8 ms·

Uber is making the rest of us in SV look terrible. 1. Collect a huge pile of money at sky-high valuations from those who really should know better. 2. Ignore

• 6t6t6t6 10y ago
  AFAIK, this is called "Dumping the market". And it should not be legal...
  • fbreduc 10y ago
    sure it should
    • duaneb 10y ago
      Why? It appears to have no value to anyone but the immediate consumer. That's not a business, it's a charity. What a collossal waste of cash.
      • fisherjeff 10y ago
        It only has short-term consumer benefit. Once there's a lack of competition they're free to benefit themselves.
      • jpatokal 10y ago
        Drivers getting paid above the market and riders getting rides below the market would disagree. If anything, it's a bizarre kind of socialism: rich venture capitalists voluntarily redistributing their wealth to the public.
        • danieltillett 10y ago
          I would rephrase that: rich venture capitalists voluntarily redistributing their limited partners wealth to the general public.
  • joatmon-snoo 10y ago
    Took me 30 seconds on the FTC website to find it: https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost https://www.ftc.gov/tips-advice/competition-guidance/guide-a... Can prices ever be "too low?" The short answer is yes, but not very often. Generally, low prices benefit consumers. Consumers are harmed only if below-cost pricing allows a dominant competitor to knock its rivals out of the market and then raise prices to above-market levels for a substantial time. A firm's independent decision to reduce prices to a level below its own costs does not necessarily injure competition, and, in fact, may simply reflect particularly vigorous competition. Instances of a large firm using low prices to drive smaller competitors out of the market in hopes of raising prices after they leave are rare. This strategy can only be successful if the short-run losses from pricing below cost will be made up for by much higher prices over a longer period of time after competitors leave the market. Although the FTC examines claims of predatory pricing carefully, courts, including the Supreme Court, have been skeptical of such claims. IANAL, but I'd be very interested in hearing a lawyer's take on this.
    • antiviral 10y ago
      From the same FTC page: Pricing below your own costs is also not a violation of the law unless it is part of a strategy to eliminate competitors, and when that strategy has a dangerous probability of creating a monopoly for the discounting firm so that it can raise prices far into the future and recoup its losses. In markets with a large number of sellers, such as gasoline retailing, it is unlikely that one company could price below cost long enough to drive out a significant number of rivals and attain a dominant position
      • ThrustVectoring 10y ago
        And it's not clear that Uber's strategy is to eliminate competitors, rather than engaging in a scheme to turn investment money into "growth" for raising further investment.
      • guiambros 10y ago
  • peller 10y ago
    (IANAL) I don't think it's legal, but "it can be difficult to prove that prices dropped because of deliberate predatory pricing rather than legitimate price competition. In any case, competitors may be driven out of the market before the case is ever heard."[0] [0] https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Predatory_pricing
    • joatmon-snoo 10y ago
      > it can be difficult Thorny legal issues in a nutshell ;)
• quickben 10y ago
  Well, about (2). Taxi got a bit cheaper. Also for peak times people use them to dodge surge pricing. It's equalizing.
  • xapata 10y ago
    Where have taxis gotten cheaper? Nowhere I've visited over the last few years.
    • quickben 10y ago
      Toronto. I haven't taken a taxi forever, but I believe they start at $3.25 (city council orders) as opposed to Uber at $2.5.
      • Retric 10y ago
        The math does not seem to work out for them. (1.7b / 0.8b + 1.7b) = 68% of their costs. 3.25 * 0.68 = 2.21$, but Uber charges more than that and would like some profit. aka Uber has higher costs than cab companies making them a long term dead end. Sure, they are probably subsidizing other markets more, but even then that are gong to run out of money long before the self driving car thing takes off.
        • quickben 10y ago
          You are assuming perfectly rational market. It isn't. Many people here would dodge Uber if they expect surge pricing (And something along these lines was said today on one of the popular for young people radios stations, here). Also, there are plenty of taxi just waiting around everywhere downtown. Many (older?) people, would never get Uber to go to the airport, which is a very good profit opportunity. So, I don't see Uber having a 100% monopoly in any future, as various people have various needs and opinions and it's not a race to the bottom on price in this segment. They will both coexist, but for people taking the cab in the first place, $0.75 is not even on the list of thoughts in downtown Toronto. You get out of a Johny Cash event, $200 a person ticket, it's snowy, and you'll wait few minutes for uber when the Taxis are parked up front? As you move outwards from the core, more people drive Uber, and one was even my ex coworker, so he told lots of stories. So, to conclude, you can't assume race to the bottom on price alone. Or IPhones, rolexes, Alienware PCs, etc would have been long gone.
