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Presumably this is intentional -- Uber could raise prices and make more money, but right now they're choosing to keep prices very low in order to undercut Lyft

• LeoPanthera 10y ago
  Lyft may be more expensive on paper but I always use it instead of Uber where it is available and they send me so many discounts and coupons that I almost never pay the full price.
  • realstuff 10y ago
    Out of curiosity, why do you prefer Lyft?
    • aetherson 10y ago
      I am not the person you're replying to, but I used to switch back and forth between Lyft and Uber and use whichever was cheaper at the moment. But Uber kept sending me drivers who were like 0.5 miles away or more, in SOMA at rush hour, and after the second time I waited ten minutes and then the driver canceled, I decided I was willing to pay a small surcharge to get a drive in less than 5 minutes and for it to, you know, actually happen. I should probably try out Uber again to see if they've resolved their problems with driver supply. This was SOMA (5th & Bryant) at like 5:15-6:00pm, several times over the course of a month.
      • trevyn 10y ago
        When you suspect there's going to be an issue with timeliness, just call both an Uber and a Lyft, and whichever one gets there first wins. ;) The cancellation fee only kicks in after 5 minutes.
        • chickenfries 10y ago
          How terrible it would be to be a driver if everyone acted like this...
    • duaneb 10y ago
      They aren't Uber and they exist.
      • kafkaesq 10y ago
        Quite a compelling reason actually, to a first-order approximation.
    • mattnewton 10y ago
      It used to seem to be the drivers of Lyft tended to be more doing it part time and fun to talk to, versus the much more business oriented and cold Uber community made up of former taxi drivers and truckers. I always assumed this had to do with the branding and the way they targeted potential drivers. I liked the Lyft feel a lot more. But lately they both seem to be a mix of both communities to me, so I don't know if that has changed or if it was even a real effect to begin with.
      • pzh 10y ago
        My experience has been that pretty much every Lyft driver I've met also drives for Uber.
    • joatmon-snoo 10y ago
      https://www.cnet.com/news/uber-executive-considered-investigating-and-attacking-journalists/ https://www.cnet.com/news/uber-executive-considered-investig... http://www.businessinsider.com/uber-employees-stalked-celebrities-ex-employee-claims-2016-12 http://www.businessinsider.com/uber-employees-stalked-celebr...
    • TAForObvReasons 10y ago
      Not parent, but years ago after hearing that Uber employees were sending fake Lyft requests I decided I didn't want to support a company that would engage in those types of shady practices
    • potatolicious 10y ago
      Have talked to a number of drivers who seem to like Lyft a lot better than Uber. For one thing, Lyft takes less of a cut and passes more to the driver. More than one driver I'ved talked to complained that Uber was in the habit of delaying earned payments to drivers. Some complained that Uber was in the habit of under-paying and making drivers spend time to fight for money they've already earned. They do not seem to have similar experiences from Lyft. In general, all else being equal (and the products are pretty close to equal), I'll prefer siding with the working stiff than multi-billion dollar multinationals.
    • LeoPanthera 10y ago
      I prefer Lyft because every driver I've spoken to who drives for both (which is almost all of them) says that Lyft treats them better. Also the app is much nicer. The Uber app drives me crazy.
    • callahad 10y ago
      Lyft allows for in-app tipping, and has a more humane contract with its drivers, as outlined in this Wired article: https://www.wired.com/2016/01/lyft-drivers-settle-suit-but-still-arent-employees/ https://www.wired.com/2016/01/lyft-drivers-settle-suit-but-s... Specifically, Lyft can only deactivate drivers for cause, and it has a clear appeals process through binding arbitration, for which Lyft foots the bill. I'm not fond of clauses that require arbitration or which prohibit class action suits, but at least Lyft allows for and pays the costs of that arbitration.
