6 ms·

This is not a sustainable company. Autonomy will not save it in time. The VC rounds and lying are over, it's valuation will continue to plummet. This is classic

This is not a sustainable company. Autonomy will not save it in time. The VC rounds and lying are over, it's valuation will continue to plummet. This is classic America for you. New startup comes in and undercuts regulated businesses (taxis) forcing them out of business. Then the VC money runs out and you find out their business was unsustainable. The only way Uber will stay afloat is to raise rates. Now we have the same rates we did before with cabs but none of the nice regulations on them, and none of the decent paying jobs. Good thing a bunch of investment people got rich though. America is still great!

darkwizard42 7y ago
Hm. Not sure I agree here. I think the rates will increase but the fundamental technology of dispatch is probably more efficient than “cruising” as cabs normally do. I’m making no claims on how profitable either company will be but I think they have added value to the transportation industry that isn’t artificial. Disclaimer: I work at Lyft.
- jasonlingx 7y ago
  The ride hailing tech is not rocket science and it is commoditised. Self driving is the end game here but the ride hailing companies are not in this game. Here in Asia, Grab/Gojek etc has diversified into payments, food delivery, massage etc which brings some semblance of sustainability.
  - ulfw 7y ago
    I am sceptical about that though. It’s a copy of the China model of super apps but that’s a way different market. South East Asia isn’t one (pretty unique) country. It’s a whole range of countries, cultures, history, languages, economies, you name it. A super app that does everything for everyone is a bit like Yahoo! in the mid 90s. Might work okay in the beginning but as the markets mature, why bother with one app instead of specialist expert apps.
    - jasonlingx 7y ago
      It’s just good ol’ fashion business of building a brand, trust, loyalty and customer base, then taxing other businesses to sell to them on your platform. But I think the real players in this meta-game are Apple and Google.
- tru3_power 7y ago
  Cab companies have had the dispatch model way before uber even existed (My dad was a taxi driver when I was growing up)
  - SEJeff 7y ago
    Not in the same way however as the GP meant I don’t think. Most cabs get most of their fares from cruising and getting flagged down whereas Uber / lyft get zero of their fares that way. He’s saying the modern dispatch only method is more efficient and I suspect in this regard he’s absolutely right.
    - alkonaut 7y ago
      That’s how most cabs get their business in the US perhaps. I have only ever gotten cabs via booking (phone and app) or simply going to a taxi line at a hotel or airport. I never hailed a cruising taxi in Europe. I don’t even know how to tell an occupied one from a free one here (if it’s even possible). Getting a cab via an app I have done for ten years now.
      - SEJeff 7y ago
        Ah that's really interesting. Well that is a huge difference between the US and Europe I suppose. It really differentiates about how you think about cabs.
      - darkwizard42 7y ago
        To be clear, in my original comment the language I should have used instead of cruising was probably "idle time searching for a fare". Waiting in a hotel line, airport queue etc. are all inefficient and would fall under my definition of cruising.
ulfw 7y ago
That’s the thing that bothers me with the whole sharing economy. Uber’s mission wasn’t even a bad one. Let’s do something about the cruft in the (San Franciscan) taxi industry and offer a better service. Unfortunately they had to grow exponentionally. So, offering a better product wasn’t enough. It had to be cheaper too. Though even paying drivers no salary and not needing taxi medallions there still was no good way to undercut them on prices unless they poured investor billions like a Ponzi scheme into the fold. More and more money was needed as more and more rides were subsidised as the company grew. It will be interesting to see what happens now that investor money won’t flow freely post-IPO and how much prices can be raised until passengers jump onto the next subsidise scheme. Grab in Singapore is the exact same story. More and more billions put into a market that already has a solid taxi industry.
- neilv 7y ago
  It seems a shame to waste a nice term like "sharing" on this. How about "gig economy" instead?
- buboard 7y ago
  > the cruft in the (San Franciscan) taxi industry You're probably right. San francisco's problems - or even america's are not "the entire world's problems"
ghaff 7y ago
It's a mixed bag. Taxis are mostly not so great, regulated or not. Personally I'm fine with Uber/Lyft costing about what taxis do. I admit I don't use them much though and almost exclusively for business. Maybe it was inevitable that this had to become about competing on price, but these services would have been attractive to many even if they hadn't undercut cabs because cabs are so often horrible.
