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If Uber, at first anyway, pay drivers regardless of rides made, then aren't such tactics philosophically similar to the medallion racket in America? To subsidiz

If Uber, at first anyway, pay drivers regardless of rides made, then aren't such tactics philosophically similar to the medallion racket in America? To subsidize some part of the equation strikes me as underhanded, as opposed to purely being innovatively disruptive.

milcron 10y ago
Eh, what about insurance companies? They "subsidize" those who have emergencies, using money from people who aren't having emergencies. The innovation there comes from evening out the cost of emergencies over time -- always pay a (relatively) flat fee. If Uber's incentives for drivers result in a better experience for riders (shorter rides), isn't that a good thing?
encoderer 10y ago
No it's called priming a two sided market. Do you think supply and demand grow in harmonious lockstep?
- chillydawg 10y ago
  They do if you don't mind waiting 30 years, but the Valley wants billions tomorrow.
  - codecamper 10y ago
    I doubt it would take 30 years. More like 3-5. But when your competitor has the cash infusion, you better have it too.
    - haney 10y ago
      In addition to this you have the problem of dissatisfied customers using the app for the first time and then never coming back. They have to ensure supply while they bring on new customers (has associated acquisition cost) if they acquire a customer and that customer isn't able to purchase anything from them due to lack of supply (or in the case of uber the price is too high because of surge kicking in) then that customer will churn forever, and potentially share their negative experience with their friends. So basically, nail supply, grow customers, don't run out of cash before the whole thing is working.
waterhouse 10y ago
philosophically similar to the medallion racket This comparison strikes me as bizarre. The medallion racket is lobbying politicians to use the force of the law to prevent competitors from doing business. What discordorama describes is paying people money to install and sign into your app. This is... either a poorly designed incentive system that was then fixed, or a clever campaign that gets a lot of future drivers through the earliest hoops and puts them in a position where it's easy to incentivize them to start driving. (Clever to the extent that that works.) I can't see why you think there's a similarity, other than that you think they're both underhanded, and that they're both done by companies providing taxi-like services.
- DavidWanjiru 10y ago
  My sense of Uber has been a company using technology innovatively to provide a much better user experience, while using currently existing but idle resources (the cars and drivers that serve customers on Uber but otherwise don't for various reasons, reasons Uber has rendered irrelevant, hence the resistance they've seen). But if they need to subsidize their drivers or customers, what does that say about their value proposition? To me, it makes them just another company using mundane, old school tactics to outdo their competition. Medallions and subsidies are old school tactics. One keeps new players out. The other throws old players out. Neither has anything to do with the value you bring to the table.
  - pborowicz 10y ago
    Winner, winner, chicken dinner. You are correct.

milcron 10y ago

Eh, what about insurance companies? They "subsidize" those who have emergencies, using money from people who aren't having emergencies. The innovation there comes from evening out the cost of emergencies over time -- always pay a (relatively) flat fee. If Uber's incentives for drivers result in a better experience for riders (shorter rides), isn't that a good thing?

encoderer 10y ago

No it's called priming a two sided market. Do you think supply and demand grow in harmonious lockstep?

chillydawg 10y ago
They do if you don't mind waiting 30 years, but the Valley wants billions tomorrow.
- codecamper 10y ago
  I doubt it would take 30 years. More like 3-5. But when your competitor has the cash infusion, you better have it too.
  - haney 10y ago
    In addition to this you have the problem of dissatisfied customers using the app for the first time and then never coming back. They have to ensure supply while they bring on new customers (has associated acquisition cost) if they acquire a customer and that customer isn't able to purchase anything from them due to lack of supply (or in the case of uber the price is too high because of surge kicking in) then that customer will churn forever, and potentially share their negative experience with their friends. So basically, nail supply, grow customers, don't run out of cash before the whole thing is working.

waterhouse 10y ago

philosophically similar to the medallion racket This comparison strikes me as bizarre. The medallion racket is lobbying politicians to use the force of the law to prevent competitors from doing business. What discordorama describes is paying people money to install and sign into your app. This is... either a poorly designed incentive system that was then fixed, or a clever campaign that gets a lot of future drivers through the earliest hoops and puts them in a position where it's easy to incentivize them to start driving. (Clever to the extent that that works.) I can't see why you think there's a similarity, other than that you think they're both underhanded, and that they're both done by companies providing taxi-like services.

DavidWanjiru 10y ago
My sense of Uber has been a company using technology innovatively to provide a much better user experience, while using currently existing but idle resources (the cars and drivers that serve customers on Uber but otherwise don't for various reasons, reasons Uber has rendered irrelevant, hence the resistance they've seen). But if they need to subsidize their drivers or customers, what does that say about their value proposition? To me, it makes them just another company using mundane, old school tactics to outdo their competition. Medallions and subsidies are old school tactics. One keeps new players out. The other throws old players out. Neither has anything to do with the value you bring to the table.
- pborowicz 10y ago
  Winner, winner, chicken dinner. You are correct.