14 ms·

Uber and Lyft competitors ready if service is suspended in California

127 points by prostoalex 6y ago

mdorazio 6y ago
A lot of Uber and Lyft proponents don’t really consider this. If both of them leave the market, the demand will still be there and will be served by other entrants that have more viable business models (including adherence to laws). This is exactly what happened in other markets where Uber and Lyft left for various reasons. Granted, the experience might be a bit worse for riders (Ex. waiting longer), but I’m 100% ok with that.
- bguillet 6y ago
  And more expensive
  - BolexNOLA 6y ago
    It should be tbh. It’s a car service. It’s a luxury expense.
    - dcow 6y ago
      It may have started that way but not anymore. You can viably replace car ownership with ride-share and spend _less_ money each month than being a car owner. Many people do this, it not just luxury.
      - hamandcheese 6y ago
        I think that is only viable in places where car ownership is prohibitively expensive already. A short trip is easily $10, and then you still have to get back. Do that every day and you’re spending ~$600/month. If you live in an area that isn’t parking constrained (most of America!) owning a car can be much more affordable than that.
        dcow 6y ago
        Uber and Lyft both have commuter arrangements that cost more on the order of $2.50-3.50 a trip. Mainly focused on the GGP claim that these services are strictly luxury.
        learc83 6y ago
        I’ve never seen prices that low when browsing for a pool trip.
  - chillwaves 6y ago
    That's what happens when you cannot rely on spending other people's money to prop up your business. It's honestly so destructive for these anti competitive business practices to pour VC money into a market.
    - graeme 6y ago
      Uber and Lyft aren’t unprofitable at the margins in developed markets. They instead spend money expanding. Back in 2016 Uber says it was profitable in places like California. Why would VC spend billions to permanently give free rides to Californians? It just doesn’t make any sense. https://fortune.com/2016/06/16/uber-profitable-markets/ https://fortune.com/2016/06/16/uber-profitable-markets/
      - learc83 6y ago
        That’s not what Forbes has been saying about Uber since 2017. Look up more recent Uber article by them. One accuses Uber of creative accounting to attempt to make the rideshare business look profitable.
        graeme 6y ago
        I looked. The articles aren’t actually saying that the rides have a negative profit. Only that margins are low (which is quite plausible) The article is consistent with both of our beliefs, i.e. it’s vague as to whether losses are intrinsic to rides, or whether margins are low + there are expansion costs. https://www.forbes.com/sites/lensherman/2019/08/22/ubers-dubious-path-to-profitability-is-not-a-meme/#4d10ecac15cf https://www.forbes.com/sites/lensherman/2019/08/22/ubers-dub...
- collinc777 6y ago
  In the consumer space in particular it's the service that offers the best combination of service and price that's going to win out. I understand you are willing to have a lower quality service with higher prices, but the market likely says otherwise.
  - noirbot 6y ago
    It's also not something I'd want to start a business on. Even assuming you think you can make the economics of it work out under the new regulation, you're gambling that CA doesn't change the law again later - either rolling back this restriction, or adding some new one because they decide that you too are being abusive. I'm not sure I'd want to invest in any company trying to get into this niche.
  - mdorazio 6y ago
    I don't think we can actually say what "the market" says since the market hasn't seen what a long-term cost basis and experience is for ridesharing that's both profitable and adheres to local regulations. Of course people want artificially cheap things, but that's not really a good start for determining what the market is actually willing to bear.
- yibg 6y ago
  We had that before with taxis. It wasn't good. Dirty cars, long wait times (if they come at all), "broken" credit card machines. Granted for the most part that was with medallions, and maybe with more open competition things will be better. But with employees only I don't see how you can get the elasticity of supply.
  - zelly 6y ago
    Uber : Taxis :: cloud/hyperscaling : bare metal
- hn_throwaway_99 6y ago
  I want to believe this is possible, but experience also says it's not worth it. This happened in Austin, TX. When Uber and Lyft left Austin due to a driver fingerprint ordinance, RideAustin, a local non-profit with the backing of an Austin tech mogul, sprung up. Ride Austin paid drivers better, had a round-up option to support local charities, and though there were some early kinks with the app most of those went away after a couple months. I was a big fan and supported them as much as I could. The second Uber and Lyft came back (state legislature overrode Austin's ordinance), Ride Austin's ridership plummeted. I tried to still take them whenever I could, but over time it became harder and harder (fewer riders meant fewer quality drivers). After 3 bad pickup experiences at the airport I said forget it. Covid was the final nail in the RideAustin coffin and it closed in June. Of course California is a much bigger market so any competitors may have better luck, but I still think a lot will be wary if it's just a matter of time before the big boys come back in one form or another.
