8 ms·

“I drove for Lyft for a week and learned its business model is broken”

106 points by jseliger 4y ago

itake 4y ago
I feel like they forgot to highlight the additional features Lyft brings to the table that the phone operator model doesn’t: safety. When Lyft and uber first launched, passengers and drivers were raping, murdering, and robbing each other. Both companies quickly added safety controls to ban repeat offenders and keep everyone safe on the platform. With a phone call model, you can’t effectively police the passengers.
- miguelazo 4y ago
  With a phone call model, you can still select your drivers more carefully. Remember that Uber and Lyft actually left the Austin market because they refused to comply with basic best practices for ensuring passenger safety-- like submitting drivers to fingerprint checks.
  - namdnay 4y ago
    You can. But did they?
    - miguelazo 4y ago
      Yes. Depends on the market, but in NYC you need fingerprints AND a drug test. https://portal.311.nyc.gov/article/?kanumber=KA-03043 https://portal.311.nyc.gov/article/?kanumber=KA-03043
  - itake 4y ago
    What about driver safety? How does fingerprinting the driver reduce criminal passengers from calling an Uber to rob?
- brianwawok 4y ago
  In NYC def got a Lyft where the driver and the car didn’t match who showed up. “Oh my car broke borrowed my cousins”. Reported it but sure it happens at least somewhat. At least there is a process, unlike bad cab drivers.
  - itake 4y ago
    yep. Many times it's because the driver was banned and is renting someone else's account. Definitely don't get in that vehicle.
- jrochkind1 4y ago
  Doesn't seem to be working. > Uber and Lyft Drivers Are Being Carjacked and Thieves Are Then Robbing Passengers They Pick Up [in Baltimore, where I live] https://sfist.com/2022/12/02/uber-drivers-are-being-carjacked-and-thieves-are-then-robbing-passengers-they-pick-up/ https://sfist.com/2022/12/02/uber-drivers-are-being-carjacke...
  - kube-system 4y ago
    I think the question is not whether the number is non-zero, but how it compares to taxis.
    - deleted 4y ago
      [deleted]
  - itake 4y ago
    This technology reduces repeat offenders, because you need to selfie-verify before you use the app. Banned users can't come back on to create accounts. Also, the selfie verification reduces crime b/c criminals are less comfortable to commit a crime once the app has their image. It's not a perfect system, but as a driver, I would trust it more than no system that taxi companies have.
Waterluvian 4y ago
If Uber is taking 28% according to its very large dataset and Lyft is taking 48% according to a single driver in a single region for a small amount of time, then I suspect the most likely explanation is the data is deficient. I suspect this because I can’t see how Lyft could ever be competitive in the market if it is taking a far larger chunk: either they’re drastically underpaying drivers or overcharging customers compared to Uber. Why would either group endure that?
- atdrummond 4y ago
  This kind of presumes that Lyft and Uber have completely similar markets and user overlap. I know of many Midwest communities, for example, where Lyft is the only option.
  - Waterluvian 4y ago
    Doesn’t that support the argument that a single driver in one region for 48 hours of driving cannot possibly be representative?
    - atdrummond 4y ago
      I don’t disagree with that claim either.
- notahacker 4y ago
  Doesn't seem unreasonable to believe that 28% across all markets including ones where Uber is subsidising their rides to try to crush the competition or make up for driver shortages translates to something more like 48% take from a typical driver in many established markets where they don't have much competition (from apps or surviving taxi firms) or shortages of drivers of regular vehicles during daylight hours...
- dylan604 4y ago
  Is Uber still subsidizing the cost of the ride with VC money? In my area, Lyft if regularly more expensive than Uber. This is based on other people telling me the prices for Uber as I do not have an account. I was recently given a $100+ fare for a ride that is normally ~$20. I kept checking back through out the day, and the lowest I saw was ~$50. The person I was trying to visit showed me the same route with Uber was ~$30. All of this to say from a single perspective that it does appear that Lyft is charging more. It also suggests why I so infrequently use Lyft because I'm not paying $100 to go <20 miles. So maybe I'm not enduring it like you say. There are times where I definitely choose to not go somewhere based on price alone.
miguelazo 4y ago
