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But neither network effects nor technology will change overall number of people who need rides (demand) and the fact that driving cars is unskilled labor. If U

But neither network effects nor technology will change overall number of people who need rides (demand) and the fact that driving cars is unskilled labor. If Uber pays more, taxi drivers will make rational decisions and become Uber drivers. Or Lyft drivers. Or whatever other competitor. If Uber has nicer cars or more efficient service, taxi services will adapt or go out of business. The drivers will go elsewhere, not change industries. And so on.

nemothekid 12y ago
>But neither network effects nor technology will change overall number of people who need rides (demand) and the fact that driving cars is unskilled labor. This may be unrelated but I don't see how technology changes doesn't increase demand. If Uber is convenient/cheap enough that people forgo car ownership and decide to use Uber, doesn't that increase demand. Even if, in the long term, car ownership was cheaper, surely there are people who would rather spend $6 today than sign a loan for $6000.
JumpCrisscross 12y ago
> But neither network effects nor technology will change overall number of people who need rides It did with me (granted, N=1). I reduced my own driving to zero and replaced it mostly with Uber. That isn't just a shift in my quantity of rides demanded, it's a shift in my demand curve. > driving cars is unskilled labor I would not have given up driving if the alternative were yellow cabs. New York taxi drivers are not knowledgeable about routes. Further, it is not uncommon for a trip to end with a debate over whether the credit card reader works. I will pay extra for even a minimally professional Uber driver over an unprofessional yellow taxi. The correlation between driver skill and rider experience is one of the problems Uber is running into when it considers scaling. That limitation is one that would be mitigated by driverless cars. > The drivers will go elsewhere, not find other jobs Network effects limit the viability of alternatives: there will be less demand on those platforms. As mentioned above, I do not believe most yellow taxi drivers would do well as Uber drivers–the supply is not fungible.
- jordanpg 12y ago
  If Uber significantly affects demand, then we might see seismic shifts in the demographics of drivers. As for the existing drivers, my point is that the effects you're touting are temporary. Taxi companies that provide a lesser service will die off and be replaced by others that follow the example of Uber. The overall economics of the thing will not change unless there is a significant change in demand. I don't think this is going to happen due to Uber any more than it did due to ZipCar.
  - JumpCrisscross 12y ago
    > Taxi companies that provide a lesser service will die off and be replaced by others that follow the example of Uber. I don't think Uber in its present form will shift the demand curve dramatically. Driverless cars will. A world with driverless cars could follow two models. Let's call them Apple and IBM. Apple: each household owns a driverless car. Perhaps it can be occasionally rideshared via UberX, Lyft, etc. In this world, you are right: Uber tomorrow will be Uber today. IBM: Uber (or Google or Tesla...) owns (and finances and repairs and replenishes) a fleet of driverless cars. Households pay it use fees. In this world, Uber's strategic autonomy is dramatically improved over today. If I were Uber, this is the long game I'd be playing for. I would be (a) training riders to depend on hiring cars with minimal personal contact, (b) encouraging the development of driverless cars, and (c) building a cash pile for rapidly acquiring a vast fleet of driverless cars the moment they become viable.
    - jordanpg 12y ago
      You are far more optimistic than me about the future of driverless cars. Given N driverless cars, some fraction p will eventually run over and kill small children. Stand back and watch the hysteria and the end of driverless cars. Also, before driverless cars become widespread, they will need to be first proven and then regulated. Imagine the fantastic force of the driving lobby that will oppose that from happening: taxi drivers, truck drivers, fleet drivers. Why do trains and subways still have a human sitting in them?
cissou 12y ago
That's the amazing thing about Uber: it does increase demand. By making it easier and simpler to ask for a cab, and actually providing an enjoyable experience in a market where expectations are very low, they managed to attract people who didn't really "need a ride" before.
- xorcist 12y ago
  This does come up in every thread that touches Uber, posted from different accounts. But do you have any idea if this is actually the case? It sounds a bit implausible that measurably more people would suddently get a burning desire to call a cab just because the app is so cool. Numbers, or any facts at all, could certainly help make your case.
  - avani 12y ago
    Even if the only difference between Uber and taxis was that Uber seamlessly takes credit cards, that's enough to increase demand vs. walking / public transit for the growing population that doesn't carry cash. Add in that an uber is much more likely to show up when called than a taxi, and all of a sudden it seems worthwhile compared to an airport shuttle or wheedling a ride from a friend. Finally, knowing you can get home after a late night without relying on the uncertainty of the taxi system may make you more likely to go out in the first place, again, increasing demand.
  - wilbo 12y ago
    Just an anecdote, I sold my car after moving to Seattle because public transit + bike, Uber, Lyft, and Flywheel (yes, normal taxi) + Car2Go + car rentals, was cheaper than owning (including opportunity cost), storing, and paying insurance on my car. I started using Uber and Lyft a few months after selling my car. Flywheel was a good enough and cheap enough alternative for my needs. I highly doubt more people are calling cabs based on the technology, but I would definitely believe fewer people are buying cars (or people are selling cars) because alternatives are easy and plentiful.
  - mikeklaas 12y ago
    Anecdotally: yes, it has for me and many people I know. It's not because the app is cool. It's because it eliminates the biggest points of friction of taking a cab (namely, ensuring that one arrives soonish, and payment). It would be shocking if that didn't increase demand in the margin. Who knows what the magnitude increase is, though (I believe it is significant).
arjie 12y ago
Not sure about this. I would have taken public transit more often before. At UberX's price point, I ask for a ride more often than before.

nemothekid 12y ago

>But neither network effects nor technology will change overall number of people who need rides (demand) and the fact that driving cars is unskilled labor. This may be unrelated but I don't see how technology changes doesn't increase demand. If Uber is convenient/cheap enough that people forgo car ownership and decide to use Uber, doesn't that increase demand. Even if, in the long term, car ownership was cheaper, surely there are people who would rather spend $6 today than sign a loan for $6000.

