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Good luck with the co-op idea. The problem is that drivers feel like their services are worth a lot, and passengers simply don't believe it. The reason why Ub

Good luck with the co-op idea. The problem is that drivers feel like their services are worth a lot, and passengers simply don't believe it. The reason why Uber is a success is that they created new demand by dropping prices. Everyone I know, including myself, would never have taken an Uber as frequently as we do if the prices were as high as taxis. You can't replicate this unless you keep pushing prices down, and this is what Uber is doing. So, as long as drivers want to keep their prices high, the riders won't come, which will prevent more drivers from entering the co-op, which will mean riders will wait a long time before their drivers arrive, which means they will just go to Uber, etc. The co-op will never reach critical mass that way and will fail. The article doesn't even mention the massive amounts of driver incentives that they pour back into the drivers. One driver told me that if they worked 2 hrs during rush hour, Uber would guarantee $50/hr. That's $100 for 2 hrs worth of work, which is pretty damn good and makes the rest of the day less stressful about trying to hit your numbers to become profitable.

svanderbleek 10y ago
Read the article more carefully, "they might be willing to switch to a co-op model that offers a cheaper price and solid service". A co-op can have lower prices and pay it's members more because they don't have to funnel profits to support the bloat of a central corporation like Uber.
- nickparker 10y ago
  Can they, though? The corporation isn't some money-sucking black box. It's dispute resolution, software development to match rides efficiently (Uber Pool is tricky), and advertising. Yes, it also skims money off the top to pay for things like driverless car R&D, but is a small, likely disorganized co-op going to be efficient enough at all the above to take advantage of that margin?
  - Kalium 10y ago
    It's highly unlikely that a small, disorganized co-op is going to be efficient enough to take advantage of the situation and be able to out-compete Uber. That said, the reality is irrelevant here. Jacobin is the kind of magazine where economic reality is treated as a suggestion, to be discarded as is convenient.
    - svanderbleek 10y ago
      That's how economic reality should be treated. Our own reality is primary. We will take back our lives. What Jacobin is working towards is admirable. We believe in progress, that a better way is possible, and that the current state of affairs is suboptimal. We should encourage alternative economic thinking.
      - Kalium 10y ago
        I am in favor of encouraging plausible, workable economic thinking. Jacobin is better described as leftist fever-dreams with roughly that level of connection to any reality. Could things work differently? Absolutely. Are they going to work differently because some hack gets off fantasizing about how in abstract theory, the services Uber performs could be better performed by a co-op that pays workers more? No. All the co-ops I've encountered or dealt with fall into one of three categories: * Non-functional, incapable of making decisions or delivering value. * Functional but completely unscalable. May depend on bizarro local economic conditions or be in one of the few cities where people are willing to pay 30% extra for pizza because it's a co-op. * Function, scalable, and does not operate much like a co-op at the level of service delivery. REI falls into this category. Uber works because it's functional, scalable, and reliable. You can go to almost any major city in the US, boot up your Uber app, and reasonably expect to get decent service. It is, abstractly, possible for a co-op to do that. You and Jacobin are completely, totally, 100% correct on this point. Things could be different and better for the people who Jacobin has decided matter. In fact, we all live in a framework where such a thing is possible! If only someone was brave enough to put their labor where their mouth is. Maybe the propagandists at Jacobin could... nah. They wouldn't go for that. They much prefer theory.
  - honkhonkpants 10y ago
    I would say at this stage Uber really is just a money-sucking black box. The revenues they get from their commissions in established cities they pour into marketing and just flat out buying business in new cities. All existing drivers are working to expand Uber, and they do not benefit from that in any way. The point of a co-op would be to recapture the spread and put it back in drivers' and riders' pockets.
  - peterwoo 10y ago
    A flat rate could cover software fees and advertising. Dispute resolution should maybe be insured for each and every ride, but at nothing close to the ~20% cut currently taken.
- srtjstjsj 10y ago
  You can't just call it "bloat", you have to prove that it is bloat.