Disgusting that drivers are making this little. And Lyft is supposed to be the better of the two evils? I wonder how the alternative platforms in places like Austin are doing and what their split is these days. I was there recently and was surprised that Lyft had been allowed to operate-- apparently the state government gave them permission to operate over the local ordinances that had been passed requiring fingerprints, etc. I enjoyed the depiction of the retro Lyft operating in the old taxi model. I agree that would probably be more efficient. These companies, like most tech, relied on extremely lax regulation, super low interest rates, QE, and dumb VCs to produce a myth of greater efficiency. It was enough to undermine an entire industry. And to think driving a taxi used to be a middle class job in some places. No wonder so many medallion owners committed suicide.
- coding123 4y ago
  What happened? 400k salaries for developers happened.
  - miguelazo 4y ago
    And don't forget the "product managers" and executives. Much harder to justify that type of capture in call center model.
  - magic_man 4y ago
    Some companies make enough in cash flow to justify paying engineers that much like facebook, google, or apple. Lyft doesn't generate the cash flow or income to do it.
    - miguelazo 4y ago
      Only as long as advertisers remain stupid. https://us.macmillan.com/books/9780374538651/subprimeattentioncrisis https://us.macmillan.com/books/9780374538651/subprimeattenti...
  - spaceman_2020 4y ago
    But how else will we create 10,000 microservices to power our taxi app?
insane_dreamer 4y ago
> I drove for Lyft for a week Not a lot of data points
- miguelazo 4y ago
  Good enough for me.
bananafly 4y ago
What other gig economy companies does this apply to?
- black_13 4y ago
  [dead]
weego 4y ago
The model of finding the thinnest gap between business and customer possible, drive a massive VC backed wedge into it, ignore unit price and hope you can figure it out before you run out of series raises has been a staple of the US scene for years, this isn't exactly shocking. We've also seen the central conceit of "you're the product" in the sense of some next wave behind the scenes user/consumer data market be exposed for literally just ads, same as it ever was.
yardie 4y ago
I drove for Lyft and Uber for about a month. I used the $.55/mi deduction to bring my effective tax rate down. 2-4 hours a weekend * 4 weekends for effectively beer and wings money! It's the only way the business makes sense, but I know quite a few drivers doing it full-time and they enjoy it. Set your hours to work around family, school, etc.
- ceejayoz 4y ago
  Aren’t you depreciating your car by more than you’re saving in taxes this way?
  - loeg 4y ago
    Probably yes.
  - Marsymars 4y ago
    Depends on the vehicle. Mine wouldn’t, but it also aged out of Uber eligibility this year.
crazygringo 4y ago
None of this shows Lyft's business model is broken. In fact it shows it's working splendidly for Lyft. The fact that Lyft takes a different percentage of each ride -- from less than 20% to more than 70%, in the author's experience -- is a reflection that at different times of day, on different days, in different locations, there are different mismatches between driver supply and passenger demand. Lyft obviously pays the minimum needed to ensure available drivers, and charges the most that passengers are willing to pay. None of this is surprising -- it's how a market intermediary works. As more drivers sign up and are active in relation to passengers, driver pay decreases. As more passengers need rides in relation to drivers, passenger fares increase. And vice-versa. The idea that taxi dispatchers could be more efficient, or as efficient, is ludicrous. Does nobody remember regularly waiting 30-60 minutes for a taxi from a dispatcher? To answer the author's question, of course Lyft could make deeper cuts while keeping the core business running. But most of running a business is about reinvesting profits/capital into growth when growth seems available. After all, the very first sentence on Wikipedia makes it clear all the things it's trying to do at once, of which ride-hailing is one of many [1]: > Lyft, Inc. offers mobility as a service, ride-hailing, vehicles for hire, motorized scooters, a bicycle-sharing system, rental cars, and food delivery in the United States and select cities in Canada. It takes a lot of employees to be doing all those things. [1] https://en.wikipedia.org/wiki/Lyft https://en.wikipedia.org/wiki/Lyft
- lallysingh 4y ago
  The argument I read was that they're charging a higher percentage than the previously-profitable taxi, yet still losing money overall.
  - UncleEntity 4y ago