JumpCrisscross 12y ago

> But neither network effects nor technology will change overall number of people who need rides It did with me (granted, N=1). I reduced my own driving to zero and replaced it mostly with Uber. That isn't just a shift in my quantity of rides demanded, it's a shift in my demand curve. > driving cars is unskilled labor I would not have given up driving if the alternative were yellow cabs. New York taxi drivers are not knowledgeable about routes. Further, it is not uncommon for a trip to end with a debate over whether the credit card reader works. I will pay extra for even a minimally professional Uber driver over an unprofessional yellow taxi. The correlation between driver skill and rider experience is one of the problems Uber is running into when it considers scaling. That limitation is one that would be mitigated by driverless cars. > The drivers will go elsewhere, not find other jobs Network effects limit the viability of alternatives: there will be less demand on those platforms. As mentioned above, I do not believe most yellow taxi drivers would do well as Uber drivers–the supply is not fungible.

jordanpg 12y ago
If Uber significantly affects demand, then we might see seismic shifts in the demographics of drivers. As for the existing drivers, my point is that the effects you're touting are temporary. Taxi companies that provide a lesser service will die off and be replaced by others that follow the example of Uber. The overall economics of the thing will not change unless there is a significant change in demand. I don't think this is going to happen due to Uber any more than it did due to ZipCar.
- JumpCrisscross 12y ago
  > Taxi companies that provide a lesser service will die off and be replaced by others that follow the example of Uber. I don't think Uber in its present form will shift the demand curve dramatically. Driverless cars will. A world with driverless cars could follow two models. Let's call them Apple and IBM. Apple: each household owns a driverless car. Perhaps it can be occasionally rideshared via UberX, Lyft, etc. In this world, you are right: Uber tomorrow will be Uber today. IBM: Uber (or Google or Tesla...) owns (and finances and repairs and replenishes) a fleet of driverless cars. Households pay it use fees. In this world, Uber's strategic autonomy is dramatically improved over today. If I were Uber, this is the long game I'd be playing for. I would be (a) training riders to depend on hiring cars with minimal personal contact, (b) encouraging the development of driverless cars, and (c) building a cash pile for rapidly acquiring a vast fleet of driverless cars the moment they become viable.
  - jordanpg 12y ago
    You are far more optimistic than me about the future of driverless cars. Given N driverless cars, some fraction p will eventually run over and kill small children. Stand back and watch the hysteria and the end of driverless cars. Also, before driverless cars become widespread, they will need to be first proven and then regulated. Imagine the fantastic force of the driving lobby that will oppose that from happening: taxi drivers, truck drivers, fleet drivers. Why do trains and subways still have a human sitting in them?

cissou 12y ago

That's the amazing thing about Uber: it does increase demand. By making it easier and simpler to ask for a cab, and actually providing an enjoyable experience in a market where expectations are very low, they managed to attract people who didn't really "need a ride" before.

xorcist 12y ago
This does come up in every thread that touches Uber, posted from different accounts. But do you have any idea if this is actually the case? It sounds a bit implausible that measurably more people would suddently get a burning desire to call a cab just because the app is so cool. Numbers, or any facts at all, could certainly help make your case.
- avani 12y ago
  Even if the only difference between Uber and taxis was that Uber seamlessly takes credit cards, that's enough to increase demand vs. walking / public transit for the growing population that doesn't carry cash. Add in that an uber is much more likely to show up when called than a taxi, and all of a sudden it seems worthwhile compared to an airport shuttle or wheedling a ride from a friend. Finally, knowing you can get home after a late night without relying on the uncertainty of the taxi system may make you more likely to go out in the first place, again, increasing demand.
- wilbo 12y ago
  Just an anecdote, I sold my car after moving to Seattle because public transit + bike, Uber, Lyft, and Flywheel (yes, normal taxi) + Car2Go + car rentals, was cheaper than owning (including opportunity cost), storing, and paying insurance on my car. I started using Uber and Lyft a few months after selling my car. Flywheel was a good enough and cheap enough alternative for my needs. I highly doubt more people are calling cabs based on the technology, but I would definitely believe fewer people are buying cars (or people are selling cars) because alternatives are easy and plentiful.
- mikeklaas 12y ago
  Anecdotally: yes, it has for me and many people I know. It's not because the app is cool. It's because it eliminates the biggest points of friction of taking a cab (namely, ensuring that one arrives soonish, and payment). It would be shocking if that didn't increase demand in the margin. Who knows what the magnitude increase is, though (I believe it is significant).

arjie 12y ago

Not sure about this. I would have taken public transit more often before. At UberX's price point, I ask for a ride more often than before.