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Until the VC money runs out and the poor(er) have zero choice. Those people chose to give their money to Lyft / Uber instead of supporting their local public tr
by vuln 8y ago
Until the VC money runs out and the poor(er) have zero choice. Those people chose to give their money to Lyft / Uber instead of supporting their local public transit. Fast forward through Uber/Lyft's 'disruption' the local public transit shuts down due to lack of funds for maintenance, upgrades, etc. The public transportation ridership will be at an all time low, so it would be very hard to get tax payers to shoulder the burden of the costs... Seems like a sad state for the future.
- jessaustin 8y agoI also prefer more robust public transit, but I know of no community who decided against a public transit project because Uber was meeting their needs.
- cornholio 8y agoUber has a low cost because it doesn't use monopoly power to gouge consumers like cities do when issuing medallions. So Uber's secret sauce is the fact that it breaks the law, not VC money. The medallion laws are unjust and should be broken, other laws like insurance, driver training and vehicle safety are not. This is what makes the debate so complex and passionate, with people taking one side or the other depending on their personal incentives and political bias.
- newfoundglory 8y agoUber loses money, so at most you could argue that it is law breaking AND VC money. And without a lot of numbers on the cost of medallions, etc in each city it operates, you're actually just asserting your belief, not making an argument.
- xapata 8y ago> Uber loses money, at most you could argue that it is law breaking AND VC money. I don't follow the logic. Many companies have negative cash flow while they invest in growth. What is "it" in your sentence? If you're saying there are only two possible factors for the relatively low ride fares, I think you're forgetting the reduction of transaction costs. Hailing a cab on the street is frustrating. Hailing a cab by phone call even more frustrating and uncertain. Decreasing the transaction cost increases demand, which encourages supply, which lowers cost, which ... Anyway, there's a new equilibrium price.
- newfoundglory 8y agoUber has a low cost because they are not charging you enough to cover their own costs, they are making up the difference with VC money. Any factors that make the cost of providing an Uber lower than the cost of providing a taxi are unimportant because they are not pricing based on the cost. If they had to pay for taxi medallions they could still undercut existing taxis if they wanted to.
- xapata 8y ago> not charging you enough to cover their own costs Are you an Uber employee revealing private information? If not, it seems you're making a big assumption about the proportion of their expenses that are marketing and growth versus steady-state marginal cost. Amazon didn't make profit for a while and everyone wondered if they could. Oh, it's a low margin business, they'll never be profitable, blah, blah. Turns out they can, in fact, make a bit of money. Maybe Uber and Lyft can, too. Delta can, even though flights are a commodity business.
- newfoundglory 8y agowow, you're really attached to this narrative you have, to be so desperately reaching for a reason to discredit the impact of VC money on their operation. I think my previous comments have already said everything relevant about the breakdown of their marketing costs vs steady state marginal costs.
- xapata 8y ago> really attached to this narrative you have Oddly enough, I was thinking the same thing. You've asserted that they're ignoring cost in their pricing, but have provided no evidence for it. Uber and Lyft have claimed to be profitable in their biggest markets. Doesn't that suggest they set prices above marginal cost?
- newfoundglory 8y ago