    Plus, I might add, the drivers are responsible for 100% of the expenses of operating the vehicle. Back when I drove cabs the company owned the car and was responsible for all maintenance and insurance requirements. I just had to put in gas and if it broke down they’d send out a tow truck and give me another car. It was more expensive this way but once I got the lease + gas paid I kept everything I made. Some days I’d have the car paid off in the first couple trips and some days I ended up working for free but I always ended up making enough to pay my rent and eat. I have to take Lyft whenever I’m in Phoenix because they destroyed the taxi industry there and I have a pretty good general idea how much it costs to get places in a cab and Lyft is currently charging as much if not more than the cabs charged while giving the drivers a smaller slice of the pie. Last time I went to visit my parents Lyft charged me ~$50 while giving the driver (IIRC) $18 plus a whole $0.50 gas surcharge for a 23 mile trip. In a cab it probably would have cost $56 (I’m really good at estimating it turned out) which would have all gone to the driver to do with what the will. Beginning of the shift that’s half their lease, end of shift it’d be all profit. The last company I drove for the owner was really good to the drivers and would do things like adjust the lease price depending on the market conditions and he had no problems turning a profit up until Covid hit.
solardev 4y ago
I always wondered if the Lyft model could be done more fairly, like as a worker owned co-op of drivers who then pay a small group of devs to build and maintain the dispatch app for them, while keeping the majority of their fare.
- Raed667 4y ago
  There was a trend around 3 years ago, where every uber driver that asked about what i do for a living, then asked me how costly would it be for me to build them a smaller version of the platform. I don't get that question much today.
- namdnay 4y ago
  I don’t see that working across cities/countries. Lyft/Uber have a powerful network effect in that with one app you can get a cab in nearly every major city in the world
  - jrochkind1 4y ago
    A co-op of co-ops is a thing that can exist. but yes, has some additional challenges organizing and capitalizing, when our society is set up for private capitalist ownership.
  - solardev 4y ago
    I'd be very happy to use this domestically and another service abroad.
- black_13 4y ago
  [dead]
- TulliusCicero 4y ago
  I think it'd be hard for that to work out. The incentive would be to underpay/underhire technical staff, and you'd probably have a much inferior app/dispatch experience, which customers wouldn't tolerate.
cortesoft 4y ago
Let’s suppose the author is correct that this new model is less efficient and more expensive to run than a traditional taxi dispatcher. That doesn’t mean a traditional taxi dispatcher can survive in the modern world. Riders would not support a traditional taxi dispatch when they have the option to use a Lyft/Uber style of ride; it is way more convenient for the rider to use an app than a traditional taxi service. Pre-Uber and Lyft, maybe a taxi service had better margins. That is no longer the case in this new market. It doesn’t matter how efficient your business model is if customers don’t want to use your service.
jrochkind1 4y ago
Wait, if the demand-based "surge" pricing doesn't go to the driver, to incentivize driving in periods where more drivers are needed to meet demand, which was always what the line was...
spaceman_2020 4y ago
No one in tech will admit it, for obvious reasons, but the reality is that startup tech salaries have grown beyond control and sanity. Employee compensation is the biggest expense item for most tech-first companies. If your engineers can't make you a profit, perhaps said engineers shouldn't be paid that much.
- notRobot 4y ago
  It could be argued that tech "is just one of the few fields whose salaries have managed to somewhat keep pace with the insane cost of living.": https://twitter.com/nhuntwalker/status/1604115088406745088 https://twitter.com/nhuntwalker/status/1604115088406745088
- edgyquant 4y ago
  All I can say is wow that’s a way different interpretation then I. It’s not the employee compensation that’s the problem here: it’s VCs dumping billions into unprofitable businesses and then trying to figure it out once they’re a nationwide brand/“monopoly.” Uber, AirBnB etc got as big as they are by breaking the law literally in a lot of places (ignoring regulations with a bad faith reasoning that it’s not the same because they’re an app) At decent places with a profitable business model the workers tend to generate many times their salary expenses.
- CSSer 4y ago
