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Where I was during uber's ascent, uber's defining value proposition was circumventing the artificial monopoly created by the taxi medallion system. This "disrup

Where I was during uber's ascent, uber's defining value proposition was circumventing the artificial monopoly created by the taxi medallion system. This "disruption" was actually great, it shook up an industry that needed shaking up (ironically I now use cabs because they have become better than uber where I am. This would not be the case if uber never existed). But even if it did some good "disrupting", I think the article's point is it's not real innovation. Same e.g. with self booked travel, self scan groceries, etc, they are not really innovating, they just change a power balance. So the it ends up being bad when all the capital is chasing these disruptors instead of "innovators" for some definition. The thing it misses, I think, is that many of the big winners (or monopolies if you like) actually do end up funding massive amounts of innovation. Facebook and Google have contributed huge $ to AI/ML research, Amazon Go I think qualifies as real innovation (and I think there are many amazon examples that are more than just an app). Tech is easy to pick on (I've picked on it a lot) and Uber may be an egregious example of a company that disrupted and didn't give back (though they don't make money either). But I think there has been some major innovation come out of tech companies, even if that isn't how they got rich in the first place.

deleted 5y ago
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Retric 5y ago
What’s missed in these discussions is these regulations had a point to them. It’s obvious Uber driving around without passengers increases congestion. Really look at AirBnb, Bird, etc and they all offload externalities from the company and it’s customers to everyone around them. When the basic building model is to break the law, chances are the law had a point and people are going to want a return to normal eventually. The only way they survive long term is if the general population feels it’s the new normal is a useful tradeoff. In the short term they can massively subsidize users, but long term the same basic economic reality sets in so they need some actual innovation.
- horsawlarway 5y ago
  > What’s missed in these discussions is these regulations had a point to them. This varies a lot by area - For example, I'd say the NY medallion regulations had a point to them, and that point was to systematically abuse cab drivers for the profit of the local government and banks. Then for example - in my area (Atlanta) medallion supply was capped at 1600 - the result meant cabs basically didn't exist outside of the airport. Need a ride home from a party? Called a cab company? They won't show up. At all. They will dispatch cab after cab after cab that simply will never EVER show up. Cabs would show up to exactly two places - Nice hotels that paid them under the table to make sure they kept coming, and the airport. Conveniently those two places tended to make circular trips. So are there negative externalities to ride-sharing? Sure. Is it currently better than the previous cab monopolies? I'd argue yes. Do Uber and Lyft really represent a sustainable model? I don't think so.
  - bsder 5y ago
    > This varies a lot by area - For example, I'd say the NY medallion regulations had a point to them, and that point was to systematically abuse cab drivers for the profit of the local government and banks. NY cab medallion regulations were rooted in the aftermath of the Great Depression where it was a race to the bottom and little things like "car maintenance" were viewed as a burden. Funnily enough, Uber and Lyft are in this race to the bottom right now. Hopefully we can stop it before they start kidnapping people. History doesn't repeat, but it sure rhymes
    - horsawlarway 5y ago
      Sure - Regulations need to be a balancing act, though. Without any - Folks will cut every corner they can to save money, which leads to lots of negative externalities. With too many - there's no reason to offer a compelling product, because the regulations define such a static status quo. Both of those are bad. You need a healthy mix.
  - wolverine876 5y ago
    NY medallion regulations auction off street space to the highest bidder, rather than allowing a tragedy of the commons: giving that limited public resource away to businesses who profit on it and consume it to the point where others are restricted from using it.
musicale 5y ago
> Uber's defining value proposition was circumventing the artificial monopoly created by the taxi medallion system Licensing/regulatory evasion is one of the principal strategies that got Uber (taxi services), Airbnb (hotel services) and Paypal (banking services) off the ground and allowed them to compete so effectively against incumbents. Eventually regulation caught up somewhat but the newcomers still seem to enjoy a favorable regulatory/licensing regime. And of course another major strategy for Uber and Airbnb was eliminating full-time frontline employees.
- horns4lyfe 5y ago
  If regulation is the only think keeping the incumbents on top for something like a car service, then that’s a problem.
  - musicale 5y ago
    I was actually describing the opposite situation: regulations helped the newcomers (who evaded them) and hindered the incumbents (who did not.) In the case of taxis, while the medallion system (for example) gave medallion owners a monopoly on regulated "taxi" service, it also discouraged (or outright prevented) them from expanding services and competing effectively against Uber. Moreover the monopoly market's reduced competition did little to encourage innovation or service improvements. That being said, your point is a good one in general, and the same result (regulation preserving incumbents - for a time at least - by increasing barriers to entry and shielding them from competition) repeats itself over and over. One could imagine a powerful company (Facebook) welcoming regulation as a way to preserve or prolong its dominance by creating a regulatory burden that potential competitors would struggle to overcome.
wolverine876 5y ago
> Same e.g. with self booked travel, self scan groceries, etc, they are not really innovating, they just change a power balance. It is more efficient to accomplish the same thing with less time and labor.