  - satya71 6y ago
    I guess if Uber and Lyft had to compete fairly, RideAustin might have stuck around.
    - hn_throwaway_99 6y ago
      What do you mean "compete fairly". I don't see how they competed unfairly when they came back. There is no way a small, single-locale-focused ride share company can provide the levels of service and quality people have come to expect from Uber and Lyft.
      - learc83 6y ago
        They mean Uber and Lyft use investor money to subsidize ride costs, so they are able to beat the local alternatives on price. It’s the classic, big company opens a store in a small town and sells at a loss until the local mom and pops are driven out of business, then raises the prices once they are the last man standing.
- deleted 6y ago
  [deleted]
- 908B64B197 6y ago
  Posted it in an other thread [0] but do we really want to go back to the medallion system? Pre-Uber, either the driver rented the car to a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid). The more I spoke to cab drivers the more it seemed their industry was a pyramid schemed aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it. Also, the argument on Uber/Lyft drivers not being contractors since they can't set their own rates and decide which ride they take strikes me as weird since medallion drivers were contractors, had to charge the price set by the city and could only pick-up customers in the (arbitrary) zones covered by their medallions. [0] https://news.ycombinator.com/item?id=24225648 https://news.ycombinator.com/item?id=24225648
  - thewebcount 6y ago
    > Posted it in an other thread [0] but do we really want to go back to the medallion system? No, but that doesn't preclude us from stopping Uber and Lyft. We can have a different system where there are no medallions, the number of cars aren't artificially constrained, but the companies running them need to obey existing laws.
    - Dylan16807 6y ago
      > the companies running them need to obey existing laws Well let's not act like "existing laws" are the most important factor. The laws were changed here, after all! I'd like to see a system where drivers have a lot of control over when they work, and can be in both apps at once, but also have healthcare and the ability to access unemployment insurance. Even though as far as I'm aware it's not feasible under existing law.
- icelancer 6y ago
  >> This is exactly what happened in other markets where Uber and Lyft left for various reasons. This is exactly the opposite of what happened in Austin.
  - noirbot 6y ago
    Well, they did get more alternatives, but a worse UX and more fragmented driver base that was smaller due to the added regulation meant that I just ended up driving more places myself. It became too expensive to take to go out drinking, so I just didn't go out as often. It became cheaper to park at the airport, and I didn't have to schedule a ride hours ahead, so I started doing that instead, It turns out price/availability is pretty important, and adding regulation that hurts both often makes it hard to run the business at all. It's like if a city demanded that all restaurants only served organic foods. It might be better in the abstract, but it's likely going to put a lot of places out of business and raise the costs of what's left over. Maybe that's ok, but it's not without cost.
    - bobthepanda 6y ago
      I mean you could say this about any regulation and any sector. I'm sure a lot of businesses went out when we banned child labor, introduced weekends, the 40-hour week, etc. We've always set a bar for a minimum societal contribution that companies need to be making. There's no indication that the current bar is anywhere close to perfect.
      - kofejnik 6y ago
        > There's no indication that the current bar is anywhere close to perfect. There's no indication current bar isn't too high, tho
        bobthepanda 6y ago
        Given that the US performs middling to poorly on most statistics of welfare and simultaneously has the longest working hours in the OECD I think it's safe to say we could set the bar higher.
- graeme 6y ago
  This is trivial. Ban the new thing, and a variant of the old thing will re-emerge. This is akin to observing that if you ban Wikipedia, the market for print encyclopedias will grow. That has no bearing on whether such a ban is a good idea.
  - fakedang 6y ago
