Uber will be a dead Unicorn in the medium future. They've got too many legal pressures, competitors with native advantages (i.e. the automakers), and their expansion plans have them overextended. Here in Edmonton, AB, Canada, regulatory changes have pushed the Uber prices to almost 2x during non-surge times over regular taxis. Taxi's have stepped up. Local competitors have sprouted. Carshares are abounding. It's all too much for them to compete effectively and the drivers are realizing they are making nothing. The driver pool has significantly dwindled here. The Uber model has no barrier to entry and they've lost their first-to-market advantage. Doesn't paint a pretty picture.
... and that exactly what the Taxi industry should do, step up. Not just in price, but in technology. IMO the best feature of Uber is the app and transparency like features of taking a trip. If I can pull the app up, input where I am and where I want to go, how much it will cost, and when my driver will be here, I'm happy.
The few experiences I've had with local Taxi systems, coming from a everyone-drives-a-car suburban background, have been awful. Overcharging, credit card machine breakdown, and unreliability of driver arrival estimation have made me seek out more expensive alternatives, just to avoid the hassle.
I now live in a city where I take public transport 90% of the time. But that 10% has been made so much easier by Uber and Lyft(they offer the "same" features, so they are the same in my book). They tell me; How long until the driver is here(often incorrect, but only by a small factor), how long the trip will take(often incorrect, by only by a small factor), and how much it will cost(often correct or guaranteed).
None of the features above sound unique to Uber/Lyft, the only difference between them and Taxi's are subsidization by Capitalization. I've heard of Flywheel offering the same app features Uber/Lyft do, but Uber's are often under ~$10 where I am, which a Taxi can take anywhere from $25-$45. But if Uber's subsidization goes dry, as long as there's an feature-like alternative, I'd still pay for that.
Some have already done it, Taxi Stockholm has a very nice app; enter pickup and destination, book it, track it, pay through it, etc. And they're marketing themselves by stressing all the things they provide that Uber doesn't. You get a licensed, properly insured taxi driver in a nice car.
One advantage Uber has over the app you mention is that it's in many (most) cities. You only need /one/ app and one place to go to get fulfillment. The network effect is not insubstantial.
Most people use Uber almost entirely in a single city. This is obviously not true for those who travel a lot, but for most people they only need a single app (whether or not it be Uber) for their home city.
The real advantage Uber has is brand trust when taxis go back to their shady and anti-competitive business practices and the regulatory environment relaxes. The important question is if brand trust will be worth anything.
But does Uber really have a competitive advantage here? In the multiple cities I have lived in in the past couple years (Boston, Austin, Dallas) I have never noticed Uber's range being greater than any particular taxi. I do prefer uber do to brand trust, but I had no issue switching to RideAustin after uber left the city.
So the people I know that use Uber in multiple cities (mostly for work), spanning multiple employers and multiple countries and locations is a 'filter bubble' - but the inverse perception from you is common sense?
I'd say it is bad form to base an argument like this as fact, when there is clearly significant evidence of the inverse. We know that Uber has targeted airport usage, with a seemingly offline cache of airport GPS locations baked into the app - to tap the travel market... I'd be hesitant to say this doesn't alone make an impact.
Spend time: figure out what app, download it (possibly on data roaming), make a new account, use app once, be stuck wuth data breaches forever, and good luck figuring out which one is tracking you all the time and running your battery to the ground.
Uber is not an angel, but at least with one app we have a lot of people pointing out privacy violations. With two (say, Lyft in US cities), there's some choice. If Uber really fails and the taxis end up running the streets again, I don't see any real pressure to make good ride hail / pay apps.
I don't travel frequently. When I do, install the app at home and then uninstall on return. So they can't track me when I am not using them. I understand it's not for everybody.
Google for it and then stand around reading the reviews to figure out which is the best one, you mean. And sign up for a new account and everything with the new app. By that time I'm already on my way to my hotel with Uber.
"Yes but you needed a different app for each taxi company."
Depends on a market I guess. Here you have a single app for all local taxi companies (actually, there are few competing apps, but you get a point), you can even select which companies do you want to use via checkboxes, because their price differs. Same centralized service works with SMS too, if you don't want to install app or have an ancient cell phone.
Yeah, but Uber and Lyft are not restricted to one city or country. No Taxi company (of the kind that actually owns and operates their own fleet of cars) could do that.
What I love about Uber is that I can use the same service pretty much everywhere I travel. I don't see them dying anytime soon. They have huge mind share at the moment and are better funded than any competitor. At a minimum Uber can pivot into being a front-end for these other players, providing a unified booking and payment experience.
I think this is like arguing that Amazon would never be worth a Billion dollars because there aren't enough book buyers.
If we were talking about Uber's current model then you're 100% correct. But if we look at all to where they're going there's tremendous potential.
They bought Otto - which is arguably the leader in self driving trucking and they have self driving trucks on the road right now. If they're able to capture say 20% of the trucking market 10 years from now that's tremendous. They're in a legal fight in SF because they're trying to get self driving cars going. What are their numbers going to look like when they aren't paying drivers anymore?
I'm skeptical of the notion that the big auto manufacturers (who had a conniption fit at the mere notion of Tesla selling cars direct, instead of through a dealership) nimbly setting up autonomous, on demand fleets of vehicles which destroy their dealership network and also cost them half of their revenue.
Yes, they are losing money, but they're playing a very different game than the local taxi company.
> They bought Otto - which is arguably the leader in self driving trucking and they have self driving trucks on the road right now. If they're able to capture say 20% of the trucking market 10 years from now that's tremendous.
Otto until now is not a truck company. They are not producing any truck. They are just retrofitting their technology in existing trucks. It is like what Google does and what I told everybody and laughed at me. Google had and has no interest in building cars. They have a very bad track record in building hardware for consumers. That said, Google is a software company. Google wants to sell their Software knowhow to the car industry. The very same seems to be true for Otto. Otto is just a technology company that does retrofitting. But all the truck manufacturers are building their technology directly into the trucks. Remember, that Freightliner and other Brands are a Daimler company. Daimler has self-driving technology for their cars and are integrating them into the trucks.
The future for Otto would be a partnership with at least one big truck manufacturer, which is not in sight. Otto will become obsolete, when it does not get such a partnership. So for Uber that is a high risk investment.
> They're in a legal fight in SF because they're trying to get self driving cars going. What are their numbers going to look like when they aren't paying drivers anymore?
You forget, that in the case of self-driving cars, then Uber has to buy (or lease) those cars. Today, they pay the drivers only for the work done, while the driver has to pay for the car and the service. So the risk and costs are distributed to the drivers. But with self-driving cars these costs are becoming Uber's costs. But Uber has until know no knowledge on handling own property.
What about Car2Go, Zipcar, and alike? They can easily exchange their existing car fleets. They have knowledge and experiences on handle car fleets. Think about that.
I have no clue what Otto is, never heard of that brand. As far as I'm concerned its a first name. However, you getting laughed at saying:
> That said, Google is a software company
..is because Google is not primarily a software company.
Google is first and foremost an advertising (or 'profiling') company which uses whatever tool (software, hardware, service, complete stack) at their disposal to increase profit derived from -you guessed it- advertising. What Google wants is to have their software and service in every car in the world. Cars are akin to Android devices. At best, Google would make reference models to give the right example (this is what Nexus originally was as well). Google goes for volume (like it did with Android, and like Microsoft did with Windows and Office), Tesla is the Apple who goes for the top segment.
Facebook is in the same league. Microsoft, with Windows and Office, used to be a software company, selling software licenses. They're reinventing themselves away from that ever since Mr Nadella's been behind the steering wheel.
Don't mistake an advertising (or 'profiling', or even spying) company for a software company. Even then, traditional software company is vastly different from SaaS which even Oracle is heading towards. Tesla, Apple, and -sortof- Microsoft have very different business models than Google and Facebook.
Google is indeed a software company the same reason why the "big 4" firms are considering accounting firms.
All the big 4 accounting firms have HR, legal, PR people, in addition accountants but the reason why they are called accounting firms is because accountants dominate their hiring.
In other words, accountants make up the bulk of the people in their revenue centers.
Same with Google: they hire a lot of software engineers that contribute directly to their revenue.
>they hire a lot of software engineers that contribute directly to their revenue.
As engineers that how we'd like to view the world, but that's not how accounting and business management work. Those engineers are a cost, nothing more. The sale of ads is Google primary source of income. The fact that engineers had to build the tools and platform for selling those ads is irrelevant. The technical stuff is "done" at this point, and now the sales people need sell enough inventory to make up the cost of production.
Even if you're a pure software company, one that sells software, the developers are still a cost, that does not directly contribute to revenue, only the sales department does.
Logically it's a bit silly, because you need to build stuff to sell it, but that's not how account and management view the world.
>The sale of ads is Google primary source of income
No, the sale of AD SPACE is Google's primary source of income. And that AD SPACE is primarily in Google's own software products (Search, Mail, Maps etc) although of course they've built a platform for others to sell related ad space...
>the developers are still a cost, that does not directly contribute to revenue, only the sales department does. Logically it's a bit silly, because you need to build stuff to sell it, but that's not how account and management view the world.
The recent season of Silicon Valley had a hilarious arc depicting this thinking. But it's important to note that not all business organizations maintain that philosophy
Self-driving trucks and, even more so, cars, are by any reasonable measure decades away. There are technical challenges that we have no answer for. Like all technical challenges, they can probably be overcome, but no one knows when or how, and what hardware advancements are necessary. That's not even getting into the regulatory hurdles.
Put out a demo proof-of-concept and people think that the product is ready. It's like those 'life-like' Japanese robots that have some people thinking that we are almost ready to replicate humans, just because they put a pretty silicone skin on top of a simple mechanical contraption.
This isn't about marketing. Uber is literally pushing toward this. They hired most of CMU's National Robotics Engineering Center! They're making this push, and it's either that or bust for them.
This isn't a start up trying to figure out how to make money (Twitter) or a company that can't/won't change (Blackberry).
This is a company making money that is pursuing a blitzkrieg on the industry. They can sit back any day and rake in billions. I agree there isn't a high entry barrier, but I don't think they've lost the first-to-market advantage.
I don't know if this is accurate. They're fending off lawsuits pushing them to recognize their drivers as employees, their prices are artificially low (in the sense that it's subsidized by VC money), and they're racing both cab companies and car companies at once (if Tesla/GM/Ford gets autonomous cars first, who needs Uber?).
At a ~$70B valuation, they have no margin for error. Their only realistic positive option at this point is to IPO. Right now, they're valued higher than Ford ($50B), GM ($55B) and Tesla ($33B), and currently Uber is reliant upon them (and others) to manufacture the cars they rent to people; if they are beaten to autonomous cars, they have no reason to exist.
This is why I think Uber is in a tough spot; they've raised a ton of money at an enormous valuation, and have to somehow convince the public markets that they're worth it. Whether they can do it, who knows? I've been wrong on these things before (Zynga and KING seemed like obvious flops, but the public bought into them).
The question is whether they will just be able to sit back and take in the billions one day.
I have always looked forward to self-driving car networks because of what I perceived to be their ultra-competitive and ultra-low margin nature.