    • uberduber 10y ago
      I used to slightly prefer Lyft but now greatly prefer Uber. In the beginning, Lyft only drivers were generally a bit more personable and Lyft Line passengers were generally always outside waiting and happy about sharing a ride. I've mostly been taking Uber recently due to their low prices. However, last month Lyft had a Line promotion and I got to take about 60 rides. The vast majority of the drivers were clearly fired Uber drivers and the experience was way worse. Dirty cars, unable to follow navigation, bad driving, no English, and one driver was just a straight up weirdo. They are clearly passing anyone at the in person interview now. And they all had high ratings of 4.7-4.9. I've had similar bad experiences on Uber but they are much less frequent and the drivers were almost always rated 4.3-4.6.
  • taxicabjesus 10y ago
    > I almost never pay the full price. In the world of venture-capital subsidized transportation, no one ever pays full price [1]. [1] Can Uber Ever Deliver? Part Two: Understanding Uber’s Uncompetitive Costs - http://www.nakedcapitalism.com/2016/12/can-uber-ever-deliver-part-two-understanding-ubers-uncompetitive-costs.html http://www.nakedcapitalism.com/2016/12/can-uber-ever-deliver... Also see Part 1: https://news.ycombinator.com/item?id=13079023 https://news.ycombinator.com/item?id=13079023 / http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver-part-one-understanding-ubers-bleak-operating-economics.html http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver...
    • moxious 10y ago
      Wow, those are some great articles with interesting points. That paints a very grim and brutal picture for Uber.
      • randyrand 10y ago
        I didn't see any comment about Uber's main advantage tho, which is a shame... 1. being able to scale supply to meet demand. In the traditional taxi model, the number of taxis and drivers are mostly fixed. during times of low demand more fixed costs brings more waste (cars driving around not making money) and in times of high demand represent lost profit (cars not capturing market potential). taxi company's can try and scale 'fixed costs' better, but then they basically just become uber. Having drivers use their daily driving cars as taxi cars allows scaling of supply much much easier than having to use purpose built taxi cars.
        • taxicabjesus 10y ago
          The taxi company I used to drive for has embraced the "ride share" model to allow people to use their own cars. They now also lease plain cars that drivers can use with any of the various phone apps. They also updated their own phone app to provide all the functionality of the upstarts, but with local staff to deal with problems. Edit: http://www.taxiwars.org/electronic-taxi-dispatch-v1.0/ http://www.taxiwars.org/electronic-taxi-dispatch-v1.0/
  • deleted 10y ago
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• Cyph0n 10y ago
  I tried Lyft the other day, but after they charged me $25 as an "authorization hold" without notification, I cancelled my ride and decided to stick with Uber. Note that Uber's auth charge is usually around $1. $25 may not be a significant amount for some, but it's non-trivial for a college student like myself. I would have been happy had they just notified me first instead of my bank. Terrible UX to be frank. I actually got in contact with Lyft support on Twitter, but they did not care and just claimed that it was "standard policy".
  • rcchen 10y ago
    There must be something else going on, because the authorization hold has been $1.25 for Lyft for as far as I've been using it.
    • Cyph0n 10y ago
      They may have some sort of risk factor, but it was definitely $25. Judging from the results on Google, the $25 charge is not uncommon.
  • jamez1 10y ago
    A $25 hold for a fare that might be $15 doesn't sound unreasonable? Is ride-sharing that big of a cost for your day to day?
    • Cyph0n 10y ago
      It does sound reasonable, but only if you notify the user upfront. Do rental car companies charge you a $200 auth hold without telling you?
    • ra1n85 10y ago
      When you're so broke that an extra couple of dollars will put you in overdraft territory, it's not reasonable. At least they inform you in most hotels. I have not used Lyft - I would hope they do the same.
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• deleted 10y ago
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• jlarocco 10y ago
  That's such a terrible strategy I can't believe that's really what they're doing. The short term problem is that they can't burn through money long enough for it to work. The barrier to entry to create an Uber or Lyft competitor is very low - anybody with a car and a laptop can create a viable Uber competitor. Nobody's doing it because Uber, Lyft, and taxis are everywhere, but when there's only Uber, and they're suddenly expensive, they'll get disrupted just like taxis did. The long term problem is that even if they succeed, purposely creating a monopoly and then raising prices is illegal. It's a great way to get in even more trouble with the government.