  We’re supposed to take the blame for people’s bad ideas too? I have friends who were willing to personally take on that risk who are making 5x my salary at a minimum to own and run their own companies. Meanwhile, as a senior in a private org, I’m being forced into tech-adjacent roles because there’s no one else competent enough to do the administrative and operational duties required to support the growing volume of work. I hear different, but just as bad, tales from startups. Look, I love what I do. I’d probably work for less if it made sense, but you make it sound like I’m somehow the one holding out for more when the recruiters are the ones who won’t leave me alone, and no one is lining up to make my role or responsibilities any easier, so I’ve gotta admit this is a pretty rich take.
  - 4y ago
AlbertCory 4y ago
> Google’s workplace culture has had a big influence across Silicon Valley—including at Lyft, which like Google has long offered employees free lunches. > But not every company works like Google. This. You don't need a lot of high-priced technical talent to run Lyft. "Frugal" should be the watchword. I just took a Lyft to the Everett airport near Seattle. There are three big things that made me use Lyft and not have the hotel call me a taxi, and I suspect it's these and not ride-sharing that make Uber/Lyft popular. 1) I could book it myself through my phone and give it the destination. 2) The driver already knew where we were going. I didn't have to tell him. 3) It was already paid for and I didn't have to interact with the driver there, either. Timothy's thought experiment is worth carrying out. Most of these are just straight-up customer service things that taxi companies could do if they really cared (and if the government let them). Some of them they already do: the hotel would have told the taxi driver I was going to the airport.
loandbehold 4y ago
Would it be possible to create a lean competitor to Uber/Lyft that would pay out full rider fare to the driver? Let's call it RideDirect. It can require passengers to setup ACH payment to avoid credit card fees. Such system could be operated by a small group of software engineers (say 10 devs). The cost would only be cloud costs and salary for 10 devs. These costs can be covered by displaying non-intrusive location-based ads to the passenger. It would be easy to recruit drivers by playing up the unfairness of Uber/Lyft, "Lyft pays you $20 of $80 fare. Don't let fat cats rob you blind. Drive for RideDirect instead".
- jareklupinski 4y ago
  whenever I fly into a new European country/city, I wonder if I'll have to set up yet another account with whichever localized version of "RideDirect" is currently operating there before I can leave the airport since the riders are the ones paying for the service, it may be more impactful to make an app designed for them, which then plugs into the independant smaller networks of drivers seamlessly. then I can fly into Hamburg and just tell whichever service is operating in that city that I'm around and need a ride. maybe even let them compete for the best fare...
  - hbrn 4y ago
    > it may be more impactful to make an app designed for them, which then plugs into the independant smaller networks of drivers seamlessly My understanding is that Uber already does that, though I don't know how big is the scale. There are cities where Uber operates only through a bunch of intermediaries (essentially taxi mini-companies). A driver cannot signup with Uber directly, they have to go to one of these companies.
- hbrn 4y ago
  It is, but Uber & Lyft got a billions of cheap dollars they spent on growth. Your growth is going to be way slower than theirs. There's also chicken & egg problem: no-one is going to use your app if it only has 5 drivers, and other drivers won't join your app if nobody uses it. Again, you'll need a lot of money to gain momentum in just a single city. It will be hard to get those funds from VCs, since your business model is less lucrative.
trilbyglens 4y ago
I have a friend who used to work in accounting at Uber freight, and he said it was the only division that actually made money at all, and even that was quite poor. If it were not for mountains of VC cash keeping these things going they would simply fail, good UX or not. Unit economics are the physics of the business world, and Uber and lift just simply have shitty numbers full stop. The VC money has let these companies escape gravity for this long but it likely won't last forever.
kthejoker2 4y ago
Main complaint is still these were originally pitched as ridesharing / "make money while you carpool" but quickly (d)evolved into a highly decentralized taxi system. There is an alternate universe where every Uber ride always has 4 folks and traffic has reduced, instead of a ton more idling cars milling around and then driving single passengers all the way across town.

