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My key takeaways: 1. Uber is actually a higher cost/less efficient producer of urban car services than the taxi companies it has driven out of business 2. Ind

• ttcbj 5y ago
  These are all interesting points. However, I recently used Uber Premier twice in Miami, after not using any car service for two years, and the experience was excellent. It was fast, friendly, the car was nice, and I was happy with the price. For my use case, I am happy to pay more to get a better service, but it didn’t really seem that expensive. Both drivers had been doing Uber for a long time, which would be surprising if they were getting ripped off. So, as much as these points are interesting, I’m not sure they fully capture the situation.
  • sbarre 5y ago
    > Both drivers had been doing Uber for a long time, which would be surprising if they were getting ripped off Did you happen to ask if this was their full-time gig, or if they were doing it as supplementary income?
    • bombcar 5y ago
      The best Uber I ever got picked up in was a high end Mercedes driven by a bored retiree wanting something to do on weekends. Clearly that ride was subsidized by a number of things and wasn’t sustainable. But I don’t expect limo service at taxi rates - and I’ve started noticing that some Ubers have been literal taxis with an Uber and Lyft sticker on them. Lately I’ve been using shuttle service or just car service.
    • xwolfi 5y ago
      It's probably a side gig, which is amazing. It means taxi didn't need to be a job all along.
      • seoaeu 5y ago
        Amazing for whom? Certainly not for the gig workers who don’t get employee benefits and are now sometimes making sub-minimum wage after accounting for gas and deprecation
        • scarface74 5y ago
          It’s only because of the US’s ass backwards health care system that people depend on their employee for health care.
  • Broken_Hippo 5y ago
    Both drivers had been doing Uber for a long time, which would be surprising if they were getting ripped off. If you need to buy food and put a roof over your child's head, you will put up with a lot of things. Being "ripped off" isn't really part of the equation: You can know you are being ripped off while still realizing this is the best way to provide for your child. Folks aren't working fast food for 20 years because they are getting treated well. Same with Uber drivers.
• slfnflctd 5y ago
  > Uber charges drivers 25-30 percent You might be a little low there. In my direct experience as a driver pre-covid, it was close to 50%, and many drivers in the relevant subreddits have reported it frequently being more than that since. Imagine hearing a passenger complain about their $15 fare when you only see $6 of it (out of which you still have to cover your gas usage). 25-30 percent seems reasonable in comparison.
  • dfadsadsf 5y ago
    That’s not full story though - with incentives Uber cut is much smaller and in many cases drivers actually got more than the customer paid.
    • chupchap 5y ago
      That's no longer the case. It was the situation at the beginning, but multiple cab folks have told me that incentives have really reduced in the last four years.
      • chrischen 5y ago
        To be fair the last two years were not kind to ride sharing.
        • smilespray 5y ago
          I wish people would stop calling it ride sharing, as it implies that one of your buddies is giving you a lift. It's just a marketing term. Uber and Lyft are (gig economy) cab companies.
          • chrischen 5y ago
            Well, shared rides were pretty popular pre-pandemic. Cabs never really did shared rides (at least not legitimately). I pretty much always opted for the shared option whenever I Uber’d or Lyfted.
• nerdponx 5y ago
  With this many billion dollars on the line, one can never be too cynical. One has to wonder if this has been the endgame all along: driving taxi services out of business, replacing them with a monopoly where consumers pay the same price (or higher) and where drivers are paid less. I will say that services like Uber have been very beneficial for areas that were previously underserved by traditional taxi companies. But that alone probably doesn't justify this multibillion-dollar wealth transfer operation.
  • chaostheory 5y ago
    The end game was AI driverless cars. It would solve the economic problem assuming they could get to level 4 in time.
  • scarface74 5y ago
    I would gladly “pay” the same price or higher for Uber than for a taxi. A better service should cost more. Then again, when I’m using Uber it’s either for business travel (someone else’s money) or vacation (not price sensitive).
  • lelanthran 5y ago
    > One has to wonder if this has been the endgame all along: driving taxi services out of business, replacing them with a monopoly where consumers pay the same price (or higher) and where drivers are paid less. Only works if you manage to get a govt monopoly and exclusive access tot he drivers. If you don't have those two things there's no point in trying to landgrab under cost and price-gouge later. For something like Uber, I figure a good team might push out a working solution in a month. The barrier to entry is so small, and travellers have literally no brand loyalty, that the minute the price goes too high there'll be someone else trying to get a cut of the (now profitable) business.