    To counter your example, I doubt people would go back to print encyclopedia once wikipedia were to be banned. Wikipedia has fundamentally changed the way one looks up reliable information online, with simple computer-enabled features such as searching, cross-referencing,fact-checking, etc. We would likely see people getting dumber (due to the lesser and scattered number of sources) or relying on less reliable internet sources for information. Or outright piracy, which is of zero utility to the publishers. Ride sharing has fundamentally changed the way I travel in developing countries. It's much easier to rely on an app's set price rather than haggle with taxi drivers on offers far higher than Uber's. On the other hand, I have found less utility in developed countries where it's much easier (and cheaper in general) to rent/buy your own car, or rely on a cab meter. Likewise I don't really see people moving back to the old ways - on the contrary, a number of taxi companies and cities are already exploring/already begun app-based services. Maybe a few years from now, we might see Star Alliance type industry groups within the taxi industry.
    - kofejnik 6y ago
      > we might see Star Alliance type industry groups within the taxi industry ... so we get legroom reduced every year, mandatory fuel surcharges, ticket printing fees, etc? No, thank you
      - fakedang 6y ago
        Leg room, fuel surcharges, fees etc are more an airline thing. Not a Star Alliance feature.
iaw 6y ago
> "Last week, top executives at Uber and Lyft said that, if forced to comply with the ruling, they’d likely have to suspend service in the state while reworking their businesses around the law." >"[The law] once passed, Uber and Lyft claimed it shouldn’t apply to them, prompting California’s attorney general and three city attorneys to sue the firms for misclassifying workers." So instead of taking the time to prepare to meet the new requirements of a law that to some extent was directly aimed at them, the current ride-sharing incumbents decided to play legal chicken and not prepare re-tooling for the change.
- tomdell 6y ago
  Uber and Lyft’s sole “innovation” is in driving down the value of driving by reclassifying drivers as contractors and not having to pay benefits while the drivers barely earn more than they spend to keep working, so I don’t think they’re going to give in easily. It’s a shame the initial investors already got away with IPOs and foisting the consequences off onto general investors before the underlying business models collapse.
  - SilasX 6y ago
    Cab companies had long been classifying drivers like that. Also, the bidding process for cab rental generally drove net wages to the bare minimum, so Uber/Lyft weren't new in either respect. Edit: reword to be easier to read.
  - stevehawk 6y ago
    weren't they contractors before? where the taxi driver rented the car and the medallion from the company that owned them?
    - pengaru 6y ago
      When Uber first started destroying the cab business there were numerous interviews of NYC cab drivers talking about how far in debt they were to buy the medallion that enables them to work in the city. That left me with the impression that cabbies rented the money to buy access to the market, and were paid enough to afford it.
asperous 6y ago
My prediction is that in the cities, things mostly won’t change. In rural or suburban areas, cost and wait times will explode, if service is offered at all. With minimum wage enforced, waiting in areas where drivers don’t make minimum wage on average will vanish since scheduled services are risk adverse and have lots of information. Before drivers might service those areas hoping to get a ride taking them to urban areas. Drivers don’t have good statistics on where to wait. Coordinated services do.
- 908B64B197 6y ago
  That and drivers refusing rides to certain neighborhoods, or customers.
- ghaff 6y ago
  I live in Boston exurbs and the once or twice I've needed a "taxi" I was able to get an Uber (from not a lot of choices during the day) but there weren't any Lyfts available. So, yes, ride-share can get pretty thin on the ground once you get out of cities. In normal times, I don't even try to use them for airport trips; just book a private car.
- Barrin92 6y ago
  > In rural or suburban areas, cost and wait times will explode, Utilization of ridesharing in rural areas is low[1]. It's a mode of transportation mostly used by urban affluent individuals with plenty of expendable income and as far as other reasons are concerned internet and credit card access trump any sort of supply problem. "Suzanne Ashe was once the only Uber driver in Haines, Alaska — population 1,374 — and said she kept getting kicked off the platform because there weren’t enough people asking for rides. She also found that some places weren’t on Uber’s maps, so clients couldn’t enter their destination, and internet could be spotty. For these reasons, Ashe quit Uber and started her own ride-hailing business called Red Cab, named for her 2010 Red Chevy HHR, the only car in her “company.” She charges a flat rate of $10 per ride and $30 per hour. “In order to cater to rural areas, especially areas where there isn’t a saturation of network, then a cab company makes a lot more sense,” she told Chilkat Valley News." It seems to have become fashionable to rush to Ubers defense by framing it as some sort of necessary mode of transportation for the undersupplied when instead every piece of data suggests the opposite. It's luxury transportation for the upper middle-class on the back of disenfranchised metropolitan army of reserve labour. [1]https://www.vox.com/the-goods/2019/1/11/18179036/uber-lyft-rural-areas-subscription-model https://www.vox.com/the-goods/2019/1/11/18179036/uber-lyft-r...
