4 ms·

Cheap cab ride? You must have missed Uber’s true cost

19 points by nkurz 11y ago

prostoalex 11y ago
There's an implied assumption that revenues collected from federal taxes ("Look at Apple, which has recently announced that it sits on $200bn of potentially taxable overseas cash") will somehow materialize on municipalities' accounts (city of Cupertino and Santa Clara county, I suppose) as if there's some mysterious revenue-sharing program with the money flowing from the federal government to the municipalities that are lucky enough to host major corporate headquarters.
- Consultant32452 11y ago
  Corporate income tax is levied in 44 states. I'm not sure if any counties/cities have corporate income tax. Presumably if Apple et. al. have to pay federal corporate income tax they'll surely have to pay the state corporate income tax as well.
  - prostoalex 11y ago
    My understanding from reading this California FAQ https://www.ftb.ca.gov/forms/misc/1083.pdf https://www.ftb.ca.gov/forms/misc/1083.pdf is that only "income from sources within California" is taxable (and in case of global corporations they resort to some formula to calculate their fair portion), so repatriated cash wouldn't matter for local coffers - Cupertino (or Santa Clara County, or California) would have as much claim on income earned somewhere in Zurich, as Trieste has on an income earned off a cup of fresh Illy espresso brewed in Cupertino. Perhaps I'm wrong, or maybe California example is very different and not indicative of general picture. In any case, it seems that companies either register their headquarters in some "cooperating" states like South Dakota http://www.marketplace.org/2009/03/25/business/borrowers/sioux-falls-town-credit-built http://www.marketplace.org/2009/03/25/business/borrowers/sio..., or approach the states directly about making a special exception to the tax rules in order to win their business (like Tesla and their Gigafactory in Nevada, or Toyota moving to Texas, or Nissan moving to Tennessee). The game is even easier at the city level - cities will introduce special tax breaks for a 99 Cent store or a new gas station, leave alone a major Fortune 500 employer.
tomasien 11y ago
This was the most meandering anti-tech piece ever. "PE is subsidizing growth and Apple hoards cash overseas and some little University project in Iceland died RABBLE!" There are LOTS of great reasons to be skeptical of Uber but come on.
- eibrahim 11y ago
  I agree. I almost disagree with every point the author makes. It sounded like just whining to me. I do see the risk of an Uber monopoly but that's highly unlikely and if it does happen there will be consequences from governments, customers and drivers. I think there is enough safety triggers in the system. For now I enjoy uber's great service and excellent prices.
  - chrismcb 11y ago
    What would those consequences be? Perhaps some sort of regulation?
    - eibrahim 11y ago
      customers defecting to competitors. employees protesting/unionizing, lawsuits... and if all fails, eventually government regulations.
- imron 11y ago
  Finland
twelve40 11y ago
Sorry having trouble parsing this: > rates so low that they didn’t even cover the combined cost of fuel and vehicle depreciation > percentages from its drivers’ fares ... 30% So apparently Uber managed to find some drivers who are willing to drive people for less than fuel+depreciation, _and_ share 30% of that with Uber? Something must be off in these statements, since I doubt any driver is stupid enough to drive people at a loss. Do the drivers get paid a different amount for a ride than what I see on the screen? I'm sure there is a potential threat of Uber wiping out the cabs and jacking up the prices, but this article is not very clear.
- deleted 11y ago
  [deleted]
- empressplay 11y ago
  When Uber offers free and discounted rides to passengers, the drivers still collect their percentage as if it was the full fare. Often the discounts are transparent (there's no notice that you've received a discount). So yes, sometimes drivers do get paid a different amount than (a flat percentage of) what you see on the screen.
  - pfarnsworth 11y ago
    If Uber gives a discounted rate, they eat the cost, the driver doesn't get hit with the discounted rate.
taxicabjesus 11y ago
This article has some good points. Most of the apologists for 'duper have no idea how the transportation industry is actually regulated. For example, somehow Uber and Lyft found a way to fully comply with New York State's transportation regulations, but ignored them everywhere else, until their lobbyists took care of those pesky, gutless state governments. I drove for a taxi company in Arizona for a few years.It was a lot of fun, at the beginning. The company I drove for built its reputation/brand over 25+ years, and incorporated the latest technology as it became available. The arrival of the "super-duper-not-a-taxi-apps" ruined the economics of the business for the companies that were complying with Arizona's free-market approach to taxi regulation. The companies are adapting, but it's hard to compete with well-funded venture capitalists. People who have a sense of self-preservation should not use the services of predatory not-transportation companies. There are times when people really, really need a ride, and the smartphone app won't be able to send somebody to pick you up. (It's more than running out of battery power while at the bar - those people were whiners.)
- loki49152 11y ago
  Free-market regulation?
- calciphus 11y ago
  Your screen name informs me that you're an unbiased source for thoughtful analysis.
dominotw 11y ago
but chicago cabbies are rude, stink, are talking on the phone in foreign language, demand cash( some even yell at passenger for not having cash), drive cars with no functional air conditioning, drive aggressively to out compete other cabs,demand tips, play annoying ads on the little screens attached to seats.... never again cabs. thank you uber for existing.
- empressplay 11y ago
  The point of the article isn't that Uber is hurting taxis, but that it's also hurting other forms of public transport, and other startups in that space (such as on-demand bus services.) Just because Uber > taxis doesn't mean Uber > everything.
Splines 11y ago
So what's Uber's long term game plan? Wiping out local taxi companies could be one, but people aren't going to disown their less-driven car anytime soon, nor is public transportation going to go away. At some point I assume they're going to turn the corner and either need to raise profits or cut expenses. You can build a moat with cash for only so long.
- imron 11y ago
  Self driving cars according to their top execs.
pfarnsworth 11y ago
The article is terrible. It's conflating VC investing with taxation of global companies with global revenues, like Apple and Google. The reason why Apple has hundreds of billions offshore is because they earned it outside the US. That's simply how taxation works.
deleted 11y ago
[deleted]

