7 ms·

If Uber works, you might be less happy with your transport options

16 points by yummyfajitas 11y ago

lemiant 11y ago
This is a badly reasoned article. If the total stock of vehicles is decreasing it creates a lot of savings (as the article admits). How are these savings captured? In cheaper Ubers. The total cost of all the cars on the road is already being paid for out of our transportation costs. As each vehicle gets shared between more people the cost to each person goes down. Obviously there will be an equilibrium between lower prices from fewer vehicles and higher convenience from having extra capacity. But, using resources more efficiently won't cause harm. Even if the total vehicle stock were to decrease as much as the article suggests the price of an uber would drop much faster than the convenience. Now this all assumes an efficient market. If Uber were to start abusing its monopoly powers, that would be something to be legitimately concerned about...
- uptown 11y ago
  "If Uber were to start abusing its monopoly powers, that would be something to be legitimately concerned about..." I wonder if they plan to do that: https://twitter.com/NeilAnAlien/status/627873374505562112 https://twitter.com/NeilAnAlien/status/627873374505562112
- yummyfajitas 11y ago
  How will the total stock of vehicles decreasing result in cheaper Ubers? It seems like that would lower supply (fewer cars to provide transport) and increased demand (fewer people with their own cars => more people turning to Uber). The article agrees that a more efficient use of resources won't cause (net) harm. It claims it might harm transportation and benefit everything else, for a net benefit.
- RockyMcNuts 11y ago
  I'm not sure I agree that Tyler's point is of major significance, but yours seems even more wrong. I think Tyler's point is, there is a stock of underutilized cars that gets converted to Ubers. Hypothetically, I needed a car for work, and I decide to drive it for Uber on weekends. In the long run, I decide I don't need a car because Ubers are so available. The supply of Ubers then goes down, while demand goes up, since I don't have the option to drive myself. I don't think there is any mechanism here that would drive the cost of an Uber ride down. Total transportation cost goes down because the total of Uber plus self-driven cars go down, but the mix goes to more Uber, less self-driven cars. I think as Uber over time ceases to benefit from an 'arb' where it piggy-backs on sunk-cost cars and personal insurance, the cost of Uber-ing goes up, but overall transport cost goes down because people don't have to pay for underutilized cars. It's possible that over time the mix of cars goes to utilitarian electric models, and a 'fun' car becomes a specialty item like a high-end sports car is today, and some people don't love their new options. But if you believe in free markets, you would have to say that the market has spoken and arrived at a revealed preference for paying less for transport in a utilitarian vehicle that is not underutilized.
  - mattlutze 11y ago
    It feels like Uber's use case is still quite a middle/upper-middle class urban thing, and that the market hasn't decided to hand itself over to microservice taxis just yet.
    - ghaff 11y ago
      That's because, when you get right down to it, Ubers are taxis which have always been primarily a middle/upper-class, urban-ish thing. It increases the pool of available drivers/cars and it simplifies the whole process, especially in areas that didn't have a well-established set of taxi services. But the economics are still basically the economics of hired cars (whether taxis, limos, or whatever).
HappyTypist 11y ago
If ETAs are too high and prices are too expensive, then more people will get cars again. I don't really see a problem. This is like saying "If email works, you might be less happy with your communication options" because 'no one will write letters anymore'.
- deleted 11y ago
  [deleted]
TeMPOraL 11y ago
If Uber works, you won't be happy about it, period. Their top management has constantly demonstrated sociopathic behaviour over the last few years. They show no respect for law, dignity, privacy and are willing to screw over journalists and their own drivers alike. What exactly do you think will happen if they win? Will the company suddenly discover God and become a good citizen? Their tech is good, but they are a menace to society.
- douche 11y ago
  Uber is providing transportation options that didn't exist before they did, at least where I am. There are something like 15 taxis in the entire corner of the state where I live, and they are expensive, and generally terrible. Uber is keeping a lot of drunk people off the road, which is a big win for us and for them.
  - TeMPOraL 11y ago
    That's great, and hopefully more such services become available - apparently there's a market there. I'm not questioning their tech, or even the value of service they currently provide. I'm only very, very seriously worried of a company with such weak moral backbone dominating the market. Does anyone seriously believe they won't start exploiting their position if they win big?
    - oldmanjay 11y ago
      I don't believe my armchair psychiatry powers include enough ensured predictive capacity to definitively state the future. That doesn't directly answer your question but the answers is contained within the principle.
- imgabe 11y ago