notananthem 6y ago
Great! Uber and Lyft are going to stop stealing from social security, unemployment etc
_red 6y ago
No doubt the competitors will be closely connected to politician families?
- notassigned 6y ago
  This is the usual with these 'compassionate' government ideas. If you can't compete with a company, lobby the government to force your competition out of business, while calling it a kindness to the public.
dalfonso 6y ago
The cities need to step up and set up their own ride sharing services e.g. https://www.metrolacampaigns.net/ https://www.metrolacampaigns.net/ in LA
- thewebcount 6y ago
  Woah! Thanks for this! I had no idea this was a thing. Definitely going to check this out. Sounds way more ethical than Uber or Lyft. I'll be interested to see what the experience is like (wait times, cleanliness, driving reasonably, etc.).
- marcell 6y ago
  I’m sure the institution that brought us the Los Angeles public school system and the thriving Los Angeles public transit system will surely succeed in building an Uber competitor.
  - geofft 6y ago
    How is that different from saying saying "I'm sure the programmer who brought us StumbleUpon and the venture capitalists who invested in WeWork will surely succeed in building a public transit competitor"?
    - monadic2 6y ago
      It's the fallacy that market success implies competence.
    - kofejnik 6y ago
      because unlike government, if they fail, they will be replaced quickly
      - dragonwriter 6y ago
        > because unlike government, if they fail, they will be replaced quickly Governments that actually fail tend to be replaced quite swiftly. Businesses can fail without being replaced (not filling an actual need is a common reason businesses fail.)
momokoko 6y ago
California is the 5th largest economy in the world. There is no way Uber and Lyft will just leave that market. These are the emptiest of threats. Uber and Lyft’s board would absolutely loose their mind if executive leadership decided to just exit, once again, the 5th largest economy in the world
- bthrn 6y ago
  Keep in mind Uber operates in almost a thousand cities worldwide. Of course certain places will earn Uber more than others, but it’s not a huge hit to their revenue. The real threat, as I see it, is other states enacting similar laws that will have a domino effect.
  - Invictus0 6y ago
    Uber does operate in many cities, but its revenue is disproportionately concentrated in California: > “In 2018, we derived 24% of our Ridesharing Gross Bookings from five metropolitan areas — Los Angeles, New York City, and the San Francisco Bay Area in the United States; London in the United Kingdom; and São Paulo in Brazil,” Uber writes in the S-1. “An economic downturn, increased competition, or regulatory obstacles in any of these key metropolitan areas would adversely affect our business, financial condition, and operating results to a much greater degree than would the occurrence of such events in other areas.” [0] https://nymag.com/intelligencer/2019/04/uber-s-1-new-york-city-could-destroy-uber.html https://nymag.com/intelligencer/2019/04/uber-s-1-new-york-ci...
  - throwaway1777 6y ago
    It is a huge hit to their revenue. It is not total catastrophe or anything, but as other people pointed out it is significant enough for this to be not as flippant as turning off some other smaller state or country.
- wmf 6y ago
  Uber and Lyft said they will leave temporarily while they adapt to employing drivers, not permanently.
- 6y ago
johnnyb9 6y ago
I recently requested a Lyft “wait and save” and had to suffer through 3 cancellations (I was going to the airport). I think there are definitely cracks in the “independent contractor” model if Lyft can quote me a definite timeline (15 min wait), have 3 drivers cancel on me because the fare was too low.
- icedistilled 6y ago
  Same, tried to get both either an uber or lyft in an upscale mountain town recently. Their algorithms seem completely unable to cope with rural areas, especially in these covid times. Zero drivers. No drivers to even reject the horribly underpriced fair for our 4 mile trip. Both uber and lyft assumed the driver would be already near our location, not 4 miles away. Lyft and uber started quoting the ride as as about $9. Lyft never changed it. Uber did actually up the price to $20something after it failed to find drivers. Local taxi company charged us $60 bucks. $30 + tip would have been what I'd think as reasonable starting for lyft or uber. That's 3x what either of showed.
dawnerd 6y ago
I hope drivers end up being forced to be employees with a set schedule. It would hopefully weed out all of the REALLY bad drivers both platforms have that I even wonder how they have licenses.
innagadadavida 6y ago
Does this men taxi medallions are good investments again. Sometime back there were articles about how the medallions market had completely crashed due to Uber and Lyft.

