6 ms·

To me, this seems to speak volumes about the viability of Uber's business model in the long run. If they can't compete because additional background checks and

To me, this seems to speak volumes about the viability of Uber's business model in the long run. If they can't compete because additional background checks and insurance are needed, is it really a $40B company?

ddingus 11y ago
My thought exactly. Or, they are mixing an agenda (low to no regulation) with business, choosing to leave a market rather than operate in it's rules.
- amyjess 11y ago
  If this is the case, Uber is being either colossally stupid or both colossally stupid and colossally evil here. You see, big businesses actually love regulation. It raises the barrier to entry and prices smaller competitors out of the market. The only companies who don't like regulation are a) small businesses who risk being priced out of the market and b) monopolists or near-monopolists, who have no competitors left to price out of the market. For Uber to throw their hands up and walk out of a market over regulation means that either they think like a small player or they think like a monopolist. If it's the former... well, they're a $40B company, and they should start acting like one; it's a sign of terrible incompetence that a $40B company is acting like a "poor, oppressed mom-and-pop". If it's the latter, then they're just plain evil, and they should be stopped before they actually become a monopoly. They're also being stupid, too, because they're not a monopoly yet, and Lyft is now going to eat up the Kansas market.
  - bsbechtel 11y ago
    You make some great points, however I question how big the Kansas market really is. I'm from a 150,000 person city in the Midwest, and there might be 5 taxis operating in town. Kansas has a few bigger cities, but the demand for personal drivers in the Midwest isn't like it is on the coasts.
    - ddingus 11y ago
      Isn't this about scale? Sure, the market isn't all that large, but the means, methods, process required to serve it are the same ones that will absolutely be needed to cope with all the different markets, rules, and authorities out there. A billion dollar level company can and should be doing this.
      - bsbechtel 11y ago
        >>Isn't this about scale? As in you mean there is little additional cost to enter the market? Sure, I'm just saying if they miss out on serving a small market, it's not going to have a huge negative impact.
        ddingus 11y ago
        Of course. But, the systems needed are important. Simple, dry runs now can prototype them, buy good will, potentially have an impact on regulations to come. Also, UBER. That's not ordinary, or dull, or tepid. It's UBER. Cherry picking, dodgy behavior to avoid compliance, and other sketchy things seem inappropriate for such a valuation.
      - norea-armozel 11y ago
        As someone that's from Wichita, I can say that the market is very small in terms of utilization. Most of the people who could afford Uber either own a car or have sufficient access to public transit to their satisfaction. The rest of us slobs who have to nickle/dime our wages are stuck with less than optimal transportation regardless of Uber's presence in the state or not. Basically, Wichita and other Kansas cities are huge for their population. Wichita along is about 8x7 miles if I remember right. And this excludes suburbs and outlying communities in and out of the county. KCMO is a bit more packed in from what I remember, but not by much. So, for Uber and its drivers to make money they'd need a relatively steady volume of riders to and from places of work and shopping. In Wichita, that's pretty hard to sustain since our employment centers are split up between downtown and East/West Wichita (Cessna, Spirit, Hawker-Beech, and etc). The rest of the employers are along the northside but they're not exactly high wage payers (Does Coleman do any work out there anymore aside from the gas bottling plant?). All in all, Wichita would suck for Uber regulations or no.
smoorman1024 11y ago
It's not that they couldn't afford to do the additional background checks and insurance it's obviously a statement they are making and that statement fits right into the 'Randian' views that Travis Kalanick has already been accused of. He thinks that Kansas will come crawling back after Uber is gone but more likely competitors that are willing to deal with regulation (that is probably righteous) will fill the gap. http://www.businessinsider.com/how-uber-ceo-travis-kalanick-was-inspired-by-ayn-rand-2015-4 http://www.businessinsider.com/how-uber-ceo-travis-kalanick-...
- bsbechtel 11y ago
  I guess the market will decide that ;-)
  - smoorman1024 11y ago
    Do you agree that this is their strategy? If you regulate us then we will leave.
athenot 11y ago
Their long term goal is to rely on self-driving cars, not drivers. So background checks for drivers and commercial insurance for drivers won't be an issue.
- r00fus 11y ago
  But that will only pan out if they've established an entrenched position in the market using human drivers. A lot can happen in 5 years - I am not expecting self-driving cars to be a mass-market reality before then, if only due to the speed of legislation.
- prostoalex 11y ago
  Relying on self-driving involves * owning the fleet with up-front capital requirements * buying insurance * owning the parking facilities for such fleet * operating filling/charging stations for such fleet * providing maintenance for the fleet on an ongoing basis * operating car washes What exactly is Uber's competence in such setup, and why are they in a dominant position to achieve this when compared to, let's say, Hertz, ZipCar, a local car dealership, or some mom-and-pop operation that bought two self-driving cars to rent them out on a busy intersection?