  - svanderbleek 10y ago
    True, I do know people who work at Uber who I have worked with before. Just kidding but I would like to show that worker owned business can be more efficient because of locality of information transfer and decision making. It's not my professional area so I have to rely on my beliefs. I am working toward creating software companies to embody these ideas.
- pfarnsworth 10y ago
  You're right, I missed that line. But I also don't believe that prices would go down in a co-op model because individual drivers don't see the big picture. It seems like a few lines later, it says: By turning to co-op apps, drivers can retain the flexibility of working under a model like Uber’s while also having a say in their own wages and conditions. If the workers have a "say" in their own wages that means increasing prices, unconditionally. And who is going to provide the assurances that drivers won't lose money if they drop prices. When Uber drops prices, they guarantee wages as per: https://newsroom.uber.com/beating-the-winter-slump-price-cuts-for-riders-with-guaranteed-earnings-for-drivers/ https://newsroom.uber.com/beating-the-winter-slump-price-cut... How will this happen in a co-op? Spoiler alert: it won't.
  - fineIllregister 10y ago
    Why doesn't Uber just raise prices, unconditionally? The same reason co-ops won't: competition.
- SilasX 10y ago
  Right, but they still have to find the funds to pay someone to set up the system and get it bootstrapped, or find enough volunteer or discounted labor to make it happen. Considering the risks and difficulty of doing so, the money funneled away as profits may not rightly be called "pointless gatekeeper bloat".
- valhalla 10y ago
  That may be true. I'd imagine that a cheap median price and solid service will depend on the scale of Swift's supply side. Assuming there's plenty of demand (lots of Uber, Lyft customers switching over) then Uber's drivers would be more than willing to switch over to Swift. The co-op model would be a great incentive. The issue is though how does one get drivers to switch from a reliable (though possibly imperfect, inefficient) source of regular income with a well-known brand to an upstart at a large enough scale to pose a direct threat to Uber, thereby forcing them to change their model or go out of business? I'm living in LA right now and I typically wait 4 min for a car (longest has been 10 min). My last ride cost $4.44. That's less than a Big Mac! ($5.04 average price in the US). I can't imagine a new service being able to beat that from it's inception. The other issue is that if drivers are allowed drive for Uber and Swift there could be a free rider dynamic: drivers get the benefit of belonging to Swifts' co-op but still get to be part of Uber's network. Sure Uber's service would suffer, but it would be a huge drain on Swift's resources and undercut their model (and reason of existing) from the driver's perspective.
  - random3 10y ago
    > The issue is though how does one get drivers to switch from a reliable (though possibly imperfect, inefficient) source of regular income with a well-known brand to an upstart at a large enough scale to pose a direct threat to Uber, Incrementally, starting to use the second for a small percent and then gradually more
- KKKKkkkk1 10y ago
  The idea behind capitalism is that people who have money use it to start a company with the goal of making profits. For example, if it's a transportation company, they will use the money to buy cars or to hire drivers. Thanks to competition, they will have to make sure that they are providing a good service at a competitive price, and so if they want to get their profits, they will have to make sure that their company runs as efficiently as possible. Those are the two ingredients of capitalism: competition and the profit motive. Once you take away one of them, things start breaking down. And that's why not-for-profits are notorious for being wastefully run and being taken advantage of by their senior management.
  - Apocryphon 10y ago
    Credit unions are co-ops.
  - tanderson92 10y ago
    Non-profit consumer-owned collectives like Vanguard, you mean? How is that working out for them?
- morgante 10y ago
  > A co-op can have lower prices and pay it's members more because they don't have to funnel profits to support the bloat of a central corporation like Uber. How? What is the "bloat" of Uber that this taxi co-op would avoid. Uber's primary spending is on marketing and developer salaries. Without marketing, how do you expect anyone to use the co-op app? Ultimately, I think it comes down to drivers (and leftists) not valuing developers. You're not going to build and maintain an app which competes with Uber if you're not paying for the "bloat" of developers.
Spooky23 10y ago
How much of Uber is the ability to burn down the massive investments made into the company? As they transition to a more normal company that needs to make money, can they afford those incentives?
