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Is it far fetched to say that Uber's business is actually taking money from the rich and giving it back to the people?

• paulcole 6y ago
  Pretty close. Maybe something like taking money from the ultra-rich-and-clueless and giving it back to the rich-and-delusional?
• scarmig 6y ago
  Kind of like Robin Hood, if Robin Hood stole from Saudi autocrats to give to status-anxious members of the UMC.
• bryanrasmussen 6y ago
  If the Robin Hood scenario being envisaged is that in the Time Bandits with Mr. Hood walking down a line of passengers handing out ride rebates while his merry men stand behind to beat them up I'd say that analogy is pretty good actually.
  • Intermernet 6y ago
    "does he really have to do that?" "yes sir, he says he really does" "jolly good" Misquoted, but accurate in spirit. I must have fruit.
    • braythwayt 6y ago
      Robin Hood on the Vision Fund and the predatory, toxic founders it bankrolls: “What awful people.”
• dbspin 6y ago
  That's almost the opposite of their business model. They're 'disintermediating' by taking a moderately paid, low skilled, highly regulated form of self employment, and turning it into low paid, unregulated gig work. One that's dependent on multi-billion dollar third parties whose 'platforms' compete to offer convenience to the rider, while utterly screwing the driver.
  • qeternity 6y ago
    This is a common refrain I see posted that drivers are getting screwed. I'm curious what this actually means, in detail, and why anybody would drive for Uber if this is the case?
    • newsclues 6y ago
      Because it takes time for the costs to be realized by the driver. Vehicle depreciation doesn’t meaningfully occur with every passenger mile, it piles up until you have a large repair bill.
      • braythwayt 6y ago
        Then they’re out, and the next desperate person takes their place. Same economics as an unsafe, unregulated building site. Get paid cash under the table, pay no taxes, get no healthcare, make enough to get by, until you get sick or injured on the job, then you’re out and the next desperate person takes your place. The invisible hand.
        • adyer07 6y ago
          Sounds a bit like a modern version of The Jungle.
      • jonfw 6y ago
        What about the uber drivers who rent cars and still find it worthwhile? Do the rental companies also not understand depreciation?
      • qeternity 6y ago
        The vast majority of Uber drivers I have are professionals doing it full time for many years.
    • ethbro 6y ago
      Because gig economy businesses successfully lower the friction of getting a job. By having an on demand workforce, they can fire (aka not schedule) much more easily. Consequently, they can also hire easily. There's a non-negligible pool of people who hate job applications and interviews, but want a paycheck.
• bhl 6y ago
  Yes, Uber is more of a reverse Robinhood: its a net positive for those who skew to the right of the income distribution, and a net negative for those in the left. Who benefits from Uber? Uber employees, stockholders, riders. Who is worse off? Mainly Uber drivers, and maybe the vision fund (but who cares).
  • GhostVII 6y ago
    If Uber drivers are worse off, why would they drive for Uber long term? Unless you are a taxi driver, I don't think Uber has taken your job, so if you are working for them it means they are providing you with something better than what you had before.
    • elcomet 6y ago
      If you were a taxi driver and uber has taken your job, then you are don't have something better. If you go work for them, you are paid less than you were as a taxi driver.
      • jonfw 6y ago
        I've never had an uber driver who used to be a taxi driver personally. Also- taxis provided a god-awful service who's pricing was only sustainable because of government regulation
    • srnvs123 6y ago
      I discovered the answer to this question a while ago when working in an uber eats competitor. Drivers continue to drive for uber long term because they literally cannot do much else. Take toronto, ontario for instance. I've spoken to hundreds, and recruited hundreds of drivers, and ~85% of them speak very little english, have extremely few skills, and are in a position where they have to pay bills NOW, and can't afford to invest in themselves. Its sad, but they're trapped in a vicious cycle.
  • sokoloff 6y ago
    Uber drivers are made worse off by Uber yet they join and drive in droves and overall seem happy about it. Do you have an explanation for this apparent contradiction?
• amelius 6y ago
  "They use the people until they have automated their jobs" seems like a better description.
  • swiley 6y ago
    I don’t have a lot of faith in their ability to automate things. The few startups I’ve interviewed at were full of very smart people who were very bored and spent their days finding the most complex way to implement web forms. I remember one explaining how they had implemented this insane distributed database that synchronized over the network so the text fields would be the same if you switched browsers half way through filling a form out.