Then two years ago everyone started talking about an Uber monopoly and I got super upset. Are we seriously seeing another industry ultra centralize due to technology?
But I'm beginning to suspect that this may be a massive miscalculation on the part of Uber and its investors. Maybe it is a low margin, highly competitive industry and Uber will be remembered as that one company that subsidized everybody's rides for a few years until it just faded into the background.
>This is a company making money that is pursuing a blitzkrieg on the industry. They can sit back any day and rake in billions. I agree there isn't a high entry barrier, but I don't think they've lost the first-to-market advantage.
The problem here is that ridership at current prices is rather higher than ridership at 2x current prices... and 2x current prices only brings you up to break-even. you want to bring that up to the point where Uber is making billions? ridership is going to fall off a cliff.
I use uber a lot mostly because it's really cheap; For five bucks? yeah, for five bucks, I'll have someone drive me to work. if that goes to $10 or $20? Yeah, I'll still use it when I go to the bar or when my car is broken or something, but for that kinda scratch I'm probably taking a shuttle, driving myself, or using a bicycle to go to work.
The point here is that Uber's competition isn't really lyft or the cab companies, it's the car I have sitting in my own driveway.
In my rather small city (~600k) there are already like 5 different uber-like options. And at least three of them were before the uber came.
Dislcaimer: I've never used uber and I hope I never will. I dislike them as a company and that dislike grows over time.
Not that it matters, but 600k is not a small city, at least by US standards. Only four of 50 state capitals (Austin, Columbus, Indianapolis, Phoenix) have a population that large.
I don't know how many potential competitors are willing to blatantly ignore existing laws (I guess this is the mythical ethics barrier). Ability to raise money given there's Uber (and Lyft etc.) is also a strong barrier since the model only works with massive VC money to keep cost artificially low. Brand recognition is another one.
At the end of the day Uber seems to prefer the classical (as in 5 forces) cost leadership strategy, currently powered by VC funding. Which means long term the play has to be autonomous vehicles. Since the chain of operations requires vehicles in some way I agree with the many posters in this thread who have said their real competition will be the Teslas of the world. Which would worry me a great deal as an investor. I think they should push to IPO quickly while joe doe still thinks yeah Uber sure I use them every now and then take my moneyz (if that's ethical...I won't judge).
As much as I hated and still hate the Uber tactics and way of business, I have to give to them, they managed to shake things up and force taxi companies to get on with the times or suffer hard ones. All in all it will be good for consumers and workers as long as Uber is forced to pay its dues where it wants to do business.
In Russia Uber will definitely die from the competition. Not only many Taxi companies have good apps today and offer better services (and licensed cars allowed to use bus lanes), but there are strong competitors with similar business model (Yandex, Gett, Maxim etc etc), which are better represented in regions. The only good thing it has done, it helped to lower prices in Moscow, but I'm not sure if it's really a good thing - you must be very desperate to become Uber driver here today.
I agree that Uber has resulted in more competition from local competitors which is great, but this information about Uber pricing is not correct. Uber prices have gone down overall since the regulatory changes were made to allow Uber and other "ride shares" in Edmonton and put in place insurance requirements. The base cost per trip has gone up but the per distance and per time cost has gone down. Before the regulatory change my trip home from work averaged ~ $10. Example: Base fare: $2.75, Distance: $3.56, Time: $2.32, Safe ride fee: $1.00, Total: $9.63 After the change my trips average the same. Example: Base fair: $2.25, distance $3.46, time: $1.58, booking fee: $2.15, per trip fee (for insurance): $0.06. The total base cost before was $3.75 and after is $4.46, but the per minute and per km costs have gone down. So very short trips cost more than before, but long trips cost less than before. The regulatory change resulted in a cost of $0.06 per trip for insurance.
But will people continue to use Uber when the price goes up to market levels. Anecdotally, when Uber entered the market where I live they offered steep discounts and everybody I knew started to use them. Today they cost basically the same as most taxis and I don't know anybody who still primarily uses Uber.
>It's introducing people to the service and acquiring market. Better prices come later.
You say this as if 75% of the reason people take Uber isn't price, and that one day Uber will simply be able to jack up all their prices and make money. Demand doesn't work that way.
I think Uber is learning that there aren't actually that much money to be made by driving people around. Regardless to the taxi business being heavily control be special interests groups and taxi lobby, medalion systems and what-not, taxi drivers aren't exactly millionaires.
I believe that Uber miscalculated the total sum of money in the "taxi-ride"-pool.
Uber has network effects too. Facebook has friends, Uber has drivers. You certainly care how many drivers the Taxi company has because it affects the time you have to wait to be picked up.
This is addressed elsewhere on this thread, but I'll repeat: drivers have no compunction about having multiple apps open at the same time. Nothing ties them to Uber.
Sure, but nothing ties eBay sellers to eBay. For an Uber driver to add another Taxi app it's not just a case of downloading and installing the app. They have to create a user account, enter their bank account details, verify their email address, take a photo of themselves, their car, drivers licence and insurance documents and upload them to the Taxi app server. Then wait a day or two for it all to be processed.
If the Taxi app has a significant number of users you might convince driver's to jump through those hoops. But if the Taxi app has no users it's impossible.
All the taxi apps are incentivizing signups by subsidizing their pay rates. Everyone is essentially taking losses to grow market share. Drivers will signup for whoever can make them money, so there isn't as much friction as suggested. They earn their livelihoods from driving, so a couple day sign up process is well worth it.
the eBay analogy would be that nothing stops people from posting the exact same product on multiple sites at the same time. If I were looking at something on eBay, and I could do a quick google to find that same product on another site for 15% less, eBay will very quickly find themselves in trouble.
In India at least, Uber is asking drivers to do ~5hrs shifts at a time. Or they cut the amount given to drivers. This is due to fierce competition from Ola, Meru and other cab companies.
Not sure, when they will just have to accept that those drivers are their employees(maybe a lawsuit is needed in India as well).
I think that says more about Facebook than it does about Uber. Not to derail the conversation but it's entirely possible that FB will be gone in ten years. They already have a demographic problem: far lower penetration among younger cohorts than in years past. And engagement metrics among new younger users show that they are using FB differently than older cohorts.
Thus, I think one could easily argue that FB could be supplanted very quickly by a new service that offers many of its features but is more attuned to the use cases of the younger generation. In Uber's case, the situation is much different because their only appeal (low fares) is unsustainable.
People have been gabbing about Facebook's demographic problems almost since Facebook debuted public access. Not that you couldn't be right, but people are going to keep making this statement until someday it becomes true, then congratulate themselves that they're great prognosticators.
I've got $5 that says their death will result from the first human one(s) at the hands of their self-driving cars. Comparisons to Icarus will be legion among former admirers.
I am happy if Uber dies as long as that death comes because of other competitors doing a better job of helping us travel, faster cheaper and by making lesser impact on climate.
It will however be horrible if Uber dies because of government's protectionist (Trump like) regime trying to protect inefficient taxies.
Uber has helped us bring more fuel efficient vehicles as rides, helped us pool rides etc. making travel cheaper yet causing less pollution.
As others point out this isn't necessarily bad, but it does mean that Uber is extremely vulnerable. If we learned anything in the last bubble it was that attempting to bootstrap through the power curve is exceptionally susceptible to capital constraints. Back in the dot com days a number of 'baby telephone companies' that were building out their networks and spending huge amounts of money on laying out the infrastructure that was going to carry the traffic they would get after their build out, meant that any cash crunch had this amazing multiplicative effect, which resulted in a massive implosion in practically no time (one customer I talked to in 1999 was putting the finishing touches on a $1.2M PO on Monday, and when we showed up for the meeting on Wednesday the doors were locked and the name of an attorney's office was there for questions. Later I found out they were negotiating additional funding and even though their business plan was "solid" once some other companies had gone under, everyone got too skittish to commit. They were already burning through cash to people who were putting in new fiber cables etc. They went upside down (more obligations than cash or revenue) on Tuesday and the bank sent the attorneys (and Sheriff) over to secure the assets before anyone could walk them out of the building that afternoon. Pilots have a term for crashes like this, its called "controlled flight into terrain" where basically right up until the last moment the pilot was flying the plane. So it can be with startups that right up until the day it isn't flying they are in control.
Its nice that if Uber does implode (not that they will) that only VC's will lose their money, of course Uber drivers will be out of their jobs as well but they hopefully won't be greatly finanically hurt. And of course a lot of employees that thought they were millionaires will realize that they aren't (been there, done that, got the t-shirt :-()
I hope at some point in the not too distant future we can get some more transparency on their financials. I really do consider them the poster child for the 'dynamic' economy (one where service suppliers and service demanders are paired in real time for a fee). If they can't make it work it will really call into question if it is even possible to make it work.
The question is whether Uber is buying anything of durable value with their billions. Dot-com companies were buying warehouse space, laying fiber, creating lock-in. Uber might be running competitors out of business, but it's a business with low barriers to entry, and they're not really locking in customers or drivers.
They may claim to be building a moat, but to me it looks more like they're buying overpriced water.
Its a fair question. If I were to speculate I would say they were buying habits. Specifically transportation habits. The closest analogy in my own experience is telephone directories. For all of my early life experience there where printed and bound telephone directories which you consulted when you needed to find the telephone number of someone you wished to talk to. There was a very profitable business in selling ads in the commercially oriented pages.
Google search changed that, over time it became easier to find a phone number online than it was in the books. Then with the smart phone it combined both the phone and the number database (search engine) into a single device and now very few people use phone books.
But that habit changed slowly, over a decade at least to go from early adopters to the majority of people out there using their phone (or the web) to look up numbers. So the habit for calling a cab is changing slowly. From regulated livery service to less regulated ride share service. During that transition Uber is apparently "spending" billions[1] to connect in peoples brains 'Uber' and 'rideshare' so that as ride sharing becomes the expected norm, people will think of it as Uber not "any number of ride share companies."
[1] It is an odd definition of spend, they are perhaps purposely under pricing their service (so subsidizing) in order to encourage use.
True but if the pension fund has more than a fractionally small percentage of their fund in startups then they don't deserve to be pension fund managers. When an Australian pension fund joined one of Blekko's funding rounds the amount their manager was spreading around the valley seemed like a lot of dollars but was less than .1% of the funds under management. So losing all of it had very little material impact on the fund, but a really big unicorn might push the return on the fund up by 20 or 30 basis points.
I thought it worth clarifying for people like those I regularly meet who aren't aware of the LP role in the industry. There's a misconception that the VCs are just investing their own money.
Presumably this is intentional -- Uber could raise prices and make more money, but right now they're choosing to keep prices very low in order to undercut Lyft and the cab companies with the assumption that having a monopoly will return more profits in the future.
At least anecdotally, here in SF Lyft is almost always more expensive than Uber.
I think almost certainly their profitability is dependent on a future of driverless cars, and I'm sure that's what they are pitching investors.
Fearfully, since their survival means going driverless and they are now losing $800 million a quarter, they will race to get driverless cars on the road, it will be rushed, and it could be reckless. I'm thinking the two driverless cars filmed blowing red lights in SF recently (at the very start of their SF driverless program), not to mention possibly many other traffic violations that no one happened to be filming. They are going to wrangle regulators and skirt laws to make it happen with urgency. They now have an advisor to Trump.