  • madeofpalk 10y ago
    They've went through periods where in some cities (plus I think they always did this in China) they would pay the drivers more than the customer would pay in order to boost both driver and rider numbers.
  • draw_down 10y ago
    They don't seem to actually get in trouble though. Sometimes an official wags their finger and then everything carries on as before.
  • cylinder 10y ago
    The local startups are going to kill them. Juno is so much better in NYC. Nobody misses uber in Austin with Fasten and Fare. Each major city will beat Uber with their own local competitor with better service and better driver relationships.
  • tomc1985 10y ago
    > anybody with a car and a laptop can create a viable Uber competitor It's a bit more complicated than that...
    • paulcole 10y ago
      No, you don't understand. He's one of the guys who can make Twitter in a weekend.
• deleted 10y ago
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• cylinder 10y ago
  I would just take Juno. The drivers here in NYC are only doing Uber to get enough ratings to qualify for Juno. Uber went way too far squeezing drivers, it's a mess. I've seen their Uber pool earnings ... It should be illegal.
  • moxious 10y ago
    Well this article makes it clear that Uber isn't shafting the drivers for their profit. It seems no one is making a profit and Uber has figured out how to have drivers help them fund their growth.
  • notliketherest 10y ago
    Maybe they should just make Uber illegal and then there would be no predatory pricing.
    • whyenot 10y ago
      It would probably be more efficient to make predatory pricing illegal.
  • notliketherest 10y ago
    Maybe they should just make Uber illegal and then there would be no predatory pricing.
  • thechut 10y ago
    What exactly is the Juno model? Just a clone of early Uber?
    • nsp 10y ago
      To some degree, Juno's stated differentiator is being the best ride hail app from the drivers perspective by: - 50% of founder equity goes to drivers - 10% vs 20-25% cut of fares - no pooled concept (this may be purely because they're too small to support it, though it is also unpopular with drivers
• beedogs 10y ago
  > right now they're choosing to keep prices very low in order to undercut Lyft and the cab companies with the assumption that having a monopoly will return more profits in the future. So they're even shittier and greedier than I thought.
• orthoganol 10y ago
  I think almost certainly their profitability is dependent on a future of driverless cars, and I'm sure that's what they are pitching investors. Fearfully, since their survival means going driverless and they are now losing $800 million a quarter, they will race to get driverless cars on the road, it will be rushed, and it could be reckless. I'm thinking the two driverless cars filmed blowing red lights in SF recently (at the very start of their SF driverless program), not to mention possibly many other traffic violations that no one happened to be filming. They are going to wrangle regulators and skirt laws to make it happen with urgency. They now have an advisor to Trump. I'm just here watching the rushing of driverless cars onto the road by Uber so that their company doesn't collapse. We'll see what happens.
  • chrischen 10y ago
    If taxis could survive there's no reason uber couldn't.
    • automatwon 10y ago
      Uber can survive, but will it survive as a global monopoly? Taxi companies survived as local monopolies.
  • colechristensen 10y ago
    Reckless and non-viable in much of the world. Nobody is going to get an autonomous car working in a winter climate for a long time. Lines on the road can't be seen, there are potholes, driving through deep piles of snow are common, communicating with other drivers and accomidating and anticipating their actions in snow narrowed streets is necessary.... There are plenty of times of year where I'd be wary trusting a human driver from the bay area in a Minneapolis snow storm much less a computer designed by them. I can see how it would be easy not being able to imagine difficult road conditions when you spend your whole life in a place where the worst weather is a tiny bit of rain. Multiple instances of running red lights right when they start testing? To me that says driverless cars are decades away and some people are so optimistic that they aren't going to see it before there are several tragedies and driverless cars are legislated away. There are lots of very common driving mistakes that are orders of magnitude more common than stopping for a red light.
• jpalomaki 10y ago
  Would the monopoly plan really work? Is there something that would prevent competition from reappearing when prices are raised? At least from customer perspective it would be pretty easy to use couple of apps and shop between different providers. For drivers this might be of course more difficult, since Uber can use contracts and other mechanisms to prevent them from working with other providers.