    • willis936 6y ago
      Bless them. I always notice when sites do this. Just yesterday my computer crashed in the middle of writing a long post on a discourse board. I was angry until I looked on my phone and saw that my WIP post had been saved.
      • RhodesianHunter 6y ago
        That's just automatically saving your work in the background as a draft. Nothing insane or particularly difficult about that.
  • lotsofpulp 6y ago
    I also use people until I automate their jobs. If I don’t, my competitors will, and they will be about to move more product than me. I also don’t use travel agents anymore. Automating things isn’t bad, society not providing safety nets is the problem.
    • amelius 6y ago
      Automation isn't bad, but letting people work directly towards their own obsolescence while somebody else profits is. It's the most literal form of "a race to the bottom".
• 29athrowaway 6y ago
  Considering all expenses related to driving an Uber, such as depreciation, Uber is equivalent to taking a loan from your future self.
  • sokoloff 6y ago
    If you already have a car and are carrying all of the fixed costs of that (a not uncommon case, at least in the US), I think that driving Uber is quite a bit positive financially for the drivers. If you go out and buy a car solely to drive Uber, I still think you're in the black, as evidenced by the non-trivial amount of Uber drivers who are driving rented cars where the rental company is bearing any long-term costs and bundling them up for the drivers in weekly rentals. Those drivers are then able to make an easy calculation of "what did I take in this week vs what did I pay out this week?" and I doubt they'd be doing it if that sum was negative or too small week after week, suggesting that when the car rental company's profits are taken out and held by the long-term car-owning drivers, that they should also be profitable.
    • 29athrowaway 6y ago
      While it's possible to make a profit from it, time is needed to learn how to maximize your margin enough to reach profitability.
• netcan 6y ago
  It's not far fetched... but it gets into somewhat abstract (or debated, at least) economics. For an analogy, neoclassical-adjacent economics' take on international trade practices like dumping or export subsidies is pretty much what you said. EG, if China subsidizes toothbrush exports, the rest of the world gets subsidized toothbrushes at chinese taxpayers' expense. A similar point to the one you are making. This argument is typically to counter the claim that export subsidies unfairly kill local production, and/or forces a subsidy war. Riffing on David Graeber (the polar extreme, and not exactly an economist) somewhat... I'd interpret Uber's investor-subsidized losses differently. Investors haven't really lost much money so far, the stock price is fairly flat. They buy shares, and then they have those shares. The shares themselves are a type of money which companies print. It is new money. Investor buys one share for $1. His net worth has not changed. Uber's bank balance has changed, and they can now fund another $1 of losses. As long as the share price holds, losses are offset by the new money (share) creation. It's that new money subsidizing rides. On a less abstract note... I think it's important to remember that subsidies don't just transfer. They also create waste... which no one benefits from. For every $1 lost, consumers only gain a few pennies of value (utility in old timey economist speak) goes to consumers and/or drivers. The whole reason that uber needs to subsidize rides is that consumers aren't consuming enough of them at "full price." That means they don't value rides at full price.
  • TomMarius 6y ago
    They don't create new money, they hand over a part of the company. The shares don't grow by themselves. It has nothing to do with printing money like central banks do.
    • zelos 6y ago
      If the 'true' value of the company is (say) $0.5 per share issued, haven't they effectively printed money?
      • TomMarius 6y ago
        No, they just sold a chunk of the company and made a $0.5/share profit on it, probably by promising future profits; there is not even a guarantee that the buyer will be able to sell it for the same price they bought it. They might commit fraud and sell valueless shares and effectively "print money" (especially if people take loans to buy them), but I have a feeling that it doesn't work for long.
• Applejinx 6y ago
  Yes, because it's an explicit effort to remove market choices from the people forcing them to use the product on a monopoly basis: otherwise the behavior wouldn't be happening, and it's such a valuable outcome that it's worth billions. The fact that it's failing doesn't change that purpose. Is a mousetrap's business the giving of cheese?
  • sokoloff 6y ago
    What choice did Uber remove from the market when they started? What choice has Uber removed from the market so far? What choice do you expect Uber to remove from the market even if they are maximally successful in their overall plan?
    • motivic 6y ago
      Supershuttle which offered shared vanpool rides to and from airports all across the US was shuttered partly because of competitions from Uber [1]. I personally find it a useful service given you can schedule it for early morning flights (6AM or earlier) without worrying about availability of drivers. 1. https://www.latimes.com/travel/story/2019-12-12/supershuttle-says-it-will-stop-service-to-lax https://www.latimes.com/travel/story/2019-12-12/supershuttle...