- barney54 10y ago
  The incentives likely don't matter in the future because the future of Uber is driverless cars.
  - deleted 10y ago
    [deleted]
  - Spooky23 10y ago
    In the future, we'll have unicorns towing magic carpets, so Uber won't matter.
    - ktta 10y ago
      I'd also like unicorns towing magic carpets and appreciate the sarcasm, self driving cars are not the 'unicorn' anymore. Uber is actively investing in prepping for a self-driving world.[0][1] https://newsroom.uber.com/mapping-ubers-future/ https://newsroom.uber.com/mapping-ubers-future/ http://www.theverge.com/2016/7/31/12338268/uber-maps-investment-500-million http://www.theverge.com/2016/7/31/12338268/uber-maps-investm...
      - brokenmachine 10y ago
        When a ~$100k Tesla can't successfully avoid a stationary guardrail or a turning semi, even under the limited conditions that it's autopilot actually attempts to run under, I'd say it's massively premature to suggest that there's anything like a driverless future coming in even the medium-term for affordable vehicles. There's just too many variables on our roads and the stakes are too high. If they are coming, it's more than 25 years away IMO. Remember 25 years ago, cars weren't super different from today. ABS was first in a production car in 1971. I think the average car on the road now is 11 years old, so there's bound to be unpredictable manually-driven cars still on the road for a long time that any driverless cars would still have to contend with as well. Self driving cars are pretty much unicorns.
rgbrgb 10y ago
> drivers feel like their services are worth a lot, and passengers simply don't believe it That's an interesting issue. We see the same thing in real estate -- seller's think their homes are worth way more than anyone will pay for them. I think this is one of the reasons For Sale By Owner (skipping realtor fees) hasn't taken off yet in the US. The FSBO seller will price too high, the home will sit on market for a while and people will think there's something wrong with it so they'll stop considering it entirely. As an anecdote, someone approached us the other day wanting to sell their family home for ~$4M that would realistically fetch about half that based on recent comparable sales in the area. At our current scale we can talk him down from that ledge, but we'd really like that listing process to be self-service and online. Traditional agents will say you need a selling agent there to talk the seller down to a reasonable price but my gut says we could solve this with computers.
- aembleton 10y ago
  Sounds like another industry ripe for disruption.
  - rgbrgb 10y ago
    Working on it :)
- ams6110 10y ago
  It's simple market economics. Driving for Uber requires basically: 1) Owning a car 2) Having insurance and good driving/criminal history records. 3) Willingness to do the work. Even assuming Uber also has minimum age requirement, that's a very large supply of potential drivers, which is going to prevent wages from rising very high, unless there is artifical pressure such as regulation.
- honkhonkpants 10y ago
  But the problem with Uber is not that sellers are listing too high, it's that Uber keeps jacking up the spread. This is not a true functioning marketplace because the buyers and sellers don't have good information. Only the market maker itself has all the information. Also it isn't really true that Uber lowers prices for riders when they lower prices for drivers. Uber practices active price discrimination to discover the highest price a rider will pay. If you get ten people together on the same street corner and everyone calls for an UberX, you'll get ten different prices.
artrlee 10y ago
In Hong Kong taxi drivers operate private networks known as "80% taxi's". You'll see many taxi's with multiple phones in them with different drivers operating on a few networks. http://hk-magazine.com/article/inside-hk/mr-know-it-all/11456/what%E2%80%99s-cab-drivers-multiple-phones-on-dashboard http://hk-magazine.com/article/inside-hk/mr-know-it-all/1145...
- x2398dh1 10y ago
  I have seen that and I never knew that was the reason for the tons of phones stuck to the windshield.
- gesman 10y ago
  Someone ought to disrupt market and create an app allowing Uber/Lyft/Blah drivers to use 1 device per bunch of providers.
- dzhiurgis 10y ago
  Somewhat similar in Sydney, you can only haul taxis from Uber app and then it filled with tons of devices, cameras, etc.
- dzhiurgis 10y ago
  Somewhat similar in Sydney, you can only haul taxis from Uber app and then it filled with tons of devices, cameras, etc.
fyhhvvfddhv 10y ago
Why Cant there be a "meta" ride-app giving you the best rides from a whole host of different services big and small
- tedmiston 10y ago
  The only thing preventing that is each service's terms, assuming the aggregator uses official API access. In some big cities, Google Maps can provide this, sort of, Uber vs bus fare, for instance.