- varjag 7y ago
  Regulated taxis are quite solid in many European countries, so it can be done.
  - ghaff 7y ago
    It's a mixed bag. Sure, they're great in London. In a lot of southern and central Europe, not so much.
    - luckylion 7y ago
      What central European countries are you referring to?
      - ghaff 7y ago
        Hungary, Czech Republic...
    - SEJeff 7y ago
      If you define great as memorizing the streets absolutely. The cab driver test for London is very intense. However cabs in London are unusually expensive compared to most cities and as much of a tourist hub as London is, most cabs don’t take credit cards. If I’m ever in London and need a quick cab I’ll always choose Uber. It’s a “good enough” knock off and way cheaper. There isn’t a ton of value in memorizing the city streets in the age of smartphones and google maps anymore. Disclaimer: had a London cabbie really take me “for a ride” from heathrow and took a very poor route on purpose. Almost 90 quid later I was not a happy camper.
Barrin92 7y ago
It's fascinating to watch how a company without any high margin business, insane losses and zero assets to their name balloons to a 80 billion evaluation, all on the promise of some vague future business model that does not exist at all. It's genuinely mad.
- deleted 7y ago
  [deleted]
- ralfd 7y ago
  > It's fascinating to watch how a company without any high margin business, insane losses and zero assets to their name balloons to a 80 billion evaluation, all on the promise of some vague future business model that does not exist at all. It's genuinely mad. That is the exact description of Amazon in the 90s though.
  - kgwgk 7y ago
    Not in the same scale. Amazon had accumulated $0.9bn in losses by the end of 1999. Uber lost that much last quarter alone.
- SEJeff 7y ago
  You realize you just perfectly described the entire Silicon Valley venture capital funded tech industry, right?
  - Barrin92 7y ago
    I really don't think I did. Facebook was cash flow positive after two years, Uber is a decade old. And at the heart of Silicon Valley tech lies the ability to leverage technology and network effects to scale. The biggest driver of costs for Uber are it's ride hailing expenditures, which is to say driver costs, insurance, carrier costs sales and marketing, all of which more or less grow linearly with the entire operation. They're not really a tech company at all, they're an oversized taxi business that redistributes money from investors to software developers and executives.
  - 7y ago
dwighttk 7y ago
How is Airbnb doing, profit-wise? It seems as if they could make money since they are paying a property owner, not a person driving around.
- navigatesol 7y ago
  How much money is there for a middleman in a $100 transaction in a regulated industry? Some but not a ton.
  - namdnay 7y ago
    A lot. Look at the hotel industry, the middlemen are the ones making all the money
icebraining 7y ago
The jobs weren't decent before. Cabbies were underpayed independent contractors who had to pay to work, by renting medallions from people like Gene Freidman (NYC's "Taxi King", now under prosecution). Many reports of the lives of cab drivers, much too old to be PR submarines for Uber, tell the story: https://www.nytimes.com/1995/04/09/nyregion/driving-a-taxi-difficult-in-best-of-times-gets-tougher.html https://www.nytimes.com/1995/04/09/nyregion/driving-a-taxi-d... Uber is not a good company, and I'm hoping they go away now that we have competitors. But this idea that they ruined the working conditions of drivers is just propaganda.
- iamben 7y ago
  The problem with competition is the fracturing in the market. It's just as painful to install 6 taxi apps as it was to call 6 taxi companies and see when they could get you a ride. More so, it's really frustrating when the drivers are running 2 (or more) apps and it says "will be with you in 2 minutes" when they're clearly finishing a job on another platform. What it needs is an open source system that stitches them all together, but let's the drivers choose whatever company they want. I use one app, every company has the chance to make money, drivers go with what works for them. But I think that's about as realistically as me only needing one subscription to watch all the TV and film I actually want to see.
  - polskibus 7y ago
    There should be just one public transport world-wide app to which local regulators can plugin their markets. Just like there is a global banking system, which allows people to send money across borders.
    - iamben 7y ago
      I don't mind many apps - perhaps that's even a good thing, I can choose the one with the UX that works best for me - but they all need to work from the same system. The app I use has a chance to get any taxi from all the connected systems.
sschueller 7y ago
Next one up: E-scooters
paulpauper 7y ago
