5 ms·

They promise a "more convenient taxi" service everywhere. Cheaper too! What they don't talk about is that their "more convenient taxi" ride is heavily subsidiz

by gvb 5y ago

They promise a "more convenient taxi" service everywhere. Cheaper too! What they don't talk about is that their "more convenient taxi" ride is heavily subsidized by VC money - that is why Uber has lost billions of dollars every year. Uber uses the subsidies to undercut traditional transportation which has the (desirable, from Uber's POV) side effect of driving traditional transportation out of the market leaving uber sized holes in cities. Heavily subsidized rides that are more convenient than a taxi are great until the bezzle collapses and suddenly the cheap, convenient Uber rides disappear and we find out how badly traditional transportation (starting with taxis) has been damaged by the bezzle.

WJW 5y ago
This is always mentioned as the endgame for uber-style monopolism, but it seems to me that taxis are an extremely difficult market to capture in this way. As soon as the VC subsidies disappear and prices rise (as they surely must to pay all those SF SWE salaries), anyone with a car will be able to jump back in. You don't even need an app to start, just loiter around busy places.
- halestock 5y ago
  Are you implying that random people will just start selling rides ad hoc?
  - WJW 5y ago
    Not ad hoc maybe, but if Uber prices would rise a lot I definitely could see a resurgence of the traditional "linger at busy nightlife area" style taxi where you just pay with cash. If the price differential becomes large enough that could draw enough customers back to "normal" taxi drivers.
nottorp 5y ago
There is no difference price wise between old school taxis and Uber here. Except during the congestion charge times when Uber costs more.
jen20 5y ago
> how badly traditional transportation (starting with taxis) has been damaged by the bezzle. While the ultimate premise might be correct, this is not exactly a compelling example. Before Uber, cabs (in SF) refused to take credit cards, regularly didn’t show up when pre booked and often smelled like they had a rotting corpse in the back. They were “ok” in New York City - though frequently cabs would flout the law if the driver saw you had a suitcase, fearing a ride to JFK. But everywhere else they were completely terrible. At least they accept credit cards now.
- pessimizer 5y ago
  Counterpoint: I found taxis fine. edit: I also didn't have to announce to the entire world where I go. I could flag one down, get in and tell them where I was going, pay, get out, and end the relationship. Talk about privacy concerns - Uber execs were literally tracking decisionmakers and enemies in realtime.
  - jen20 5y ago
    You could do this with Uber for many years also. The need to specify a destination location corresponded with fixed price rides, at least in New York. None of this changes the fact that you can only specify a destination with a cab if there is one to get in, though.
- ylee 5y ago
  >Before Uber, cabs (in SF) refused to take credit cards, regularly didn’t show up when pre booked In September 2005 I spent 20 minutes on a Sunday afternoon trying to get a cab at 19th and Judah before giving up and taking a Muni. (For those unfamiliar with San Francisco, 19th is the main north-south route through the city, so is very very busy at all times.) This is the sort of problem that car sharing has completely solved.
marcosdumay 5y ago
> What they don't talk about is that their "more convenient taxi" ride is heavily subsidized by VC money Yet there are competitors around where I live that pay the drivers more, bill their clients less, and still manage to make a profit.
- Nextgrid 5y ago
  > Yet there are competitors around where I live that pay the drivers more, bill their clients less, and still manage to make a profit. The engineering playground full of microservices and $200k+ employees doesn't come for free.
- spywaregorilla 5y ago
  Who are they?
  - marcosdumay 5y ago
    Nationwide, there is 99 Taxi. Also, many cities have competing applications.
    - mcculley 5y ago
      Uber gets my business when I travel because I am not going to install another app and enter my credit card into it every time I visit a new city.
      - marcosdumay 5y ago
        Well, to be fair, we pay by PIX.... Using credit cards on those small amount apps is such a hassle. This is the reason I don't install many of them.
    - spywaregorilla 5y ago
      In my experience these are usually more expensive. Can't say I am convinced they pay the drivers less either. Uber's getting fairly pricey these days though.
lhorie 5y ago
> What they don't talk about is that their "more convenient taxi" ride is heavily subsidized by VC money This meme really needs to die. Uber did burn VC cash earlier on, especially in places w/ intense competition (e.g. vs Didi in China), but that's not an accurate portrayal of the company anymore. Uber has been a public company for like 3 years now, and they actually posted a profit on adjusted ebitda basis on Q3 last year (with a promise for a larger profit for Q4). The Uber-is-cheaper thing isn't an accurate premise these days either. There have been numerous articles of people complaining about high airport trip fares due to the mismatch between demand and supply curves due to covid lockdowns/reopenings. There were also price hikes in two key markets (SF and LA) partly due to regulation.
- disgruntledphd2 5y ago
  > https://techcrunch.com/2021/11/04/uber-squeaks-tiny-adjusted-profit-in-q3-despite-2-4b-net-loss/ https://techcrunch.com/2021/11/04/uber-squeaks-tiny-adjusted... This suggests that on GAAP metrics, they lost $1.28 a share. Doesn't sound like they're making money.
  - lhorie 5y ago
    Yeah, that's why I qualified by saying it's on adjusted ebitda. The ridesharing industry doesn't use GAP yet under the argument it's still a nascent industry, so the narrative right now mostly centers around showing a trend towards actual profitability quarter after quarter (as opposed to this narrative that 1B+ losses are still somehow just being masked by VC cash injections of equal weight). The being public thing is especially important since it basically means these companies (Uber, Lyft, Grab, Didi, etc) can't rely on cute accounting tricks. It's kinda do or die before the runway ends.
    - disgruntledphd2 5y ago
      Fundamentally, either IPO proceeds or remains of VC money (or debt) are funding Uber, as they're not broke yet.
dv_dt 5y ago
I'm keeping an eye on some of the developing cooperative ride-hailing and delivery apps (eg [1] [2]). As long as you're not trying to allocate a huge amount of R&D to a huge number growth areas, the core mobile hailing services should actually amount to a pretty low overhead to supply. By squeezing out costs of a VC management ownership & hypergrowth objectives, as well as automating more of the core administrative needs, that mix of tech and operating approach should be very competitive for providing modern ride services. [1] https://drivers.coop/ https://drivers.coop/ [2] https://www.kqed.org/news/11849055/tired-of-big-tech-co-ops-appeal-to-delivery-workers-burned-by-gigs https://www.kqed.org/news/11849055/tired-of-big-tech-co-ops-...
SergeAx 5y ago
I don't think Uber can compete with public transportation. It is still an order of magnitude more expensive. Maybe some edge cases like airport/train station rides, but that's it.