svanderbleek 10y ago

Read the article more carefully, "they might be willing to switch to a co-op model that offers a cheaper price and solid service". A co-op can have lower prices and pay it's members more because they don't have to funnel profits to support the bloat of a central corporation like Uber.

nickparker 10y ago
Can they, though? The corporation isn't some money-sucking black box. It's dispute resolution, software development to match rides efficiently (Uber Pool is tricky), and advertising. Yes, it also skims money off the top to pay for things like driverless car R&D, but is a small, likely disorganized co-op going to be efficient enough at all the above to take advantage of that margin?
- Kalium 10y ago
  It's highly unlikely that a small, disorganized co-op is going to be efficient enough to take advantage of the situation and be able to out-compete Uber. That said, the reality is irrelevant here. Jacobin is the kind of magazine where economic reality is treated as a suggestion, to be discarded as is convenient.
  - svanderbleek 10y ago
    That's how economic reality should be treated. Our own reality is primary. We will take back our lives. What Jacobin is working towards is admirable. We believe in progress, that a better way is possible, and that the current state of affairs is suboptimal. We should encourage alternative economic thinking.
    - Kalium 10y ago
      I am in favor of encouraging plausible, workable economic thinking. Jacobin is better described as leftist fever-dreams with roughly that level of connection to any reality. Could things work differently? Absolutely. Are they going to work differently because some hack gets off fantasizing about how in abstract theory, the services Uber performs could be better performed by a co-op that pays workers more? No. All the co-ops I've encountered or dealt with fall into one of three categories: * Non-functional, incapable of making decisions or delivering value. * Functional but completely unscalable. May depend on bizarro local economic conditions or be in one of the few cities where people are willing to pay 30% extra for pizza because it's a co-op. * Function, scalable, and does not operate much like a co-op at the level of service delivery. REI falls into this category. Uber works because it's functional, scalable, and reliable. You can go to almost any major city in the US, boot up your Uber app, and reasonably expect to get decent service. It is, abstractly, possible for a co-op to do that. You and Jacobin are completely, totally, 100% correct on this point. Things could be different and better for the people who Jacobin has decided matter. In fact, we all live in a framework where such a thing is possible! If only someone was brave enough to put their labor where their mouth is. Maybe the propagandists at Jacobin could... nah. They wouldn't go for that. They much prefer theory.
- honkhonkpants 10y ago
  I would say at this stage Uber really is just a money-sucking black box. The revenues they get from their commissions in established cities they pour into marketing and just flat out buying business in new cities. All existing drivers are working to expand Uber, and they do not benefit from that in any way. The point of a co-op would be to recapture the spread and put it back in drivers' and riders' pockets.
- peterwoo 10y ago
  A flat rate could cover software fees and advertising. Dispute resolution should maybe be insured for each and every ride, but at nothing close to the ~20% cut currently taken.
srtjstjsj 10y ago
You can't just call it "bloat", you have to prove that it is bloat.
- svanderbleek 10y ago
  True, I do know people who work at Uber who I have worked with before. Just kidding but I would like to show that worker owned business can be more efficient because of locality of information transfer and decision making. It's not my professional area so I have to rely on my beliefs. I am working toward creating software companies to embody these ideas.
pfarnsworth 10y ago
