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Having done work for a few cab company owners, Uber never made sense. Many of these guys, the owners, probably make $75k in a great year - and Uber’s genius pat

Having done work for a few cab company owners, Uber never made sense. Many of these guys, the owners, probably make $75k in a great year - and Uber’s genius path to billions was to undercut them? Just image search “cab company owner” and see if you can find the billions.

sokoloff 5y ago
If a medallion owner can earn $75K per medallion per year, it seems there's a lot of possible value in trying to take $5-10K/year times the number of full-time medallion equivalents while avoiding the cost of buying the medallion and car [and maintaining the car] in the first place.
- JohnJamesRambo 5y ago
  They are talking about the owner of the whole cab company making 75k.
  - prepend 5y ago
    No, I don’t think so. That’s earnings for a single medallion. Cab companies might own hundreds if not thousands of medallions. For example, a single private equity firm owns about 4,000 New York medallions [0]. Most medallions are owned in pools by private firms. [0] https://www.ny1.com/nyc/all-boroughs/news/2021/04/01/private-equity-firm-is-the-city-s-biggest-taxi-medallion-player https://www.ny1.com/nyc/all-boroughs/news/2021/04/01/private...
    - michaelt 5y ago
      Medallions sound like a truly bizarre and unfair system. And if Uber operated exclusively in New York, we could accept they had a profitable-sounding business model: bypassing that system. But given that Uber has expanded into many other cities and countries, 99% of which don't have medallions, it's pretty clear that merely bypassing the medallion system isn't their business model.
JohnJamesRambo 5y ago
I really just think the play on all these sorts of companies was just to get max amount of money in this era of intense amounts of dumb investor money before it dries up. The math on WeWork etc finding profitability never made sense. The investor money IS the end goal. I didn’t know things were already this bad for Uber. Looking like a big short on the stock would pay off nicely soon. I’ll leave that to the big guys.
- laurent92 5y ago
  > The investor money IS the end goal. “But you said you would never betray our customers! —Yes, because the customer is the shareholder.” – You know it’s bad when the series Silicon Valley mocks one’s business model for a joke. > The math on WeWork etc. finding profitability never made sense. “Don’t worry, we lose on every unit but we make it up on the quantity.” Yes, we were in a bubble. More seriously though, Kondratief cycles are very long cycles, 50+ years, and the phase II is land grab. Economics didn’t make sense because investors are betting that they can extort customers later on. Example: If WeWork succeeded to make building management code as difficult as construction code, they could have evicted all companies who try to maintain their own workspace (“Too bad, he didn’t know every 4th extinguisher has to be blue to be seen in case of red light event”) and WeWork would have rented companies their own workspaces. For that, you need to both dominate and modify the legal framework to prevent small actors from giving birth.
  - JohnJamesRambo 5y ago
    Hadn't heard of Kondratief cycles, it's an interesting idea, thanks for sharing.
hprotagonist 5y ago
> Just image search “cab company owner” and see if you can find the billions. I keep getting all these photos of Michael Cohen
mattzito 5y ago
I’m not sure which cab company owners you are thinking of, but the one I know is worth in the $XXm range from a major US city. Uber has hurt his business a lot, and he’s totally unwilling to acknowledge that maybe taxicab companies offering terrible experiences has something to do with it.

sokoloff 5y ago

If a medallion owner can earn $75K per medallion per year, it seems there's a lot of possible value in trying to take $5-10K/year times the number of full-time medallion equivalents while avoiding the cost of buying the medallion and car [and maintaining the car] in the first place.

JohnJamesRambo 5y ago
They are talking about the owner of the whole cab company making 75k.
- prepend 5y ago
  No, I don’t think so. That’s earnings for a single medallion. Cab companies might own hundreds if not thousands of medallions. For example, a single private equity firm owns about 4,000 New York medallions [0]. Most medallions are owned in pools by private firms. [0] https://www.ny1.com/nyc/all-boroughs/news/2021/04/01/private-equity-firm-is-the-city-s-biggest-taxi-medallion-player https://www.ny1.com/nyc/all-boroughs/news/2021/04/01/private...
  - michaelt 5y ago
    Medallions sound like a truly bizarre and unfair system. And if Uber operated exclusively in New York, we could accept they had a profitable-sounding business model: bypassing that system. But given that Uber has expanded into many other cities and countries, 99% of which don't have medallions, it's pretty clear that merely bypassing the medallion system isn't their business model.

JohnJamesRambo 5y ago

I really just think the play on all these sorts of companies was just to get max amount of money in this era of intense amounts of dumb investor money before it dries up. The math on WeWork etc finding profitability never made sense. The investor money IS the end goal. I didn’t know things were already this bad for Uber. Looking like a big short on the stock would pay off nicely soon. I’ll leave that to the big guys.

laurent92 5y ago
> The investor money IS the end goal. “But you said you would never betray our customers! —Yes, because the customer is the shareholder.” – You know it’s bad when the series Silicon Valley mocks one’s business model for a joke. > The math on WeWork etc. finding profitability never made sense. “Don’t worry, we lose on every unit but we make it up on the quantity.” Yes, we were in a bubble. More seriously though, Kondratief cycles are very long cycles, 50+ years, and the phase II is land grab. Economics didn’t make sense because investors are betting that they can extort customers later on. Example: If WeWork succeeded to make building management code as difficult as construction code, they could have evicted all companies who try to maintain their own workspace (“Too bad, he didn’t know every 4th extinguisher has to be blue to be seen in case of red light event”) and WeWork would have rented companies their own workspaces. For that, you need to both dominate and modify the legal framework to prevent small actors from giving birth.
- JohnJamesRambo 5y ago
  Hadn't heard of Kondratief cycles, it's an interesting idea, thanks for sharing.

hprotagonist 5y ago

> Just image search “cab company owner” and see if you can find the billions. I keep getting all these photos of Michael Cohen

mattzito 5y ago

I’m not sure which cab company owners you are thinking of, but the one I know is worth in the $XXm range from a major US city. Uber has hurt his business a lot, and he’s totally unwilling to acknowledge that maybe taxicab companies offering terrible experiences has something to do with it.