ddingus 11y ago

My thought exactly. Or, they are mixing an agenda (low to no regulation) with business, choosing to leave a market rather than operate in it's rules.

amyjess 11y ago
If this is the case, Uber is being either colossally stupid or both colossally stupid and colossally evil here. You see, big businesses actually love regulation. It raises the barrier to entry and prices smaller competitors out of the market. The only companies who don't like regulation are a) small businesses who risk being priced out of the market and b) monopolists or near-monopolists, who have no competitors left to price out of the market. For Uber to throw their hands up and walk out of a market over regulation means that either they think like a small player or they think like a monopolist. If it's the former... well, they're a $40B company, and they should start acting like one; it's a sign of terrible incompetence that a $40B company is acting like a "poor, oppressed mom-and-pop". If it's the latter, then they're just plain evil, and they should be stopped before they actually become a monopoly. They're also being stupid, too, because they're not a monopoly yet, and Lyft is now going to eat up the Kansas market.
- bsbechtel 11y ago
  You make some great points, however I question how big the Kansas market really is. I'm from a 150,000 person city in the Midwest, and there might be 5 taxis operating in town. Kansas has a few bigger cities, but the demand for personal drivers in the Midwest isn't like it is on the coasts.
  - ddingus 11y ago
    Isn't this about scale? Sure, the market isn't all that large, but the means, methods, process required to serve it are the same ones that will absolutely be needed to cope with all the different markets, rules, and authorities out there. A billion dollar level company can and should be doing this.
    - bsbechtel 11y ago
      >>Isn't this about scale? As in you mean there is little additional cost to enter the market? Sure, I'm just saying if they miss out on serving a small market, it's not going to have a huge negative impact.
      - ddingus 11y ago
        Of course. But, the systems needed are important. Simple, dry runs now can prototype them, buy good will, potentially have an impact on regulations to come. Also, UBER. That's not ordinary, or dull, or tepid. It's UBER. Cherry picking, dodgy behavior to avoid compliance, and other sketchy things seem inappropriate for such a valuation.
    - norea-armozel 11y ago
      As someone that's from Wichita, I can say that the market is very small in terms of utilization. Most of the people who could afford Uber either own a car or have sufficient access to public transit to their satisfaction. The rest of us slobs who have to nickle/dime our wages are stuck with less than optimal transportation regardless of Uber's presence in the state or not. Basically, Wichita and other Kansas cities are huge for their population. Wichita along is about 8x7 miles if I remember right. And this excludes suburbs and outlying communities in and out of the county. KCMO is a bit more packed in from what I remember, but not by much. So, for Uber and its drivers to make money they'd need a relatively steady volume of riders to and from places of work and shopping. In Wichita, that's pretty hard to sustain since our employment centers are split up between downtown and East/West Wichita (Cessna, Spirit, Hawker-Beech, and etc). The rest of the employers are along the northside but they're not exactly high wage payers (Does Coleman do any work out there anymore aside from the gas bottling plant?). All in all, Wichita would suck for Uber regulations or no.

smoorman1024 11y ago

It's not that they couldn't afford to do the additional background checks and insurance it's obviously a statement they are making and that statement fits right into the 'Randian' views that Travis Kalanick has already been accused of. He thinks that Kansas will come crawling back after Uber is gone but more likely competitors that are willing to deal with regulation (that is probably righteous) will fill the gap. http://www.businessinsider.com/how-uber-ceo-travis-kalanick-was-inspired-by-ayn-rand-2015-4 http://www.businessinsider.com/how-uber-ceo-travis-kalanick-...

bsbechtel 11y ago
I guess the market will decide that ;-)
- smoorman1024 11y ago
  Do you agree that this is their strategy? If you regulate us then we will leave.

athenot 11y ago

Their long term goal is to rely on self-driving cars, not drivers. So background checks for drivers and commercial insurance for drivers won't be an issue.

r00fus 11y ago
But that will only pan out if they've established an entrenched position in the market using human drivers. A lot can happen in 5 years - I am not expecting self-driving cars to be a mass-market reality before then, if only due to the speed of legislation.
prostoalex 11y ago
Relying on self-driving involves * owning the fleet with up-front capital requirements * buying insurance * owning the parking facilities for such fleet * operating filling/charging stations for such fleet * providing maintenance for the fleet on an ongoing basis * operating car washes What exactly is Uber's competence in such setup, and why are they in a dominant position to achieve this when compared to, let's say, Hertz, ZipCar, a local car dealership, or some mom-and-pop operation that bought two self-driving cars to rent them out on a busy intersection?