6 ms·

A prediction about "sharing economy" companies. Almost all of them are tacking on a thin rind of web/mobile UI and smart dispatch technology to an existing serv

A prediction about "sharing economy" companies. Almost all of them are tacking on a thin rind of web/mobile UI and smart dispatch technology to an existing service. The long-term winners will be companies like Flywheel that recognize this and focus on providing that service to existing operators, much like payment processors. This, of course, is perceived as a smaller market since they can't count revenue the same way. EDIT: on the other hand, an advantage is they don't have to worry about acquiring customers, drivers, etc, nor the regulatory overhead of the underlying business, but instead just focus on customer experience, schedule/dispatch, etc.

seizethecheese 11y ago
Absolutely, however another "advantage" of many "sharing economy" companies is that they skirt regulations that incumbents must adhere to.
- mycroft-holmes 11y ago
  The real question to ask in this case is whether those regulations should be there in the first place.
  - austenallred 11y ago
    Disregarding the competitive aspect, it's absurd to me that people praise banning Uber and Tesla for the "consumer safety" of taxis and car dealerships.
    - jsight 11y ago
      There is a significant consumer safety element to the way Taxis are regulated. The fact that this is used to protect a monopoly is a separate issue and I agree that it is a real problem. The Tesla analogy is perfect, though. I've never felt like car dealerships being independently owned was a useful benefit. I don't see any reason why both models can't coexist.
      - austenallred 11y ago
        > There is a significant consumer safety element to the way Taxis are regulated. Whatever those safety elements are, I've certainly never experienced them. Theoretically they're there, I guess, but my (admittedly anecdotal) experience has been that Uber is safer in every way than taxis are.
        emodendroket 11y ago
        Well, I'd say they're twofold: * Obviously, whether the guy is going to try and kidnap you. Well, Uber has rating, but the background checks are pretty flimsy. Still, I'll concede that it may well be just as good. * The second thing affects non-customers and it's ensuring the roads aren't congesting with a glut of taxis driving around looking for fares all day (with all the attendant problems that causes). While the average car spends 2 hours or less on the road in a day a taxi or an Uber is going to spend a lot more than that. I'm not really convinced Uber has an answer to that. There are also issues like insurance/liability and so on that are rarely encountered, but are something of a big deal if they do come up. And there's the worker protection aspect of it.
        9872 11y ago
        > it's ensuring the roads aren't congesting with a glut of taxis driving around looking for fares all day Ever hear of this thing called supply and demand?
        emodendroket 11y ago
        You're missing the point, which is that the costs are not borne by customers but by everyone on the road. Supply and demand is not a mechanism to solve this kind of problem
      - mahyarm 11y ago
        I think taxi regulations are there to deal with a world way before mobile computing. The regulations addressed at it's heart an information asymmetry between taxi drivers and riders, especially with tourists. With current ride sharing apps, a lot of that goes away. You don't worry about tampered meters and being driven the long way around, because the trip is GPS tracked on both sides for example. You don't have to worry about getting in a random car in a city with a complete stranger, because reputation systems have pre-vetted your drivers and your driver's cars. a If taxi drivers get angry at you for using credit cards or for short trips, you can complain to a central agency that will deal with it. In developing (and some developed) nations, these ride sharing apps have a better safety margin than the local regulations do. Inefficient systems like taxi lineups at airports are not necessary anymore. The international nature of these ride sharing apps also give you a universal set of rules as you travel, and make it you can communicate your destination without being able to speak the language. The advantages go on and on. The companies making and creating these things don't really matter, but the general app really does and we shouldn't smother them with regulations.
  - brianmcconnell 11y ago
    In the case of using the "independent contractor" loophole to avoid paying UI, social sec tax, minimum wage, etc, it's an issue of making sure everyone plays by the same rules. Operators who abide by these rules should not be punished for doing so.
    - pjhile 11y ago
      Are you implying that taxes/regulations are punitive?
      - brianmcconnell 11y ago
        No I am implying that companies that avoid paying them are getting an unfair advantage versus the companies that treat their workers as employees.
    - pbreit 11y ago
      I can't wait until Uber starts scheduling drivers at min wage plus bennies and makes even more money.
    - ghufran_syed 11y ago
      The quote from one of the lawsuits suggests that the 'independent contractors' really weren't very independent... "Cleaners are unable to provide any additional information before jobs are assigned. For example, a Cleaner cannot tell Homejoy that while she may have picked different zip codes or cities as part of her territory, she only wants to stay within one zip code, or within one small part of a zip code, each day. Instead, if a Cleaner chooses Oakland and San Francisco as part of her territory, Homejoy alone determines whether the cleaner will stay in Oakland on a given day, stay in San Francisco on a given day, or travel in between the two cities multiple times on a given day. Furthermore, Cleaners cannot tell Homejoy whether they want a little or a lot of down time between each job, or each job start time or end time. Cleaners cannot tell Homejoy how much driving they prefer to do, whether the jobs need to be near public transportation, whether the Cleaners prefer to be stuck in rush hour traffic or instead on routes that are reverse commutes, how many jobs the Cleaners want to perform each day, or whether or not they want to return to a previous customer." http://arstechnica.com/tech-policy/2015/03/startup-workers-sue-to-be-recognized-as-employees-not-mere-contractors/ http://arstechnica.com/tech-policy/2015/03/startup-workers-s...