I'm just here watching the rushing of driverless cars onto the road by Uber so that their company doesn't collapse. We'll see what happens.
Reckless and non-viable in much of the world. Nobody is going to get an autonomous car working in a winter climate for a long time. Lines on the road can't be seen, there are potholes, driving through deep piles of snow are common, communicating with other drivers and accomidating and anticipating their actions in snow narrowed streets is necessary....
There are plenty of times of year where I'd be wary trusting a human driver from the bay area in a Minneapolis snow storm much less a computer designed by them. I can see how it would be easy not being able to imagine difficult road conditions when you spend your whole life in a place where the worst weather is a tiny bit of rain.
Multiple instances of running red lights right when they start testing? To me that says driverless cars are decades away and some people are so optimistic that they aren't going to see it before there are several tragedies and driverless cars are legislated away.
There are lots of very common driving mistakes that are orders of magnitude more common than stopping for a red light.
Your comment got me thinking that to tackle driving in rough and ambiguous terrains, like snow-covered or muddy roads, they need better integration of vibration and bodily balance sensory signals into the autonomous driving system.
I wonder if the most advanced autonomous vehicles already have those sensors installed and how well the signals are integrated into the prediction and decision making processes.
Uber autonomous doesn't have to be better than the best human drivers in all conditions. They only have to be much better than the average human driver in all conditions. This isn't a very high threshold to meet.
It IS a high threshold to meet. People on HN handwave it all the time, but the fact is that not only are driverless cars still less capable than human drivers, they're also less safe today. And if you believe that that will change in the very new future, your belief is essentially faith.
I would point out that as much as people complain about how well cabbies drive, they have way more hours behind the wheel than most people.
Quick calculation: Lets think about people who drive their whole lives, not city folks. Lets think about work hours driving as it's likely to be the most by quantity, and vacation or pleasure driving should be roughly equivalent.
30 minutes each average way 5 days a week starting at 16, so by 40 they've driven 5/7365 = 260hrs / year. 260 24 years = 6240 hours.
8 Hours a day, 5 days a week, with salaried level vacations is 2000 hours a year. Many drivers are likely to work way more than that. Anyway, 6240 / 2000 = 3.12 years. That means that if you started driving at 18, you'd have the same hours driving as a 40 year old.
This also means that by the gladwell definition of 10,000 hours, you don't become an expert driver till 54.5 years.
However a pro driver becomes and expert after 5 YEARS of driving.
2) But the Gladwell's "10,000 hours rule" was proven wrong (http://journals.sagepub.com/doi/abs/10.1177/0956797614535810). For example, if we follow FAA that recently changed the rules to require 1500 hours for ATP (i.e. airline pilots) license, then you are talking about 3.5 years (for average driver) vs. 9 months (for taxi driver). Not that big of a difference.
This means that on average the US driver becomes an "expert" by the age of 21-22. This actually matches quite well with the insurance company rates that drop drastically at about this age.
This is a false equivalence that I've seen a few times here and elsewhere. It's wrong because:
The majority of car accidents are correlated with someone's fault, related to altered state, inexperience, distraction, or bad judgment. Some types of people are prone to accidents, others are less prone.
But in the self driving car world it's all equal - it's completely arbitrary who is a victim of an accident.
Someone who has never run a red light or had an accident in their life because they are an alert, careful, experienced, defensive driver suddenly has all that stripped from them and now they are driving at just an "above average" level.
Why should the good, consistent drivers be punished? (And they absolutely would if we settle for just "better than average"). I'm all for driverless cars, but only with patience; no one should even entertain mass adoption of self-driving cars without a minimum of multiple years of testing in live traffic with zero accidents or major traffic violations (by fault of self-driving car).
Seeing the traffic violations at the start of the SF program, we probably ought to expect the mass adoption minimum 5 years out, more likely 10-15.
>But in the self driving car world it's all equal...
And that, my friend, is a very good thing. We slowly raise the bar and eventually get rid of bad drivers - because in the future only people with a near perfect driving record will be granted a license.
I would just take Juno. The drivers here in NYC are only doing Uber to get enough ratings to qualify for Juno. Uber went way too far squeezing drivers, it's a mess. I've seen their Uber pool earnings ... It should be illegal.
To some degree, Juno's stated differentiator is being the best ride hail app from the drivers perspective by:
- 50% of founder equity goes to drivers
- 10% vs 20-25% cut of fares
- no pooled concept (this may be purely because they're too small to support it, though it is also unpopular with drivers
Good for you, but a lot of people care about supporting the more sustainable and fair businesses and pay extra for that. Buying only on price and thus personal gain is short sighted and will eventually lead to worse market conditions in many cases.
To put it the other way around, why not care? In NYC Juno is no more expensive than Uber (in fact there's a promo rate on right now), so if I have the option, why wouldn't I choose the option that does best by the person driving me around in their car?
Even if I were entirely selfish it wouldn't be in my interests for them to be stressed and rushing to cram in as many jobs as they can.
This is why I don't get why Uber tries to "undercut competitors". Even if they succeed, the second it stops bleeding money and raises prices competition will reappear. It's not like it is hard to install another app.
except they are already running at a huge loss and they will be stuck in one city forever? plus they came in so late that funding is harder to find as a lot of investors have already made bets in their competitors
Juno is totally non-viable. Being "better for drivers" is not a competitive differentiator. 99% (including me) don't choose services based on which is "better for drivers."
I dunno, I have several friends who consistently use Lyft pool even though the Uber pool in my area is usually less than half the cost, and Juno has a much more credible claim, as far as I can tell, at being ethical than Lyft does.
People spend money on that sort of thing.
That aside, getting drivers is half the battle; even choosing on a selfish basis (and I choose ride-share services on a selfish basis) - if you have more drivers, I have to wait less. For a while, in my area, lyft consistently had more drivers and got there quicker, while uber was consistently cheaper; when I was in a hurry, I'd use lyft.
(my perception is that this has changed and that lyft no longer has that advantage in my area, but point being, if you can't get there in 5 minutes and your competitor can? I might be going with your competitor, even if it's more expensive.)
Well this article makes it clear that Uber isn't shafting the drivers for their profit. It seems no one is making a profit and Uber has figured out how to have drivers help them fund their growth.
Lyft may be more expensive on paper but I always use it instead of Uber where it is available and they send me so many discounts and coupons that I almost never pay the full price.
I didn't see any comment about Uber's main advantage tho, which is a shame...
1. being able to scale supply to meet demand.
In the traditional taxi model, the number of taxis and drivers are mostly fixed. during times of low demand more fixed costs brings more waste (cars driving around not making money) and in times of high demand represent lost profit (cars not capturing market potential).
taxi company's can try and scale 'fixed costs' better, but then they basically just become uber. Having drivers use their daily driving cars as taxi cars allows scaling of supply much much easier than having to use purpose built taxi cars.
The taxi company I used to drive for has embraced the "ride share" model to allow people to use their own cars. They now also lease plain cars that drivers can use with any of the various phone apps.
They also updated their own phone app to provide all the functionality of the upstarts, but with local staff to deal with problems.
So, in many respects taxi companies are essentially becoming Uber in order to compete with Uber. Not shocking.
Cost is not the only factor. In fact, it's not even that important in terms of why Uber is trouncing taxis in terms of ridership. Uber has some very important UX advantages -- much lower wait times, integrated payment, fewer no-shows, ratings, less scummy drivers that people -- are willing to pay a premium for. Price is not the only variable in whether Uber can compete, your first link forgets that. UX is much more important IMO in terms of how shitty cabs are compared to Ubers.
Even only in regards to price, can uber compete on costs? your first link misses the bigger picture. Traditional taxi companies and Uber are efficient at different niches.
Traditional taxi companies (yellow cabs) are best at higher density areas due to being limited by the need for close-by depot, and 'base load' rides due to having a fixed supply of cars and not being able to dispatch new drivers as quickly.
Uber-models are good for all densities, and particularly areas with wide fluctuations in demand.
Taxis will need to adopt many Uber strategies in order to compete. They already have begun as you said. Taxi cabs sucked. Still do. And I would have no issue paying a premium to Uber to fuck it to the taxi cab companies. Especially when we are talking 10% difference in costs. UX dominates in terms of which ill choose to ride with.
Uber models are not going away, even if your first article thinks they will be slightly more expensive in certain scenarios and thus not able to compete at all, lol. What a leap in logic.
That said, will Uber be the long-term company that dominates? Maybe not. But their model will be.
Specifically, Lyft can only deactivate drivers for cause, and it has a clear appeals process through binding arbitration, for which Lyft foots the bill.
I'm not fond of clauses that require arbitration or which prohibit class action suits, but at least Lyft allows for and pays the costs of that arbitration.
Not parent, but years ago after hearing that Uber employees were sending fake Lyft requests I decided I didn't want to support a company that would engage in those types of shady practices
It used to seem to be the drivers of Lyft tended to be more doing it part time and fun to talk to, versus the much more business oriented and cold Uber community made up of former taxi drivers and truckers. I always assumed this had to do with the branding and the way they targeted potential drivers. I liked the Lyft feel a lot more.
But lately they both seem to be a mix of both communities to me, so I don't know if that has changed or if it was even a real effect to begin with.
I am not the person you're replying to, but I used to switch back and forth between Lyft and Uber and use whichever was cheaper at the moment.
But Uber kept sending me drivers who were like 0.5 miles away or more, in SOMA at rush hour, and after the second time I waited ten minutes and then the driver canceled, I decided I was willing to pay a small surcharge to get a drive in less than 5 minutes and for it to, you know, actually happen.
I should probably try out Uber again to see if they've resolved their problems with driver supply. This was SOMA (5th & Bryant) at like 5:15-6:00pm, several times over the course of a month.
I used to slightly prefer Lyft but now greatly prefer Uber. In the beginning, Lyft only drivers were generally a bit more personable and Lyft Line passengers were generally always outside waiting and happy about sharing a ride.
I've mostly been taking Uber recently due to their low prices. However, last month Lyft had a Line promotion and I got to take about 60 rides. The vast majority of the drivers were clearly fired Uber drivers and the experience was way worse. Dirty cars, unable to follow navigation, bad driving, no English, and one driver was just a straight up weirdo. They are clearly passing anyone at the in person interview now. And they all had high ratings of 4.7-4.9. I've had similar bad experiences on Uber but they are much less frequent and the drivers were almost always rated 4.3-4.6.
Have talked to a number of drivers who seem to like Lyft a lot better than Uber.
For one thing, Lyft takes less of a cut and passes more to the driver.
More than one driver I'ved talked to complained that Uber was in the habit of delaying earned payments to drivers. Some complained that Uber was in the habit of under-paying and making drivers spend time to fight for money they've already earned. They do not seem to have similar experiences from Lyft.
In general, all else being equal (and the products are pretty close to equal), I'll prefer siding with the working stiff than multi-billion dollar multinationals.
I tried Lyft the other day, but after they charged me $25 as an "authorization hold" without notification, I cancelled my ride and decided to stick with Uber. Note that Uber's auth charge is usually around $1. $25 may not be a significant amount for some, but it's non-trivial for a college student like myself.
