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There are some good and some not so good among these companies. Uber is a taxi company with an app. Cars still cost the same as before to run, drivers still cos

by asabhi 9y ago

There are some good and some not so good among these companies. Uber is a taxi company with an app. Cars still cost the same as before to run, drivers still cost the same as before, all costs are the same as before. So once the subsidization by VCs stops, Uber rides will be as expensive as any other ride. Self-driving cars will not save Uber either. There is no network effect with self-driving cars, and once the technology is ready it will be commoditized, and Uber will have no advantage. As a rider, it's great to use it while you can, but there is no actual business there. Airbnb on the there hand has all the advantages people like to see in a business.

posix_compliant 9y ago
I disagree. Uber facilitates the process of becoming a driver, therefore there will be a larger supply of drivers. I believe the price of a fare will decrease due to the increased competition.
- Retric 9y ago
  Amortization over say 20 fairs per day * 20 days a month * 12 months a year, reducing the cost by 1 cent per ride per ~50$ dollars in cost savings. Suggests it's just not a meaningful savings.
  - posix_compliant 9y ago
    Where are you getting the 1 cent reduction quantity? My only point was that a greater supply of drivers could yield a lower price, but I never asserted to what degree the price would decrease.
    - Retric 9y ago
      Increasing costs to add a driver does not prevent company's from adding new drivers it just makes that more expensive. Thus, you need to consider it as another form of cost savings not a difference in the number of drivers. A company that pays 50$ less to get an employee can reduce fairs on the order of 1 cent or make an extra 1 cent per ride. It's possible Uber might add a few cents per ride this way, but it's not particularly significant even assuming the average driver does not last that long.
- loeg 9y ago
  Also facilitates becoming a rider through ease of use/payment. And more riders, more revenue even with the same margins. The app is much smoother than the 2011-era cab experience — call a phone dispatcher, hope a cab shows up eventually. (Of course, Lyft provides exactly the same experience for consumers and even taxi companies are attempting to provide an app nowadays.)
- dbasedweeb 9y ago
  Has Uber stopped operating at a massive loss, subsidizing every ride with VC cash? Fares are already artificially and unsustainably depressed, and without Lvl 5 automation (clearly not incoming soon) the fares eventually have to rise. Those fares will rise even more as driver backlash against how little they’re paid increases with time.
BurningFrog 9y ago
My impression is that Uber is making money of the rides. It loses money on all its other research and investment schemes. I don't know if there are any actual facts out?
- Retric 9y ago
  No, "Uber passengers paid only 41% of the cost of their trips for the fiscal year ended in September 2015." Prices have not changed much since then, so they are a long way from break even. https://www.reuters.com/article/us-uber-profitability/true-price-of-an-uber-ride-in-question-as-investors-assess-firms-value-idUSKCN1B3103 https://www.reuters.com/article/us-uber-profitability/true-p...
  - wenttomarket 9y ago
    Prices haven’t changed much in the US but Uber has divested some of its most expensive investments around the world (China, Russia, APAC).
  - lathiat 9y ago
    That's assuming the only reason they paid that much of those trips was because of price. That's not true of how Uber operates. They do a lot of things like driver incentives (for being logged on a certain amount of time etc, or for signing up in the first place - a lot of this is during market setup for a given city), complete discounted rides based on new signups for riders, etc. You can assume as their penetration into the market saturates for both drivers and riders that both of these costs will diminish. A lot of people on Hacker News being US based also ignore the fact that Uber is highly international. I use it almost everywhere I travel for work, I think Malta was one of the few places they weren't. Lyft and similar competitors are mostly either US-specific or even city-specific. There is a lot of different economies in other regions to look at.
  - BurningFrog 9y ago
    I just don't get where the money goes if that's true. If I pay $10 for a ride, $7 goes to the driver, which covers all the cost for the car, gas, his wage etc. $3 goes to Uber. What marginal costs do the have for my ride that are anywhere close to that?
xsmasher 9y ago
Re: "all costs are the same as before" If you mean the same as running a Taxi, you're ignoring the higher prices caused by the artificial scarcity imposed by the medallion system, and ignoring the cost / fee for of the medallion itself. Uber could absolutely return some of that to the user in the form of lower prices than traditional taxis; and keep some for itself, of course.
- wpietri 9y ago
  If you're going to count that, you'll also have to figure out the costs for negative externalities like congestion, pollution, accidents, social services for drivers (health care, retirement, food stamps, etc), bankruptcies, and regulation. The medallion system had its issues, but there were reasons it existed. City after city decided it didn't want infinite unregulated taxis in circulation.
- AndrewGaspar 9y ago
  Uber also has some efficiencies - its ability to pair customers and drivers makes robust taxi markets in a lot of places that wouldn't otherwise have them. (I honestly don't even know if my city has a traditional taxi company, but it definitely has Uber and Lyft)
  - 80386 9y ago
    I'd be surprised if it doesn't. I know someone who lived in West Virginia for a while. Before she got a car, she had to call a taxi to get to and from the grocery store. (To be fair, this was the eastern panhandle, which has the capital and the tourist attractions.)
mgummelt 9y ago
Self driving cars have massive network effects, just like any product dependent on machine learning. More users -> more data -> better product -> more users. It's the same reason Google is invulnerable in web search.
- jgalt212 9y ago
  More users -> more data -> better product -> more users s/b More users -> more labeled data -> better product -> more users ML systems need lots of labeled data, not just lots of data. This is one of the primary why game playing AI's have had such great successes, tons of labeled data are relatively cheap. Great discourse on this and other related issues here: https://medium.com/@karpathy/alphago-in-context-c47718cb95a5 https://medium.com/@karpathy/alphago-in-context-c47718cb95a5
  - mgummelt 9y ago
    Supervised learning requires labels. Unsupervised doesn't. Self driving cars use elements of both. This is why companies like Cruise and Tesla are rushing to get basic self driving cars out there. They need driving data.
    - jgalt212 9y ago
      Fair enough. I guess I'm in the camp that unsupervised learning is of limited utility.
      - jmalicki 9y ago
        You can get creative about labels. For instance, with known velocity of the car, predict where an object in view of the camera will be 5 frames in the future... This makes all data recorded by the camera effectively labeled, and is actually a useful thing to have.
      - nl 9y ago
        Human input in normal cars with sensors provides supervision.
woolvalley 9y ago
Things like uber pool & friends is something that is hard to do efficiently as a dude with a few weeks. While airbnb is a fancy ecommerce website ;). "Airbnb is just a fancy ebay CRUD app for rooms, anybody can code that!"
ggg9990 9y ago
Having ridden in thousands of cabs, and hundreds of Ubers, calling Uber a “taxi company with an app” is like calling an airplane a car with a crossbeam.
- walshemj 9y ago
  You must have some pretty poor apps - my local one doesn't even need an app. In the UK when I call my normal cab company it knows where my phone is and asks you to press 1 to book a cab to my location - I then get a SMS confirming the booking another when the cab is dispatched and one when it arrives
  - ggg9990 9y ago
    I have never used an app to call a taxi. I used taxis for decades, and when Uber came out it was such a night and day difference that I have taken exactly one taxi in the last five years, when my phone battery was dead.

