are taking... | HappyTypist wrote: | Okay, OVH is not realistic, but at Uber scale, you can | certainly roll your own data-centres and get costs lower | than, or similar to OVH, even when including the cost of | sysadmin and maintenance. | | Yes, it means you won't get all the shiny quality of life | services offered by cloud providers, but you're in a _margin | sensitive business_. Deal with it. Optimize every cost. | | Also, you don't need expensive engineers re-inventing the | most basic things (I know Uber had a huge not-invented-here | syndrome). Use the boring tools for the job. Only reinvent | what is necessary. You don't need engineers practicing | resume-driven-development. | bthrn wrote: | Uber _does_ use its own data centers. | rockarage wrote: | It can turn a profit, but not the sort of profit the investors | and top stake holders want i.e. Microsoft and Google type | margins and profit. | modeless wrote: | I recently got a ridiculous coupon code for 50% off Postmates | (Uber Eats) orders, when I did a Google search for Postmates. 5 | orders, up to $100 savings on each order, and the code worked on | my wife's account too so we get 10 orders. For weeks I've been | ordering $200 meals from fancy steakhouses and paying $100, with | leftovers for days. Somehow they haven't stopped subsidizing | their customers yet. | | The code is FEAST if anyone cares to try it. Probably expired by | now. It doesn't seem to work on Uber Eats, only Postmates.com on | desktop web. | 0x53 wrote: | Wow, just looked this up and this is insane. Guess I'm gonna be | eating out for a bit. Thanks for the tip | lumost wrote: | If they stop subsidizing, then revenue growth may slow, stop, | or turn negative. If the latter happened to Uber/Lyft for even | a quarter, they may struggle to continue operations. After all, | what's worse than a business losing billions of dollars? A | shrinking business losing billions of dollars. | tablespoon wrote: | So have they hit price-parity with traditional taxis, yet? | jesusofnazarath wrote: | ravenstine wrote: | I've been noticing more drivers going independent. When I landed | at LAX recently and waited at the taxi area for a Lyft, there | were a bunch of drivers coming up and offering people rides, but | not through Uber or Lyft. I thought "why not", took one of these | independent rides home, and paid the guy through Square. It | wasn't a "cheap" ride, but it was cheaper than the Lyft ride I | cancelled and I'm sure he made a greater profit than through a | "ride share" company. | | That's just one example, but I've noticed this drastically | increase in the last year. Whether I'm at the airport, a train | station, or a bus depot, I've been seeing way more independent | drivers. | | What's stopping more drivers from doing this? If it's the "trust" | aspect that comes from Uber, then surely there's some system that | can meet us halfway that doesn't apparently need large sums of VC | money and high fees but at least provides trust and safety for | riders. | onlyrealcuzzo wrote: | Doesn't that make you an illegal taxi? | paulcole wrote: | What do you think Uber was for years and years? | onlyrealcuzzo wrote: | It's different when you're a large company with a legal | team doing something not clearly illegal - than when you're | a single individual doing something clearly illegal. | | You didn't have to have a taxi medallion to be a black car | driver and pick people up at locations upon request - | which, originally, is what Uber was, exactly. | | The whole point of a taxi medallion is to be able to pick | people up off the street - which is what these independent | drivers at the airport and train stops are doing. | paulcole wrote: | > It's different when you're a large company with a legal | team doing something not clearly illegal - than when | you're a single individual doing something clearly | illegal. | | If this is sarcasm it's too subtle for me to recognize. | onlyrealcuzzo wrote: | It's not. | | Black cars picked up people upon request. They weren't | taxis. That was Uber's core business. It wasn't | regulated. | | They don't pick people up off the street. That's the taxi | business. It's heavily regulated. | | It was never clear Uber was an illegal business, and it's | never been ruled that it is. | brtkdotse wrote: | I'm all for scrappy bootstrapers but the middle aged adult in | me just sees a licensing and insurance nightmare. | almost_usual wrote: | There's the risk they take you somewhere and rob you. Happened | to someone I know in NYC. | loceng wrote: | So does this mean it's going to begin to become cheaper to use | the services of old taxi organizations, who arguably