I would have been happy had they just notified me first instead of my bank. Terrible UX to be frank. I actually got in contact with Lyft support on Twitter, but they did not care and just claimed that it was "standard policy".
> I tried Lyft the other day, but after they charged me $25 as an "authorization hold" without notification, I cancelled my ride and decided to stick with Uber. Note that Uber's auth charge is usually around $1. $25 may not be a significant amount for some, but it's non-trivial for a college student like myself.
I've found it more common at interstate gas stations than at local gas stations. E.g. the one that always does it for me is Hooksett, NH; with a Tesla Supercharger, it is more a place that serves everyone and their mother than a lower income area.
It's a horrible idea to use a debit card for electronic payments. The laws that require credit card companies to refund unauthorized charges are much more consumer friendly than for debits from your bank account.
With a credit card your maximum liability for fraudulent charges is $50 even if you don't timely report a stolen card or suspect transaction; $0 if you do. For debit cards, it's unlimited.
So, for example, somebody could fraudulently use your debit card number to buy a stick of gum, hoping the charge goes unnoticed. Then, 60 days later, they drain your entire bank account, and possibly other linked accounts if you have automatic overdraft protection. If you failed to notify the bank for the gum purchase, your entire life savings is lost. Even if the bank account is only used for small purchases and only maintains a small balance, it can still create huge headaches.
Debit cards are for ATMs, and preferably ATMs inside bank buildings. Credit cards are for transactions everywhere else.
For similar reasons, you should be careful who you write checks to--because similar rules that govern debit card transactions also govern ACH transactions. And if you can help it, don't link a checking account on which you draw checks and make other payments to any of your other accounts; or at least, don't then enable automatic overdraft protection.
Oh wow. I wonder how upset you would be when you realize that some gas stations put a $100 hold on your credit card. Btw. a hold is not a charge. A charge is only when it shows up on your credit card bill as a charge and not as a hold.
I do not see what the issue is with having a $25 hold? It's not a charge.
Haha, you're right - I did not phrase that correctly: I use a secured CC sparingly to avoid over-utilization. In this case, I had to use my debit card.
Utilization has no lasting effect on your credit score - if you have 100% utilization one month and pay it off next month, your credit score will be the same as if your utilization was 0% the whole time. It doesn't matter for building credit in the long term.
I use public transport for my daily commute. I use Uber for shopping 2 or 3 times per month, and only on the way back. I think it's tough to save more than that.
If you find yourself starting a comment with “not to sound rude”, you might consider whether skipping the comment altogether is the best way to not be rude.
Uber isn't a cash venture, and several activities in the US require either a credit card upon which temporary authorizations can be placed, or a full (and sometimes, over-)payment on a debit card, the difference being that the debit card isn't backed by a line of credit that becomes due in at least 20 days, but rather it is spent directly out of a checking account.
You need this for:
- gas stations
- hotel stays
- car rentals
- sit-down restaurants or bars
The SV/HN is out of touch argument doesn't fly here. Rather, there is a wide gulf in the spending ability and access to services between a US credit card owner therefore a participant in the mainstream banking system, vs. someone with only a checking account, vs. a person who can't qualify for either and conducts their affairs with cash. This is a problem much older and much more foundational than the Bay Area vs. everyone else and the techies and non-techies divide, and is a significant delineation between the US middle class and lower class.
Is ride-sharing that big of a cost for your day to day?
For a lot of people, it is. The only people I have ever heard say this kind of thing, at least from my experience, are middle-class and well-off, or better. This cohort is the exception, because the norm (especially among millenials) is check-to-check living. $25 is several days' worth of food, two weeks' coffee budget, the price of a full tank of gas for a small car, or numerous other things to many, and $25 can be the difference between your card going through or being declined.
Truly reliable and useful public transit is a luxury in the United States that isn't available to a huge majority of the country.
Walking also isn't an option for many people due to safety, health reasons, scheduling, childcare needs, and not to mention just too much stuff to carry.
Again, if you are cutting it that close you should not be taking "luxury" transportation, barring needing to go to the ER.. in which case, maybe that hold was worth it.
I've never seen a $25 authorization hold before. Usually Lyft does something like $5. In any case, once the charge is captured, the rest of the authorization should go away (and the charge is captured as soon as you rate/tip the driver, or after 24 hours, whichever comes first).
An authorization hold should happen for all rides, but it's normally not very large. The whole point of it is so you can't get a ride and then have their charge fail because you don't actually have any money. Any company that provides a service before payment can be expected to do the same thing (e.g. basically any company that's part of the gig economy). The perfect authorization hold is one that's for the exact amount you'll be paying later, but in most cases that amount can't be predicted, so companies try to slightly overshoot (because they can always charge less than the hold, but if they try and charge more it will fail if you don't have any more money).
If you got a $25 authorization hold from Lyft there's a couple possibilities that come to mind. The first is that Lyft thought your ride would in fact come somewhere close to $25 (after tip). The second is that if you're a new customer, they likely consider you a much higher risk of fraud, and therefore want to err generously on the side of overshooting the estimate, instead of trying to place a lower hold and risk not being able to capture the real cost of the ride. Also, if you hailed your ride without providing a destination, they wouldn't have been able to produce a usable estimate.
It was my first ride, so it was probably an anti-fraud measure. Still, a simple notification like "we will be charging you $25 to verify your card" would have been great.
Interestingly, I use Uber semi-regularly, and they don't hold anything. They probably only did it for the first ride.
I've only used Uber once, out of curiosity really.
It was fine, just like a taxi, the price was a little less but not much.
I asked the driver if he liked driving for Uber and he said it was his last shift, he was going back to driving for a taxi company as he couldn't make any money driving for Uber.
As the city I live in has an over supply of taxis Uber can't exploit the customers, so it sounds like they need to exploit their drivers instead.
It is. It's a war of cash against other companies. The same way the OPEC has been dumping oil on the market to make its price crash to break competitors. So with a price at the barrel two times lower that their break even, oil companies in particular the US shale companies [1], will suffer or even declare bankruptcy and then the OPEC would have got their market share back and then would have raise its price like in 2012-2014. (They failed [2]).
But for Uber apart of China [3], Uber is winning and all VCs will make it that way anyway. Uber is the clear winner and they will continue to pool cash to the winner until it breaks all competitors. And then it will rise its prices and start piles of cash.
Yes but on a simple point of view: the strategy, dynamic, and end results are the same here. And it's the same for oil companies too. With the price starting to go up with the cut from OPEC and other countries, more oil companies start to be created, the old ones have finally more air to breath and start to drill again.
Also with Uber investing on autonomous cars and how they are the only one with real tests with several cars on the road, this is going to be a huge barrier of entry. Even more when we see how the best tech giants like Apple and Google are struggling to develop one.
Would the monopoly plan really work? Is there something that would prevent competition from reappearing when prices are raised? At least from customer perspective it would be pretty easy to use couple of apps and shop between different providers. For drivers this might be of course more difficult, since Uber can use contracts and other mechanisms to prevent them from working with other providers.
IMO no. Others mention the network effect, and while it will certainly be a factor, I don't think it will be anywhere near strong enough to make the monopoly plan work.
The network effect for Uber is really local - at the city level. An "Uber, but only in Austin" service can easily compete with a national-level Uber, since the vast majority of cab rides are taken within a user's home city.
You need a critical mass of cars/drivers to present real competition in this space, but you don't need to do it at national, or even state-level scale. A small upstart that can achieve critical mass in a single city can present real threat to Uber in that city.
The network effect of cabs between cities is so little that while a lot of consolidation of cab companies have occurred in each city, until Uber there was never a major cross-city network. I'm not convinced that a unified worldwide fleet has a significant competitive advantage. It'd be useful for tourists, maybe.
And this is already happening - Juno here in NYC is gaining real traction by charging drivers less, getting drivers to evangelize to each other. Uber won't be toppled by Lyft or any other megalithic ride hailing company, it will more likely be toppled by hundreds of smaller, geographically narrow companies.
I think Uber has a huge advantage. If you start a new transportation service in NYC, Uber can just flip a switch, undercut your NYC prices by $2 per ride, and make up the difference by raising prices $0.10 per ride in other cities without competition.
How do you compete with that? You'd be burning money to compete, and Uber would just wait it out until you're bankrupt.
If you launch a global competitor that gains traction, Uber would just lower prices worldwide. If they can sustain a billion dollar loss every quarter, then you're quickly going out of business, and once that happens, they'd raise prices again and return to be profitable.
>>The network effect for Uber is really local - at the city level. An "Uber, but only in Austin" service can easily compete with a national-level Uber
Not really. Uber customers only pay 41% of the cost of their rides. The rest is subsidized by Uber's investors. This is what allows them to compete with (read: severely undercut) taxi companies.
Local ridesharing won't have this massive advantage.
They likely are banking on the network effect of having the most drivers and users. Having a lot of drivers makes pickup times for riders shorter. Having a lot of user makes it easier to pool people together and give lower prices. Plus more users means the drivers spend less time waiting around to get a pickup. Any new startup needs to (1) get people to download their app and (2) build up enough drivers/users to get pickup times down.
Yes the network effects of everyone being used to using Uber to get anywhere, the verb "Uber it" and the established brand that comes along with it. Any company in future won't have the drivers, car fleet or coverage to compete, which will become increasingly difficult after Uber becomes established and gets embedded in people's minds.
This hits the nail on the head with respect to the monopoly argument. There is plenty of room for other companies to enter the market is Uber jacks up prices.
I just bit the bullet and installed Lyft on my phone. Then I tried to complete the account creation flow, and the app insisted my (Republic Wireless) phone number is invalid. I lose, Lyft loses... While this is admittedly anecdotal, it does not bode well for Lyft's expansion.
> right now they're choosing to keep prices very low in order to undercut Lyft and the cab companies with the assumption that having a monopoly will return more profits in the future.
So they're even shittier and greedier than I thought.
That's such a terrible strategy I can't believe that's really what they're doing.
The short term problem is that they can't burn through money long enough for it to work. The barrier to entry to create an Uber or Lyft competitor is very low - anybody with a car and a laptop can create a viable Uber competitor. Nobody's doing it because Uber, Lyft, and taxis are everywhere, but when there's only Uber, and they're suddenly expensive, they'll get disrupted just like taxis did.
The long term problem is that even if they succeed, purposely creating a monopoly and then raising prices is illegal. It's a great way to get in even more trouble with the government.
The local startups are going to kill them. Juno is so much better in NYC. Nobody misses uber in Austin with Fasten and Fare. Each major city will beat Uber with their own local competitor with better service and better driver relationships.
It's not trivial to make an Uber clone, bit it doesn't take a 20 man developer team two years, either. The basic technology is not super complicated. You can do it with maybe five or six developers in a reasonable time frame. Most of the really interesting stuff that Uber does is scale, and you won't have to deal with that.
Source: was principal server engineer for flywheel, an Uber competitor.
That's a dumb metric. Now, let me be the first to say that Flywheel wasn't very successful in competing with Uber (and there are tons of reasons for that that I could expand upon if anyone is super interested).