106 points by jseliger 4y ago

I feel like they forgot to highlight the additional features Lyft brings to the table that the phone operator model doesn’t: safety. When Lyft and uber first launched, passengers and drivers were raping, murdering, and robbing each other. Both companies quickly added safety controls to ban repeat offenders and keep everyone safe on the platform. With a phone call model, you can’t effectively police the passengers.

miguelazo 4y ago
With a phone call model, you can still select your drivers more carefully. Remember that Uber and Lyft actually left the Austin market because they refused to comply with basic best practices for ensuring passenger safety-- like submitting drivers to fingerprint checks.
- namdnay 4y ago
  You can. But did they?
  - miguelazo 4y ago
    Yes. Depends on the market, but in NYC you need fingerprints AND a drug test. https://portal.311.nyc.gov/article/?kanumber=KA-03043 https://portal.311.nyc.gov/article/?kanumber=KA-03043
- itake 4y ago
  What about driver safety? How does fingerprinting the driver reduce criminal passengers from calling an Uber to rob?
brianwawok 4y ago
In NYC def got a Lyft where the driver and the car didn’t match who showed up. “Oh my car broke borrowed my cousins”. Reported it but sure it happens at least somewhat. At least there is a process, unlike bad cab drivers.
- itake 4y ago
  yep. Many times it's because the driver was banned and is renting someone else's account. Definitely don't get in that vehicle.
jrochkind1 4y ago
Doesn't seem to be working. > Uber and Lyft Drivers Are Being Carjacked and Thieves Are Then Robbing Passengers They Pick Up [in Baltimore, where I live] https://sfist.com/2022/12/02/uber-drivers-are-being-carjacked-and-thieves-are-then-robbing-passengers-they-pick-up/ https://sfist.com/2022/12/02/uber-drivers-are-being-carjacke...
- kube-system 4y ago
  I think the question is not whether the number is non-zero, but how it compares to taxis.
  - deleted 4y ago
    [deleted]
- itake 4y ago
  This technology reduces repeat offenders, because you need to selfie-verify before you use the app. Banned users can't come back on to create accounts. Also, the selfie verification reduces crime b/c criminals are less comfortable to commit a crime once the app has their image. It's not a perfect system, but as a driver, I would trust it more than no system that taxi companies have.

Waterluvian 4y ago

If Uber is taking 28% according to its very large dataset and Lyft is taking 48% according to a single driver in a single region for a small amount of time, then I suspect the most likely explanation is the data is deficient. I suspect this because I can’t see how Lyft could ever be competitive in the market if it is taking a far larger chunk: either they’re drastically underpaying drivers or overcharging customers compared to Uber. Why would either group endure that?

atdrummond 4y ago
This kind of presumes that Lyft and Uber have completely similar markets and user overlap. I know of many Midwest communities, for example, where Lyft is the only option.
- Waterluvian 4y ago
  Doesn’t that support the argument that a single driver in one region for 48 hours of driving cannot possibly be representative?
  - atdrummond 4y ago
    I don’t disagree with that claim either.
notahacker 4y ago
Doesn't seem unreasonable to believe that 28% across all markets including ones where Uber is subsidising their rides to try to crush the competition or make up for driver shortages translates to something more like 48% take from a typical driver in many established markets where they don't have much competition (from apps or surviving taxi firms) or shortages of drivers of regular vehicles during daylight hours...
dylan604 4y ago
Is Uber still subsidizing the cost of the ride with VC money? In my area, Lyft if regularly more expensive than Uber. This is based on other people telling me the prices for Uber as I do not have an account. I was recently given a $100+ fare for a ride that is normally ~$20. I kept checking back through out the day, and the lowest I saw was ~$50. The person I was trying to visit showed me the same route with Uber was ~$30. All of this to say from a single perspective that it does appear that Lyft is charging more. It also suggests why I so infrequently use Lyft because I'm not paying $100 to go <20 miles. So maybe I'm not enduring it like you say. There are times where I definitely choose to not go somewhere based on price alone.

