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As with any independent contractor, the market sets the rate. Uber is just a really efficient marketplace since an Uber ride is a complete commodity with no spe

As with any independent contractor, the market sets the rate. Uber is just a really efficient marketplace since an Uber ride is a complete commodity with no specialization.

TeMPOraL 7y ago
It's Uber who sets the price, not the market, so this doesn't apply.
celticmusic 7y ago
What a crock, Uber is setting those prices not the market. The market says Uber should be going out of business with the prices it sets, except investors keep dumping money into it.
- cle 7y ago
  Doesn’t Uber have competitors? And why shouldn’t we consider investors part of the market? (Pardon my ignorance if these are dumb questions...)
  - TeMPOraL 7y ago
    It does, but the competitors are having a hard time because Uber can keep undercutting them and staying unprofitable longer than the competitors can stay solvent. > And why shouldn’t we consider investors part of the market? We can, but there are rules of "fair play" to the market that are supposed to be followed. What Uber is doing with SV money is, in saner sectors, called dumping, and generally considered illegal. Somehow it isn't, and even if it was, it probably wouldn't do much, as Uber's whole "rideshare" operation is illegal almost everywhere they run it.
    - jquery 7y ago
      >the competitors are having a hard time because Uber can keep undercutting them They keep undercutting Uber, should Uber ignore that? Besides, Uber doesn't set prices significantly below the competitors, it relies on being a superior service with lower wait times and higher vehicle utilization. If you open Uber and Lyft you will typically see very similar prices, with the main difference that Uber can be lower because they are a more efficient service, but Lyft will make up for this by subsidizing rides even more than Uber (something you can see very clearly in their S-1 and quarterly earnings reports).
      - deleted 7y ago
        [deleted]
      - cannonedhamster 7y ago
        No... Uber is not more efficient than a taxi service. They were at one point but now they aren't. Taxi businesses have similar apps, drivers who know the area, and regular hours. If it were more efficient, than they wouldn't have needed all that SV money, they still need SV money while cutting worker wages, commanding a ton of the market, and externalizing most of their costs. There is no way Uber exists without someone dumping money in to keep them artificially in business.
        jquery 7y ago
        That’s wrong. Uber is more efficient than taxis at keeping each car highly utilized. Real-time utilization of a changing network is not an easy problem to solve. Taxis are empty a much greater percentage of the time than Ubers. I won’t address the rest except to say that’s more a factor of them expanding into other markets or maintaining category position than efficiency.
- jacques_chester 7y ago
  Markets are still markets when subsidy is involved. In this case the market behaves as an oligopoly: it's dominated by two firms.
  - xref 7y ago
    GP specifically claimed Uber was an efficient market, not simply a market. (Regardless, Uber is in a market, but it is not itself a market)
    - jacques_chester 7y ago
      Good call. I think the discussion comes down to the difference between Uber being in the market vs Uber being a marketplace. The former is where subsidy and oligopoly belong. The latter is where Uber superficially resembles a market but is not.
- jquery 7y ago
  Uber isn't setting the prices, Lyft exists too. Uber would be going out of business except for investor money but that goes for all their competitors too. >The market says Uber should be going out of business The market isn't saying Uber should go out of business or it would have gone out of business. The market is saying Uber should be aggressive about pricing until Uber's competitors stop subsidizing their rides. Investors are part of the market too.
jakelazaroff 7y ago
Uber isn't a real marketplace. "Sellers" (riders) don't set their own prices, and "consumers" (riders) don't get to choose who provides the service to them. Furthermore, prices are driven down artificially by investors who are willing to take a loss until other "markets" are forced out of business, at which point Uber will presumably raise its prices to actual taxi market rates.
- icebraining 7y ago
  > "Sellers" (riders) don't set their own prices They kinda do, by not accepting rides under a certain price and forcing a raise, like it has been reported. > Furthermore, prices are driven down artificially by investors who are willing to take a loss until other "markets" are forced out of business, at which point Uber will presumably raise its prices to actual taxi market rates. This will never happen. Anyone can start a ride-sharing service with a tiny investment. There's no way bankrupting current companies will give Uber an unassailable market.
  - jakelazaroff 7y ago
    > They kinda do, by not accepting rides under a certain price and forcing a raise, like it has been reported. Yes, kinda. My understanding is that once they're "on the clock", they get penalized for declining too many rides. > This will never happen. Anyone can start a ride-sharing service with a tiny investment. There's no way bankrupting current companies will give Uber an unassailable market. Except any startup will be forced to either price their rides above the cost of service, or find investors willing to take a loss in order to undercut the former. Uber may not ever have an unassailable market, but they will have to eventually raise their prices or lower the cost of providing rides.
  - kds3 7y ago
    > This will never happen. Anyone can start a ride-sharing service with a tiny investment. There's no way bankrupting current companies will give Uber an unassailable market. Also "markets" doesn't necessary mean ride-sharing markets, they can also destroy public transport and other new ways of transportation that doesn't fit well to Uber model.