Then short lyft and uber or buy put options on them Ppl have been saying this for years now. They said the same ting about tesla as far back as 2010 and the stock has increased 10x since then. They said the same about amazon a decade ago. Not saying that Uber is like Tesla or Amazon but that the media's track record at predicting this sort of stuff is really poor. People underestimate the ability of these companies to raise money and turn things around. Uber can keep raising moeny by selling more stocks or selling debt. There is a lot of enthusiasm still about it, similar to Tesla.
- Barrin92 7y ago
  >Uber can keep raising moeny by selling more stocks or selling debt. There is a lot of enthusiasm still about it, similar to Tesla. The point of a company isn't to raise money or to generate enthusiasm, it's to generate profit, and on that front exactly none of those businesses have turned anything around, and the only thing the media got wrong was underestimating how generous softbank is in playing lender of last resort.
- navigatesol 7y ago
  Turn what around? Tesla and Uber both offer a great product priced well below its actual costs, in a world awash with capital (so much so that there are trillions in negative yielding debt). This thinking that at some point the unit economics will magically turn around is the error.
  - sailfast 7y ago
    I mean... if drivers aren’t in the picture it might work, no? That said, the odds of that happening any time soon or that Uber / Lyft are the first to do it are pretty low - but markets can be irrational for a long time! Not where I’d put my money, but plenty of folks have more than me to burn up.
    - twic 7y ago
      > I mean... if drivers aren’t in the picture it might work, no? Driver wages are a cost to Uber, but the drivers supply the cars, so they're also a source of working capital. A driverless taxi company would save on the wages, but would have to put up all the capital for the cars itself. This is not a slam dunk. And yes, Uber is a bit more complicated because they often finance drivers' purchases of cars. But since they make money doing that, you can't make Uber more profitable by taking that out of the equation! But on the gripping hand, we are not going to get replacement-level self-driving cars within the next decade, so whether Uber could make money with such cars just doesn't matter.
kuzehanka 7y ago
> Now we have the same rates we did before with cabs but none of the nice regulations on them, and none of the decent paying jobs. I ride with rideshare/taxi 10+ times per week for work, I try to make all 10 of those rideshare. I'll keep doing it if Uber starts to cost more than taxi. Every time I have to get in a taxi, I'm reminded why it was so easy to disrupt in the first place. Shitty cars, rude drivers, 'broken' card machines, drivers have no idea where to go and inexplicably try to avoid using GPS. Taxi driver picked me up from the airport in my home city and tried to take me on a 20+ min out of the way route until I told him I'm going to my fucking house. 'Oh sorry I thought this way is quicker because of the traffic'. This doesn't happen with rideshare, and drivers are usually much nicer. I'm happy to pay extra for that. People who keep saying that the only thing Uber did was undercut the existing taxi industry, have no clue what they're talking about.
- nradov 7y ago
  In addition, Lyft and Uber now integrate directly with corporate expense reporting systems which saves me time by avoiding the need to do manual data entry after a trip.
IGotThroughIt 7y ago
> same rates No problem. Cabs still suck compared to ride apps. It's not even a comparison that's fair to make under your stated conditions. That I can summon a ride at any time, any place and have a near accurate estimate of the cost so I can plan ahead and not have to negotiate with the driver (happens sometimes) is way better anyway.
- alkonaut 7y ago
  If your cab can’t be hailed with an app, tracked to arrival, provide an estimate, pre paid etc - then the problem is that the cab regulators and cab companies in that particular city are bad. It’s certainly not something inherent to taxi, it’s just that in some cities with outdated regulation (for example most US cities it seems) the service sucks and hasn’t improved in years. Where I live there is no difference between taxi and Uber. For example, I could hail my taxis with an app ten years ago (note: before Uber even existed!).
  - IGotThroughIt 7y ago
    > Where I live there is no difference between taxi and Uber. That's one of the problems that ride apps solve - ubiquity of service. No matter where you go in the world - and I come from a very remote place so I should know this - uber is there and it sometimes even delivers food for less than a dollar and in about 1 hour!!! Taxis on the other hand don't always have apps and can't bring you goods like food.
buboard 7y ago
The saving grace for tech is that Uber is "not a real tech company"

