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Uber is a great service for the customer. It made getting places within cities convenient and reliable. I don't think there's anyone who misses calling cab comp

by habosa 5y ago

Uber is a great service for the customer. It made getting places within cities convenient and reliable. I don't think there's anyone who misses calling cab companies late at night. However their pricing was never real. They took billions of VC dollars to make it seem like Uber could be better AND cheaper which drove every tradition cab company out of business. It also meant that all of the benefits of Uber accrued to the rider and the shareholders, the driver's didn't do so well. Now they have to raise prices to a rate that's actually profitable. Meanwhile the taxi companies got their act together a bit. They have apps now, they take credit cards. So things will end up better across the board, just maybe not cheaper. Consumer benefit aside. Ubers pricing strategy should probably have been illegal. You should not be able to flood a market like that. In international trade this is called dumping [0]. I wish we had a similar law for tech companies that want to destroy incumbents with VC money. 0: https://en.wikipedia.org/wiki/Dumping_(pricing_policy) https://en.wikipedia.org/wiki/Dumping_(pricing_policy)

rorykoehler 5y ago
I don't understand how this practice of using VC money to offer services below cost to undercut competition isn't illegal. In Ireland loss leading (offering certain goods below cost to entice customers who will then spend on other goods/services) is illegal. Not sure about other countries but doing what Uber did is straight up theft with huge negative externalities for society.
- username_my1 5y ago
  It’s the common practice in food delivery and mobility in Germany. New startup, vc money, bankrupt others… run out of money Then repeat
- nullc 5y ago
  Dumping for anti-competitive purposes is unlawful in many places uber operates, including California. But when has breaking the law ever really concerned uber? At this juncture if they were threatened with it they'd just override the legislature via an amendment, again.
  - rorykoehler 5y ago
    So rule of law has completely broken down in the US?
    - AlexandrB 5y ago
      Only if you're rich.
    - tolbish 5y ago
      Can you be more specific? We did have an insurrection attempt 6 months ago.
CPLX 5y ago
> Uber is a great service for the customer. It made getting places within cities convenient and reliable. I don't think there's anyone who misses calling cab companies late at night. The ubiquitous smartphone equipped with GPS did this. Once the technology existed it was an inevitability, just like it was for boarding passes and restaurant reservations and everything else. The predatory anti-competitive lawless aspect of the transition to smartphone driven can hailing however was probably optional.
- skybrian 5y ago
  This is an "invisible hand" argument that ignores the fact that markets consist of people and some business needs to actually do the work. Someone still had to create a popular service to compete with taxis, which wasn't all that easy when it wasn't even clear how to do it legally. It's only with hindsight that it might seem obvious. Yes, maybe some other company would have eventually figured out how to do it a different way, but "eventually" can be a long time and reasoning about counterfactual events isn't as easy as invisible hand arguments make it seem.
  - Slartie 5y ago
    Maybe the American taxicab market was especially dysfunctional (the stuff I read about NY taxi medallions suggests that somehow), but in other countries, this "inevitability" came about, largely without Uber's involvement. In Germany for example we can easily hail taxis (actual ones, not private cars) with at least two or three different apps, and this has been a thing for almost a decade now, even though Uber never really got its private-car-based service on track here due to legal problems. I've used Lyft in the US a few times, and the experience with those taxi apps in Germany is very much comparable.
    - skybrian 5y ago
      Yep, local conditions matter a lot, like what the rules are and how well existing companies learn from what's happening elsewhere. Abstract, universal arguments only go so far.
  - 5y ago
naikrovek 5y ago
Uber and Lyft take a commission, but most of the money goes to the driver. Surge pricing happens when there is high demand and supply can not keep up, or supply (drivers) choose not accept offers based on price and whatever other factors that driver chooses when they make a decision on who to give rides to and how far to drive. I am not sure Uber and Lyft work like you think they work. Drivers can take anyone they want. They often take the most profitable offers, because they want to make the time they spend in their car more worthwhile. The drivers can offer rides all day long and accept any proposal offered, if they choose to do that. Drivers can also hold out within a metro, collectively, and drive the price up by artificially shortening supply. People need rides, so they will offer to pay more in order to entice a driver to pick them up. And, if prices get too high, taxis are usually an option where artificial supply limitation is happening. VC money goes to kick-starting infrastructure and software and employees that run the business.
wavepruner 5y ago
Uber hasn't raised their base rates in my city for years now. I drive for Uber, and it's more profitable than ever. This is because of surge pricing and higher volume. Even when there is no surge profitability is quite good as long as it's busy enough for back to back rides. If you're patient and ride during slower times you pay a similar amount to what the price was years ago.