19 points by nkurz 11y ago

There's an implied assumption that revenues collected from federal taxes ("Look at Apple, which has recently announced that it sits on $200bn of potentially taxable overseas cash") will somehow materialize on municipalities' accounts (city of Cupertino and Santa Clara county, I suppose) as if there's some mysterious revenue-sharing program with the money flowing from the federal government to the municipalities that are lucky enough to host major corporate headquarters.

Consultant32452 11y ago
Corporate income tax is levied in 44 states. I'm not sure if any counties/cities have corporate income tax. Presumably if Apple et. al. have to pay federal corporate income tax they'll surely have to pay the state corporate income tax as well.
- prostoalex 11y ago
  My understanding from reading this California FAQ https://www.ftb.ca.gov/forms/misc/1083.pdf https://www.ftb.ca.gov/forms/misc/1083.pdf is that only "income from sources within California" is taxable (and in case of global corporations they resort to some formula to calculate their fair portion), so repatriated cash wouldn't matter for local coffers - Cupertino (or Santa Clara County, or California) would have as much claim on income earned somewhere in Zurich, as Trieste has on an income earned off a cup of fresh Illy espresso brewed in Cupertino. Perhaps I'm wrong, or maybe California example is very different and not indicative of general picture. In any case, it seems that companies either register their headquarters in some "cooperating" states like South Dakota http://www.marketplace.org/2009/03/25/business/borrowers/sioux-falls-town-credit-built http://www.marketplace.org/2009/03/25/business/borrowers/sio..., or approach the states directly about making a special exception to the tax rules in order to win their business (like Tesla and their Gigafactory in Nevada, or Toyota moving to Texas, or Nissan moving to Tennessee). The game is even easier at the city level - cities will introduce special tax breaks for a 99 Cent store or a new gas station, leave alone a major Fortune 500 employer.