• xapata 10y ago
  > do they really think they can just permanently ignore all driving laws? What laws do you think they'd need to permanently ignore? And no, I doubt that's their belief.
  • deleted 10y ago
    [deleted]
• ylhert 10y ago
  Uber does background checks, not sure where the idea that they are skipping them comes from
  • Analemma_ 10y ago
    It might come from the fact that they ragequit Austin rather than do background checks.
    • mgraczyk 10y ago
      Uber was already doing background checks in Austin. They quit in protest of a requirement that drivers be fingerprinted and forced to drive around with Uber decals on their cars.
      • ylhert 10y ago
        Correct
      • wavefunction 10y ago
        Uber (combined with Lyft) spent $10,000,000 to lie to the people of Austin about the effects of Prop 1. At a conservative cost of $50 per finger-printing, that's enough to fingerprint 200,000 drivers. I know because I received over 30 pieces of direct mail in the two weeks leading up to the vote from whatever clown-show operation they hired. Twelve of the direct mail pieces were the same mailer. Given the waste of paper and their previous history (especially the behavior of the executives), I don't care if Uber ever "comes back."
    • TheCondor 10y ago
      I thought it had something to do with the type of background check and what was included
      • fudged71 10y ago
        Yeah, here in Alberta, Uber wanted to be able to do their own background checks, but they were forced by the government to have the local police run background checks as well. Presumably there were a bunch of criminals passing the Uber background checks in the states and this needed to be addressed to meet the regulations.
• rubicon33 10y ago
  Huh? What's the end game? The end game is a company with self driving cars, having SIGNIFICANTLY less overhead than they currently do with human drivers. And, probably a ton of technology patents to boot? Yea, they're definitely a brazen company, but do you really expect anything less from a unicorn company? Very few make it this big without cutting some corners, having some connection, etc.
  • revelation 10y ago
    In this particular iteration of the game, what exact benefit does running a $800M losing ride-hailing service confer? If the entire value proposition is "taxi using self-driving cars", then surely they would be much better off dropping the money burning ride-hailing operation with cars they don't own to spend more on R&D...
    • andrewksl 10y ago
      > what exact benefit does running a $800M losing ride-hailing service confer Market share. Or more precisely, establishing market dominance by undercutting the competition.
      • revelation 10y ago
        It's an app. If competitor X beats them to the self-driving-punch, I'll simply install their app and start saving. A first-to-market competitor will have 747s full of money landing on their doorstep begging them to take it. There is simply no scenario where having a network of poorly paid drivers, their heterogeneous fleet of unmaintained cars and a load of debt is an advantage in a rollout of self-driving cars, the first useful version of which will surely be limited to one particular manufacturer, model and sensor suite.
        • andrewksl 10y ago
          > If competitor X beats them to the self-driving-punch, I'll simply install their app and start saving. And Uber couldn't double down on their existing strategy of heavily subsidised rides to undercut self-driving cars? I mean, this is assuming that self-driving taxis are cheaper off the bat, which kind of ignores the fairly large capital expenditure of buying a fleet. > A first-to-market competitor will have 747s full of money landing on their doorstep begging them to take it. I don't think it's that simple. That's not taking into account how difficult it would be for Competitor X to build enough of a network to rival Uber, and how easy it would be for Uber to replicate/steal/buy the tech and steamroll Competitor X. Having superior tech and being first to market are not enough alone to trump market share.
• Eridrus 10y ago
  For all the shitiness that Uber has engaged in, at least they've shown that you can get around the antiquated Medalion system.
  • astrodust 10y ago
    Where I live they were already working to phase out the medallion system by introducing new permits for cabs that don't require medallions. They're cabs just the same, with the same requirements for insurance and such, but were a way of expanding the number of cabs without expanding the medallion pool. This softens the depreciation in the medallion market. The cab drivers who paid a lot of money for their medallions would be furious if they're worthless overnight. This way it takes 10-15 years for them to fully depreciate. Then Uber showed up and decided they didn't need a proper license or anything and shit got crazy.