darkwizard42 7y ago

Hm. Not sure I agree here. I think the rates will increase but the fundamental technology of dispatch is probably more efficient than “cruising” as cabs normally do. I’m making no claims on how profitable either company will be but I think they have added value to the transportation industry that isn’t artificial. Disclaimer: I work at Lyft.

jasonlingx 7y ago
The ride hailing tech is not rocket science and it is commoditised. Self driving is the end game here but the ride hailing companies are not in this game. Here in Asia, Grab/Gojek etc has diversified into payments, food delivery, massage etc which brings some semblance of sustainability.
- ulfw 7y ago
  I am sceptical about that though. It’s a copy of the China model of super apps but that’s a way different market. South East Asia isn’t one (pretty unique) country. It’s a whole range of countries, cultures, history, languages, economies, you name it. A super app that does everything for everyone is a bit like Yahoo! in the mid 90s. Might work okay in the beginning but as the markets mature, why bother with one app instead of specialist expert apps.
  - jasonlingx 7y ago
    It’s just good ol’ fashion business of building a brand, trust, loyalty and customer base, then taxing other businesses to sell to them on your platform. But I think the real players in this meta-game are Apple and Google.
tru3_power 7y ago
Cab companies have had the dispatch model way before uber even existed (My dad was a taxi driver when I was growing up)
- SEJeff 7y ago
  Not in the same way however as the GP meant I don’t think. Most cabs get most of their fares from cruising and getting flagged down whereas Uber / lyft get zero of their fares that way. He’s saying the modern dispatch only method is more efficient and I suspect in this regard he’s absolutely right.
  - alkonaut 7y ago
    That’s how most cabs get their business in the US perhaps. I have only ever gotten cabs via booking (phone and app) or simply going to a taxi line at a hotel or airport. I never hailed a cruising taxi in Europe. I don’t even know how to tell an occupied one from a free one here (if it’s even possible). Getting a cab via an app I have done for ten years now.
    - SEJeff 7y ago
      Ah that's really interesting. Well that is a huge difference between the US and Europe I suppose. It really differentiates about how you think about cabs.
    - darkwizard42 7y ago
      To be clear, in my original comment the language I should have used instead of cruising was probably "idle time searching for a fare". Waiting in a hotel line, airport queue etc. are all inefficient and would fall under my definition of cruising.

ulfw 7y ago

That’s the thing that bothers me with the whole sharing economy. Uber’s mission wasn’t even a bad one. Let’s do something about the cruft in the (San Franciscan) taxi industry and offer a better service. Unfortunately they had to grow exponentionally. So, offering a better product wasn’t enough. It had to be cheaper too. Though even paying drivers no salary and not needing taxi medallions there still was no good way to undercut them on prices unless they poured investor billions like a Ponzi scheme into the fold. More and more money was needed as more and more rides were subsidised as the company grew. It will be interesting to see what happens now that investor money won’t flow freely post-IPO and how much prices can be raised until passengers jump onto the next subsidise scheme. Grab in Singapore is the exact same story. More and more billions put into a market that already has a solid taxi industry.

neilv 7y ago
It seems a shame to waste a nice term like "sharing" on this. How about "gig economy" instead?
buboard 7y ago
> the cruft in the (San Franciscan) taxi industry You're probably right. San francisco's problems - or even america's are not "the entire world's problems"

ghaff 7y ago

It's a mixed bag. Taxis are mostly not so great, regulated or not. Personally I'm fine with Uber/Lyft costing about what taxis do. I admit I don't use them much though and almost exclusively for business. Maybe it was inevitable that this had to become about competing on price, but these services would have been attractive to many even if they hadn't undercut cabs because cabs are so often horrible.

