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I think the issue is that there aren't any profits, just billions in losses. I think where a co-op would fail is that it would have to charge higher prices as

by mdasen 9y ago

I think the issue is that there aren't any profits, just billions in losses. I think where a co-op would fail is that it would have to charge higher prices as the drivers wouldn't want to sustain (and pay for) losses for many years. If the co-op owned company charged 20-80% more than Uber, but offered drivers ownership and/or other benefits, would it bleed enough drivers from Uber or would enough drivers stick with Uber that it would be a viable and cheaper alternative for riders? This isn't a new idea. Juno planned to have drivers own 50% of equity (https://en.wikipedia.org/wiki/Juno_(company) https://en.wikipedia.org/wiki/Juno_(company)) and someone tried to create a driver-owned Uber named Swift (https://www.dailydot.com/debug/swift-uber-lyft-driver-app/ https://www.dailydot.com/debug/swift-uber-lyft-driver-app/). However, given the costs associated with effectively competing are high - especially as Uber subsidizes rides. In the long run, there won't be drivers and Uber has mentioned a bleak future for its company if it doesn't get to driver-less cars sooner rather than later. A solution with drivers won't compete against a driver-less solution regardless of ownership. Even in the medium term where Uber will be using drivers, they have a large pile of money to use as a weapon against alternatives - and there are more driver-focused alternatives. Fasten has launched in two cities and takes $1 per ride rather than 20-30% of the fare. But Uber has a lot of money to encourage riders to use Uber and encourage drivers they might worry about switching. Corbyn is taking the attitude that a company like Uber is making all the money while the workers aren't getting their fair share. But Uber isn't profitable and it's unclear how much of that is expansion into new markets and how much of that is the marketing and subsidies needed to keep the business rolling in current markets. Would ridership decline significantly with 20% higher fares? Would you be able to retain enough drivers without the constant marketing to get new drivers? Uber launched in 2009 during the peak in unemployment. Today, unemployment is near all-time lows which makes recruiting and retaining drivers much more challenging. Ultimately, a driver-owned co-op sounds great, but where would the money come from? Would drivers be willing to take home less for share of the company? Would riders be willing to pay more knowing that it was a "good" company?

confounded 9y ago
At least from my reading of the tweet, he appears to be saying that a cooperatively owned version could exist, not making a prediction that it will, and will win the cab wars because of innate properties of cooperatives. I understand your questions are probably rhetorical, but > Ultimately, a driver-owned co-op sounds great, but where would the money come from? I could imagine banks and governments being interested in funding a good proposal. > Would drivers be willing to take home less for share of the company? I’m not sure if they would need to take home less. But, being a driver is a more enterprising job than you might imagine. Most drivers work for themselves, and commonly minicab companies in London are put together by (ex) drivers clubbing together. Even drivers who have only worked for Uber have to think relatively in a relatively entrepreneurial fashion to make it work for them. > Would riders be willing to pay more knowing that it was a "good" company? If the rest of the consumer-facing economy is anything to go by, the answer is quite possibly yes. Organic food, fair trade, paying a premium for domestic manufacture etc. are all doing rather well (though of course, cheap stuff made by monopolies will do better). I think a large part of the reason Lyft exist (also VC funded and subsidized!) is that they’re less toxic than Uber, and pay drivers slightly more.
airza 9y ago
There's no model that can compete against a company that's willing to sell at a loss until its competitors go out of business- that's why it's an anticompetitive tactic

by mdasen 9y ago

confounded 9y ago

At least from my reading of the tweet, he appears to be saying that a cooperatively owned version could exist, not making a prediction that it will, and will win the cab wars because of innate properties of cooperatives. I understand your questions are probably rhetorical, but > Ultimately, a driver-owned co-op sounds great, but where would the money come from? I could imagine banks and governments being interested in funding a good proposal. > Would drivers be willing to take home less for share of the company? I’m not sure if they would need to take home less. But, being a driver is a more enterprising job than you might imagine. Most drivers work for themselves, and commonly minicab companies in London are put together by (ex) drivers clubbing together. Even drivers who have only worked for Uber have to think relatively in a relatively entrepreneurial fashion to make it work for them. > Would riders be willing to pay more knowing that it was a "good" company? If the rest of the consumer-facing economy is anything to go by, the answer is quite possibly yes. Organic food, fair trade, paying a premium for domestic manufacture etc. are all doing rather well (though of course, cheap stuff made by monopolies will do better). I think a large part of the reason Lyft exist (also VC funded and subsidized!) is that they’re less toxic than Uber, and pay drivers slightly more.

airza 9y ago

There's no model that can compete against a company that's willing to sell at a loss until its competitors go out of business- that's why it's an anticompetitive tactic