    • Eridrus 10y ago
      From what I can tell, cities have largely been able to kick Uber out, if they want to, but many residents are not interested in eating shit from taxi companies for another 10-15 years, so it's been hard to kick them out by appealing to their sympathy for the medalion holders.
      • astrodust 10y ago
        It's not "sympathy" for medallion holders, but the fact that those holders have considerable political sway. Anything too dramatic, too abrupt will be staunchly opposed. A more gradual phasing out helps to ease the pressure on this system and move to a more market-driven approach.
• pizza 10y ago
  Is there something akin to a city's uber manager that all drivers have to report to for the sake of noticing if someone should _not_ be driving for uber?
  • zaroth 10y ago
    Are you asking if there's someone who looks over the driver pool and decides who looks like they should not be driving for Uber?
    • pizza 10y ago
      I was thinking more along the lines of someone that notices something like "alcohol on breath", a person that acts as a customer's ally/mediator for corporate in cases of transgressions, an accountability person with little purpose than for corroborating corporate's opinions on "bad apples" (whether rightly or wrongfully) etc.
• mindcrime 10y ago
  Evade local regulations that everyone else follows in the name of 'innovation' even though the reality is they are just taking a free pass on conducting background checks, and skipping safety guidelines. When they replace all taxis, do they really think they can just permanently ignore all driving laws? Since when do hackers bleat about obeying laws and regulations? What happened to having a "we can do better" mindset? Has everybody wigged out and flipped their "I want a nanny state to protect me 24/7" bit? And as far as that goes... I guess no "certified" taxi driver has ever turned out to be a criminal or done anything to harm a passenger? Me personally, I prefer to exercise some personal discretion and simply decide whether or not I will ride with a particular Uber driver, or cabbie, or Lyft driver, or whatever, based on my own judgment in the moment, as opposed to abdicating responsibility to either the State or a corporation.
  • lacampbell 10y ago
    Since when do hackers bleat about obeying laws and regulations? What happened to having a "we can do better" mindset? Has everybody wigged out and flipped their "I want a nanny state to protect me 24/7" bit? Hacker News is fairly progressive/authoritarian. The kind of attitude you describe can still be found on slashdot.
    • Apocryphon 10y ago
      It looks like they're pretty much on the side of government/against Uber in the story about Uber flouting DMV regulations: https://tech.slashdot.org/story/16/12/15/1559226/uber-we-dont-need-a-permit-for-self-driving-cars#comments https://tech.slashdot.org/story/16/12/15/1559226/uber-we-don...
    • mindcrime 10y ago
      Hacker News is fairly progressive/authoritarian. It has become more so over the past few years for sure. It was a lot more balanced in the past, as I recall.
    • vertex-four 10y ago
      And as a leftist, Hacker News is very, very libertarian-leaning most of the time by nature of its general support for startup companies no matter what laws they break and its general dislike of laws and systems designed to protect people from the sociopathic entities we call companies. There's some dissent, but it's certainly not a progressive haven. This is one of those places where people will happily sit around and argue that breaking laws is moral and necessary, no matter what the law.
• jlarocco 10y ago
  > When they replace all taxis, do they really think they can just permanently ignore all driving laws? Why wait? https://www.wired.com/2016/12/ubers-self-driving-car-ran-red-light-san-francisco/ https://www.wired.com/2016/12/ubers-self-driving-car-ran-red...
• tomc1985 10y ago
  Oh, you forgot: 4. Dump all your drivers once your self-piloting cars come fully online Drivers are just the stepping stone...
  • tribby 10y ago
    which is maybe why the losses are a little less dramatic than they sound. once they eliminate their network of independent contractors I'm sure the financials look a whole lot better. ultimately they are just another boring logistics company.
  • atbentley 10y ago
    Self driving cars won't make financial sense in a lot of regions. The driver plus bring your own vehicle model is a mostly operational cost model where the cost slides based on region, which makes it perfect for rolling out on a global scale. The self driving taxi service model has a significant capital cost associated with it and that cost won't slide much based on region. It would take far too long to see meaningful returns on self driving taxis in India for example.
• Pyxl101 10y ago
  > 3. Evade local regulations Could you share some specific information to substantiate this? I frequently hear this statement on Hacker News, and (as far as I can recall), every time I've asked for a source or evidence for the claim, I have not gotten a satisfactory answer. Black car services where you arrange pickup with a specific driver ahead of time have always been regulated differently than taxis. Uber has cars that operate as taxis, and they're properly licensed.