by asabhi 9y ago

posix_compliant 9y ago

I disagree. Uber facilitates the process of becoming a driver, therefore there will be a larger supply of drivers. I believe the price of a fare will decrease due to the increased competition.

Retric 9y ago
Amortization over say 20 fairs per day * 20 days a month * 12 months a year, reducing the cost by 1 cent per ride per ~50$ dollars in cost savings. Suggests it's just not a meaningful savings.
- posix_compliant 9y ago
  Where are you getting the 1 cent reduction quantity? My only point was that a greater supply of drivers could yield a lower price, but I never asserted to what degree the price would decrease.
  - Retric 9y ago
    Increasing costs to add a driver does not prevent company's from adding new drivers it just makes that more expensive. Thus, you need to consider it as another form of cost savings not a difference in the number of drivers. A company that pays 50$ less to get an employee can reduce fairs on the order of 1 cent or make an extra 1 cent per ride. It's possible Uber might add a few cents per ride this way, but it's not particularly significant even assuming the average driver does not last that long.
loeg 9y ago
Also facilitates becoming a rider through ease of use/payment. And more riders, more revenue even with the same margins. The app is much smoother than the 2011-era cab experience — call a phone dispatcher, hope a cab shows up eventually. (Of course, Lyft provides exactly the same experience for consumers and even taxi companies are attempting to provide an app nowadays.)
dbasedweeb 9y ago
Has Uber stopped operating at a massive loss, subsidizing every ride with VC cash? Fares are already artificially and unsustainably depressed, and without Lvl 5 automation (clearly not incoming soon) the fares eventually have to rise. Those fares will rise even more as driver backlash against how little they’re paid increases with time.

BurningFrog 9y ago

My impression is that Uber is making money of the rides. It loses money on all its other research and investment schemes. I don't know if there are any actual facts out?