varjag 7y ago
Regulated taxis are quite solid in many European countries, so it can be done.
- ghaff 7y ago
  It's a mixed bag. Sure, they're great in London. In a lot of southern and central Europe, not so much.
  - luckylion 7y ago
    What central European countries are you referring to?
    - ghaff 7y ago
      Hungary, Czech Republic...
  - SEJeff 7y ago
    If you define great as memorizing the streets absolutely. The cab driver test for London is very intense. However cabs in London are unusually expensive compared to most cities and as much of a tourist hub as London is, most cabs don’t take credit cards. If I’m ever in London and need a quick cab I’ll always choose Uber. It’s a “good enough” knock off and way cheaper. There isn’t a ton of value in memorizing the city streets in the age of smartphones and google maps anymore. Disclaimer: had a London cabbie really take me “for a ride” from heathrow and took a very poor route on purpose. Almost 90 quid later I was not a happy camper.

Barrin92 7y ago

It's fascinating to watch how a company without any high margin business, insane losses and zero assets to their name balloons to a 80 billion evaluation, all on the promise of some vague future business model that does not exist at all. It's genuinely mad.

deleted 7y ago
[deleted]
ralfd 7y ago
> It's fascinating to watch how a company without any high margin business, insane losses and zero assets to their name balloons to a 80 billion evaluation, all on the promise of some vague future business model that does not exist at all. It's genuinely mad. That is the exact description of Amazon in the 90s though.
- kgwgk 7y ago
  Not in the same scale. Amazon had accumulated $0.9bn in losses by the end of 1999. Uber lost that much last quarter alone.
SEJeff 7y ago
You realize you just perfectly described the entire Silicon Valley venture capital funded tech industry, right?
- Barrin92 7y ago
  I really don't think I did. Facebook was cash flow positive after two years, Uber is a decade old. And at the heart of Silicon Valley tech lies the ability to leverage technology and network effects to scale. The biggest driver of costs for Uber are it's ride hailing expenditures, which is to say driver costs, insurance, carrier costs sales and marketing, all of which more or less grow linearly with the entire operation. They're not really a tech company at all, they're an oversized taxi business that redistributes money from investors to software developers and executives.
- 7y ago

dwighttk 7y ago

How is Airbnb doing, profit-wise? It seems as if they could make money since they are paying a property owner, not a person driving around.

navigatesol 7y ago
How much money is there for a middleman in a $100 transaction in a regulated industry? Some but not a ton.
- namdnay 7y ago
  A lot. Look at the hotel industry, the middlemen are the ones making all the money

icebraining 7y ago

The jobs weren't decent before. Cabbies were underpayed independent contractors who had to pay to work, by renting medallions from people like Gene Freidman (NYC's "Taxi King", now under prosecution). Many reports of the lives of cab drivers, much too old to be PR submarines for Uber, tell the story: https://www.nytimes.com/1995/04/09/nyregion/driving-a-taxi-difficult-in-best-of-times-gets-tougher.html https://www.nytimes.com/1995/04/09/nyregion/driving-a-taxi-d... Uber is not a good company, and I'm hoping they go away now that we have competitors. But this idea that they ruined the working conditions of drivers is just propaganda.

iamben 7y ago
The problem with competition is the fracturing in the market. It's just as painful to install 6 taxi apps as it was to call 6 taxi companies and see when they could get you a ride. More so, it's really frustrating when the drivers are running 2 (or more) apps and it says "will be with you in 2 minutes" when they're clearly finishing a job on another platform. What it needs is an open source system that stitches them all together, but let's the drivers choose whatever company they want. I use one app, every company has the chance to make money, drivers go with what works for them. But I think that's about as realistically as me only needing one subscription to watch all the TV and film I actually want to see.
- polskibus 7y ago
  There should be just one public transport world-wide app to which local regulators can plugin their markets. Just like there is a global banking system, which allows people to send money across borders.
  - iamben 7y ago
    I don't mind many apps - perhaps that's even a good thing, I can choose the one with the UX that works best for me - but they all need to work from the same system. The app I use has a chance to get any taxi from all the connected systems.

sschueller 7y ago

Next one up: E-scooters

paulpauper 7y ago

Then short lyft and uber or buy put options on them Ppl have been saying this for years now. They said the same ting about tesla as far back as 2010 and the stock has increased 10x since then. They said the same about amazon a decade ago. Not saying that Uber is like Tesla or Amazon but that the media's track record at predicting this sort of stuff is really poor. People underestimate the ability of these companies to raise money and turn things around. Uber can keep raising moeny by selling more stocks or selling debt. There is a lot of enthusiasm still about it, similar to Tesla.