miguelazo 4y ago

Disgusting that drivers are making this little. And Lyft is supposed to be the better of the two evils? I wonder how the alternative platforms in places like Austin are doing and what their split is these days. I was there recently and was surprised that Lyft had been allowed to operate-- apparently the state government gave them permission to operate over the local ordinances that had been passed requiring fingerprints, etc. I enjoyed the depiction of the retro Lyft operating in the old taxi model. I agree that would probably be more efficient. These companies, like most tech, relied on extremely lax regulation, super low interest rates, QE, and dumb VCs to produce a myth of greater efficiency. It was enough to undermine an entire industry. And to think driving a taxi used to be a middle class job in some places. No wonder so many medallion owners committed suicide.

coding123 4y ago
What happened? 400k salaries for developers happened.
- miguelazo 4y ago
  And don't forget the "product managers" and executives. Much harder to justify that type of capture in call center model.
- magic_man 4y ago
  Some companies make enough in cash flow to justify paying engineers that much like facebook, google, or apple. Lyft doesn't generate the cash flow or income to do it.
  - miguelazo 4y ago
    Only as long as advertisers remain stupid. https://us.macmillan.com/books/9780374538651/subprimeattentioncrisis https://us.macmillan.com/books/9780374538651/subprimeattenti...
- spaceman_2020 4y ago
  But how else will we create 10,000 microservices to power our taxi app?

insane_dreamer 4y ago

> I drove for Lyft for a week Not a lot of data points

miguelazo 4y ago
Good enough for me.

bananafly 4y ago

What other gig economy companies does this apply to?

black_13 4y ago
[dead]

weego 4y ago

The model of finding the thinnest gap between business and customer possible, drive a massive VC backed wedge into it, ignore unit price and hope you can figure it out before you run out of series raises has been a staple of the US scene for years, this isn't exactly shocking. We've also seen the central conceit of "you're the product" in the sense of some next wave behind the scenes user/consumer data market be exposed for literally just ads, same as it ever was.

yardie 4y ago

I drove for Lyft and Uber for about a month. I used the $.55/mi deduction to bring my effective tax rate down. 2-4 hours a weekend * 4 weekends for effectively beer and wings money! It's the only way the business makes sense, but I know quite a few drivers doing it full-time and they enjoy it. Set your hours to work around family, school, etc.

ceejayoz 4y ago
Aren’t you depreciating your car by more than you’re saving in taxes this way?
- loeg 4y ago
  Probably yes.
- Marsymars 4y ago
  Depends on the vehicle. Mine wouldn’t, but it also aged out of Uber eligibility this year.

crazygringo 4y ago

None of this shows Lyft's business model is broken. In fact it shows it's working splendidly for Lyft. The fact that Lyft takes a different percentage of each ride -- from less than 20% to more than 70%, in the author's experience -- is a reflection that at different times of day, on different days, in different locations, there are different mismatches between driver supply and passenger demand. Lyft obviously pays the minimum needed to ensure available drivers, and charges the most that passengers are willing to pay. None of this is surprising -- it's how a market intermediary works. As more drivers sign up and are active in relation to passengers, driver pay decreases. As more passengers need rides in relation to drivers, passenger fares increase. And vice-versa. The idea that taxi dispatchers could be more efficient, or as efficient, is ludicrous. Does nobody remember regularly waiting 30-60 minutes for a taxi from a dispatcher? To answer the author's question, of course Lyft could make deeper cuts while keeping the core business running. But most of running a business is about reinvesting profits/capital into growth when growth seems available. After all, the very first sentence on Wikipedia makes it clear all the things it's trying to do at once, of which ride-hailing is one of many [1]: > Lyft, Inc. offers mobility as a service, ride-hailing, vehicles for hire, motorized scooters, a bicycle-sharing system, rental cars, and food delivery in the United States and select cities in Canada. It takes a lot of employees to be doing all those things. [1] https://en.wikipedia.org/wiki/Lyft https://en.wikipedia.org/wiki/Lyft