  • hizanberg 10y ago
    Yes the network effects of everyone being used to using Uber to get anywhere, the verb "Uber it" and the established brand that comes along with it. Any company in future won't have the drivers, car fleet or coverage to compete, which will become increasingly difficult after Uber becomes established and gets embedded in people's minds.
  • jartelt 10y ago
    They likely are banking on the network effect of having the most drivers and users. Having a lot of drivers makes pickup times for riders shorter. Having a lot of user makes it easier to pool people together and give lower prices. Plus more users means the drivers spend less time waiting around to get a pickup. Any new startup needs to (1) get people to download their app and (2) build up enough drivers/users to get pickup times down.
  • potatolicious 10y ago
    > "Would the monopoly plan really work?" IMO no. Others mention the network effect, and while it will certainly be a factor, I don't think it will be anywhere near strong enough to make the monopoly plan work. The network effect for Uber is really local - at the city level. An "Uber, but only in Austin" service can easily compete with a national-level Uber, since the vast majority of cab rides are taken within a user's home city. You need a critical mass of cars/drivers to present real competition in this space, but you don't need to do it at national, or even state-level scale. A small upstart that can achieve critical mass in a single city can present real threat to Uber in that city. The network effect of cabs between cities is so little that while a lot of consolidation of cab companies have occurred in each city, until Uber there was never a major cross-city network. I'm not convinced that a unified worldwide fleet has a significant competitive advantage. It'd be useful for tourists, maybe. And this is already happening - Juno here in NYC is gaining real traction by charging drivers less, getting drivers to evangelize to each other. Uber won't be toppled by Lyft or any other megalithic ride hailing company, it will more likely be toppled by hundreds of smaller, geographically narrow companies.
• nazka 10y ago
  It is. It's a war of cash against other companies. The same way the OPEC has been dumping oil on the market to make its price crash to break competitors. So with a price at the barrel two times lower that their break even, oil companies in particular the US shale companies [1], will suffer or even declare bankruptcy and then the OPEC would have got their market share back and then would have raise its price like in 2012-2014. (They failed [2]). But for Uber apart of China [3], Uber is winning and all VCs will make it that way anyway. Uber is the clear winner and they will continue to pool cash to the winner until it breaks all competitors. And then it will rise its prices and start piles of cash. [1] https://www.bloomberg.com/news/articles/2016-05-04/u-s-output-tumbles-as-shale-drillers-capitulate-to-opec-chart https://www.bloomberg.com/news/articles/2016-05-04/u-s-outpu... [2] https://www.bloomberg.com/news/articles/2016-12-10/non-opec-joins-opec-in-first-global-oil-output-cuts-in-15-years https://www.bloomberg.com/news/articles/2016-12-10/non-opec-... [3] http://qz.com/746930/the-battle-between-uber-and-its-fiercest-competitor-is-over-and-uber-lost/ http://qz.com/746930/the-battle-between-uber-and-its-fierces...
  • WhitneyLand 10y ago
    Whoa there that's very different business. In oil there are huge barriers to entry and big costs to ramp down and ramp back up production. If Uber ever tries to raise prices too high competitors wil swarm into the market.
    • nazka 10y ago
      Yes but on a simple point of view: the strategy, dynamic, and end results are the same here. And it's the same for oil companies too. With the price starting to go up with the cut from OPEC and other countries, more oil companies start to be created, the old ones have finally more air to breath and start to drill again. Also with Uber investing on autonomous cars and how they are the only one with real tests with several cars on the road, this is going to be a huge barrier of entry. Even more when we see how the best tech giants like Apple and Google are struggling to develop one.
• objclxt 10y ago
  > At least anecdotally, here in SF Lyft is almost always more expensive than Uber. Really? I took three trips this weekend, price checked both apps, and Lyft was consistently cheaper. There is definitely a price war going on.
• hrrsn 10y ago
  I've noticed the same in LA.
• jasone 10y ago
  I just bit the bullet and installed Lyft on my phone. Then I tried to complete the account creation flow, and the app insisted my (Republic Wireless) phone number is invalid. I lose, Lyft loses... While this is admittedly anecdotal, it does not bode well for Lyft's expansion.