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My favorite feature of Uber and Lyft the last several years is that it's essentially a crowdsourced way to transfer wealth from VCs to random users. Operating
by munificent 4y ago
My favorite feature of Uber and Lyft the last several years is that it's essentially a crowdsourced way to transfer wealth from VCs to random users.
Operating every drive at a loss means the rider and drivers benefit and the person holding the bag is some VC who apparently has more money than they know what to do with. Given how many financial structures today seem to flow in the opposite direction and skim a little money from everyone to transfer it to the already-rich, it's nice seeing a system that (completely unintentionally) flows the other way.
- hotpotamus 4y agoI felt the same way until the IPO.
- mperham 4y agoThe VCs made plenty of money in the IPO. It’s the shareholders who are left holding an empty bag.
- icedchai 4y agoYep. I own both UBER and LYFT stock. They have been some of my worst investments.
- robertlagrant 4y agoVC funds are constantly being spent like this. The main unavoidable flow in the other direction is taxes and inflation from printing money. VCs get rich, but they risk a lot of their own money doing so.
- native_samples 4y agoVCs are generally not risking their own money these days. They raise funds from many other people, and sometimes that includes <gulp> pension funds.
- astrange 4y agoSpending your own money is called angel investing. VCs spend other people’s money.
- robertlagrant 4y agoSure - I mean it's their own firm's money under management.
- hef19898 4y agoDrivers work gogs, as in not being employees. Traditional taxi companies, as shitty as their service might be some places, are risking of being driven out of business. Legislation has been ignored. Thebonly ones not holding the bag are the VCs, and users. Everyone else is. And all that in the pursuit of an elusive monopoly fuel by cheap, and later dumb, money. Oh yeah, talking about dumb money, retail investors are holding the bag as well.
- Permit 4y ago> Traditional taxi companies, as shitty as their service might be some places, are risking of being driven out of business. This is not the downside you think it is. So help me if I could snap my fingers and make this happen I just might do it.
- gcheong 4y agoBut what makes them so awful? Most likely it was the medallion system that limited competition in the market so maybe there is a system somewhere in-between that and the unprofitable ride share systems that work well for everyone. I just got back from Madrid and taxis were plentiful and metered with a flat fare to and from the airport. They all have the same markings so you can tell they are taxis but there are a variety of vehicles from Teslas to bare bones stick shifters being used. Uber was barely a thing there but there was an app called Free Now that many of the cars had on them.
- admax88qqq 4y agoSo basically they had Uber but as a different brand. If you remove the medallion system, let people drive their own cars, and coordinate with riders via an app, you have Uber.
- gcheong 4y agoThe difference is there is some regulation around it because they are all metered so everyone is charging the same rates and I suspect it’s a better deal for the drivers and customers overall. Btw I didn’t use the app once as it was just easier to hail from the street.
- princevegeta89 4y agoIsn't that how a majority of inflated startups work? VC money moves the bus for a quite a long time and if profitability can't be figured out, it will come out in the form of layoffs and downturns. Take Doordash for example, every delivery they do with is powered by VC money.
- dasil003 4y agoDoorDash IPO'ed 18 months ago.
- princevegeta89 4y agoYeah, but still not turning any profit. And probably still using leftover VC money. With the stock value way down, I wonder if they have issues pumping cash anymore
- walrus01 4y agothe drivers don't really benefit that much, because after you subtract the cost of the purchase of a suitable car, repairs/maintenance, tires, fuel and so on to calculate the fully loaded cost per mile of operating a lyft car for several years, the wage remaining for the driver (after subtracting the US income tax as a 1099) is often under the minimum wage (and far under the living wage) in many major metro areas. Using Seattle as an example and its $15/hr minimum wage.
- aetherson 4y agoIt's a strong labor market. Nothing stopping lyft drivers from getting jobs in food service or warehouses or a variety of other jobs that have few requirements to qualify for.
- walrus01 4y agoI think there's a big reliance on the part of these employers in recruiting and retaining employees who are either less literate, less informed, more gullible, or more servile than the average service industry worker.
- AYBABTME 4y agoYou don't need a work visa to drive an Uber.
- aetherson 4y agoIs that in fact is a major differentiator between lyft/uber driving and other jobs (I'm dubious), then it sounds like a major and useful advantage of the platform that is reasonably worth paying for, albeit also one that is fragile.
- black_13 4y ago
- WalterBright 4y agoIf it didn't work for them, they wouldn't drive.
- 1270018080 4y agoThe early VC's cashed out and made billions. Retail investors are paying for these losses.
- s5300 4y agoI once had uber x drives (that’s what the solo is called right?) in San Diego going… at least 5 miles. Sorrento Valley/La Jolla. After a month or two I started having rides discounted to literally as low as $3.12 All I could think was that “somebody is definitely losing a lot of money here & it’s not me” Was very interesting. I know the driver wouldn’t be doing that if he was making $3 for the trip.
- rglullis 4y agoIt could also be seen as a very convoluted way to subsidize the car industry and to stall the push for better public transit.
- rzz3 4y agoI always see people coming back to public transit in discussions like this, but there seems to be some kind of fundamental disconnect. Uber/Lyft are for people who don’t have that kind of time.
- ncr100 4y agoAaaand the disruption to the faltering regulated Taxi system, eating that for lunch. Travis K is still out there. Doing things.