lallysingh 4y ago
The argument I read was that they're charging a higher percentage than the previously-profitable taxi, yet still losing money overall.
- UncleEntity 4y ago
  Plus, I might add, the drivers are responsible for 100% of the expenses of operating the vehicle. Back when I drove cabs the company owned the car and was responsible for all maintenance and insurance requirements. I just had to put in gas and if it broke down they’d send out a tow truck and give me another car. It was more expensive this way but once I got the lease + gas paid I kept everything I made. Some days I’d have the car paid off in the first couple trips and some days I ended up working for free but I always ended up making enough to pay my rent and eat. I have to take Lyft whenever I’m in Phoenix because they destroyed the taxi industry there and I have a pretty good general idea how much it costs to get places in a cab and Lyft is currently charging as much if not more than the cabs charged while giving the drivers a smaller slice of the pie. Last time I went to visit my parents Lyft charged me ~$50 while giving the driver (IIRC) $18 plus a whole $0.50 gas surcharge for a 23 mile trip. In a cab it probably would have cost $56 (I’m really good at estimating it turned out) which would have all gone to the driver to do with what the will. Beginning of the shift that’s half their lease, end of shift it’d be all profit. The last company I drove for the owner was really good to the drivers and would do things like adjust the lease price depending on the market conditions and he had no problems turning a profit up until Covid hit.

solardev 4y ago

I always wondered if the Lyft model could be done more fairly, like as a worker owned co-op of drivers who then pay a small group of devs to build and maintain the dispatch app for them, while keeping the majority of their fare.

Raed667 4y ago
There was a trend around 3 years ago, where every uber driver that asked about what i do for a living, then asked me how costly would it be for me to build them a smaller version of the platform. I don't get that question much today.
namdnay 4y ago
I don’t see that working across cities/countries. Lyft/Uber have a powerful network effect in that with one app you can get a cab in nearly every major city in the world
- jrochkind1 4y ago
  A co-op of co-ops is a thing that can exist. but yes, has some additional challenges organizing and capitalizing, when our society is set up for private capitalist ownership.
- solardev 4y ago
  I'd be very happy to use this domestically and another service abroad.
black_13 4y ago
[dead]
TulliusCicero 4y ago
I think it'd be hard for that to work out. The incentive would be to underpay/underhire technical staff, and you'd probably have a much inferior app/dispatch experience, which customers wouldn't tolerate.

cortesoft 4y ago

Let’s suppose the author is correct that this new model is less efficient and more expensive to run than a traditional taxi dispatcher. That doesn’t mean a traditional taxi dispatcher can survive in the modern world. Riders would not support a traditional taxi dispatch when they have the option to use a Lyft/Uber style of ride; it is way more convenient for the rider to use an app than a traditional taxi service. Pre-Uber and Lyft, maybe a taxi service had better margins. That is no longer the case in this new market. It doesn’t matter how efficient your business model is if customers don’t want to use your service.

jrochkind1 4y ago

Wait, if the demand-based "surge" pricing doesn't go to the driver, to incentivize driving in periods where more drivers are needed to meet demand, which was always what the line was...

spaceman_2020 4y ago

No one in tech will admit it, for obvious reasons, but the reality is that startup tech salaries have grown beyond control and sanity. Employee compensation is the biggest expense item for most tech-first companies. If your engineers can't make you a profit, perhaps said engineers shouldn't be paid that much.