But we were plenty successful in creating a system in which people who wanted to get a ride were able to hail our drivers and our drivers could come and pick up the passengers and they could cancel and see ETAs and so forth. We served hundreds of thousands of rides while I was there, and presumably more in the two years since I left.
They've went through periods where in some cities (plus I think they always did this in China) they would pay the drivers more than the customer would pay in order to boost both driver and rider numbers.
Sincere question: what protects Uber from competition enough to imply huge profits in the future?
Network effects don't seem that strong. People will download an app to save money, and drivers will download an app to make money. It doesn't cause any major inconvenience.
In fact, it seems like a market that may approach perfect competition in a matter of years. There are only two companies now because there are only two companies willing to lose money. After they start making money, that could change quickly.
Network effects are incredibly important for the service they're able to give. Where I live they have so many active drivers that I never have to wait more than 5 minutes if I request one sometime between ~8am-10pm.
And that effect is even larger for things like Uberpool, where a smaller network means they may have to go way out of the way to find another rider going to a similar destination, making your ride take longer and the service worse.
Network effect also extends to their other services, like Ubereats, where they can get you your food faster and more accurately-timed than their competitors, because of their larger network of drivers.
Yes, that's correct. The taxi business (now they called "ride sharing" for some reason!) is just like air travel. Price matters the most but brand and quality of service is important as well. It's a very low margin business and has a low barrier to entry.
This makes Uber a risky investment in my opinion. Once Uber decides to make money, the real game will start. You'll see lots of competition and not much appetite for losing money like now.
Driverless cars?! That's going to make barrier to entry even lower but it's science fiction for next decade anyways.
>Many drivers drive for both Lyft and Uber so what exactly is that brand? The app? I don't see a lot of brand to be loyal to.
I believe this is incorrect. Many drivers stick to one because they get a guaranteed wage if they're online for 50 minutes per hour and pick up every call they get.
As for customers, switching costs might be low, but unless there's a reason to switch, why would they?
There is most certainly a network effect. It's similar to eBay: Buyers and sellers can switch to another eBay clone, but they don't because there are no buyers or sellers on the clone.
Similarly, nobody will download another app if it doesn't have any drivers, and drivers will not install another app if there are no riders.
That's spot on. The massive moat is that Uber has captured the market, which requires both drivers and customers (not to mention the billions of dollars of global infrastructure & deployment, people talent, accumulated knowledge, brand & user trust, etc).
To compete you need a very large amount of capital and nobody is going to give you that money now that there is an Uber. You don't just have to replicate Uber, you have to then steal their drivers & customers, which is drastically more difficult than just replicating Uber (extremely difficult unto itself despite what the MVP crowd pretends). See: try raising large sums of money to go after Google's search business in the last decade.
The problem is that Uber doesn't control the platform. It doesn't control the cars that it uses, or the laws, or anything. It has no natural moat - its moat are the money it has.
But the moment a car manufacturer that has significant production capacity deploys self-driving cars on it own, with an app to rent-a-ride on its platform, and the caveat that the self-driving tech cannot be used on the Uber service (Tesla, I'm looking at you), Uber is toast.
I think this analogy breaks down with ridesharing services because there isn't any lock-in, and barrier to entry is low (now that Uber has plowed through the regulations).
Many Uber drivers are already logged into Lyft at the same time, despite a disparity in demand.
Yes, it probably does - good point! When that happens the Taxi market will probably be analogous to airlines: companies will have huge capital investments but will receive low returns on that investment because the service they are selling is essentially a commodity.
Only if you assume Uber isn't going to get there first, with their billions in capital and other vast resources. Meanwhile you have to convince a VC firm or similar to give you an extremely large amount of capital, to build out your fleet, enable/create the self-driving car tech, hire the people to make it all work, market to customers / convince them to even try you, all the while Uber is racing forward. Uber's present advantages are providing the springboard to lead in the next evolution of that business. Similar conceptually to what Netflix managed in transitioning from physical to digital. The advantages of your present can provide for your continued dominance in the future if you're willing to eat your own business when necessary. In five to ten years when self-driving cabs are increasingly common, Uber will already have been there the entire time. You still have to steal their customers (a lot of marketing $$$), build out a huge infrastructure, have a large fleet of vehicles, convince someone to give you a lot of money, compete against a super famous brand (that has already achieved Kleenex type status), and be able to survive the blood-letting competition with a very entrenched and very rich company (see Amazon vs Diapers.com).
You really can’t. I can use any taxi company I want to get from A to B. I can’t use any chat app I want to talk to my cousin Alice or my brother Bob. I have to choose one that they’re already on. That’s the network effect.
In transportation, all these taxi companies are using the same roads; the same network. I don’t have to make sure AcmeRideShare has permission at both the pickup and drop off points.
And I can change my mind tomorrow and go with ABCRideShare if I have a coupon. I can’t just arbitrarily decide to use ICQ tomorrow to talk to my Facebook friends.
Not every taxi company is willing to pick you up in a reasonable time frame and take you wherever you want to go. In many cities, on many occasions, I have had significant trouble hailing or calling for a cab. Further, I've often had them (illegally) refuse to take me to my desired destination.
Uber and Lyft are wonderful, because the drivers show up and don't complain about where you're going.
It's not the same. If you only ever needed to chat with one person at a time, and it didn't matter who that person was, and there was nothing stopping you from downloading multiple apps just to see who's out there to chat with and picking the person who charges the least... well then WhatApp would be pretty easy to switch away from.
Compare this with the airline industry. What protects Delta from competition enough to allow profits? Not very much. In fact, airlines have historically struggled to show profit since deregulation. In the last few years they've finally had some profits, but a tiny amount in comparison to the decades of taking on debt. Still, the airlines keep going.
Can you be more specific? Their self-driving tech is worth $70B?
If it's the combination, then I still don't quite get it. Wouldn't any good self-driving tech pretty easily adapt to ride hailing?
Let's say it's a best case for Uber: there are only few self-driving techs out there, and Uber is one; and they dominate ride hailing, and start turning a profit. Couldn't another self-driving tech company snap up Lyft and bundle in the ride hailing, too?
I think a lot of people see todays taxi company being tomorrows ground transport ruler, once self driving cars are ubiquitous.
The theory being less people will own cars. The savings made on storage/parking, fuel and maintenance will be greater than paying for individual rides (with no labour costs).
The car manufactures would no longer be the company the consumer interact with. i.e. How much does the average consumer care if they are picked up in a Lexus or a Toyota for the average ride?
This would put the car manufacturers in competition for the taxi companies business commoditizing the car industry.
Who knows what will happen? Maybe regulation will prevent self driving cars becoming ubiquitous? or maybe some advance in manufacturing makes it much cheaper to own self driving cars.
But speculation that Uber pulls this off is the only way that I can see how Uber is worth over $60Bn (more than ford $50Bn ish, GM $50Bn ish, Nissian $45Bn ish) while making a $0.8Bn loss on $1.7Bn revenue - as a gamble for what might end up owning a $400Bn+ market.
It seems like self driving cars would reduce the importance of the network effect and make the barrier to entry a capital one (cost of the fleet).
I'd like to see how much utilization the drivers in a typical market are getting. In order for the self-driving fleet-ownership model of future-uber to work, I think the vehicle utilization would need to be relatively high to make it economically competitive with car owning.
It also occurs to me that ride-hailing may not be a good substitute for those who use a car to commute. $70B starts to look awfully high if most people still need to own a car to get to work....
If Google and Tesla get self driving cars too, don't network effects suddenly disappear? The ebay analogy stops holding since the "sellers" (drivers) are a pool of self driving cars.
The headline figure is net of driver costs. They had a revenue of $1.7b, and a loss of $800m, after paying their drivers. Doesn't that mean that if the cost of the drivers was $0 they'd still have made this loss?
self driving cars will bring Uber into the black, but it'll make competing with them so much easier, since signing up self-driving fleets will be way easier than signing up individual drivers.
Off-topic - but currently in India and the uber experience is absolutely amazing.
The handful of times we have used taxi drivers, none of them can find the place where we are staying even with written directions in english and in hindi or even with a hindi speaking person instructing them via the phone. There is always some niggle over pricing and whatever you pay them they claim you are shortchanging them.
With uber they go to the right place EVERY TIME, there is no haggling at all, they dont try to angle for tips but are very grateful if they get tipped. It is a complete gamechanger for travel in these areas.
In Boston it's practically the opposite experience. Cabbies almost always know exactly where I'm going and the fastest way to get there, because they've logged the hours necessary to learn Boston's confusing street system. Uber drivers are usually flipping between at least 2 GPS systems, and frequently get lost, confused, and turned around. The rider experience has really dropped off now that any Joe can make a few bucks as a part-time Uber driver.
Yes, in 3rd world countries, Uber is an improvement of several orders of magnitude over traditional cabbies and cab companies. Even moreso for tourists. For this reason I think they'll hold steady in these regions even if there is a big change in their economics in the future.
The runway is finite. They have about ~5B in cash on hand and are losing ~3B per year. They are putting on the spending brakes somewhat but revenue will have to take off for their valuation to make sense.
They've already said no more dilution, so that limits new sources of financing. Tick-tock.
Side note, profitability is generally described as "into the black" not the green. Amazon is probably the best example, their GAAP losses totalled several billion dollars for a decade or so before they flipped the switch.
That completely got me. I thought he was talking about green technology which did not make much sense to me. Didn't realize he was talking about profitability.
That's a good question. As far as I know these losses are pretty epic, so it's somewhat uncharted territory. They're also not directly comparable to previous unicorns because of their cost structure. They also can't exactly amp up the website ads to cash in on advertising, like previous big losers who turned things around.
autonomous driving could potentially cut one of the main expenses (like the driver's fee), which could cut down prices even more, and probably get them enough of a margin to make them profitable.
that's probably why it makes sense to dominate the market while they still can.
Would it be fair to call it a Hail Mary if a technology that isn't ready for the mass market is a potential savior for a company losing $2 billion per year?
To be a Hail Mary it'd need to be a last minute risky play wouldn't it? I was under the impression that Uber has been playing the "lose money on human drivers until we have robot drivers and market share" game since, if not day one, a long time ago.
AWS is wildly profitable, but Amazon as a whole isn't consistently making profits. They've been in the black lately, but that's largely just to keep up appearances. Who knows of they'll choose to carry on that way. They certainly haven't "turned on the tap" yet, though (as always) they could choose to whenever they want.
TBH I think profit is a terrible metric for them. Profit measures cash, and why does Amazon want cash? To buy back shares? To pay dividends? No. We should measure Amazon by annual growth of book value.
Uber is making the rest of us in SV look terrible.
1. Collect a huge pile of money at sky-high valuations from those who really should know better.
2. Ignore any sensible unit economics and undercut local taxi/transport services until those small businesses go bankrupt since they don't have Uber's money pile.
3. Evade local regulations that everyone else follows in the name of 'innovation' even though the reality is they are just taking a free pass on conducting background checks, and skipping safety guidelines.
What's the endgame here? When they replace all taxis, do they really think they can just permanently ignore all driving laws?
Can prices ever be "too low?" The short answer is yes, but not very often.