aren't going | to have the shareholders to appease to to pad revenues with | profits? | | I really think, in all cases of online platforms, that laws | requiring the platform to be transparent with all costs - | including how much they keep as a platform, how much they give | the actual driver, how much the restaurant gets (if doing | delivery) etc. would be highly beneficial, if not necessary, to | not only society but also to potential investors. | | E.g. How sustainable are their prices, and are the billions | invested simply subsidizing lower fares to outcompete based on | price for a temporary time while fighting over to capture as much | of a market (artificially and temporarily?) until the | shareholders come knocking asking for the profit tap to get | turned on? | scarface74 wrote: | Why? It was "transparent" from the day that Uber and Lyft went | public that they weren't profitable and losing billions . | | They were always Ponzi schemes and retail investors who naively | believed the hype were the "biggest fools". | Spooky23 wrote: | Wait a minute! That was just temporary while the service | hyperscaled. I read on HN that Elon Musk's fully self aware | self-driving would take over from drivers starting in 2019 | and cost like $9,000! | loceng wrote: | It's the VC-finance industrial complex, where the incentives | aren't aligned with the sources of the money. | | Arguably being transparent at the per-transaction level which | allow everyone and their mother to then do simple math to | understand that such a business model isn't sustainable - but | they're not currently paying enough attention, just in a very | shallow way - they see Uber or Lyft on the news plenty, maybe | use the services themself - until it's too late. | | All of this should be educating people giving their money to | institutions or stockbrokers to make sure their money and | whomever they're giving the power to dictate where it goes is | aligned with long-term results, and arguably not at all on | per-transaction buy/sell actions. | | I think a lot of our problems today stem from there being | such an abundance of wealth/riches that enough people could | become lazy and relatively inattentive with their money, | blindly trusting others without understanding the underlying | mechanisms enough - and perhaps blindly believing government | institutions like the SEC would protect them - instead | perhaps trusting long-time existing brand names as some sort | of measure of trust. | | Bitcoin et al are the next evolution the VC-finance | industrial complex has latched onto quite successfully, so | far. | scarface74 wrote: | For the most part, unsophisticated investors aren't buying | individual stocks. They are buying mutual funds and most of | them are buying index funds. Neither Uber or Lyft are part | of the S&P. | | Only "qualified investors" are allowed to buy pre-IPO stock | and they should know what they are doing. If they lost | money, it's on them. | | Even if you did what you suggested, how should a company | allocate fixed expenses? Allocate per mile? | Finnucane wrote: | Uber cratered the value of the taxi medallion. The main benefit | the medallion gave you was the right to pick people up on the | street, unlike other kinds of car services that you had to call | for. Since anyone using a taxi could probably afford a cell | phone and a credit card, taxis were vulnerable. Does this mean | that the cost of entry into the taxi business is lower? Sure. | Will it matter? WHo knows. | loceng wrote: | These industries usually get captured via regulation imposed | by lobbyists of the biggest players, to make the barrier of | entry more costly to keep out potentially new entrants. | | I know a few taxi drivers who are medallion holders - which | are now worthless - they of course have been put in a shit | position, and the Cities don't particularly care anymore | because whatever lobby structure that got the medallions in | place to begin with basically no longer exists - they're not | necessary to get today's lobbyist funded politicians into | play, positions of power. | d23 wrote: | Seems unsurprising. The check had to come due eventually. It'll | be interesting to see whether riders keep using it in enough | volume to keep them afloat. | tootie wrote: | Aside from them spending money on boondoggle after boondoggle, | these guys both still have no moat. They had to burn a ton of | cash buying up competitors and there's absolutely nothing | stopping a third player from entering and eating their lunches. | The core premise of hailing taxis via GPS is very simple and | very appealing. The could have run these as lean, low-margin | businesses