As with any independent contractor, the market sets the rate. Uber is just a really efficient marketplace since an Uber ride is a complete commodity with no specialization.

TeMPOraL 7y ago

It's Uber who sets the price, not the market, so this doesn't apply.

celticmusic 7y ago

What a crock, Uber is setting those prices not the market. The market says Uber should be going out of business with the prices it sets, except investors keep dumping money into it.

cle 7y ago
Doesn’t Uber have competitors? And why shouldn’t we consider investors part of the market? (Pardon my ignorance if these are dumb questions...)
- TeMPOraL 7y ago
  It does, but the competitors are having a hard time because Uber can keep undercutting them and staying unprofitable longer than the competitors can stay solvent. > And why shouldn’t we consider investors part of the market? We can, but there are rules of "fair play" to the market that are supposed to be followed. What Uber is doing with SV money is, in saner sectors, called dumping, and generally considered illegal. Somehow it isn't, and even if it was, it probably wouldn't do much, as Uber's whole "rideshare" operation is illegal almost everywhere they run it.
  - jquery 7y ago
    >the competitors are having a hard time because Uber can keep undercutting them They keep undercutting Uber, should Uber ignore that? Besides, Uber doesn't set prices significantly below the competitors, it relies on being a superior service with lower wait times and higher vehicle utilization. If you open Uber and Lyft you will typically see very similar prices, with the main difference that Uber can be lower because they are a more efficient service, but Lyft will make up for this by subsidizing rides even more than Uber (something you can see very clearly in their S-1 and quarterly earnings reports).
    - deleted 7y ago
      [deleted]
    - cannonedhamster 7y ago
      No... Uber is not more efficient than a taxi service. They were at one point but now they aren't. Taxi businesses have similar apps, drivers who know the area, and regular hours. If it were more efficient, than they wouldn't have needed all that SV money, they still need SV money while cutting worker wages, commanding a ton of the market, and externalizing most of their costs. There is no way Uber exists without someone dumping money in to keep them artificially in business.
      - jquery 7y ago
        That’s wrong. Uber is more efficient than taxis at keeping each car highly utilized. Real-time utilization of a changing network is not an easy problem to solve. Taxis are empty a much greater percentage of the time than Ubers. I won’t address the rest except to say that’s more a factor of them expanding into other markets or maintaining category position than efficiency.
jacques_chester 7y ago
Markets are still markets when subsidy is involved. In this case the market behaves as an oligopoly: it's dominated by two firms.
- xref 7y ago
  GP specifically claimed Uber was an efficient market, not simply a market. (Regardless, Uber is in a market, but it is not itself a market)
  - jacques_chester 7y ago
    Good call. I think the discussion comes down to the difference between Uber being in the market vs Uber being a marketplace. The former is where subsidy and oligopoly belong. The latter is where Uber superficially resembles a market but is not.
jquery 7y ago
Uber isn't setting the prices, Lyft exists too. Uber would be going out of business except for investor money but that goes for all their competitors too. >The market says Uber should be going out of business The market isn't saying Uber should go out of business or it would have gone out of business. The market is saying Uber should be aggressive about pricing until Uber's competitors stop subsidizing their rides. Investors are part of the market too.

jakelazaroff 7y ago

Uber isn't a real marketplace. "Sellers" (riders) don't set their own prices, and "consumers" (riders) don't get to choose who provides the service to them. Furthermore, prices are driven down artificially by investors who are willing to take a loss until other "markets" are forced out of business, at which point Uber will presumably raise its prices to actual taxi market rates.

icebraining 7y ago
> "Sellers" (riders) don't set their own prices They kinda do, by not accepting rides under a certain price and forcing a raise, like it has been reported. > Furthermore, prices are driven down artificially by investors who are willing to take a loss until other "markets" are forced out of business, at which point Uber will presumably raise its prices to actual taxi market rates. This will never happen. Anyone can start a ride-sharing service with a tiny investment. There's no way bankrupting current companies will give Uber an unassailable market.
- jakelazaroff 7y ago
  > They kinda do, by not accepting rides under a certain price and forcing a raise, like it has been reported. Yes, kinda. My understanding is that once they're "on the clock", they get penalized for declining too many rides. > This will never happen. Anyone can start a ride-sharing service with a tiny investment. There's no way bankrupting current companies will give Uber an unassailable market. Except any startup will be forced to either price their rides above the cost of service, or find investors willing to take a loss in order to undercut the former. Uber may not ever have an unassailable market, but they will have to eventually raise their prices or lower the cost of providing rides.
- kds3 7y ago
  > This will never happen. Anyone can start a ride-sharing service with a tiny investment. There's no way bankrupting current companies will give Uber an unassailable market. Also "markets" doesn't necessary mean ride-sharing markets, they can also destroy public transport and other new ways of transportation that doesn't fit well to Uber model.