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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 captur
by 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 agoHow 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 agoI'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 agoIt 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 agoThat'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).