and earned a tidy profit forever, but instead they | decided to play the valuation game. | Spooky23 wrote: | It wasn't about taxis, man, it was changing everything. | | Listen to the old Ben Thompson podcasts from when Uber was | taking over life itself. Private cars, self driving, blah | blah blah. Why go to a restaurant when Uber can fly one to | you? | walrus01 wrote: | It'll be interesting to see in a number of cities where | traditional medallion licensed yellow taxis almost entirely | disappeared, and the drivers went to go be Uber or Lyft for a | period of some years, how much of it reverts back to the | traditional system of taxis. I can foresee something like a lot | of heavily used 300,000 mile Honda Accords with all city miles | on them getting sold cheap. Buyer beware. | tootie wrote: | The medallion system was completely broken before the ride | apps appeared. Traditional car services were reliable and | easy to reach via phone. A lot of them have still survived. | ghaff wrote: | It's more expensive but I always use a traditional car | service to get to the airport. Super-reliable, comfortable, | clean, good drivers. They're always pre-scheduled (which is | fine for the airport) but I've never had problems with | getting them to make changes when flight stuff happens. | jeffbee wrote: | What are they going to do when they can't get parts for | those Lincolns? | walrus01 wrote: | the same thing all the car services in NYC are doing now | with luxury SUVs with leather seats and such? you rarely | see an actual _town car_ now. | bsder wrote: | Every "car service" I know of has changed over to some | level of electric/hybrid car. | | The gasoline economics were far too compelling even | before this round of gas price gouging. | walrus01 wrote: | In Vancouver BC where petrol costs have always been | considerably higher than the other side of the border in | WA, taxis switched almost entirely to Prius as far back | as 2004. Even before that it was very common to see CNG | modified taxis. | ghaff wrote: | Why would it be any different from auto/auto part supply | chains in general? (Which, yes, from personal experience | are a considerable issue at the moment.) | jeffbee wrote: | It's different because they stopped making Lincolns, so | the clock is running. | [deleted] | ghaff wrote: | There are plenty of other vehicles. Yes, the limo | companies liked the unibody limos but there's no shortage | of different models they can use. I'm certainly not | especially picky in general. | seydor wrote: | So they made a full circle ... back to taxis? | walrus01 wrote: | > The fundamental problem Uber and Lyft keep running into is that | most people are not willing to pay the fares it would cost to run | a profitable taxi service with the overhead Uber and Lyft require | | [surprisedpikachu.gif] | toomuchtodo wrote: | You mean this was all a scam to enrich early shareholders and | incinerate $30B+ in capital!? | | _pearl clutching intensifies_ | carapace wrote: | You left out the part where they're siphoning capital from | their drivers: | | > Here is the thing about Uber and Lyft (and much of the | "sharing economy"). | | > They don't pay the cost of their capital. | | > The wages they pay to their drivers are less than the | depreciation of the cars and the expense of keeping the | drivers fed, housed, and healthy. They pay less than minimum | wage in most markets, and, in most markets, that is not | enough to pay the costs of a car plus a human. | | > These business models are ways of draining capital from the | economy and putting them into the hands of a few investors | and executives. They prey on desperate people who need money | now, even if the money is insufficient to pay their total | costs. Drivers are draining their own reserves to get cash | now, but, hey, they gotta eat and pay the bills. | | https://www.ianwelsh.net/the-market-fairy-will-not-solve- | the... | walrus01 wrote: | yeah sadly it seems to be a scam on the people who don't do | the fully-loaded cost per mile of operating a modern sedan | in city traffic, including the purchase cost of the car, | repairs and maintenance, fuel, tires, subtracting the | eventual small resale value of a 250,000+ mile "used up" | ex-Uber car. | moralestapia wrote: | always_has_been.jpg | walrus01 wrote: | Writing as somebody who was working in network engineering | and IT/tech stuff during the dotcom 1.0 VC funded boom and | crash from 1997-2002 none of this is particularly surprising. | | it sure has been amusing to watch, however. | | maybe we can pay for future uber and lyft rides in beenz and | flooz | dotcoma wrote: | Yes, exactly. | ghaff wrote: | The