127 points by prostoalex 6y ago

A lot of Uber and Lyft proponents don’t really consider this. If both of them leave the market, the demand will still be there and will be served by other entrants that have more viable business models (including adherence to laws). This is exactly what happened in other markets where Uber and Lyft left for various reasons. Granted, the experience might be a bit worse for riders (Ex. waiting longer), but I’m 100% ok with that.

bguillet 6y ago
And more expensive
- BolexNOLA 6y ago
  It should be tbh. It’s a car service. It’s a luxury expense.
  - dcow 6y ago
    It may have started that way but not anymore. You can viably replace car ownership with ride-share and spend _less_ money each month than being a car owner. Many people do this, it not just luxury.
    - hamandcheese 6y ago
      I think that is only viable in places where car ownership is prohibitively expensive already. A short trip is easily $10, and then you still have to get back. Do that every day and you’re spending ~$600/month. If you live in an area that isn’t parking constrained (most of America!) owning a car can be much more affordable than that.
      - dcow 6y ago
        Uber and Lyft both have commuter arrangements that cost more on the order of $2.50-3.50 a trip. Mainly focused on the GGP claim that these services are strictly luxury.
        learc83 6y ago
        I’ve never seen prices that low when browsing for a pool trip.
- chillwaves 6y ago
  That's what happens when you cannot rely on spending other people's money to prop up your business. It's honestly so destructive for these anti competitive business practices to pour VC money into a market.
  - graeme 6y ago
    Uber and Lyft aren’t unprofitable at the margins in developed markets. They instead spend money expanding. Back in 2016 Uber says it was profitable in places like California. Why would VC spend billions to permanently give free rides to Californians? It just doesn’t make any sense. https://fortune.com/2016/06/16/uber-profitable-markets/ https://fortune.com/2016/06/16/uber-profitable-markets/
    - learc83 6y ago
      That’s not what Forbes has been saying about Uber since 2017. Look up more recent Uber article by them. One accuses Uber of creative accounting to attempt to make the rideshare business look profitable.
      - graeme 6y ago
        I looked. The articles aren’t actually saying that the rides have a negative profit. Only that margins are low (which is quite plausible) The article is consistent with both of our beliefs, i.e. it’s vague as to whether losses are intrinsic to rides, or whether margins are low + there are expansion costs. https://www.forbes.com/sites/lensherman/2019/08/22/ubers-dubious-path-to-profitability-is-not-a-meme/#4d10ecac15cf https://www.forbes.com/sites/lensherman/2019/08/22/ubers-dub...
collinc777 6y ago
In the consumer space in particular it's the service that offers the best combination of service and price that's going to win out. I understand you are willing to have a lower quality service with higher prices, but the market likely says otherwise.
- noirbot 6y ago
  It's also not something I'd want to start a business on. Even assuming you think you can make the economics of it work out under the new regulation, you're gambling that CA doesn't change the law again later - either rolling back this restriction, or adding some new one because they decide that you too are being abusive. I'm not sure I'd want to invest in any company trying to get into this niche.
- mdorazio 6y ago
  I don't think we can actually say what "the market" says since the market hasn't seen what a long-term cost basis and experience is for ridesharing that's both profitable and adheres to local regulations. Of course people want artificially cheap things, but that's not really a good start for determining what the market is actually willing to bear.
yibg 6y ago
We had that before with taxis. It wasn't good. Dirty cars, long wait times (if they come at all), "broken" credit card machines. Granted for the most part that was with medallions, and maybe with more open competition things will be better. But with employees only I don't see how you can get the elasticity of supply.
- zelly 6y ago
  Uber : Taxis :: cloud/hyperscaling : bare metal
hn_throwaway_99 6y ago
I want to believe this is possible, but experience also says it's not worth it. This happened in Austin, TX. When Uber and Lyft left Austin due to a driver fingerprint ordinance, RideAustin, a local non-profit with the backing of an Austin tech mogul, sprung up. Ride Austin paid drivers better, had a round-up option to support local charities, and though there were some early kinks with the app most of those went away after a couple months. I was a big fan and supported them as much as I could. The second Uber and Lyft came back (state legislature overrode Austin's ordinance), Ride Austin's ridership plummeted. I tried to still take them whenever I could, but over time it became harder and harder (fewer riders meant fewer quality drivers). After 3 bad pickup experiences at the airport I said forget it. Covid was the final nail in the RideAustin coffin and it closed in June. Of course California is a much bigger market so any competitors may have better luck, but I still think a lot will be wary if it's just a matter of time before the big boys come back in one form or another.
- satya71 6y ago
  I guess if Uber and Lyft had to compete fairly, RideAustin might have stuck around.
  - hn_throwaway_99 6y ago
