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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 entra
by 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 agoAnd more expensive
- BolexNOLA 6y agoIt should be tbh. It’s a car service. It’s a luxury expense.
- dcow 6y agoIt 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 agoI 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.
- chillwaves 6y agoThat'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 agoUber 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 agoThat’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 agoI 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 agoIn 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 agoIt'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 agoI 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 agoWe 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 agoUber : Taxis :: cloud/hyperscaling : bare metal
- hn_throwaway_99 6y agoI 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 agoI guess if Uber and Lyft had to compete fairly, RideAustin might have stuck around.
- hn_throwaway_99 6y agoWhat 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 agoThey 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 agoPosted 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 agoWell, 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 agoI 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 agoGiven 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 agoThis 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 agoTo 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 agoLeg room, fuel surcharges, fees etc are more an airline thing. Not a Star Alliance feature.