incineration was just a byproduct. | | I do wonder in so many of these cases, how much is: | | - Completely cynical fleece the suckers | | - Irrational optimism that things will be different because | self-driving or whatever | | - Fake it till you make it (which is related but slightly | different) | IgorPartola wrote: | More or less, though it did move the needle forward. Now most | taxi services are easier to use thanks to Uber. But they were | always in the business of selling dollar bills for $0.90. | Soon as they want to make a profit it turns out to be more | expensive than running a local taxi service and they aren't | price competitive. In the meantime taxi services got their | own apps/app integrations while maintaining their competitive | advantage. | pjmlp wrote: | Depends on where one leaves. | | I am yet to board a Uber and have used taxis quite a lot in | the last 30 years. | [deleted] | alphabettsy wrote: | This was inevitable without automation right? | Finnucane wrote: | Inevitable even with automation. As the article points out, | automation would mean they'd have to actually own, maintain, | insure, etc. the cars. | AlexandrB wrote: | Automation was always a form of "investor story time". Going | from a software company to a logistics company that has to | buy, store, and maintain a fleet of vehicles across hundreds | of cities was never going to happen even if they figured out | full self driving. | ergocoder wrote: | Western countries have such a weird problem | | A seemingly boring business seems unviable. | | For example, food is expensive, and we have to tip, but | restaurant is tough business, and the servers don't make enough | for living. Like why the heck is this not viable? | alar44 wrote: | Well, that's just not true. | | I'm in the Midwest and a server at a decent restaurant can pull | in $300/night in tips. | ergocoder wrote: | I have been told that we tip because servers can't make a | living. | | If we don't tip, we are killing them. | | Why do we tip 20% again? It seems like we can tip 5% and the | servers would still make bank. | [deleted] | slaw wrote: | At markets where Uber has competition. I know Brazil and Mexico. | DiDi pays driver more and charges client less. So DiDi takes less | cut than Uber and is still profitable. | daenz wrote: | Are traditional taxicab services still alive? How did they | survive until this time? | [deleted] | Spooky23 wrote: | They win bids for Medicaid car services and airport | concessions. | | Plus, there's a 50 year old woman making $19/hour to smoke | cigarettes and dispatch cars, a mechanic, and a bookkeeper. | woodruffw wrote: | They're still alive (albeit damaged) in NYC, and in most large | cities I've visited. The answer is simple: they don't have | thousands of expensive software engineers doing god-knows-what | as overhead. | richrichardsson wrote: | Or all the servers etc. | | They just needed a (usually tiny) little office and 1 person | to answer the phone. | gruez wrote: | >They just needed a (usually tiny) little office and 1 | person to answer the phone. | | That also makes for terrible ux. One of the things | ridesharing apps got right was the ux, ie. | | 1. being able to hail a cab via app, and see its ETA in | real time | | 2. being able to pay with credit card, without fear that | the machine "broke" | | 3. a rating system to weed out bad drivers | | 4. after-ride support | woodruffw wrote: | All of these things can be (and are) true _and_ it can be | true that Uber and Lyft appear to have an order of | magnitude more engineers than they need. | pigtailgirl wrote: | -- in my city the remaining cab companies have contracts with | hospitals/the city/companies - can always find a cab outside | the dialysis clinic - when I asked why a driver told me the | dispatch company accepts a chit from the clinic -- | bdcravens wrote: | Sometimes they offer a better service. Flew to Honolulu, called | Uber. No one grabbed it for 15 minutes. I grabbed a cab that | was there at the airport. | | Also many cab services have started leveraging apps like zTrip. | bitwize wrote: | zTrip sounds identical to an app I envisioned in 2010 I | called "Yo Taxi!" It would take your phone-reported GPS | location and send it out to one of the affiliated taxi | services (depending on who serves that location, cost, etc.) | who would dispatch a cab to that point. | | I'm kind of glad "Yo Taxi!" exists in some form now, what | with the wheels (figuratively) falling off Uber and Lyft. | marcinzm wrote: | In my experience by cutting corners wherever possible but that | leaves a bad reputation. Cars that were beat up, sometimes just | didn't show up, no GPS or