  The top management of every company is sociopathic. Uber just isn't experienced enough yet to appropriately hide it.
  - 11y ago
rubidium 11y ago
>The better Uber gets, the more people can do without cars Perhaps, but fares would have to drop by about half. My daily commute is 18-25 minutes each way. Current Uber rate is about $20-25 to get me between home and work (midwest metropolitan city). That works out to 249 * $ 20 * 2=$9960 / year to take Uber currently. True cost to own for my current vehicle is between $4000-5000/year. My wife has a car as well and needs one during the day. If Uber became close to cost effective with owning, I'd drop my car, take Uber, and we could use my wife's car for all our other transportation needs.
- exDM69 11y ago
  > Perhaps, but fares would have to drop by about half. But the opposite is going to happen when they stop subsidizing fares. At the moment, they are ripping off their drivers and still making a loss on each ride they sell. Their strategy is predatory pricing and that won't go on forever. I'd be willing to share rides (with other passengers that is) as long as it gets me from where I want to my destination with a single hop and pay a reasonable price for that. At the moment I'm taking two buses to work and I can beat that with a bicycle (14 km or 8 miles in 40 minutes at best, 70 minutes at worst). That time should be beatable using smart routing of small vechiles (I have 5-20 min of waiting for my connection typically), using "maximum flow" rather than "shortest path" algorithm. There is such a bus service available here but only in the urban areas so it won't take me to work from where I live.
mattlutze 11y ago
Total volume of privately owned vehicles isn't going to dramatically decrease because of the new slightly more convenient option of private taxis. The set of privately owned vehicles is going to decrease as a function of increase in population density and truly alternative transportation options. It still takes a while to find an Uber driver in lower density areas, and in both the City and the Suburbs, alternative services like Curb and myTaxi have been leveling the competitive gap between Uber's microservice taxis and traditional taxis. But an Uber-facilitated ride-for-hire is still a taxi ride, albeit one that's easier to schedule. Cars will go away when people don't need them. Yes, some people wealthy enough to afford to take a taxi everywhere are going to get rid of their cars. And it does constitute further saturating a market with car hiring options. But folks that don't live within walking distance to daily needs like their bank, grocery stores, barber, doctor... are going to rack up extra costs switching to hired cars. If your town grows 2x or 4x and suddenly there's a grocery store two blocks down? Less need to get in the car. In those scenarios, eventually yes you're going to see the cars-per-person go down. I'm rehashing I suppose, but fleets of subscription-service autonomous cars will be the next big disruptor. This is where Uber could make that big dent -- when you have a stable cadre of always-on, always-ready people movers, optimally distributed for service, picking up and dropping people off. These could replace that second car, or the beater you keep limping along to get down the highway to work.
- nthj 11y ago
  > But folks that don't live within walking distance to daily needs like their bank, grocery stores, barber, doctor... are going to rack up extra costs switching to hired cars. This may be a bit too simple. Technology is solving these problems, too. Online banking continues to improve. Instacart is expanding to more cities. People are consulting with doctors over FaceTime for a flat fee. Many other errands can be batched up into one day a week or month. With all these improvements combined together, Uber becomes an economic choice for many people sooner than later. (I have saved ~60% on car costs over the past year by switching to Uber exclusively. I realize not everyone is in the exact situation I am, but I'm not riding Uber because I have money to throw away.)
  - 11y ago
petra 11y ago
This discussion doesn't take into account shared ride services (like uberpool). They're the thing that might enable the shift from private cars, and without considering them, this discussion don't teach us much.
amyjess 11y ago
Well, my boss is travelling for business next month, and one of my coworkers was trying to talk him into taking Uber over renting a car (don't know whether or not he succeeded), so I can totally buy that Uber is eating into rental cars. Honestly, I'm fine with it. I don't have a car, and the all my transportations needs are met by a combination of Lyft and public transit (ultimately, it's cheaper and probably faster to take the train downtown). I'm fine with everything else going away.
- ghaff 11y ago
  I suppose that UberX specifically drops the price point a bit but my personal rent a car vs. get a ride calculus for trips doesn't really change with Uber and I don't think it would for most people. If I'm flying to an airport and just need to head into a city like San Francisco where a car would just be parked until my return, I'll get a cab/Uber or, if there's a good option like BART, public transportation. If I'm going somewhere that's more spread out like the South Bay and can't easily get between hotel, restaurants, work sites without a car, I'll typically rent.