Retric 9y ago
No, "Uber passengers paid only 41% of the cost of their trips for the fiscal year ended in September 2015." Prices have not changed much since then, so they are a long way from break even. https://www.reuters.com/article/us-uber-profitability/true-price-of-an-uber-ride-in-question-as-investors-assess-firms-value-idUSKCN1B3103 https://www.reuters.com/article/us-uber-profitability/true-p...
- wenttomarket 9y ago
  Prices haven’t changed much in the US but Uber has divested some of its most expensive investments around the world (China, Russia, APAC).
- lathiat 9y ago
  That's assuming the only reason they paid that much of those trips was because of price. That's not true of how Uber operates. They do a lot of things like driver incentives (for being logged on a certain amount of time etc, or for signing up in the first place - a lot of this is during market setup for a given city), complete discounted rides based on new signups for riders, etc. You can assume as their penetration into the market saturates for both drivers and riders that both of these costs will diminish. A lot of people on Hacker News being US based also ignore the fact that Uber is highly international. I use it almost everywhere I travel for work, I think Malta was one of the few places they weren't. Lyft and similar competitors are mostly either US-specific or even city-specific. There is a lot of different economies in other regions to look at.
- BurningFrog 9y ago
  I just don't get where the money goes if that's true. If I pay $10 for a ride, $7 goes to the driver, which covers all the cost for the car, gas, his wage etc. $3 goes to Uber. What marginal costs do the have for my ride that are anywhere close to that?

xsmasher 9y ago

Re: "all costs are the same as before" If you mean the same as running a Taxi, you're ignoring the higher prices caused by the artificial scarcity imposed by the medallion system, and ignoring the cost / fee for of the medallion itself. Uber could absolutely return some of that to the user in the form of lower prices than traditional taxis; and keep some for itself, of course.

wpietri 9y ago
If you're going to count that, you'll also have to figure out the costs for negative externalities like congestion, pollution, accidents, social services for drivers (health care, retirement, food stamps, etc), bankruptcies, and regulation. The medallion system had its issues, but there were reasons it existed. City after city decided it didn't want infinite unregulated taxis in circulation.
AndrewGaspar 9y ago
Uber also has some efficiencies - its ability to pair customers and drivers makes robust taxi markets in a lot of places that wouldn't otherwise have them. (I honestly don't even know if my city has a traditional taxi company, but it definitely has Uber and Lyft)
- 80386 9y ago
  I'd be surprised if it doesn't. I know someone who lived in West Virginia for a while. Before she got a car, she had to call a taxi to get to and from the grocery store. (To be fair, this was the eastern panhandle, which has the capital and the tourist attractions.)

mgummelt 9y ago

Self driving cars have massive network effects, just like any product dependent on machine learning. More users -> more data -> better product -> more users. It's the same reason Google is invulnerable in web search.

jgalt212 9y ago
More users -> more data -> better product -> more users s/b More users -> more labeled data -> better product -> more users ML systems need lots of labeled data, not just lots of data. This is one of the primary why game playing AI's have had such great successes, tons of labeled data are relatively cheap. Great discourse on this and other related issues here: https://medium.com/@karpathy/alphago-in-context-c47718cb95a5 https://medium.com/@karpathy/alphago-in-context-c47718cb95a5
- mgummelt 9y ago
  Supervised learning requires labels. Unsupervised doesn't. Self driving cars use elements of both. This is why companies like Cruise and Tesla are rushing to get basic self driving cars out there. They need driving data.
  - jgalt212 9y ago
    Fair enough. I guess I'm in the camp that unsupervised learning is of limited utility.
    - jmalicki 9y ago
      You can get creative about labels. For instance, with known velocity of the car, predict where an object in view of the camera will be 5 frames in the future... This makes all data recorded by the camera effectively labeled, and is actually a useful thing to have.
    - nl 9y ago
      Human input in normal cars with sensors provides supervision.

woolvalley 9y ago

Things like uber pool & friends is something that is hard to do efficiently as a dude with a few weeks. While airbnb is a fancy ecommerce website ;). "Airbnb is just a fancy ebay CRUD app for rooms, anybody can code that!"

ggg9990 9y ago

Having ridden in thousands of cabs, and hundreds of Ubers, calling Uber a “taxi company with an app” is like calling an airplane a car with a crossbeam.

walshemj 9y ago
You must have some pretty poor apps - my local one doesn't even need an app. In the UK when I call my normal cab company it knows where my phone is and asks you to press 1 to book a cab to my location - I then get a SMS confirming the booking another when the cab is dispatched and one when it arrives
- ggg9990 9y ago
  I have never used an app to call a taxi. I used taxis for decades, and when Uber came out it was such a night and day difference that I have taken exactly one taxi in the last five years, when my phone battery was dead.