knowledge of streets, cash payments | to avoid some taxes, avoiding unprofitable locations or rides, | etc. Uber and Lyft aimed for a better brand image but that is | at odds with cheap costs. | woodruffw wrote: | I've never had a beat up taxi, but NYC might be an outlier in | that regard (due to the yellowcab fleet + TLC regulation). | The part about avoiding unprofitable locations is certainly | true, however. | | OTOH, I've taken a decent number of sketchy Lyft and Uber | rides: ones where the driver was clearly not the person on | the account (possibly a relative?), where the car didn't | match, etc. All in medium to large US cities. | Spooky23 wrote: | A lot of people pool these services. | Uber/lyft/DoorDash/etc. | | There's a ton of hustles. Sometimes they'll hang a bunch of | phones in a tree near a strategic location to get gigs. | | It gets to the real problem. If you get in an accident in | an Uber and get hurt, there's a high likelihood that you're | fucked. | dagw wrote: | NYC has some of the most beat up taxis I've seen, only | place I've been that compares is probably Cairo. | marcinzm wrote: | The comparison to Uber in NYC isn't yellow cabs but the | call taxi companies which were as I described. Yellow taxis | were non-existent outside Manhattan and even then couldn't | be scheduled conveniently. Even the yellow cabs often | refused to pick up people based on appearance/race, refused | to drop off outside Manhattan and had conveniently broken | credit card readers. That's not even getting into the true | "gypsy" cabs (as they were called) which had no TLC | licenses. | vips7L wrote: | > refused to drop off outside Manhattan | | I recently had a taxi refuse to take me from the Vegas | Strip to a friends house on the North side. It's because | they'll have to drive back to the city center without a | ride. | bitwize wrote: | In the Boston area, taxi drivers often ask you two things: | | 1) Where you goin'? | | 2) How do you get there? | | Which is... if you're new to the area or going someplace new, | how do you answer that second one? | rzz3 wrote: | That's to scam you. Either you know how to get there, or | you don't and they'll take the long way to run up the | meter. | tunesmith wrote: | I wonder how much of this transfers to the music industry. It's | much more complicated than the taxi industry, but in broad | strokes, VC-subsidized companies basically undercut the | combination of record publishers and musicians, setting the price | and revenue-per-listen to levels much lower than they would have | been without subsidization. But it's also been happening for | longer, so I think that it's more like as-if all the taxi drivers | had already been driven out of the business and the taxis junked. | With taxis, you know if there are no rides available, but with | music, you don't really realize all the great music that isn't | being written. | endisneigh wrote: | I always figured by now there would be some sort of centralized | "trust" entity, ala credit bureaus, where you can build apps on | top of that using the same "trust". | | Supposing such a thing existed, then drivers could simply offer | their own driving services by themselves. Perhaps that's the next | evolution here. | | I used to drive a pretty boring, but predictable route in the | morning and in the late afternoon. I would've loved to drive | people who are near my destination both ways, but without anyway | to trust them, no way. | | Surely someone has tried to implement this before and failed and | I just don't know? | curiousllama wrote: | It totally exists, it's just not a tech company | | https://en.wikipedia.org/wiki/Slugging | endisneigh wrote: | huh. I've never heard of this. thanks for the link. though, | what I'm describing ideally could be beyond driving. the same | sort of "trust" would also be helpful for selecting someone | to take care of your children, clean your house, etc. | BoiledCabbage wrote: | I swear this country is going to try to implement all of | the worst aspects of China's authoritatiran system and | claim it's all 'ok' because it's capitalist and to serve | business instead of the govt. | | Implementing a Chinese style societal "social credit" | system is not a good thing. Even if it would make it a bit | cheaper to undercut Uber. Making every action and | interation you have in life tracked and rated is not a net | plus. The constant visibility and permanance of everything | is part of why middle school and high schoolers are having | such trouble now. They can't develop as teenagers as they | are already part way to living in '1984' with every action | tracked via social