Barrin92 7y ago
>Uber can keep raising moeny by selling more stocks or selling debt. There is a lot of enthusiasm still about it, similar to Tesla. The point of a company isn't to raise money or to generate enthusiasm, it's to generate profit, and on that front exactly none of those businesses have turned anything around, and the only thing the media got wrong was underestimating how generous softbank is in playing lender of last resort.
navigatesol 7y ago
Turn what around? Tesla and Uber both offer a great product priced well below its actual costs, in a world awash with capital (so much so that there are trillions in negative yielding debt). This thinking that at some point the unit economics will magically turn around is the error.
- sailfast 7y ago
  I mean... if drivers aren’t in the picture it might work, no? That said, the odds of that happening any time soon or that Uber / Lyft are the first to do it are pretty low - but markets can be irrational for a long time! Not where I’d put my money, but plenty of folks have more than me to burn up.
  - twic 7y ago
    > I mean... if drivers aren’t in the picture it might work, no? Driver wages are a cost to Uber, but the drivers supply the cars, so they're also a source of working capital. A driverless taxi company would save on the wages, but would have to put up all the capital for the cars itself. This is not a slam dunk. And yes, Uber is a bit more complicated because they often finance drivers' purchases of cars. But since they make money doing that, you can't make Uber more profitable by taking that out of the equation! But on the gripping hand, we are not going to get replacement-level self-driving cars within the next decade, so whether Uber could make money with such cars just doesn't matter.

kuzehanka 7y ago

> Now we have the same rates we did before with cabs but none of the nice regulations on them, and none of the decent paying jobs. I ride with rideshare/taxi 10+ times per week for work, I try to make all 10 of those rideshare. I'll keep doing it if Uber starts to cost more than taxi. Every time I have to get in a taxi, I'm reminded why it was so easy to disrupt in the first place. Shitty cars, rude drivers, 'broken' card machines, drivers have no idea where to go and inexplicably try to avoid using GPS. Taxi driver picked me up from the airport in my home city and tried to take me on a 20+ min out of the way route until I told him I'm going to my fucking house. 'Oh sorry I thought this way is quicker because of the traffic'. This doesn't happen with rideshare, and drivers are usually much nicer. I'm happy to pay extra for that. People who keep saying that the only thing Uber did was undercut the existing taxi industry, have no clue what they're talking about.

nradov 7y ago
In addition, Lyft and Uber now integrate directly with corporate expense reporting systems which saves me time by avoiding the need to do manual data entry after a trip.

IGotThroughIt 7y ago

> same rates No problem. Cabs still suck compared to ride apps. It's not even a comparison that's fair to make under your stated conditions. That I can summon a ride at any time, any place and have a near accurate estimate of the cost so I can plan ahead and not have to negotiate with the driver (happens sometimes) is way better anyway.

alkonaut 7y ago
If your cab can’t be hailed with an app, tracked to arrival, provide an estimate, pre paid etc - then the problem is that the cab regulators and cab companies in that particular city are bad. It’s certainly not something inherent to taxi, it’s just that in some cities with outdated regulation (for example most US cities it seems) the service sucks and hasn’t improved in years. Where I live there is no difference between taxi and Uber. For example, I could hail my taxis with an app ten years ago (note: before Uber even existed!).
- IGotThroughIt 7y ago
  > Where I live there is no difference between taxi and Uber. That's one of the problems that ride apps solve - ubiquity of service. No matter where you go in the world - and I come from a very remote place so I should know this - uber is there and it sometimes even delivers food for less than a dollar and in about 1 hour!!! Taxis on the other hand don't always have apps and can't bring you goods like food.

buboard 7y ago

The saving grace for tech is that Uber is "not a real tech company"