16 points by yummyfajitas 11y ago

This is a badly reasoned article. If the total stock of vehicles is decreasing it creates a lot of savings (as the article admits). How are these savings captured? In cheaper Ubers. The total cost of all the cars on the road is already being paid for out of our transportation costs. As each vehicle gets shared between more people the cost to each person goes down. Obviously there will be an equilibrium between lower prices from fewer vehicles and higher convenience from having extra capacity. But, using resources more efficiently won't cause harm. Even if the total vehicle stock were to decrease as much as the article suggests the price of an uber would drop much faster than the convenience. Now this all assumes an efficient market. If Uber were to start abusing its monopoly powers, that would be something to be legitimately concerned about...

uptown 11y ago
"If Uber were to start abusing its monopoly powers, that would be something to be legitimately concerned about..." I wonder if they plan to do that: https://twitter.com/NeilAnAlien/status/627873374505562112 https://twitter.com/NeilAnAlien/status/627873374505562112
yummyfajitas 11y ago
How will the total stock of vehicles decreasing result in cheaper Ubers? It seems like that would lower supply (fewer cars to provide transport) and increased demand (fewer people with their own cars => more people turning to Uber). The article agrees that a more efficient use of resources won't cause (net) harm. It claims it might harm transportation and benefit everything else, for a net benefit.
RockyMcNuts 11y ago
I'm not sure I agree that Tyler's point is of major significance, but yours seems even more wrong. I think Tyler's point is, there is a stock of underutilized cars that gets converted to Ubers. Hypothetically, I needed a car for work, and I decide to drive it for Uber on weekends. In the long run, I decide I don't need a car because Ubers are so available. The supply of Ubers then goes down, while demand goes up, since I don't have the option to drive myself. I don't think there is any mechanism here that would drive the cost of an Uber ride down. Total transportation cost goes down because the total of Uber plus self-driven cars go down, but the mix goes to more Uber, less self-driven cars. I think as Uber over time ceases to benefit from an 'arb' where it piggy-backs on sunk-cost cars and personal insurance, the cost of Uber-ing goes up, but overall transport cost goes down because people don't have to pay for underutilized cars. It's possible that over time the mix of cars goes to utilitarian electric models, and a 'fun' car becomes a specialty item like a high-end sports car is today, and some people don't love their new options. But if you believe in free markets, you would have to say that the market has spoken and arrived at a revealed preference for paying less for transport in a utilitarian vehicle that is not underutilized.
- mattlutze 11y ago
  It feels like Uber's use case is still quite a middle/upper-middle class urban thing, and that the market hasn't decided to hand itself over to microservice taxis just yet.
  - ghaff 11y ago
    That's because, when you get right down to it, Ubers are taxis which have always been primarily a middle/upper-class, urban-ish thing. It increases the pool of available drivers/cars and it simplifies the whole process, especially in areas that didn't have a well-established set of taxi services. But the economics are still basically the economics of hired cars (whether taxis, limos, or whatever).

HappyTypist 11y ago

If ETAs are too high and prices are too expensive, then more people will get cars again. I don't really see a problem. This is like saying "If email works, you might be less happy with your communication options" because 'no one will write letters anymore'.

deleted 11y ago
[deleted]

TeMPOraL 11y ago

If Uber works, you won't be happy about it, period. Their top management has constantly demonstrated sociopathic behaviour over the last few years. They show no respect for law, dignity, privacy and are willing to screw over journalists and their own drivers alike. What exactly do you think will happen if they win? Will the company suddenly discover God and become a good citizen? Their tech is good, but they are a menace to society.

douche 11y ago
Uber is providing transportation options that didn't exist before they did, at least where I am. There are something like 15 taxis in the entire corner of the state where I live, and they are expensive, and generally terrible. Uber is keeping a lot of drunk people off the road, which is a big win for us and for them.
- TeMPOraL 11y ago
  That's great, and hopefully more such services become available - apparently there's a market there. I'm not questioning their tech, or even the value of service they currently provide. I'm only very, very seriously worried of a company with such weak moral backbone dominating the market. Does anyone seriously believe they won't start exploiting their position if they win big?
  - oldmanjay 11y ago
    I don't believe my armchair psychiatry powers include enough ensured predictive capacity to definitively state the future. That doesn't directly answer your question but the answers is contained within the principle.
imgabe 11y ago
The top management of every company is sociopathic. Uber just isn't experienced enough yet to appropriately hide it.
- 11y ago

rubidium 11y ago

>The better Uber gets, the more people can do without cars Perhaps, but fares would have to drop by about half. My daily commute is 18-25 minutes each way. Current Uber rate is about $20-25 to get me between home and work (midwest metropolitan city). That works out to 249 * $ 20 * 2=$9960 / year to take Uber currently. True cost to own for my current vehicle is between $4000-5000/year. My wife has a car as well and needs one during the day. If Uber became close to cost effective with owning, I'd drop my car, take Uber, and we could use my wife's car for all our other transportation needs.