You're right, I missed that line. But I also don't believe that prices would go down in a co-op model because individual drivers don't see the big picture. It seems like a few lines later, it says: By turning to co-op apps, drivers can retain the flexibility of working under a model like Uber’s while also having a say in their own wages and conditions. If the workers have a "say" in their own wages that means increasing prices, unconditionally. And who is going to provide the assurances that drivers won't lose money if they drop prices. When Uber drops prices, they guarantee wages as per: https://newsroom.uber.com/beating-the-winter-slump-price-cuts-for-riders-with-guaranteed-earnings-for-drivers/ https://newsroom.uber.com/beating-the-winter-slump-price-cut... How will this happen in a co-op? Spoiler alert: it won't.
- fineIllregister 10y ago
  Why doesn't Uber just raise prices, unconditionally? The same reason co-ops won't: competition.
SilasX 10y ago
Right, but they still have to find the funds to pay someone to set up the system and get it bootstrapped, or find enough volunteer or discounted labor to make it happen. Considering the risks and difficulty of doing so, the money funneled away as profits may not rightly be called "pointless gatekeeper bloat".
valhalla 10y ago
That may be true. I'd imagine that a cheap median price and solid service will depend on the scale of Swift's supply side. Assuming there's plenty of demand (lots of Uber, Lyft customers switching over) then Uber's drivers would be more than willing to switch over to Swift. The co-op model would be a great incentive. The issue is though how does one get drivers to switch from a reliable (though possibly imperfect, inefficient) source of regular income with a well-known brand to an upstart at a large enough scale to pose a direct threat to Uber, thereby forcing them to change their model or go out of business? I'm living in LA right now and I typically wait 4 min for a car (longest has been 10 min). My last ride cost $4.44. That's less than a Big Mac! ($5.04 average price in the US). I can't imagine a new service being able to beat that from it's inception. The other issue is that if drivers are allowed drive for Uber and Swift there could be a free rider dynamic: drivers get the benefit of belonging to Swifts' co-op but still get to be part of Uber's network. Sure Uber's service would suffer, but it would be a huge drain on Swift's resources and undercut their model (and reason of existing) from the driver's perspective.
- random3 10y ago
  > The issue is though how does one get drivers to switch from a reliable (though possibly imperfect, inefficient) source of regular income with a well-known brand to an upstart at a large enough scale to pose a direct threat to Uber, Incrementally, starting to use the second for a small percent and then gradually more
KKKKkkkk1 10y ago
The idea behind capitalism is that people who have money use it to start a company with the goal of making profits. For example, if it's a transportation company, they will use the money to buy cars or to hire drivers. Thanks to competition, they will have to make sure that they are providing a good service at a competitive price, and so if they want to get their profits, they will have to make sure that their company runs as efficiently as possible. Those are the two ingredients of capitalism: competition and the profit motive. Once you take away one of them, things start breaking down. And that's why not-for-profits are notorious for being wastefully run and being taken advantage of by their senior management.
- Apocryphon 10y ago
  Credit unions are co-ops.
- tanderson92 10y ago
  Non-profit consumer-owned collectives like Vanguard, you mean? How is that working out for them?
morgante 10y ago
> A co-op can have lower prices and pay it's members more because they don't have to funnel profits to support the bloat of a central corporation like Uber. How? What is the "bloat" of Uber that this taxi co-op would avoid. Uber's primary spending is on marketing and developer salaries. Without marketing, how do you expect anyone to use the co-op app? Ultimately, I think it comes down to drivers (and leftists) not valuing developers. You're not going to build and maintain an app which competes with Uber if you're not paying for the "bloat" of developers.