    • projektfu 5y ago
      I think they were hoping for network lock-in. Drivers might carry 2 phones but probably not 3. Riders will check 2-3 apps at most. Incumbents end up in a prisoner's dilemma where raising prices in concert usually pays off and defection is actually costly.
• subroutine 5y ago
  Nice summary. A thought on point #2: (from a total costs perspective) is this still true considering yellow cab drivers still need to acquire, maintain, and insure their personal use vehicle?
  • westcort 5y ago
    Good point. I hear the insurance for the commercial vehicles is much higher, too.
• jmyeet 5y ago
  I don't disagree with your points but let me give you some counterpoints: 1. Taxi services are balkanized; 2. Many tax services don't allow you to order a taxi ahead of time. You have to flag one down (eg NYC). For ordering a car, you need to otherwise deal with an (expensive) car service; 3. Uber made the payment process seamless and I cannot overstate how important this is as a user. I hate dealing with NYC yellow cabs, card readers that don't work (or actually have skimmers) and a stupid touch screen where your minimum tip option is 20%, etc; 4. The ability to rate both drivers and passengers may have its issues but IME it tends to keep passengers on better behaviour and cars in better condition; 5. Taxis have weird edge cases. In NYC, for example, getting a cab at 3-4pm was nigh-on impossible because of the shift change. It also means that drivers near the end of their shift may not take you places too out of the way; 6. Whatever the costs of owning and maintaining a car are, the traditional taxi system has huge taxes in the form of medallion costs and quotas. These costs are directly passed on to consumers; 7. Uber may well have a lot of value in value-added services. They're trying this with Uber Eats, for example. I can't say if these will be successful or not. I've certainly seen cities where I've tried to use Uber Eats only to be told "There are no drivers available". Obviously the drivers haven't signed up because there are plenty on Doordash and Seamless/Grubhub. 8. I see the flexibility for drivers as a huge plus rather than the rigid shift system of being a taxi driver. 9. The barrier to entry as a driver tends to be low because for many people they have a car anyway. Taxis died because it's a horrible user experience that was propped up by a government-enforced monopoly. Good riddance. I mean I feel bad for NYC taxi drivers who were lured into paying a fortune to buy a medallion before the market crashed, many of whom had limitd English proficiency and were the victims of predatory practices that should be illegal.
  • westcort 5y ago
    These are valid points and good counterpoints to what the article presents.
  • omegalulw 5y ago
    > Taxis died because it's a horrible user experience that was propped up by a government-enforced monopoly. This cannot be understated. Also, as an introvert, negotiating with drivers, especially those that don't drive by the meter was always stressful, I mostly ended up overpaying.
• hatchnyc 5y ago
  > Uber charges drivers 25-30 percent without coming close to covering their actual costs I mean this is it, right? This is the big one. All these "tech" companies that are not actually selling software taking huge cuts off the top line, this can't be sustainable. You can own the market for a while, but sooner or later someone is going to come along and disrupt you.
• deleted 5y ago
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• kingcharles 5y ago
  Good points, but I would add that what Uber is doing now is just carving out a chunk of the market for what is coming in the next few years. Most of your points revolve around human drivers and the gasoline-powered vehicles they own. The future of Uber is probably a majority of driverless vehicles that are corporately-owned. That is a vastly different model.
  • oblio 5y ago
    > The future of Uber is probably a majority of driverless vehicles that are corporately-owned. That is a vastly different model. And the future of BP and Shell is cold fusion reactors. Any day now!
  • WithinReason 5y ago
    Or people renting out their own vehicles through Uber
• xapata 5y ago
  In some countries, taxis are so often criminal that tourists are warned to avoid them. In some less extreme places, drivers simply never use the meter and the passengers must negotiate every ride. Uber and its competitors have been wonderful for hailing rides in these places.
  • creamyhorror 5y ago
    I remember areas of Bali where local cabs would threaten and drive away cabs from outside the area, including private-hire ones ordered via app. Their argument was local drivers should be supported, but the cab prices were really high for short rides as a result (because the clientele was foreign tourists, many from Australia and Europe).