tomasien 11y ago

This was the most meandering anti-tech piece ever. "PE is subsidizing growth and Apple hoards cash overseas and some little University project in Iceland died RABBLE!" There are LOTS of great reasons to be skeptical of Uber but come on.

eibrahim 11y ago
I agree. I almost disagree with every point the author makes. It sounded like just whining to me. I do see the risk of an Uber monopoly but that's highly unlikely and if it does happen there will be consequences from governments, customers and drivers. I think there is enough safety triggers in the system. For now I enjoy uber's great service and excellent prices.
- chrismcb 11y ago
  What would those consequences be? Perhaps some sort of regulation?
  - eibrahim 11y ago
    customers defecting to competitors. employees protesting/unionizing, lawsuits... and if all fails, eventually government regulations.
imron 11y ago
Finland

twelve40 11y ago

Sorry having trouble parsing this: > rates so low that they didn’t even cover the combined cost of fuel and vehicle depreciation > percentages from its drivers’ fares ... 30% So apparently Uber managed to find some drivers who are willing to drive people for less than fuel+depreciation, _and_ share 30% of that with Uber? Something must be off in these statements, since I doubt any driver is stupid enough to drive people at a loss. Do the drivers get paid a different amount for a ride than what I see on the screen? I'm sure there is a potential threat of Uber wiping out the cabs and jacking up the prices, but this article is not very clear.

deleted 11y ago
[deleted]
empressplay 11y ago
When Uber offers free and discounted rides to passengers, the drivers still collect their percentage as if it was the full fare. Often the discounts are transparent (there's no notice that you've received a discount). So yes, sometimes drivers do get paid a different amount than (a flat percentage of) what you see on the screen.
- pfarnsworth 11y ago
  If Uber gives a discounted rate, they eat the cost, the driver doesn't get hit with the discounted rate.

taxicabjesus 11y ago

This article has some good points. Most of the apologists for 'duper have no idea how the transportation industry is actually regulated. For example, somehow Uber and Lyft found a way to fully comply with New York State's transportation regulations, but ignored them everywhere else, until their lobbyists took care of those pesky, gutless state governments. I drove for a taxi company in Arizona for a few years.It was a lot of fun, at the beginning. The company I drove for built its reputation/brand over 25+ years, and incorporated the latest technology as it became available. The arrival of the "super-duper-not-a-taxi-apps" ruined the economics of the business for the companies that were complying with Arizona's free-market approach to taxi regulation. The companies are adapting, but it's hard to compete with well-funded venture capitalists. People who have a sense of self-preservation should not use the services of predatory not-transportation companies. There are times when people really, really need a ride, and the smartphone app won't be able to send somebody to pick you up. (It's more than running out of battery power while at the bar - those people were whiners.)

loki49152 11y ago
Free-market regulation?
calciphus 11y ago
Your screen name informs me that you're an unbiased source for thoughtful analysis.

dominotw 11y ago

but chicago cabbies are rude, stink, are talking on the phone in foreign language, demand cash( some even yell at passenger for not having cash), drive cars with no functional air conditioning, drive aggressively to out compete other cabs,demand tips, play annoying ads on the little screens attached to seats.... never again cabs. thank you uber for existing.

empressplay 11y ago
The point of the article isn't that Uber is hurting taxis, but that it's also hurting other forms of public transport, and other startups in that space (such as on-demand bus services.) Just because Uber > taxis doesn't mean Uber > everything.

Splines 11y ago

So what's Uber's long term game plan? Wiping out local taxi companies could be one, but people aren't going to disown their less-driven car anytime soon, nor is public transportation going to go away. At some point I assume they're going to turn the corner and either need to raise profits or cut expenses. You can build a moat with cash for only so long.

imron 11y ago
Self driving cars according to their top execs.

pfarnsworth 11y ago

The article is terrible. It's conflating VC investing with taxation of global companies with global revenues, like Apple and Google. The reason why Apple has hundreds of billions offshore is because they earned it outside the US. That's simply how taxation works.

deleted 11y ago

[deleted]