    What do you mean "compete fairly". I don't see how they competed unfairly when they came back. There is no way a small, single-locale-focused ride share company can provide the levels of service and quality people have come to expect from Uber and Lyft.
    - learc83 6y ago
      They mean Uber and Lyft use investor money to subsidize ride costs, so they are able to beat the local alternatives on price. It’s the classic, big company opens a store in a small town and sells at a loss until the local mom and pops are driven out of business, then raises the prices once they are the last man standing.
deleted 6y ago
[deleted]
908B64B197 6y ago
Posted it in an other thread [0] but do we really want to go back to the medallion system? Pre-Uber, either the driver rented the car to a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid). The more I spoke to cab drivers the more it seemed their industry was a pyramid schemed aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it. Also, the argument on Uber/Lyft drivers not being contractors since they can't set their own rates and decide which ride they take strikes me as weird since medallion drivers were contractors, had to charge the price set by the city and could only pick-up customers in the (arbitrary) zones covered by their medallions. [0] https://news.ycombinator.com/item?id=24225648 https://news.ycombinator.com/item?id=24225648
- thewebcount 6y ago
  > Posted it in an other thread [0] but do we really want to go back to the medallion system? No, but that doesn't preclude us from stopping Uber and Lyft. We can have a different system where there are no medallions, the number of cars aren't artificially constrained, but the companies running them need to obey existing laws.
  - Dylan16807 6y ago
    > the companies running them need to obey existing laws Well let's not act like "existing laws" are the most important factor. The laws were changed here, after all! I'd like to see a system where drivers have a lot of control over when they work, and can be in both apps at once, but also have healthcare and the ability to access unemployment insurance. Even though as far as I'm aware it's not feasible under existing law.
icelancer 6y ago
>> This is exactly what happened in other markets where Uber and Lyft left for various reasons. This is exactly the opposite of what happened in Austin.
- noirbot 6y ago
  Well, they did get more alternatives, but a worse UX and more fragmented driver base that was smaller due to the added regulation meant that I just ended up driving more places myself. It became too expensive to take to go out drinking, so I just didn't go out as often. It became cheaper to park at the airport, and I didn't have to schedule a ride hours ahead, so I started doing that instead, It turns out price/availability is pretty important, and adding regulation that hurts both often makes it hard to run the business at all. It's like if a city demanded that all restaurants only served organic foods. It might be better in the abstract, but it's likely going to put a lot of places out of business and raise the costs of what's left over. Maybe that's ok, but it's not without cost.
  - bobthepanda 6y ago
    I mean you could say this about any regulation and any sector. I'm sure a lot of businesses went out when we banned child labor, introduced weekends, the 40-hour week, etc. We've always set a bar for a minimum societal contribution that companies need to be making. There's no indication that the current bar is anywhere close to perfect.
    - kofejnik 6y ago
      > There's no indication that the current bar is anywhere close to perfect. There's no indication current bar isn't too high, tho
      - bobthepanda 6y ago
        Given that the US performs middling to poorly on most statistics of welfare and simultaneously has the longest working hours in the OECD I think it's safe to say we could set the bar higher.
graeme 6y ago
This is trivial. Ban the new thing, and a variant of the old thing will re-emerge. This is akin to observing that if you ban Wikipedia, the market for print encyclopedias will grow. That has no bearing on whether such a ban is a good idea.
- fakedang 6y ago
  To counter your example, I doubt people would go back to print encyclopedia once wikipedia were to be banned. Wikipedia has fundamentally changed the way one looks up reliable information online, with simple computer-enabled features such as searching, cross-referencing,fact-checking, etc. We would likely see people getting dumber (due to the lesser and scattered number of sources) or relying on less reliable internet sources for information. Or outright piracy, which is of zero utility to the publishers. Ride sharing has fundamentally changed the way I travel in developing countries. It's much easier to rely on an app's set price rather than haggle with taxi drivers on offers far higher than Uber's. On the other hand, I have found less utility in developed countries where it's much easier (and cheaper in general) to rent/buy your own car, or rely on a cab meter. Likewise I don't really see people moving back to the old ways - on the contrary, a number of taxi companies and cities are already exploring/already begun app-based services. Maybe a few years from now, we might see Star Alliance type industry groups within the taxi industry.
  - kofejnik 6y ago
    > we might see Star Alliance type industry groups within the taxi industry ... so we get legroom reduced every year, mandatory fuel surcharges, ticket printing fees, etc? No, thank you
    - fakedang 6y ago
      Leg room, fuel surcharges, fees etc are more an airline thing. Not a Star Alliance feature.