Generally, low prices benefit consumers. Consumers are harmed only if below-cost pricing allows a dominant competitor to knock its rivals out of the market and
then raise prices to above-market levels for a substantial time. A firm's
independent decision to reduce prices to a level below its own costs does not
necessarily injure competition, and, in fact, may simply reflect particularly
vigorous competition. Instances of a large firm using low prices to drive
smaller competitors out of the market in hopes of raising prices after they
leave are rare. This strategy can only be successful if the short-run losses
from pricing below cost will be made up for by much higher prices over a longer
period of time after competitors leave the market. Although the FTC examines
claims of predatory pricing carefully, courts, including the Supreme Court, have
been skeptical of such claims.
IANAL, but I'd be very interested in hearing a lawyer's take on this.
Pricing below your own costs is also not a violation of the law unless it is part of a strategy to eliminate competitors, and when that strategy has a dangerous probability of creating a monopoly for the discounting firm so that it can raise prices far into the future and recoup its losses. In markets with a large number of sellers, such as gasoline retailing, it is unlikely that one company could price below cost long enough to drive out a significant number of rivals and attain a dominant position
The key part is "...has a dangerous probability of creating a monopoly for the discounting firm".
That's not the case here. I don't see Uber creating a monopoly in any way. If they raise prices to unreasonable levels (i.e., more than people used to pay for regular cabs), people will go to Lyft, Juno, or the next ride-hailing startup. If there's no competitor remaining, new ones will show up. Or regular cabs will be back.
IMO, the endgame for Uber is not to raise prices; it is to reduce costs. They're betting the farm on driverless cars.
Not too different than Amazon with retail. Amazon doesn't need to charge more than the local retailers they've put out of business; they just need to have a lower cost structure.
Amazon had a structural advantage built into their more efficient online operations vs. a traditional brick and mortar store.
Regarding your point about probability of creating a monopoly:
"Brishen Rogers, an associate professor at Temple University’s Beasley School of Law who has studied Uber’s effects on the taxi market, said traditional cab companies are clearly threatened by newer competitors, and he expects many more will go out of business as a result.
[Many] lenders, including Citibank, expressed concerns about the effects that “nontraditional ride-sharing companies” would have on the city’s traditional medallion-based business model.
"
Traditional taxis are threatened by new competitors, but the plural here is important. It's not just Uber, it's Uber, Lyft, and all the others that can come up. Here in London we already have a large number of minicab companies. Uber is very successful because they're cheapest. But as soon as they'd raise prices someone else will take the crown.
Developing a basic app for taxis (calling a cab, paying, ETA) will probably not cost more than a few millions. Getting people to drive for you (in addition to other companies) is also very easy at the moment. That makes barriers to entry extremely low in the market. It's not an Amazon with huge warehouses and not a Google with a highly sophisticated search algorithm. Uber just competes by price, they have no real technical advantage here.
The lack of medallion rent-seeking could be Uber's structural advantage against taxis.
The framing I see sometimes of Big Mean Uber vs 'poor little guy cab driver' seems wholly out of touch with my experience. At least in Boston the taxi system is/was rife with corruption and cronyism. Neither riders or drivers get a good deal, just medallion owners and the regulators they captured[0]. The money isn't staying in the 'local economy', to 'small business owners', it is, by and large, going to rent-seeking medallion owners, many of whom live out of state to monopoly holders who use that power to prevent competition through regulation. I'd happily pay the same to take an Uber driven by someone who wasn't being exploited and who was accountable for the quality of the ride than a crappy medallion cab with a driver who is on the phone, the whole time being forced to watch ads on their "entertainment screen" with no off button.
Uber isn't a monopoly (yet), but they are breaking a monopoly, and that's a good thing.
> IMO, the endgame for Uber is not to raise prices; it is to reduce costs. They're betting the farm on driverless cars.
What special advantage does Uber have there, though? Many companies are working on driverless cars. When that reduces costs, it'll reduce costs for Uber's competitors too.
And it's not clear that Uber's strategy is to eliminate competitors, rather than engaging in a scheme to turn investment money into "growth" for raising further investment.
(IANAL) I don't think it's legal, but "it can be difficult to prove that prices dropped because of deliberate predatory pricing rather than legitimate price competition. In any case, competitors may be driven out of the market before the case is ever heard."[0]
Drivers getting paid above the market and riders getting rides below the market would disagree. If anything, it's a bizarre kind of socialism: rich venture capitalists voluntarily redistributing their wealth to the public.
The end game is a company with self driving cars, having SIGNIFICANTLY less overhead than they currently do with human drivers. And, probably a ton of technology patents to boot?
Yea, they're definitely a brazen company, but do you really expect anything less from a unicorn company? Very few make it this big without cutting some corners, having some connection, etc.
Perhaps, but we are still a long way off from fully self driving cars actually giving rides to replace taxis at scale. It's not clear how Uber gets from here to there without continuing to lose many billions per year... at which point the whole self driving car thing will be largely a commodity that others could easily run themselves.
Right now Uber is really just proving that if you burn billions and billions you can create a "market" for your "product." It has yet to show that it's a real company with long term prospects. There's a difference between losing money because you haven't hit scale (when Facebook was losing money in the early years) and losing money because you're at scale and just undercutting everyone to show you can make "revenue" or by investing in "innovation" that everyone and their brother is doing and doing it better than Uber.
Self driving or driverless? I don't see any significant savings for self-driving cars, you still need to pay the person and you have the significant added expense of fleet maintenance. Not to mention liability concerns, unless they plan in passing that off onto the 'drivers'.
Driverless cars on the other had and still decades away, whether the tech is ready or not. Society is not yet at a place that will allow the use of full driverless vehicles on public roads. It doesnt matter how much statistically better a driverless car is than a human, every single accident will be magnified. Driverless cars could be our first foray into truly autonomous robotics within the general public, it is not something that will occur lightly.
For established tech and car companies, both Uber and Florida have basically no rules about testing and implementation of autonomous vehicles. Essentially the only rule is 'don't make us look bad, guys'.
Google is a league ahead of the competition with their Autonomous OS, and they're getting close to implementing robotaxis commercially in limited capacities. However, Chris Urmson, ex CTO of the self driving project doesn't think they'll be able to go everywhere a human can for ~30 years.
Uber's autonomous program is looking pretty sketchy at the moment, but now that they have Anthony Levandowski to play Darth Vader to Kalanick's Emperor Palpatine, the project is in capable hands.
Uber's robotaxis need only augment their human network of drivers through the mid-term, and as the capabilities of their Autonomous OS improves they take over more responsibility. Still, this is capital intensive and it'll be still be many years before autonomous vehicles have any measurable effect on Uber's bottom line, and even then, Uber will still be facing competition from other companies with robotaxi networks in development, including but not limited to GM/Lyft/Cruise, The Tesla Network, Waymo, Zoox, and any Automaker willing to license from the Mobileye/Delphi/Intel partnership.
Uber is currently playing hardball with the California DMV, in some sort of attempt at asserting their dominance over the law. I'm not sure if they've got some kind of legit strategy here or not, because I'm skeptical they'll have as much luck leveraging popular public support against regulators in the Autonomous Vehicle space with as they've had in the taxi industry.
It's also an inevitability that Uber's labour will organize for better bargaining power. Legislators seem to side with drivers as 'employees' rather than 'contractors' in the few regional cases that have made it through the courts.
Nonetheless, these incomplete financial reports that have been leaking out make it easy to spin a negative narrative about Uber's future prospects. That narrative may be on the mark, but we can't know for sure.
> The end game is a company with self driving cars, having SIGNIFICANTLY less overhead than they currently do with human drivers. And, probably a ton of technology patents to boot?
This is never going to happen. This is a pipe dream. Self-driving cars are so far away from being a reality that you might as well assume you'll never live to see them, and Uber will certainly expire long before they arrive on the scene.
In this particular iteration of the game, what exact benefit does running a $800M losing ride-hailing service confer?
If the entire value proposition is "taxi using self-driving cars", then surely they would be much better off dropping the money burning ride-hailing operation with cars they don't own to spend more on R&D...
It's an app. If competitor X beats them to the self-driving-punch, I'll simply install their app and start saving. A first-to-market competitor will have 747s full of money landing on their doorstep begging them to take it.
There is simply no scenario where having a network of poorly paid drivers, their heterogeneous fleet of unmaintained cars and a load of debt is an advantage in a rollout of self-driving cars, the first useful version of which will surely be limited to one particular manufacturer, model and sensor suite.
> If competitor X beats them to the self-driving-punch, I'll simply install their app and start saving.
And Uber couldn't double down on their existing strategy of heavily subsidised rides to undercut self-driving cars? I mean, this is assuming that self-driving taxis are cheaper off the bat, which kind of ignores the fairly large capital expenditure of buying a fleet.
> A first-to-market competitor will have 747s full of money landing on their doorstep begging them to take it.
I don't think it's that simple. That's not taking into account how difficult it would be for Competitor X to build enough of a network to rival Uber, and how easy it would be for Uber to replicate/steal/buy the tech and steamroll Competitor X. Having superior tech and being first to market are not enough alone to trump market share.
I think they're already putting everything in there they can. They're probably the most aggressive developer of self driving capabilities (i.e. directly testing in the wild).
Where I live they were already working to phase out the medallion system by introducing new permits for cabs that don't require medallions. They're cabs just the same, with the same requirements for insurance and such, but were a way of expanding the number of cabs without expanding the medallion pool.
This softens the depreciation in the medallion market. The cab drivers who paid a lot of money for their medallions would be furious if they're worthless overnight. This way it takes 10-15 years for them to fully depreciate.
Then Uber showed up and decided they didn't need a proper license or anything and shit got crazy.
From what I can tell, cities have largely been able to kick Uber out, if they want to, but many residents are not interested in eating shit from taxi companies for another 10-15 years, so it's been hard to kick them out by appealing to their sympathy for the medalion holders.
It's not "sympathy" for medallion holders, but the fact that those holders have considerable political sway. Anything too dramatic, too abrupt will be staunchly opposed.
A more gradual phasing out helps to ease the pressure on this system and move to a more market-driven approach.
By 'background check' I mean a process that the local govt. believes is necessary based on experience and past incidents, not something that someone at Uber came up with randomly.
"News of assaults by ride-hailing drivers has been a frequent occurrence. Reports of rape, battery and harassment have grabbed headlines in California, Georgia, Illinois, Texas, Washington, Florida and many other states. While some of these drivers have clean criminal histories, others had prior convictions that Uber and Lyft's background checks didn't find."
Background checks are definitely imperfect, but that is not Ubers fault. The issue is usually not the background check providers, but rather the upstream data sources (read: local governments, courthouses, DMV, etc)
Have you bothered searching the incidences of taxi drivers attacking their customers? No, you'll just take whatever is spoonfed to you from the media, I guess.
No, you'll just take whatever is spoonfed to you from the media, I guess.
Within this thread, your parent has at least provided some support for their position. If you're aware of evidence to support yours (e.g., information regarding taxi-driver attacks or counter to the info in the cnet article), that would be a worthwhile contribution. Dismissing out of hand the commenter as naïve isn't civil.