deleted 5y ago

[deleted]

Retric 5y ago

What’s missed in these discussions is these regulations had a point to them. It’s obvious Uber driving around without passengers increases congestion. Really look at AirBnb, Bird, etc and they all offload externalities from the company and it’s customers to everyone around them. When the basic building model is to break the law, chances are the law had a point and people are going to want a return to normal eventually. The only way they survive long term is if the general population feels it’s the new normal is a useful tradeoff. In the short term they can massively subsidize users, but long term the same basic economic reality sets in so they need some actual innovation.

horsawlarway 5y ago
> What’s missed in these discussions is these regulations had a point to them. This varies a lot by area - For example, I'd say the NY medallion regulations had a point to them, and that point was to systematically abuse cab drivers for the profit of the local government and banks. Then for example - in my area (Atlanta) medallion supply was capped at 1600 - the result meant cabs basically didn't exist outside of the airport. Need a ride home from a party? Called a cab company? They won't show up. At all. They will dispatch cab after cab after cab that simply will never EVER show up. Cabs would show up to exactly two places - Nice hotels that paid them under the table to make sure they kept coming, and the airport. Conveniently those two places tended to make circular trips. So are there negative externalities to ride-sharing? Sure. Is it currently better than the previous cab monopolies? I'd argue yes. Do Uber and Lyft really represent a sustainable model? I don't think so.
- bsder 5y ago
  > This varies a lot by area - For example, I'd say the NY medallion regulations had a point to them, and that point was to systematically abuse cab drivers for the profit of the local government and banks. NY cab medallion regulations were rooted in the aftermath of the Great Depression where it was a race to the bottom and little things like "car maintenance" were viewed as a burden. Funnily enough, Uber and Lyft are in this race to the bottom right now. Hopefully we can stop it before they start kidnapping people. History doesn't repeat, but it sure rhymes
  - horsawlarway 5y ago
    Sure - Regulations need to be a balancing act, though. Without any - Folks will cut every corner they can to save money, which leads to lots of negative externalities. With too many - there's no reason to offer a compelling product, because the regulations define such a static status quo. Both of those are bad. You need a healthy mix.
- wolverine876 5y ago
  NY medallion regulations auction off street space to the highest bidder, rather than allowing a tragedy of the commons: giving that limited public resource away to businesses who profit on it and consume it to the point where others are restricted from using it.

musicale 5y ago

> Uber's defining value proposition was circumventing the artificial monopoly created by the taxi medallion system Licensing/regulatory evasion is one of the principal strategies that got Uber (taxi services), Airbnb (hotel services) and Paypal (banking services) off the ground and allowed them to compete so effectively against incumbents. Eventually regulation caught up somewhat but the newcomers still seem to enjoy a favorable regulatory/licensing regime. And of course another major strategy for Uber and Airbnb was eliminating full-time frontline employees.

horns4lyfe 5y ago
If regulation is the only think keeping the incumbents on top for something like a car service, then that’s a problem.
- musicale 5y ago
  I was actually describing the opposite situation: regulations helped the newcomers (who evaded them) and hindered the incumbents (who did not.) In the case of taxis, while the medallion system (for example) gave medallion owners a monopoly on regulated "taxi" service, it also discouraged (or outright prevented) them from expanding services and competing effectively against Uber. Moreover the monopoly market's reduced competition did little to encourage innovation or service improvements. That being said, your point is a good one in general, and the same result (regulation preserving incumbents - for a time at least - by increasing barriers to entry and shielding them from competition) repeats itself over and over. One could imagine a powerful company (Facebook) welcoming regulation as a way to preserve or prolong its dominance by creating a regulatory burden that potential competitors would struggle to overcome.

wolverine876 5y ago

> Same e.g. with self booked travel, self scan groceries, etc, they are not really innovating, they just change a power balance. It is more efficient to accomplish the same thing with less time and labor.