  • prmoustache 5y ago
    Apparently in Mexico it used to be the case 5years ago but nowadays you can't rely on Uber either anymore if you are a woman and you don't want to just be a dead raped corpse the next morning. Source: mexican gf and her family still living there. Not sure if the issue comes from Uber not giving out drivers info, drivers blaming someone borrowed their car but not disclosing identity of supposed borrower or police not even asking but it seems to be the true reality. Also a quick google search shows there are occurences of this in the USA as well. The fact the driver may be charged and found guilty after that sadly do not prevent the crime from happening in the first place.
    • projektfu 5y ago
      "In Mexico" is really too broad to say what to expect. Cancun, Tijuana, CDMX, and Queretaro, as examples, are going to be vastly different experiences.
      • prmoustache 5y ago
        Well Cancun is not mx anymore. GF is from Queretaro, which is somewhat considered a safe place. She would not take an Uber alone anymore as she used to do.
• faller 5y ago
  > 1. Uber is actually a higher cost/less efficient producer of urban car services than the taxi companies it has driven out of business This doesn't seem to be true, given that in some countries you have taxi companies providing services through Uber, as well as their own ride hailing platforms. > 2. Individual Uber drivers with limited capital cannot acquire, finance, maintain and insure vehicles more economically than Yellow Cab I'm not sure this belief holds any truth as well. I mean, isn't the biggest cost associated with Yellow Cab the taxi medallion, which represents a +$80k additional charge over the vehicle?
  • projektfu 5y ago
    It's a one time charge and also can be resold if needed.
    • faller 5y ago
      > It's a one time charge and also can be resold if needed. It's a hefty one-time charge that is not required to operate a Uber and thus can baloon the initial investment between 2x and 3x, and at best is capex that you have to tie down. Therefore, how is that an advantage?
• sebastos 5y ago
  I have absolutely no vested interest in defending Uber, but every time one of these threads pops up I feel compelled to throw cold water on it because this website is so damn obsessed with predicting Uber's doom. I have comments that are 6 years old saying "no, uber is not dying", with a thread full of angry pitchforks sure I am wrong. Nobody cares if Uber as a whole is more "efficient" as measured by some global measure of dollars invested into the service. They care whether -their- individual lived experience is preferable. The obvious takeaway is that urban residents are happy to pay more money overall on car services, so long as those services provide a higher quality experience. People do not like feeling like the end of a cab ride might result in a game of "pretend the card reader doesn't work", people don't like to feel like their destination is an imposition on the driver who will now sit up front fuming about where you've taken him. People don't like having their sense of decency pitted against each other to win a cab in a reasonable amount of time without rudely upstreaming someone. People don't like waiting outside in the cold. People don't like being surprised by how high the meter is when they get out. People don't like having no recourse when they accidentally leave their phone behind besides calling a rude dispatcher. People like cars with nicely maintained interiors that don't smell weird. How hard is this to understand? The average ride experience you get in an Uber is better. Uber pioneered that improved customer experience by figuring out a solution (some social, some technical) to the biggest friction points. Uber and Lyft are the 700lb gorillas in the rideshare company space, which absolutely DOES have network effects, despite the facile claim otherwise in the article. This is the basis for thinking these companies have a promising future. It's that simple. The size of the circlejerk predicting that it's all going to fall over tomorrow is so embarrassingly, transparently motivated by _hoping_ that it's going to fall over tomorrow.
  • telchior 5y ago
    Excellent commentary on all the other reasons Uber succeeded. One other comment I'd have is that taxi services are spectacular in some places. Get a black cab in London or Tokyo and you're overwhelmingly likely to experience a better ride than Uber can offer. But the list of similar cities is extremely short; it just happens that a lot of these doomsayers live in them. One also doubts that the guy writing this article ever needed to take a cab anywhere.
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• AtlasBarfed 5y ago
  My takeaway is that there is a big reason that the "robotaxi" is still on the leaderboard of VC investment plays. I'm surprised that Uber/Lyft never tried lowtech self driving: basically have drone operators guide the cars when they are not in use, and then just monitor/track the drivers when they use them. Then a "sweeper crew" can handle the outliers/stranded cars. Basically the scooter model but with cars.
• michaelcampbell 5y ago
  > 1. Uber is actually a higher cost/less efficient producer of urban car services than the taxi companies it has driven out of business How is its cost/efficiency in the areas where there ARE no taxis? I have nothing but "gut" to back this up but I live in one of the areas where aren't (m)any, and uber/lyft is infinitely more efficient here.