Uber is an interesting example. I think there are genuine improvements that came out of what they did, most notably the idea of having a unified app that you could go to just to request rides that felt usable and that could do things like tell you how close your driver was and that would allow you to pay online.
On the other hand, I think it's become clear that Uber's pricing wasn't sustainable, and part of the reason why Uber was less expensive was because it wasn't sustainable and rides-on-demand might just be something that is naturally expensive because it's expensive, not because taxis were all exploiting the market.
I don't want to say that the taxi industry shouldn't have been "disrupted", everything I've heard about how taxis operated makes it feel like that industry was a poorly run cartel. But I sort of feel like there must have been a better way to disrupt it than what Uber did, and the winner-takes-all approach that Uber took probably introduced some harms as well. Having a decent app that allows you to know in advance what you'll pay, to be able to pay online -- those are value propositions that in theory should have been enough to make Uber competitive even without shoveling VC money into a furnace and saying, "we'll figure out the profit part once we own the market."
But I can't know for sure what would have happened.
It feels like when the VC model does yield improvements we end up getting those improvements in a batch lump during the "nice" phase of the company. And then we end up back at square one where there are a few taxi services that increasingly care less and less about doing a good job. I'd prefer a system where businesses compete on quality as much as they can without ignoring pricing realities, because who knows -- maybe there were other taxi services that might have done an even better job than Uber or who might have had improvements that Uber might have been forced to copy, but they couldn't operate or compete because unlike Uber they didn't have a bunch of rich investors throwing money at them covering for all of their losses.
The honeymoon period with VC companies is nice and sometimes occasionally we get permanent improvements out of it, but overall it's necessarily temporary, and it masks the fact that Uber probably would have needed to compete a lot harder and would have needed to make their experience even better if they weren't able to charge so little for rides for so long.
On the other hand, I think it's become clear that Uber's pricing wasn't sustainable, and part of the reason why Uber was less expensive was because it wasn't sustainable and rides-on-demand might just be something that is naturally expensive because it's expensive, not because taxis were all exploiting the market.
I don't want to say that the taxi industry shouldn't have been "disrupted", everything I've heard about how taxis operated makes it feel like that industry was a poorly run cartel. But I sort of feel like there must have been a better way to disrupt it than what Uber did, and the winner-takes-all approach that Uber took probably introduced some harms as well. Having a decent app that allows you to know in advance what you'll pay, to be able to pay online -- those are value propositions that in theory should have been enough to make Uber competitive even without shoveling VC money into a furnace and saying, "we'll figure out the profit part once we own the market."
But I can't know for sure what would have happened.
It feels like when the VC model does yield improvements we end up getting those improvements in a batch lump during the "nice" phase of the company. And then we end up back at square one where there are a few taxi services that increasingly care less and less about doing a good job. I'd prefer a system where businesses compete on quality as much as they can without ignoring pricing realities, because who knows -- maybe there were other taxi services that might have done an even better job than Uber or who might have had improvements that Uber might have been forced to copy, but they couldn't operate or compete because unlike Uber they didn't have a bunch of rich investors throwing money at them covering for all of their losses.
The honeymoon period with VC companies is nice and sometimes occasionally we get permanent improvements out of it, but overall it's necessarily temporary, and it masks the fact that Uber probably would have needed to compete a lot harder and would have needed to make their experience even better if they weren't able to charge so little for rides for so long.