exDM69 11y ago
> Perhaps, but fares would have to drop by about half. But the opposite is going to happen when they stop subsidizing fares. At the moment, they are ripping off their drivers and still making a loss on each ride they sell. Their strategy is predatory pricing and that won't go on forever. I'd be willing to share rides (with other passengers that is) as long as it gets me from where I want to my destination with a single hop and pay a reasonable price for that. At the moment I'm taking two buses to work and I can beat that with a bicycle (14 km or 8 miles in 40 minutes at best, 70 minutes at worst). That time should be beatable using smart routing of small vechiles (I have 5-20 min of waiting for my connection typically), using "maximum flow" rather than "shortest path" algorithm. There is such a bus service available here but only in the urban areas so it won't take me to work from where I live.

mattlutze 11y ago

Total volume of privately owned vehicles isn't going to dramatically decrease because of the new slightly more convenient option of private taxis. The set of privately owned vehicles is going to decrease as a function of increase in population density and truly alternative transportation options. It still takes a while to find an Uber driver in lower density areas, and in both the City and the Suburbs, alternative services like Curb and myTaxi have been leveling the competitive gap between Uber's microservice taxis and traditional taxis. But an Uber-facilitated ride-for-hire is still a taxi ride, albeit one that's easier to schedule. Cars will go away when people don't need them. Yes, some people wealthy enough to afford to take a taxi everywhere are going to get rid of their cars. And it does constitute further saturating a market with car hiring options. But folks that don't live within walking distance to daily needs like their bank, grocery stores, barber, doctor... are going to rack up extra costs switching to hired cars. If your town grows 2x or 4x and suddenly there's a grocery store two blocks down? Less need to get in the car. In those scenarios, eventually yes you're going to see the cars-per-person go down. I'm rehashing I suppose, but fleets of subscription-service autonomous cars will be the next big disruptor. This is where Uber could make that big dent -- when you have a stable cadre of always-on, always-ready people movers, optimally distributed for service, picking up and dropping people off. These could replace that second car, or the beater you keep limping along to get down the highway to work.

nthj 11y ago
> But folks that don't live within walking distance to daily needs like their bank, grocery stores, barber, doctor... are going to rack up extra costs switching to hired cars. This may be a bit too simple. Technology is solving these problems, too. Online banking continues to improve. Instacart is expanding to more cities. People are consulting with doctors over FaceTime for a flat fee. Many other errands can be batched up into one day a week or month. With all these improvements combined together, Uber becomes an economic choice for many people sooner than later. (I have saved ~60% on car costs over the past year by switching to Uber exclusively. I realize not everyone is in the exact situation I am, but I'm not riding Uber because I have money to throw away.)
- 11y ago

petra 11y ago

This discussion doesn't take into account shared ride services (like uberpool). They're the thing that might enable the shift from private cars, and without considering them, this discussion don't teach us much.

amyjess 11y ago

Well, my boss is travelling for business next month, and one of my coworkers was trying to talk him into taking Uber over renting a car (don't know whether or not he succeeded), so I can totally buy that Uber is eating into rental cars. Honestly, I'm fine with it. I don't have a car, and the all my transportations needs are met by a combination of Lyft and public transit (ultimately, it's cheaper and probably faster to take the train downtown). I'm fine with everything else going away.

ghaff 11y ago
I suppose that UberX specifically drops the price point a bit but my personal rent a car vs. get a ride calculus for trips doesn't really change with Uber and I don't think it would for most people. If I'm flying to an airport and just need to head into a city like San Francisco where a car would just be parked until my return, I'll get a cab/Uber or, if there's a good option like BART, public transportation. If I'm going somewhere that's more spread out like the South Bay and can't easily get between hotel, restaurants, work sites without a car, I'll typically rent.