Spooky23 10y ago

How much of Uber is the ability to burn down the massive investments made into the company? As they transition to a more normal company that needs to make money, can they afford those incentives?

barney54 10y ago
The incentives likely don't matter in the future because the future of Uber is driverless cars.
- deleted 10y ago
  [deleted]
- Spooky23 10y ago
  In the future, we'll have unicorns towing magic carpets, so Uber won't matter.
  - ktta 10y ago
    I'd also like unicorns towing magic carpets and appreciate the sarcasm, self driving cars are not the 'unicorn' anymore. Uber is actively investing in prepping for a self-driving world.[0][1] https://newsroom.uber.com/mapping-ubers-future/ https://newsroom.uber.com/mapping-ubers-future/ http://www.theverge.com/2016/7/31/12338268/uber-maps-investment-500-million http://www.theverge.com/2016/7/31/12338268/uber-maps-investm...
    - brokenmachine 10y ago
      When a ~$100k Tesla can't successfully avoid a stationary guardrail or a turning semi, even under the limited conditions that it's autopilot actually attempts to run under, I'd say it's massively premature to suggest that there's anything like a driverless future coming in even the medium-term for affordable vehicles. There's just too many variables on our roads and the stakes are too high. If they are coming, it's more than 25 years away IMO. Remember 25 years ago, cars weren't super different from today. ABS was first in a production car in 1971. I think the average car on the road now is 11 years old, so there's bound to be unpredictable manually-driven cars still on the road for a long time that any driverless cars would still have to contend with as well. Self driving cars are pretty much unicorns.

rgbrgb 10y ago

> drivers feel like their services are worth a lot, and passengers simply don't believe it That's an interesting issue. We see the same thing in real estate -- seller's think their homes are worth way more than anyone will pay for them. I think this is one of the reasons For Sale By Owner (skipping realtor fees) hasn't taken off yet in the US. The FSBO seller will price too high, the home will sit on market for a while and people will think there's something wrong with it so they'll stop considering it entirely. As an anecdote, someone approached us the other day wanting to sell their family home for ~$4M that would realistically fetch about half that based on recent comparable sales in the area. At our current scale we can talk him down from that ledge, but we'd really like that listing process to be self-service and online. Traditional agents will say you need a selling agent there to talk the seller down to a reasonable price but my gut says we could solve this with computers.

aembleton 10y ago
Sounds like another industry ripe for disruption.
- rgbrgb 10y ago
  Working on it :)
ams6110 10y ago
It's simple market economics. Driving for Uber requires basically: 1) Owning a car 2) Having insurance and good driving/criminal history records. 3) Willingness to do the work. Even assuming Uber also has minimum age requirement, that's a very large supply of potential drivers, which is going to prevent wages from rising very high, unless there is artifical pressure such as regulation.
honkhonkpants 10y ago
But the problem with Uber is not that sellers are listing too high, it's that Uber keeps jacking up the spread. This is not a true functioning marketplace because the buyers and sellers don't have good information. Only the market maker itself has all the information. Also it isn't really true that Uber lowers prices for riders when they lower prices for drivers. Uber practices active price discrimination to discover the highest price a rider will pay. If you get ten people together on the same street corner and everyone calls for an UberX, you'll get ten different prices.

artrlee 10y ago

In Hong Kong taxi drivers operate private networks known as "80% taxi's". You'll see many taxi's with multiple phones in them with different drivers operating on a few networks. http://hk-magazine.com/article/inside-hk/mr-know-it-all/11456/what%E2%80%99s-cab-drivers-multiple-phones-on-dashboard http://hk-magazine.com/article/inside-hk/mr-know-it-all/1145...

x2398dh1 10y ago
I have seen that and I never knew that was the reason for the tons of phones stuck to the windshield.
gesman 10y ago
Someone ought to disrupt market and create an app allowing Uber/Lyft/Blah drivers to use 1 device per bunch of providers.
dzhiurgis 10y ago
Somewhat similar in Sydney, you can only haul taxis from Uber app and then it filled with tons of devices, cameras, etc.
dzhiurgis 10y ago
Somewhat similar in Sydney, you can only haul taxis from Uber app and then it filled with tons of devices, cameras, etc.

fyhhvvfddhv 10y ago

Why Cant there be a "meta" ride-app giving you the best rides from a whole host of different services big and small

tedmiston 10y ago
The only thing preventing that is each service's terms, assuming the aggregator uses official API access. In some big cities, Google Maps can provide this, sort of, Uber vs bus fare, for instance.