media. | | https://www.businessinsider.com/china-social-credit- | system-p... | | > The Chinese Communist Party has been constructing a moral | ranking system for years that will monitor the behavior of | its enormous population -- and rank them all based on their | "social credit." | | > But at the moment the system is piecemeal and voluntary, | though the plan is for it to eventually be mandatory and | unified across the nation, with each person given their own | unique code used to measure their social credit score in | real-time, per Wired. | | > The exact methodology is a secret -- but examples of | infractions include bad driving, smoking in non-smoking | zones, buying too many video games, and posting fake news | online, specifically about terrorist attacks or airport | security. | | > Authorities banned people from purchasing flights 17.5 | million times by the end of 2018, according to the National | Public Credit Information Centre, as the Guardian reported. | | > And in July of 2018, a Chinese university denied an | incoming student his spot because the student's father had | a bad social credit score for failing to repay a loan. | | *Please* fellow tech people. Whether you work in ML, DS, or | software for a random business or open source project | please think through the societal impact and long-run end | state of what you propose and produce. We really have to | move past the days of "I'm just an engineer I'll only focus | on the tech and ignore the impact of my work on society". | Implementing China's societal wide social credit system is | a bad path. And of course the argument will be, "well | anyone who doesn't want to use it doesn't have to". And | then that will turn into, "well most companies offer | discounts if you use it." Then to "well most companies | offer higher rates if you don't use it". Then "most | companies won't serve you if you don't use it". Then it's | universal in society just as if govt mandated, but people | will consider it less horrific because it was slipery slope | implemented vs via a mandate. | endisneigh wrote: | It's not about capitalism - it's about trust. If you're | meeting up with strangers how exactly can you do so | safely? | hackernewds wrote: | Through a credit system that is centralized, just like | China's credit system. Except it's not even run by | elected officials so there's no representation. | | it's a terrible idea and Boiled Cabbage makes a very good | point | endisneigh wrote: | So you're against the idea of Uber, eBay, Care, Lyft, | etc? Since what I'm describing already exists. Not to | mention the credit bureaus. You'd prefer arbitrariness? | If anything a single place for the trust would be better | as it would be more thoroughly examined. | toomuchtodo wrote: | Are there any open source solutions that could enable this to | be offered as a non profit platform? | synu wrote: | That was really common at Microsoft in the late 90s (and may | still be) to be able to use the HOV lanes when driving from | Redmond to Seattle. It worked well because you were picking | up colleagues, which sort of established a certain level of | trust. | filoleg wrote: | I don't know how it is now, because I've left since then. | But in pre-covid times, Microsoft was pushing/advertising | this carpool app they partnered with called Scoop. Similar | idea, except it can include workers from other companies as | well, and it isn't for making money for the driver, but | just to cover the cost of gas + to be able to use the HOV | lane. | | As a passenger, you schedule your approximate time to go to | work (or from work, or both, depending on how you want to | use it), and the app matches you with a driver for the next | morning who is going to about the same area, but maybe a | different building. So they pick you up, drop you off, and | go along their merry way, and you are only out of about | $5-7 or so (that was the rate for going from Seattle | downtown to Redmond, which is about a factor of 6-8 cheaper | than an uber/lyft was at the time). | | I used it as both a driver (a few times) and as a passenger | (many times). Feels like a pretty great idea that worked | well. If I was driving, I didn't mind a 5 minute reroute to | pick up or drop off someone nearby, and those $7 + (more | importantly) HOV lane access were totally worth it. I | estimated that the HOV lane access alone saved me | significantly more time than I lost by going out of my way | to pick up/drop off the passenger. And the fact that those | people are guaranteed to not be randos, but either other | MSFT employees or employees of other nearby companies made | it much more trustworthy for me (the app required work | email to sign