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Think on how much cheaper rides are with Uber, Lyft, or any similar service, compared with an ordinary taxi cab. The reason for that is that you're splitting t
by rudolfwinestock 7y ago
Think on how much cheaper rides are with Uber, Lyft, or any similar service, compared with an ordinary taxi cab. The reason for that is that you're splitting the fare with a venture capitalist.
The reason why VCs were willing to do that was that they anticipated that Uber (in particular) would monopolize ride-sharing. After that, they intended to replace the drivers (who are still the most expensive part of the ride) with self-driving cars. I spoke with a Google employee, about two years ago, who told me that everyone in the self-driving business hoped to have some big advances ready by 2021.
Turns out that autonomous vehicles are a lot harder than anticipated, so the ride-share companies have had to pivot. That explains Uber Eats.
As sketchy as Uber has been, I have no sympathy for the traditional taxi cab companies. They refused to adapt in the face of a new situation staring them in the face. The New York City medallion-owners just expected to continue farming from the cab drivers with zero effort. Parasites.
I spoke with a guy who had recently come to America and needed a ride. His friends couldn't drive him, for some reason, so they tried to arrange a cab. While they bickered, trying to find a cab company phone number, this guy downloaded the Uber app, punched in his credit card info, and his ride showed up before his friends had finished finding a cab company.
Nevertheless, Uber is a sketchy company and desperately needs regulation.
- frankbreetz 7y agoThe article says they take 30% of each fare, but we are splitting it with a VC? This does not add up to me.
- bena 7y agoYou get an Uber. The overall cost of your trip should be $15 once you figure in all the various costs and overhead. But you get charged only $10. Uber has already eaten $5 of the fare for you. That money has to come from somewhere. The 30% they take on the $10 isn't covering what they've already knocked off the price. That money has to come from somewhere. That somewhere is the VC. The 30% they take is really only stemming the bleeding.
- frankbreetz 7y agoThat's what I don't understand. What are the various cost and overhead? If a trip cost $10, the driver gets $7. You are telling me $3 to uber doesn't cover overhead? Overhead to me seems extremely small, what is the marginal cost on an uber ride to uber?
- tryitnow 7y agoOther costs include vehicle depreciation, insurance, maintenance, gas, etc. Hubert Horan is an analyst who goes into these costs into detail. http://horanaviation.com/Uber.html http://horanaviation.com/Uber.html
- misnome 7y agoIsn't all this offloaded to the driver though? e.g. not Uber's $3 cut
- johnbrodie 7y agoThere is a huge amount of Uber right now that needs paid for but is out of sight, though. Developers for the app and infrastructure, but also entire offices of engineers dedicated to R&D for driverless cars. Eats into that $3 quick.
- ninth_ant 7y ago> If a trip cost $10, the driver gets $7. You are telling me $3 to uber doesn't cover overhead? Your mistake (I think) is that you are connecting the costs to the prices on a per-trip basis. In the hyper-growth phase where the objective is to gain mindshare and market share, their VC and IPO cash can be used instead of charging reasonable prices. For your scenario it’s entirely possible that the price of the ride is $10 but the cost of the ride to the driver is $12.
- bena 7y agoThat's a different discussion. I'm not the one telling you that the $3 doesn't cover overhead. Uber is. Taxis that cost more are.