If you don't like CNET, here are a few hundred more 'incidents' involving Uber and also Lyft drivers, the most recent one being a kidnapping on 12/14/16:
Uber was already doing background checks in Austin. They quit in protest of a requirement that drivers be fingerprinted and forced to drive around with Uber decals on their cars.
Uber (combined with Lyft) spent $10,000,000 to lie to the people of Austin about the effects of Prop 1. At a conservative cost of $50 per finger-printing, that's enough to fingerprint 200,000 drivers.
I know because I received over 30 pieces of direct mail in the two weeks leading up to the vote from whatever clown-show operation they hired. Twelve of the direct mail pieces were the same mailer.
Given the waste of paper and their previous history (especially the behavior of the executives), I don't care if Uber ever "comes back."
Austin was requiring fingerprinting background checks, which have been shown to be much less accurate than the background check process that Uber currently uses. It's really a step backwards in every respect (speed, accuracy, cost).
Yeah, here in Alberta, Uber wanted to be able to do their own background checks, but they were forced by the government to have the local police run background checks as well. Presumably there were a bunch of criminals passing the Uber background checks in the states and this needed to be addressed to meet the regulations.
Evade local regulations that everyone else follows in the name of 'innovation' even though the reality is they are just taking a free pass on conducting background checks, and skipping safety guidelines.
When they replace all taxis, do they really think they can just permanently ignore all driving laws?
Since when do hackers bleat about obeying laws and regulations? What happened to having a "we can do better" mindset? Has everybody wigged out and flipped their "I want a nanny state to protect me 24/7" bit?
And as far as that goes... I guess no "certified" taxi driver has ever turned out to be a criminal or done anything to harm a passenger? Me personally, I prefer to exercise some personal discretion and simply decide whether or not I will ride with a particular Uber driver, or cabbie, or Lyft driver, or whatever, based on my own judgment in the moment, as opposed to abdicating responsibility to either the State or a corporation.
> Since when do hackers bleat about obeying laws and regulations? ... Has everybody wigged out and flipped their "I want a nanny state to protect me 24/7" bit?
Please stop perpetuating this myth- started by Eric Raymond and happily encouraged by SV "thought leaders"- that hackers must, by definition, be laissez-faire capitalists who love Ayn Rand and treat breaking laws as a noble goal in and of itself. I do none of those things, because I recognize that many times regulations are vital for ensuring human health and happiness, and think that free-for-all capitalism leads mostly to misery for all but a few in the plutocracy. "We can do beter" implies not settling for a world like that.
Other people don't have to agree with my politics, but if they want to say I'm "not a hacker" because of that, they can take their very-politically-motivated prescriptivism and... well, I got told by dang the other day and I'm trying to cut down on the angry HN posts because of it, but you get the idea.
> regulations are vital for ensuring human health and happiness
I agree. The regulations created for the war on drugs has lifted millions of African Americans out of poverty and into group-oriented communities that promise shelter, free food, and at least one hour of happiness per day.
Please stop perpetuating this myth- started by Eric Raymond and happily encouraged by SV "thought leaders"- that hackers must, by definition, be laissez-faire capitalists who love Ayn Rand and treat breaking laws as a noble goal in and of itself.
Nice strawman. Luckily I didn't say anything about esr, laissez-faire, capitalism, or Ayn Rand in the post you replied to. Hell, I didn't even say that breaking the law is a "noble goal in and of itself".
All I'm saying is that it's disturbing to me how so many HN'ers have just completely sold out to the idea that the State is their proper master, and should regulate / control pretty much everything and anything. It seems to me that in the past, there was a more individualist / freedom oriented mindset around sites like this - whether it was from "American style libertarians" or socialist anarchists or whatever. Personally I find the change to be a bit depressing.
Somewhere in between "Since when do hackers bleat about obeying laws and regulations?" and "I want a nanny state to protect me 24/7" exists a middle ground where people realize that government regulation exists for a reason. You can't just throw away the law for the sake of your definition of progress...
No, you're right, there's no "law" molecule in nature.
What gives the state its authority is that me and three hundred million other people continue to give the state its authority. Break a severe enough law and we'll take away your freedom of movement for a while.
Strange that you would respond with that, given that I'm arguing exactly against "following dogma". What I'm saying is that, as hackers, we have traditionally taken on a mindset that says "we can use our intellect, reason, science, etc. to figure out better solutions" without regard for dogma. And more and more people seem to be drifting away from that and just punting and saying "fuck it, the State will make everything OK". That's what gets me, is the way hackerdom seems to be losing that spirit of independence that it used to have.
The very fact that you treat this state as a separate entity from the people is a problem. In a republic, the state is the citizenry. Hackers are part of the state and can influence the state and should work with the state. No one here is agitating for delegating all responsibilities to the state. The point is that private businesses should work with the state and seek to change and reform regulation when necessary, not permanently act in defiance of the laws of the state. Hackers understand the use of a good tool, and if the state is one, then hackers should use that tool. To throw it away is blind libertarian dogma with empty rhetoric about "nanny states" and other bogeymen.
Furthermore, even supposed would-be laissez-faire capitalists know this- I doubt that startups pass up the chance to use government policies to their own advantage, or pursue rent-seeking behaviors that help their startups. The perfect libertarian society you envision exists next to the perfect communist society, as utopias that contravene human nature.
The citizenry may have severe differences of opinion with the leader in charge, but they have so far seen fit to endorse the system that brought him into power. So yes, the citizenry is Trump because Trump is a citizen, and he has won the electoral process that the citizenry did not work up the effort to reform or change to make it otherwise.
So if "the citizens", or some subset thereof, are unable to change the system, then they're assume, as a group, to be endorsing the system and its actions? And to be genuinely represented, indeed manifested, by its officials, even when those officials are aggressively at odds with each other?
There's different degrees of endorsement. There's "agreeing with every jot and thistle of the system's actions" and there's "not trying to violently overthrow the system as bullshit." Most people live somewhere in between, closer to the former position than the latter. Most people want to change the system, but do not dispute the necessity of the system. As such, that means "the state is made of the people" is truer in the consent of the governed sense, and not the dystopian Soylent Green sense. That isn't to say there is no need for large-scale reform and changes; of course there is.
Of course there's degrees of endorsement, there always is. I'm just responding to the notion of yours that "in a republic, the state is the citizenry." Well, no, it's not, and it doesn't need to be - and indeed, there's no real way for it, in fact, to be so. Certainly, it can represent certain preferences of the citizenry, through various mechanisms and political tools, but the state isn't the citizenry, it's an institution with particular powers and structures. That's not objecting to the concept of endorsement, it's just pointing out the distinction.
It's fair to point out the distinction between the elected representatives (and the unelected appointed civil servants, bureaucrats, etc.) and the citizens who elected them. My original statement was to remind minarchists that ultimately, though, the state is still made up of the people it rules. The libertarian inclination to view the state as an alien, nefarious entity, doesn't lead to much room to improve it. Certainly your distinction is correct.
> Since when do hackers bleat about obeying laws and regulations?
Bleat? People would give Uber a pass if they actually created new and innovative technology.
Right now they're much more of a financial services (attracting VC funds) and DC lobbying firm than a technologically innovative company. They have a few (albeit NP complete) interesting technological problems. The rest is mostly legal and finance.
Why wouldn't people complain about companies who try to muscle in with money and lobbying featuring products that are not noticeably superior at all?
Since when do hackers bleat about obeying laws and regulations? What happened to having a "we can do better" mindset? Has everybody wigged out and flipped their "I want a nanny state to protect me 24/7" bit?
Hacker News is fairly progressive/authoritarian. The kind of attitude you describe can still be found on slashdot.
And as a leftist, Hacker News is very, very libertarian-leaning most of the time by nature of its general support for startup companies no matter what laws they break and its general dislike of laws and systems designed to protect people from the sociopathic entities we call companies. There's some dissent, but it's certainly not a progressive haven.
This is one of those places where people will happily sit around and argue that breaking laws is moral and necessary, no matter what the law.
HN is very far from being "libertarian leaning". It might have been so in the past, but that time is long gone.
This is one of those places where people will happily sit around and argue that breaking laws is moral and necessary, no matter what the law.
It looks like there are about two of us in that camp, in this discussion, versus pretty much everybody else. It's pretty clear the pendulum has swung and this site is largely oriented towards big government interventionism.
You should go back and look at some of the Uber posts from when they were still spreading across the US - HN broadly agreed that it was moral to, instead of fighting taxi regulations at the relevant levels (politics or court), just violate them. That HN has stopped being pro-Uber is mostly the result of people realising that Uber is not trustworthy, not a radical change in belief, combined with the fact that Uber apparently gets to do things we as people don't (and believe we shouldn't).
The sociopathic entities we call governments are far more powerful and do far more damage than those we call companies. MacDonalds has yet to bomb anyone that I am aware of, and I can't recall Google using force to prevent someone leaving a country, or Amazon water-boarding people it has captured through overseas kidnapping.
Funny how libertarians never seem to consider dumping millions of lbs of poison into the environment an "initiation of force", but god forbid government raise taxes by one cent.
If you want to play the game of "find the worst things corporations have done to prove they are worse than states", then you will surely lose. How does the actions of those corporations compare to say the bombing of Hiroshima, or the Great Leap Forward, or the Holocaust?
It's also worth noting - both of your examples involved the state actually doing the dirty work.
Funny how libertarians never seem to consider dumping millions of lbs of poison into the environment an "initiation of force"
Citation needed - AFAIK there is no such consensus.
Is there something akin to a city's uber manager that all drivers have to report to for the sake of noticing if someone should _not_ be driving for uber?
I was thinking more along the lines of someone that notices something like "alcohol on breath", a person that acts as a customer's ally/mediator for corporate in cases of transgressions, an accountability person with little purpose than for corroborating corporate's opinions on "bad apples" (whether rightly or wrongfully) etc.
which is maybe why the losses are a little less dramatic than they sound. once they eliminate their network of independent contractors I'm sure the financials look a whole lot better. ultimately they are just another boring logistics company.
Self driving cars won't make financial sense in a lot of regions.
The driver plus bring your own vehicle model is a mostly operational cost model where the cost slides based on region, which makes it perfect for rolling out on a global scale.
The self driving taxi service model has a significant capital cost associated with it and that cost won't slide much based on region. It would take far too long to see meaningful returns on self driving taxis in India for example.
At least in São Paulo the taxis took a lesson from Uber and improved their service, created a premium service that isn't more expensive, taxi hauling apps introduced reduced fares, that the drivers can choose whether to accept or not.
Outside peak hours (and on the intl airport which isn't São Paulo proper) I still find Uber more convenient/cheaper, but otherwise they have a tough competition with taxi services.
(1.7b / 0.8b + 1.7b) = 68% of their costs. 3.25 * 0.68 = 2.21$, but Uber charges more than that and would like some profit. aka Uber has higher costs than cab companies making them a long term dead end.
Sure, they are probably subsidizing other markets more, but even then that are gong to run out of money long before the self driving car thing takes off.
You are assuming perfectly rational market. It isn't.
Many people here would dodge Uber if they expect surge pricing (And something along these lines was said today on one of the popular for young people radios stations, here).
Also, there are plenty of taxi just waiting around everywhere downtown.
Many (older?) people, would never get Uber to go to the airport, which is a very good profit opportunity.