up). | | Obviously, this wasn't meant to be an uber/lyft | alternative, as it is only useful for going to/from work | and only during specific days/hours. And you gotta | schedule/get matched with a driver the night before, you | cannot just wake up and spontaneously get a ride. Which | makes sense given the context, because people typically | want to have their commute to work planned the night | before. | woodruffw wrote: | My understanding is that it's also still very common in | DC's beltway, for similar reasons (lots of civil servants | going to similar areas, living nearby each other). | bdcravens wrote: | I've had many Uber drivers give me a business card. | randallsquared wrote: | The whole point of Uber is that you don't have to call around | for a ride, though; a rolodex of business cards is not a good | substitute for Uber. | bdcravens wrote: | At the end of the day all we want is reliability and | convenience. Sometimes one-to-one business gives you that. | hyperhopper wrote: | > reliability | | > Sometimes | | I garuntee you the reliability of the Uber network of | drivers is higher than a single person who may be asleep | when you need them. | | I've lived in NYC and I've lived in < 2k person remote | towns where business card drivers are more common than a | Lyft. Trying to deal with the individuals in the small | towns is always a nightmare | angmarsbane wrote: | Waze Carpool! | arkokoley wrote: | I used to do that with QuickRide in Bangalore. Very popular and | fairly simple to use. As a rider, you can put up your origin | and destination points. You are shown people with cars who have | a high overlap with your origin-destination route and you can | send them requests to join. Usually 1/4th the price of a cab | and the app has information about where each rider/car owner | works (mostly MNCs), that works as a trust factor. | | https://quickride.in/ | hackernewds wrote: | Sounds like a great way to kidnap victims with high paying | jobs | DeathArrow wrote: | >Surely someone has tried to implement this before and failed | and I just don't know? | | In Europe there is BlaBlaCar | Raed667 wrote: | In France, there was an attempt at something close to this | concept[0]. | | Despite having thousands of people doing my same commute, I | have never been able to to get anyone to drive me to/from work. | | [0] https://blablacardaily.com/ | baisq wrote: | That works in Spain and it's more or less the same. Of | course, Spain is a much poorer country, so it makes more | sense to share a vehicle there. | marwatk wrote: | Isn't this the plot of a Black Mirror episode? | | https://en.wikipedia.org/wiki/Nosedive_(Black_Mirror) | jjfoooo6 wrote: | A chicken and egg problem of data acquisition. If I'm a user, | why would I share data to such a service without concrete | services to unlock? If I'm a service provider, why would I pay | for a service without users? | | Really such data is obtained only by service providers, credit | bureaus being an edge case. And if I've built a service that | acquires such data, why would I sell it rather than build more | services to sell? | ghaff wrote: | At one point, I think people did this crossing the Bay Bridge | in SF. It didn't need a VC-funded startup with a bunch of | expensive engineers though. I think people just parked in a | known location and people pooled. | zten wrote: | I remember there being signs on Spear St at Folsom with | specific destinations for carpools. I can see them on Google | Street View in 2021, but they appear to be removed in 2022. | (or maybe they're designated on the paper you can't read on | street view right now?) | ghaff wrote: | Never had a need myself but a friend in the East Bay way | back when mentioned to me once. | jaredsohn wrote: | Never used it myself but I think it is this: | https://sfcasualcarpool.com/ Found that at | https://511.org/carpool which includes a few alternatives | as well | memco wrote: | There was Waze carpool, which I used as a passenger. It was not | meant to be profitable as a source of income for drivers, but | helped cover the cost of gas and such. I don't remember the | exact sign up requirements but both the driver and rider had a | decision in who to pick up, when and where. Not sure if it's | still in existence but it sounds like it would be worth a look | for you. | hackernewds wrote: | Waze was bought by Google. They're allowed to coexist, but | got squashed as a competitor into irrelevance | FunnyBadger wrote: | I can proudly say that I've NEVER ONCE used these NeoSlavery | services and never will. ___________________________________________________________________ (page generated 2022-05-28 23:00 UTC)