iaw 6y ago

> "Last week, top executives at Uber and Lyft said that, if forced to comply with the ruling, they’d likely have to suspend service in the state while reworking their businesses around the law." >"[The law] once passed, Uber and Lyft claimed it shouldn’t apply to them, prompting California’s attorney general and three city attorneys to sue the firms for misclassifying workers." So instead of taking the time to prepare to meet the new requirements of a law that to some extent was directly aimed at them, the current ride-sharing incumbents decided to play legal chicken and not prepare re-tooling for the change.

tomdell 6y ago
Uber and Lyft’s sole “innovation” is in driving down the value of driving by reclassifying drivers as contractors and not having to pay benefits while the drivers barely earn more than they spend to keep working, so I don’t think they’re going to give in easily. It’s a shame the initial investors already got away with IPOs and foisting the consequences off onto general investors before the underlying business models collapse.
- SilasX 6y ago
  Cab companies had long been classifying drivers like that. Also, the bidding process for cab rental generally drove net wages to the bare minimum, so Uber/Lyft weren't new in either respect. Edit: reword to be easier to read.
- stevehawk 6y ago
  weren't they contractors before? where the taxi driver rented the car and the medallion from the company that owned them?
  - pengaru 6y ago
    When Uber first started destroying the cab business there were numerous interviews of NYC cab drivers talking about how far in debt they were to buy the medallion that enables them to work in the city. That left me with the impression that cabbies rented the money to buy access to the market, and were paid enough to afford it.

asperous 6y ago

My prediction is that in the cities, things mostly won’t change. In rural or suburban areas, cost and wait times will explode, if service is offered at all. With minimum wage enforced, waiting in areas where drivers don’t make minimum wage on average will vanish since scheduled services are risk adverse and have lots of information. Before drivers might service those areas hoping to get a ride taking them to urban areas. Drivers don’t have good statistics on where to wait. Coordinated services do.

908B64B197 6y ago
That and drivers refusing rides to certain neighborhoods, or customers.
ghaff 6y ago
I live in Boston exurbs and the once or twice I've needed a "taxi" I was able to get an Uber (from not a lot of choices during the day) but there weren't any Lyfts available. So, yes, ride-share can get pretty thin on the ground once you get out of cities. In normal times, I don't even try to use them for airport trips; just book a private car.
Barrin92 6y ago
> In rural or suburban areas, cost and wait times will explode, Utilization of ridesharing in rural areas is low[1]. It's a mode of transportation mostly used by urban affluent individuals with plenty of expendable income and as far as other reasons are concerned internet and credit card access trump any sort of supply problem. "Suzanne Ashe was once the only Uber driver in Haines, Alaska — population 1,374 — and said she kept getting kicked off the platform because there weren’t enough people asking for rides. She also found that some places weren’t on Uber’s maps, so clients couldn’t enter their destination, and internet could be spotty. For these reasons, Ashe quit Uber and started her own ride-hailing business called Red Cab, named for her 2010 Red Chevy HHR, the only car in her “company.” She charges a flat rate of $10 per ride and $30 per hour. “In order to cater to rural areas, especially areas where there isn’t a saturation of network, then a cab company makes a lot more sense,” she told Chilkat Valley News." It seems to have become fashionable to rush to Ubers defense by framing it as some sort of necessary mode of transportation for the undersupplied when instead every piece of data suggests the opposite. It's luxury transportation for the upper middle-class on the back of disenfranchised metropolitan army of reserve labour. [1]https://www.vox.com/the-goods/2019/1/11/18179036/uber-lyft-rural-areas-subscription-model https://www.vox.com/the-goods/2019/1/11/18179036/uber-lyft-r...