So, I don't see Uber having a 100% monopoly in any future, as various people have various needs and opinions and it's not a race to the bottom on price in this segment.
They will both coexist, but for people taking the cab in the first place, $0.75 is not even on the list of thoughts in downtown Toronto. You get out of a Johny Cash event, $200 a person ticket, it's snowy, and you'll wait few minutes for uber when the Taxis are parked up front?
As you move outwards from the core, more people drive Uber, and one was even my ex coworker, so he told lots of stories.
So, to conclude, you can't assume race to the bottom on price alone. Or IPhones, rolexes, Alienware PCs, etc would have been long gone.
> Many people here would dodge Uber if they expect surge pricing
Notice that they've stopped displaying the surge price multiple on their hail screen. Previously I would have hesitated at 1.4x surge, but now "fares are slightly higher due to increased demand" just makes me shrug my shoulders.
You misunderstand me. That's the verbiage they display now. "fares are slightly higher due to increased demand", rather than the actual surge multiplier. If the surge multiplier is higher than that, it'll say something to the effect "fares are a lot higher due to high demand". It doesn't tell you the exact multiplier anymore, which makes me at least a bit more price insensitive.
I'm surprised to hear there are no taxis in SF. However, in the city of San Francisco there are plenty of taxis. I take them all the time and they are still easy to hail from the street. There are plenty of times when I want a professional driver who knows The City, instead of some random person from the East Bay.
Taxi companies are "small businesses"? Like in NYC, where taxi medallions used to be a safe investment? I guess mafia enterprises are "small businesses" and taxi and limo companies are not far from those. Zero compassion for those.
The endgame is a monopoly, at which point they raise prices to the monopolist profit maximising level and extract those sweet sweet rents from consumers: https://en.wikipedia.org/wiki/Predatory_pricing
This practice is illegal in many countries. Legalities and ethics aside (it's easier to discuss this in 'value neutral' terms), the strategy only works if you've got a bigger bankroll than your competitors (i.e. they go bankrupt before you do). By the sounds of it, Uber have a pretty big bankroll thanks to VC funding?
[Value Free Zone]
Also, they're going about it in a fairly clever way. It's almost like a market version of the 'blitzkrieg' strategy. By progressively moving through one localised market to the next, it's essentially Uber's bankroll vs. whatever the largest local market incumbent can muster. In addition, they're ignoring regulations because it further lowers their costs.
And here's the blitzkrieg part: when they encounter a market (e.g. Austin) with particularly strong regulators or incumbents with larger than usual bankrolls, they bypass it (for the moment), just as the Nazi's did if they encountered heavily fortified positions on the Maginot line. They'll just bypass and move on to softer targets.
I imagine once those are monopolised, and they've replenished their bankroll by charging monopoly prices where they can, they'll come back for the more 'fortified markets'. Except this time they'll:
- Have a bigger bank roll
- Have a constant stream of cash rolling in from their monopolised markets
- Possibly have a more favourable regulatory environment due to 'lobbying' (i.e. political 'donations')
Given the position they will be in by the time they swing back to the 'holdouts', they may not even see the need to flaunt local regulations to crush their competition.
[/Value Free Zone]
Personally, and assuming I'm right, it's pretty despicable behaviour. It's not innovative; it's illegal. And it's not 'disruptive' either; it's destructive and exploitative. I wouldn't deny these guys are smart, but so were most 'robber-barons' throughout US history. If 'hacker culture' is synonymous with 'destroy all who might oppose us, then turn around and screw consumers', then yeah, they're hackers (and I most certainly am not).
But if SV gives a fig about its reputation, and believes that hackers can 'break the rules' while maintaining some shred of personal integrity, then I wouldn't be so keen to hitch my wagon to the likes of Uber.
Note: I have no stake in this one way or the other. Frankly, I'm not a big fan of the traditional taxi industry in my country; they're essentially a government protected oligopoly and a bunch of rent-seekers to boot. Just calling it like I see it.
Could you share some specific information to substantiate this?
I frequently hear this statement on Hacker News, and (as far as I can recall), every time I've asked for a source or evidence for the claim, I have not gotten a satisfactory answer.
Black car services where you arrange pickup with a specific driver ahead of time have always been regulated differently than taxis. Uber has cars that operate as taxis, and they're properly licensed.
The burden of proof is on the person making the claim. If someone wants to claim that Uber is breaking the law or has broken the law, then it should be relatively simple to explain what that law is and provide some evidence that it's been broken.
I'm not looking for flawless proof, suitable for a court of law, just some kind of cogent allegation of what happened and what law was broken would suffice. These kind of vague claims about Uber breaking the law do nobody any good; they are middlebrow mud slinging.
Here is an example of what a cogent allegation might look like: "Zenefits broke the law by allowing salespeople to act as insurance brokers in seven states despite lacking the licenses to do so." [1]
Has Uber broken the law? Who knows? There have certainly been accusations that Uber tried to sabotage competitors by placing fake rides, for example. I am not trying to make any kind of moral claim about Uber, so please do not misunderstand. I am simply to hear the evidence from people who make comments like "Uber evades local regulation".
From my casual research into the matter, no, black car services or any kind of private, pre-arranged transportation for hire are not considered taxis in most municipalities. Uber actually offers taxis in certain places through UberTAXI [2]. The key difference seems to be whether the trip is arranged ahead of time through an existing business relationship, versus whether it might be solicited or formed directly on the street at the beginning of the ride. This seems to be how law works in most places in the USA, anyway. If you know of examples of municipal law where it works differently, I'd be glad to hear the details.
My understanding is that in mature markets, Uber is profitable. The issue is that it takes a few years to become profitable in a market and so it's extreme growth pushes out profitability on the whole for a few years
> Even in the U.S., Uber's home market, the company continues to lose money. After turning a slight profit in the in the first quarter of this year, Uber lost $100 million in the U.S. in the second quarter. The loss increased in the third quarter, the person said.
I thought that they'd turned the corner in the US too, but go figure. I guess the claim that Travis makes about driverless cars relates to their profit margin as much as it does to their long term competitive advantage [0]:
> Developing an autonomous vehicle, he adds, “is basically existential for us.”
The US is not a mature market for Uber, it still includes a huge amount of cities where Uber is still relatively new and has yet to reach profitability. My understanding is that the profitable markets are places like SF or LA where Uber has been around for 5 years
Not before destroying any competition with cripplingly low rates. That's the problem: I can't hail a goddamn taxi anymore, despite it being cheaper by any back of the envelope calculation for society as a whole.
You know.... a monopoly controlling drivers is... um... some how better.
In all seriousness, Uber drives down price to a point that no one can really figure out if being an uber driver is profitable. Uber makes money, but none of that proffit is spent in the local economy. Capitalism doesn't work at that scale... look at the loss they can endure, compare that to a local cab firm, or even somewhere like NY.
> despite it being cheaper by any back of the envelope calculation for society as a whole.
How is it 'cheaper' to manufacture extra yellow cars and have them drive around aimlessly searching the streets for fares vs. hitching a ride with my neighbour who drives for Uber part-time with the personal car he'd have bought anyways?
You mean once they have burned VC money to price dump transportation in a given market, they start charging higher rates to make money and run pet R&D projects.
Next, Uber will raise enough money to boil the ocean. Now their self-driving trucks can go from continent to continent, completely obliterating the container shipping business!
Because VCs are using investor money and their investors are looking for a return. Someone along the line will be pissed off of their investments don't pay off.
Burning up $800m to subsidise an app with the justification of "market share" decades before self driving vehicles become the norm is totally fine by me, as long as it's not my money being incinerated.
After the tens of articles outlining Uber's bad business practices I've been trying to use other apps as much as I can. What's amazed me is how many drivers on Lyft and the like are former Uber drivers who left the service. I'm sure that they've been able to replace those drivers but I wonder if they'll he able to keep this up for the time it takes to introduce self driving cars. I suspect not.
Here's what I'm not understanding about Uber. There' nothing they provide that couldn't be cloned. It's clear there's no way to grow into profitability so once the VC subsidies go away Uber will have to significantly raise prices to survive, putting them in the same price range as traditional car services. At that point, what's to stop Yellow Cab from creating their own Uber clone and eating Uber's lunch?
Well, Yellow Cab could hardly even get credit payments to work in their cabs, so they are not exactly a technology company. It's not going to be easy for a cab company to clone what Uber (or lyft) have built during the last 7 years. Plus Uber has a network of drivers/users that has significant value.
The biggest beef I have with Uber is that they went from a transparent price calculation to an opaque (and basically always more expensive rate).
So I always write back to their support team and they usually refund the extra charged money, but it's tiring to have to do this for every long trip I make with them.
There is so much irrationality in this thread and in public opinion in general... it makes we wish I could personally bet on Uber's future success.
However, Uber is staying private, so they don't have to cater their long term plans to the whims of random people who have no idea what they are talking about. (I include myself in this category)
I always thought revenue was income before costs, and profit was revenue minus cost. Gross revenue would make sense as "total income", but net revenue doesn't make any sense to me. Clearly I'm missing something.
I don't know how people get this impression, unless it is by only reading the comments on this site and never reading any primary sources. Uber's "self-driving" tech is currently unable to do things that other companies were doing years ago. Google's car took a blind man to Taco Bell in 2012. Uber's car has two engineers in the front seat and still blows stop lights and can't make a right turn.
Yea, Google drove a blind man to Taco Bell in 2012 and still hasn't released a self driving car 4 years later.
Meanwhile, Uber's been in the self driving car business half that time? They already looks more likely to actually have these things on the road, and, they have the incentive, and cash pool to do it.
Another reason people "get this impression" is that Google has a history of interesting projects that never made it to market. Waymo gives me more confidence, but I'm still skeptical.
I don't understand how Uber "looks more likely to actually have these things on the road" when Google's cars have been driving people around Mountain View for years. Please explain.
I also believe Uber will probably go wide first because the risk (people get injured, they possibly go down in flames from legal issues) is worth the reward (they have a chance of surviving as a business by automating human drivers out of the equation).
Google has money falling out of their ears and will do a wide release when it's boringly safe.
I much prefer companies waiting until it is boringly safe but I don't think that's compatible with the money fire Uber has built.
Google has been in the self driving car business since 2009. Uber was FOUNDED in 2009.
Google has a history of starting cool projects, which never make it to market (Wave, Video, Glass, etc.)... That alone, doesn't inspire much confidence that their self driving car project will reach production.
Uber has the incentive, far more than Google, to actually see this through. If they can cut out drivers, their overhead shrinks significantly and their core business grows.
as a google employee, this often makes me sad too, but when it comes to human life, it's a bit more nuanced than that.
engineers don't have the luxury to do many things they could otherwise do on their server side software. You break a server, you fire-drill it, get the resources, roll back the release or so on. You lose money, sometimes tens of millions of dollars, but not human life. You write your post mortem, and put the protections in place, you learn from it.
You could have used those $10m to save hundreds or thousands of lives. It doesn't make any sense to hypothetically spend $10m extra dollars to save a single life.
Google's "self-driving" car in 2012, was more like a remote control car on a pre-planned route for a PR campaign. Please stop making up lies about your employer to make it look good.