by habosa 5y ago

rorykoehler 5y ago

I don't understand how this practice of using VC money to offer services below cost to undercut competition isn't illegal. In Ireland loss leading (offering certain goods below cost to entice customers who will then spend on other goods/services) is illegal. Not sure about other countries but doing what Uber did is straight up theft with huge negative externalities for society.

username_my1 5y ago
It’s the common practice in food delivery and mobility in Germany. New startup, vc money, bankrupt others… run out of money Then repeat
nullc 5y ago
Dumping for anti-competitive purposes is unlawful in many places uber operates, including California. But when has breaking the law ever really concerned uber? At this juncture if they were threatened with it they'd just override the legislature via an amendment, again.
- rorykoehler 5y ago
  So rule of law has completely broken down in the US?
  - AlexandrB 5y ago
    Only if you're rich.
  - tolbish 5y ago
    Can you be more specific? We did have an insurrection attempt 6 months ago.

CPLX 5y ago

> Uber is a great service for the customer. It made getting places within cities convenient and reliable. I don't think there's anyone who misses calling cab companies late at night. The ubiquitous smartphone equipped with GPS did this. Once the technology existed it was an inevitability, just like it was for boarding passes and restaurant reservations and everything else. The predatory anti-competitive lawless aspect of the transition to smartphone driven can hailing however was probably optional.

skybrian 5y ago
This is an "invisible hand" argument that ignores the fact that markets consist of people and some business needs to actually do the work. Someone still had to create a popular service to compete with taxis, which wasn't all that easy when it wasn't even clear how to do it legally. It's only with hindsight that it might seem obvious. Yes, maybe some other company would have eventually figured out how to do it a different way, but "eventually" can be a long time and reasoning about counterfactual events isn't as easy as invisible hand arguments make it seem.
- Slartie 5y ago
  Maybe the American taxicab market was especially dysfunctional (the stuff I read about NY taxi medallions suggests that somehow), but in other countries, this "inevitability" came about, largely without Uber's involvement. In Germany for example we can easily hail taxis (actual ones, not private cars) with at least two or three different apps, and this has been a thing for almost a decade now, even though Uber never really got its private-car-based service on track here due to legal problems. I've used Lyft in the US a few times, and the experience with those taxi apps in Germany is very much comparable.
  - skybrian 5y ago
    Yep, local conditions matter a lot, like what the rules are and how well existing companies learn from what's happening elsewhere. Abstract, universal arguments only go so far.
- 5y ago

naikrovek 5y ago

Uber and Lyft take a commission, but most of the money goes to the driver. Surge pricing happens when there is high demand and supply can not keep up, or supply (drivers) choose not accept offers based on price and whatever other factors that driver chooses when they make a decision on who to give rides to and how far to drive. I am not sure Uber and Lyft work like you think they work. Drivers can take anyone they want. They often take the most profitable offers, because they want to make the time they spend in their car more worthwhile. The drivers can offer rides all day long and accept any proposal offered, if they choose to do that. Drivers can also hold out within a metro, collectively, and drive the price up by artificially shortening supply. People need rides, so they will offer to pay more in order to entice a driver to pick them up. And, if prices get too high, taxis are usually an option where artificial supply limitation is happening. VC money goes to kick-starting infrastructure and software and employees that run the business.

wavepruner 5y ago

Uber hasn't raised their base rates in my city for years now. I drive for Uber, and it's more profitable than ever. This is because of surge pricing and higher volume. Even when there is no surge profitability is quite good as long as it's busy enough for back to back rides. If you're patient and ride during slower times you pay a similar amount to what the price was years ago.