notananthem 6y ago

Great! Uber and Lyft are going to stop stealing from social security, unemployment etc

_red 6y ago

No doubt the competitors will be closely connected to politician families?

notassigned 6y ago
This is the usual with these 'compassionate' government ideas. If you can't compete with a company, lobby the government to force your competition out of business, while calling it a kindness to the public.

dalfonso 6y ago

The cities need to step up and set up their own ride sharing services e.g. https://www.metrolacampaigns.net/ https://www.metrolacampaigns.net/ in LA

thewebcount 6y ago
Woah! Thanks for this! I had no idea this was a thing. Definitely going to check this out. Sounds way more ethical than Uber or Lyft. I'll be interested to see what the experience is like (wait times, cleanliness, driving reasonably, etc.).
marcell 6y ago
I’m sure the institution that brought us the Los Angeles public school system and the thriving Los Angeles public transit system will surely succeed in building an Uber competitor.
- geofft 6y ago
  How is that different from saying saying "I'm sure the programmer who brought us StumbleUpon and the venture capitalists who invested in WeWork will surely succeed in building a public transit competitor"?
  - monadic2 6y ago
    It's the fallacy that market success implies competence.
  - kofejnik 6y ago
    because unlike government, if they fail, they will be replaced quickly
    - dragonwriter 6y ago
      > because unlike government, if they fail, they will be replaced quickly Governments that actually fail tend to be replaced quite swiftly. Businesses can fail without being replaced (not filling an actual need is a common reason businesses fail.)

momokoko 6y ago

California is the 5th largest economy in the world. There is no way Uber and Lyft will just leave that market. These are the emptiest of threats. Uber and Lyft’s board would absolutely loose their mind if executive leadership decided to just exit, once again, the 5th largest economy in the world

bthrn 6y ago
Keep in mind Uber operates in almost a thousand cities worldwide. Of course certain places will earn Uber more than others, but it’s not a huge hit to their revenue. The real threat, as I see it, is other states enacting similar laws that will have a domino effect.
- Invictus0 6y ago
  Uber does operate in many cities, but its revenue is disproportionately concentrated in California: > “In 2018, we derived 24% of our Ridesharing Gross Bookings from five metropolitan areas — Los Angeles, New York City, and the San Francisco Bay Area in the United States; London in the United Kingdom; and São Paulo in Brazil,” Uber writes in the S-1. “An economic downturn, increased competition, or regulatory obstacles in any of these key metropolitan areas would adversely affect our business, financial condition, and operating results to a much greater degree than would the occurrence of such events in other areas.” [0] https://nymag.com/intelligencer/2019/04/uber-s-1-new-york-city-could-destroy-uber.html https://nymag.com/intelligencer/2019/04/uber-s-1-new-york-ci...
- throwaway1777 6y ago
  It is a huge hit to their revenue. It is not total catastrophe or anything, but as other people pointed out it is significant enough for this to be not as flippant as turning off some other smaller state or country.
wmf 6y ago
Uber and Lyft said they will leave temporarily while they adapt to employing drivers, not permanently.
6y ago

johnnyb9 6y ago

I recently requested a Lyft “wait and save” and had to suffer through 3 cancellations (I was going to the airport). I think there are definitely cracks in the “independent contractor” model if Lyft can quote me a definite timeline (15 min wait), have 3 drivers cancel on me because the fare was too low.

icedistilled 6y ago
Same, tried to get both either an uber or lyft in an upscale mountain town recently. Their algorithms seem completely unable to cope with rural areas, especially in these covid times. Zero drivers. No drivers to even reject the horribly underpriced fair for our 4 mile trip. Both uber and lyft assumed the driver would be already near our location, not 4 miles away. Lyft and uber started quoting the ride as as about $9. Lyft never changed it. Uber did actually up the price to $20something after it failed to find drivers. Local taxi company charged us $60 bucks. $30 + tip would have been what I'd think as reasonable starting for lyft or uber. That's 3x what either of showed.

dawnerd 6y ago

I hope drivers end up being forced to be employees with a set schedule. It would hopefully weed out all of the REALLY bad drivers both platforms have that I even wonder how they have licenses.

innagadadavida 6y ago

Does this men taxi medallions are good investments again. Sometime back there were articles about how the medallions market had completely crashed due to Uber and Lyft.