  • frgtpsswrdlame 10y ago
    Your position then is that ubers (the ones most of us use) are not actually taxis? How do you define 'taxi'?
    • Pyxl101 10y ago
      The burden of proof is on the person making the claim. If someone wants to claim that Uber is breaking the law or has broken the law, then it should be relatively simple to explain what that law is and provide some evidence that it's been broken. I'm not looking for flawless proof, suitable for a court of law, just some kind of cogent allegation of what happened and what law was broken would suffice. These kind of vague claims about Uber breaking the law do nobody any good; they are middlebrow mud slinging. Here is an example of what a cogent allegation might look like: "Zenefits broke the law by allowing salespeople to act as insurance brokers in seven states despite lacking the licenses to do so." [1] Has Uber broken the law? Who knows? There have certainly been accusations that Uber tried to sabotage competitors by placing fake rides, for example. I am not trying to make any kind of moral claim about Uber, so please do not misunderstand. I am simply to hear the evidence from people who make comments like "Uber evades local regulation". From my casual research into the matter, no, black car services or any kind of private, pre-arranged transportation for hire are not considered taxis in most municipalities. Uber actually offers taxis in certain places through UberTAXI [2]. The key difference seems to be whether the trip is arranged ahead of time through an existing business relationship, versus whether it might be solicited or formed directly on the street at the beginning of the ride. This seems to be how law works in most places in the USA, anyway. If you know of examples of municipal law where it works differently, I'd be glad to hear the details. [1] https://www.buzzfeed.com/williamalden/zenefits-under-scrutiny-for-flouting-insurance-laws?utm_term=.gq18Y5XB4#.cyyk49JKM https://www.buzzfeed.com/williamalden/zenefits-under-scrutin... [2] https://www.uber.com/ride/ubertaxi/ https://www.uber.com/ride/ubertaxi/
• diebir 10y ago
  Taxi companies are "small businesses"? Like in NYC, where taxi medallions used to be a safe investment? I guess mafia enterprises are "small businesses" and taxi and limo companies are not far from those. Zero compassion for those.
• spangry 10y ago
  The endgame is a monopoly, at which point they raise prices to the monopolist profit maximising level and extract those sweet sweet rents from consumers: https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Predatory_pricing This practice is illegal in many countries. Legalities and ethics aside (it's easier to discuss this in 'value neutral' terms), the strategy only works if you've got a bigger bankroll than your competitors (i.e. they go bankrupt before you do). By the sounds of it, Uber have a pretty big bankroll thanks to VC funding? [Value Free Zone] Also, they're going about it in a fairly clever way. It's almost like a market version of the 'blitzkrieg' strategy. By progressively moving through one localised market to the next, it's essentially Uber's bankroll vs. whatever the largest local market incumbent can muster. In addition, they're ignoring regulations because it further lowers their costs. And here's the blitzkrieg part: when they encounter a market (e.g. Austin) with particularly strong regulators or incumbents with larger than usual bankrolls, they bypass it (for the moment), just as the Nazi's did if they encountered heavily fortified positions on the Maginot line. They'll just bypass and move on to softer targets. I imagine once those are monopolised, and they've replenished their bankroll by charging monopoly prices where they can, they'll come back for the more 'fortified markets'. Except this time they'll: - Have a bigger bank roll - Have a constant stream of cash rolling in from their monopolised markets - Possibly have a more favourable regulatory environment due to 'lobbying' (i.e. political 'donations') Given the position they will be in by the time they swing back to the 'holdouts', they may not even see the need to flaunt local regulations to crush their competition. [/Value Free Zone] Personally, and assuming I'm right, it's pretty despicable behaviour. It's not innovative; it's illegal. And it's not 'disruptive' either; it's destructive and exploitative. I wouldn't deny these guys are smart, but so were most 'robber-barons' throughout US history. If 'hacker culture' is synonymous with 'destroy all who might oppose us, then turn around and screw consumers', then yeah, they're hackers (and I most certainly am not). But if SV gives a fig about its reputation, and believes that hackers can 'break the rules' while maintaining some shred of personal integrity, then I wouldn't be so keen to hitch my wagon to the likes of Uber. Note: I have no stake in this one way or the other. Frankly, I'm not a big fan of the traditional taxi industry in my country; they're essentially a government protected oligopoly and a bunch of rent-seekers to boot. Just calling it like I see it.