notRobot 4y ago
It could be argued that tech "is just one of the few fields whose salaries have managed to somewhat keep pace with the insane cost of living.": https://twitter.com/nhuntwalker/status/1604115088406745088 https://twitter.com/nhuntwalker/status/1604115088406745088
edgyquant 4y ago
All I can say is wow that’s a way different interpretation then I. It’s not the employee compensation that’s the problem here: it’s VCs dumping billions into unprofitable businesses and then trying to figure it out once they’re a nationwide brand/“monopoly.” Uber, AirBnB etc got as big as they are by breaking the law literally in a lot of places (ignoring regulations with a bad faith reasoning that it’s not the same because they’re an app) At decent places with a profitable business model the workers tend to generate many times their salary expenses.
CSSer 4y ago
We’re supposed to take the blame for people’s bad ideas too? I have friends who were willing to personally take on that risk who are making 5x my salary at a minimum to own and run their own companies. Meanwhile, as a senior in a private org, I’m being forced into tech-adjacent roles because there’s no one else competent enough to do the administrative and operational duties required to support the growing volume of work. I hear different, but just as bad, tales from startups. Look, I love what I do. I’d probably work for less if it made sense, but you make it sound like I’m somehow the one holding out for more when the recruiters are the ones who won’t leave me alone, and no one is lining up to make my role or responsibilities any easier, so I’ve gotta admit this is a pretty rich take.
- 4y ago

AlbertCory 4y ago

> Google’s workplace culture has had a big influence across Silicon Valley—including at Lyft, which like Google has long offered employees free lunches. > But not every company works like Google. This. You don't need a lot of high-priced technical talent to run Lyft. "Frugal" should be the watchword. I just took a Lyft to the Everett airport near Seattle. There are three big things that made me use Lyft and not have the hotel call me a taxi, and I suspect it's these and not ride-sharing that make Uber/Lyft popular. 1) I could book it myself through my phone and give it the destination. 2) The driver already knew where we were going. I didn't have to tell him. 3) It was already paid for and I didn't have to interact with the driver there, either. Timothy's thought experiment is worth carrying out. Most of these are just straight-up customer service things that taxi companies could do if they really cared (and if the government let them). Some of them they already do: the hotel would have told the taxi driver I was going to the airport.

loandbehold 4y ago

Would it be possible to create a lean competitor to Uber/Lyft that would pay out full rider fare to the driver? Let's call it RideDirect. It can require passengers to setup ACH payment to avoid credit card fees. Such system could be operated by a small group of software engineers (say 10 devs). The cost would only be cloud costs and salary for 10 devs. These costs can be covered by displaying non-intrusive location-based ads to the passenger. It would be easy to recruit drivers by playing up the unfairness of Uber/Lyft, "Lyft pays you $20 of $80 fare. Don't let fat cats rob you blind. Drive for RideDirect instead".

jareklupinski 4y ago
whenever I fly into a new European country/city, I wonder if I'll have to set up yet another account with whichever localized version of "RideDirect" is currently operating there before I can leave the airport since the riders are the ones paying for the service, it may be more impactful to make an app designed for them, which then plugs into the independant smaller networks of drivers seamlessly. then I can fly into Hamburg and just tell whichever service is operating in that city that I'm around and need a ride. maybe even let them compete for the best fare...
- hbrn 4y ago
  > it may be more impactful to make an app designed for them, which then plugs into the independant smaller networks of drivers seamlessly My understanding is that Uber already does that, though I don't know how big is the scale. There are cities where Uber operates only through a bunch of intermediaries (essentially taxi mini-companies). A driver cannot signup with Uber directly, they have to go to one of these companies.
hbrn 4y ago
It is, but Uber & Lyft got a billions of cheap dollars they spent on growth. Your growth is going to be way slower than theirs. There's also chicken & egg problem: no-one is going to use your app if it only has 5 drivers, and other drivers won't join your app if nobody uses it. Again, you'll need a lot of money to gain momentum in just a single city. It will be hard to get those funds from VCs, since your business model is less lucrative.

trilbyglens 4y ago

I have a friend who used to work in accounting at Uber freight, and he said it was the only division that actually made money at all, and even that was quite poor. If it were not for mountains of VC cash keeping these things going they would simply fail, good UX or not. Unit economics are the physics of the business world, and Uber and lift just simply have shitty numbers full stop. The VC money has let these companies escape gravity for this long but it likely won't last forever.

kthejoker2 4y ago

Main complaint is still these were originally pitched as ridesharing / "make money while you carpool" but quickly (d)evolved into a highly decentralized taxi system. There is an alternate universe where every Uber ride always has 4 folks and traffic has reduced, instead of a ton more idling cars milling around and then driving single passengers all the way across town.