by gvb 5y ago

WJW 5y ago

This is always mentioned as the endgame for uber-style monopolism, but it seems to me that taxis are an extremely difficult market to capture in this way. As soon as the VC subsidies disappear and prices rise (as they surely must to pay all those SF SWE salaries), anyone with a car will be able to jump back in. You don't even need an app to start, just loiter around busy places.

halestock 5y ago
Are you implying that random people will just start selling rides ad hoc?
- WJW 5y ago
  Not ad hoc maybe, but if Uber prices would rise a lot I definitely could see a resurgence of the traditional "linger at busy nightlife area" style taxi where you just pay with cash. If the price differential becomes large enough that could draw enough customers back to "normal" taxi drivers.

nottorp 5y ago

There is no difference price wise between old school taxis and Uber here. Except during the congestion charge times when Uber costs more.

jen20 5y ago

> how badly traditional transportation (starting with taxis) has been damaged by the bezzle. While the ultimate premise might be correct, this is not exactly a compelling example. Before Uber, cabs (in SF) refused to take credit cards, regularly didn’t show up when pre booked and often smelled like they had a rotting corpse in the back. They were “ok” in New York City - though frequently cabs would flout the law if the driver saw you had a suitcase, fearing a ride to JFK. But everywhere else they were completely terrible. At least they accept credit cards now.

