4 ms·
Furthermore, Uber solved a problem in a market with inefficiencies and use regulation arbitrage to do it. This is just an on demand service betting on the fact
by noer 10y ago
Furthermore, Uber solved a problem in a market with inefficiencies and use regulation arbitrage to do it. This is just an on demand service betting on the fact that people are lazy enough to not want to put gas into their car. IMO, there are bigger (or actual) problems to solve.
Honestly, I wonder why they didn't launch in Chicago or Boston in the winter when weather would make people not want to bother going outside.
- sealthedeal 10y agoBecause you cant't be a Ycombinatorbro in Boston bro.
- sedachv 10y ago> Furthermore, Uber solved a problem in a market with inefficiencies and use regulation arbitrage to do it. What is "regulation arbitrage?"
- serge2k 10y agoIgnoring regulations and using your influence to try to force governments to change regulations when they finally come calling.
- SilasX 10y agoProfiting from legal loopholes[1], esp where two things accomplish the same goal, but one of them is more vigorously enforced/regulated than the other. In this case, both taxis and limo/livery services[2] provide the same good -- "rides to somewhere" -- but taxis are more regulated in terms of rate, driver training, equipment, and how many can be active (medallion limits). Limo/livery services (or something passed off as one), by contrast, are less regulated, and what regulations they have aren't as closely monitored because (until recently) no one cared. The analogy to arbitrage is that it's a case of same good, but different prices on different "markets". (Whether you market it as a "livery" or "taxi" service.) Side note: IMHO, such arbitrage can't fully account for the success of Uber/Lyft, which have actually obeyed the major "no street hails" rule. They provided a better service (reliability and seeing when your ride is coming), squeezed out enormous efficiencies from harnessing IT, and solved major public goods/incentive problems that the regs were failing at -- how to fairly allocate the undesirable fares and get people to provide feedback on bad drivers. [1] http://www.investopedia.com/terms/r/regulatory-arbitrage.asp http://www.investopedia.com/terms/r/regulatory-arbitrage.asp [2] The legal difference between the two is that a taxi can do street hails -- on-the-spot arrangements found by line of sight -- while limo/livery services must be pre-arranged through some booking service that logs the specific driver/vehicle assigned to chauffeur a specific person + guests to another place.
- noer 10y agoI think [2] is the regulation arbitrage/loophole. In many places those cars must still be licensed & regulated. It's more than just the driver/ booking service keeping a log.
- SilasX 10y agoRegulatory arbitrage includes differentials in enforcement, which I think is true here: even when a limo needs a license, you can operate a lot longer before anyone bothers to do anything.
- lazyant 10y agoDon't they have full service stations in Chicago or Boston?
- jayjay71 10y agoThey don't in Chicago.