    • cableshaft 6y ago
      While they may not have removed it entirely, they've severely damaged the existing taxi industry, which was slow to change and had tons of issues itself (like selling medallions that let you be a driver for hundreds of thousands of dollars and drivers no longer making enough to pay that back now that Uber is in town). According to the article below, in 2013 a medallion in NYC reached a cost of $1.3 million, but has crashed as low as $240k since Uber and Lyft started operating. The drivers that bought it when they were expensive are probably really struggling right now. Uber and Lyft have since made it clear that the medallion is an unnecessary expense, so in a way it's a good thing, but meanwhile the drivers that bought into it are screwed. https://www.cbsnews.com/news/how-much-is-a-nyc-taxi-medallion-worth-these-days/ https://www.cbsnews.com/news/how-much-is-a-nyc-taxi-medallio...
    • 6y ago
• noad 6y ago
  No because the amount of money they spend on this is negligible compared to the shell game of pumping up equity valuations and getting out at the right time. It's like running a shell game on the street, you let the first person win $20 so other people think it's possible then you scam all them. Except in this shell game we are also crushing small companies whenever possible.
• kerkeslager 6y ago
  Let's be clear on who the rich are here: 1. Executives 2. Venture capitalists And who "the people" are here: 1. Riders 2. Drivers Right off the bat, the entire business model is moving money from riders to drivers, while siphoning off a percentage for the rich. So at a fundamental level, the purpose of the company is to use moving money around between the people as a reason to move money from the people to the rich--the exact opposite direction of what you're proposing. But that's the gross effects, and one could argue that what matters is the net effects. It's possible that while the rich are taking from the people here, these particular rich are taking less than other rich would be. I would argue that "taking less" and "giving" are not the same thing, but I'll at least entertain the point that the net effect might be positive for the people. To analyze that we have to look at our two "the people" groups separately: 1. Uber's fares are significantly lower in most places than taxis were previously. But we have to realize that this is a temporary anomaly caused by competition with Lyft et al--Uber is using their massive funding to undercut competitors and drive them out of business. If that happens (which is probably will) Uber will have no competitive pressure to keep their prices low. In fact, following incentives, Uber should probably start buying up taxi medallions and then reverse their stance on how those rules should be enforced, so they can pull the ladder up behind them. But even without that, Uber has significant first-to-market advantages that will make it hard for a competitor to arise. Any competitor would have to be global, otherwise Uber will just use their global profits to undercut them on price locally. And a starting a global business has significant technical challenges, which Uber didn't have to deal with because they started locally. There are also legal challenges, which Uber didn't have to deal with up front, since Uber invented loopholes, many of which are now closed. And as a last line of defense, Uber can just keep enough cash on hand to buy out any competitors that arise (similar to Facebook's purchases of Instagram, Giphy, etc.). Whatever benefits Uber provides to riders, are short game: their long game isn't running a rider-focused charity. 2. The data regarding drivers is rife with issues. First off, the results are uneven: some sources say that Uber drivers in New York and San Francisco are making more net profit than they were as taxi drivers, but that effect drops off as you move toward smaller cities and moves well into the negative in more rural areas. And there are good reasons to believe that the benefits of a taxi company are being undervalued in these comparisons: health insurance and mechanic services are priced lower for a taxi service because they have collective leverage: an individual seeking health insurance or a mechanic pays a higher price. And hourly wages don't include the extra time a gig driver has to spend finding parking, getting repairs done, etc., due to not having a taxi garage. These are hours that they work but don't bill for, which aren't included in stats. It would be hard to argue that drivers are better off with the current system. The simplest truth is if you just talk to drivers: the positive thing I hear from drivers is that they don't have cash in their cars so they aren't as likely to get robbed, but most who I've talked to say they have to work more to make the same money. And finally, this is again a temporary concession: Uber is doing their best to replace human drivers with self-driving cars. Even if you disagree with me that net results are worse for drivers, any net benefit you can claim is temporary. And there are even more fundamental questions: What are the network effects on local economies of taking a percentage of all driver transactions in the world and sending it to San Francisco? Should we be weaving cars into the transportation infrastructure of our cities when bikes and public transit have such clear benefits? Is it worth it to give up your location privacy for a cheap ride?