pessimizer 5y ago
Counterpoint: I found taxis fine. edit: I also didn't have to announce to the entire world where I go. I could flag one down, get in and tell them where I was going, pay, get out, and end the relationship. Talk about privacy concerns - Uber execs were literally tracking decisionmakers and enemies in realtime.
- jen20 5y ago
  You could do this with Uber for many years also. The need to specify a destination location corresponded with fixed price rides, at least in New York. None of this changes the fact that you can only specify a destination with a cab if there is one to get in, though.
ylee 5y ago
>Before Uber, cabs (in SF) refused to take credit cards, regularly didn’t show up when pre booked In September 2005 I spent 20 minutes on a Sunday afternoon trying to get a cab at 19th and Judah before giving up and taking a Muni. (For those unfamiliar with San Francisco, 19th is the main north-south route through the city, so is very very busy at all times.) This is the sort of problem that car sharing has completely solved.

marcosdumay 5y ago

> What they don't talk about is that their "more convenient taxi" ride is heavily subsidized by VC money Yet there are competitors around where I live that pay the drivers more, bill their clients less, and still manage to make a profit.

Nextgrid 5y ago
> Yet there are competitors around where I live that pay the drivers more, bill their clients less, and still manage to make a profit. The engineering playground full of microservices and $200k+ employees doesn't come for free.
spywaregorilla 5y ago
Who are they?
- marcosdumay 5y ago
  Nationwide, there is 99 Taxi. Also, many cities have competing applications.
  - mcculley 5y ago
    Uber gets my business when I travel because I am not going to install another app and enter my credit card into it every time I visit a new city.
    - marcosdumay 5y ago
      Well, to be fair, we pay by PIX.... Using credit cards on those small amount apps is such a hassle. This is the reason I don't install many of them.
  - spywaregorilla 5y ago
    In my experience these are usually more expensive. Can't say I am convinced they pay the drivers less either. Uber's getting fairly pricey these days though.

lhorie 5y ago

> What they don't talk about is that their "more convenient taxi" ride is heavily subsidized by VC money This meme really needs to die. Uber did burn VC cash earlier on, especially in places w/ intense competition (e.g. vs Didi in China), but that's not an accurate portrayal of the company anymore. Uber has been a public company for like 3 years now, and they actually posted a profit on adjusted ebitda basis on Q3 last year (with a promise for a larger profit for Q4). The Uber-is-cheaper thing isn't an accurate premise these days either. There have been numerous articles of people complaining about high airport trip fares due to the mismatch between demand and supply curves due to covid lockdowns/reopenings. There were also price hikes in two key markets (SF and LA) partly due to regulation.

disgruntledphd2 5y ago
> https://techcrunch.com/2021/11/04/uber-squeaks-tiny-adjusted-profit-in-q3-despite-2-4b-net-loss/ https://techcrunch.com/2021/11/04/uber-squeaks-tiny-adjusted... This suggests that on GAAP metrics, they lost $1.28 a share. Doesn't sound like they're making money.
- lhorie 5y ago
  Yeah, that's why I qualified by saying it's on adjusted ebitda. The ridesharing industry doesn't use GAP yet under the argument it's still a nascent industry, so the narrative right now mostly centers around showing a trend towards actual profitability quarter after quarter (as opposed to this narrative that 1B+ losses are still somehow just being masked by VC cash injections of equal weight). The being public thing is especially important since it basically means these companies (Uber, Lyft, Grab, Didi, etc) can't rely on cute accounting tricks. It's kinda do or die before the runway ends.
  - disgruntledphd2 5y ago
    Fundamentally, either IPO proceeds or remains of VC money (or debt) are funding Uber, as they're not broke yet.

dv_dt 5y ago

I'm keeping an eye on some of the developing cooperative ride-hailing and delivery apps (eg [1] [2]). As long as you're not trying to allocate a huge amount of R&D to a huge number growth areas, the core mobile hailing services should actually amount to a pretty low overhead to supply. By squeezing out costs of a VC management ownership & hypergrowth objectives, as well as automating more of the core administrative needs, that mix of tech and operating approach should be very competitive for providing modern ride services. [1] https://drivers.coop/ https://drivers.coop/ [2] https://www.kqed.org/news/11849055/tired-of-big-tech-co-ops-appeal-to-delivery-workers-burned-by-gigs https://www.kqed.org/news/11849055/tired-of-big-tech-co-ops-...

SergeAx 5y ago

I don't think Uber can compete with public transportation. It is still an order of magnitude more expensive. Maybe some edge cases like airport/train station rides, but that's it.