  - thatusertwo 11y ago
    Regulations exist for a reason, some maybe old or irrelevant but they all evolved in response to the industries they regulate.
    - mycroft-holmes 11y ago
      There's a such thing as regulatory capture.
      - thatusertwo 11y ago
        Agreed, but that doesn't discredit all evolved regulations.
  - s73v3r 11y ago
    If that was the question, then these companies would be lobbying to get rid of those regulations. Far too many of them see their ignoring of regulations to be a competitive edge.
    - 9872 11y ago
      Lobbying is expensive and time consuming. If you ignore regulations and do a good job, the population will lobby for you, for free.
      - mycroft-holmes 11y ago
        Exactly. The new entrant into a market isn't the one who can afford to get into the lobbying game.
austenallred 11y ago
> The long-term winners will be companies like Flywheel that recognize this and focus on providing that service to existing operators, much like payment processors. I don't think this creates a very big moat - that's essentially what Uber started out as (dispatch for private driving companies that already existed); they started letting anyone drive in order to meet demand. If all the services are interchangable (and now, at least for ridesharing, it seems like they are), the winner will be the app that's used by default.
- psadri 11y ago
  Uber is different than Homejoy. You would use the same house cleaning professional over and over again but you will likely never ride with the same Uber driver again. This means that the Homejoy house cleaner can bypass Homejoy but the Uber drivers/users can't do without it.
  - ProblemFactory 11y ago
    > you will likely never ride with the same Uber driver again. In theory, having your "own" driver would not be a bad thing. But the main difference is in scheduling. With taxis and Uber, you want a car to show up in 10 minutes at any time of the day without advance booking. This requires a large pool of drivers on standby and a middleman to handle the communication. A cleaner can visit pretty much any time during the week, and is usually pre-booked for every week indefinitely into the future. This doesn't need a middleman, since you can arrange the details directly.
- Retric 11y ago
  Defaults can change really quickly. Unlike Facebook Uber has basically zero network effect between cities. So, a competitor can win one or two small cities and just keep growing. Consider there are only 40,000 taxi drivers in New York. All it takes is for a company to find the top 5-50% of Uber/Lift drivers in a city offer them a minimum income of a few k/month assuming they take A% of rides and work y hours and boom instant driver network. Sure, doing it now when Uber is flush with cash is a bad idea, but after it pop’s there is no way they can stay competitive without paper thin margins long term.
superuser2 11y ago
There is a great deal of schlep involved in generating supply and demand, and more importantly developing good technical controls to promote quality and reduce fraud, and the human support to handle the disputes and quality issues that slip through the cracks. There is nothing thin about the layer. Interchangeable maybe, but Uber et al are not going to be replaced by pure software anytime soon.
prostoalex 11y ago
Dispatch services where by design you interact with a variety of vendors work because there's no value in building long-term relationship on either side. But dispatch services where worker-customer relationship can evolve into long-term are indeed not adding much value outside of the original lead generator.
pbreit 11y ago
Nope. The Uber/Lyft experience is so far superior, for both drivers and riders, that it is the obvious eventual winner. How drivers are employed/compensated is a mere technicality. Uber could pay some drivers minimum wage + benefits and probably make even more money.
jondubois 11y ago
I think ride sharing companies like Uber are a bit different though because the dispatch system (the element of coordination and availability) is critical for that type of service. This is different from cleaning because people don't need down-to-the-minute availability. Homejoy had to find a way to lock their cleaners into ongoing agreements to prevent them from bypassing them. I agree that it's natural with these services for consumers to want to 'bypass' the middleman if possible. Unfortunately, under capitalism, creating value and capturing it are two very different things. There are a lot of business ideas which have potential to create amazing value for society, but these businesses will not be able to exist because they are not capable of capturing that value.

seizethecheese 11y ago

Absolutely, however another "advantage" of many "sharing economy" companies is that they skirt regulations that incumbents must adhere to.

mycroft-holmes 11y ago
The real question to ask in this case is whether those regulations should be there in the first place.
- austenallred 11y ago
  Disregarding the competitive aspect, it's absurd to me that people praise banning Uber and Tesla for the "consumer safety" of taxis and car dealerships.
  - jsight 11y ago
    There is a significant consumer safety element to the way Taxis are regulated. The fact that this is used to protect a monopoly is a separate issue and I agree that it is a real problem. The Tesla analogy is perfect, though. I've never felt like car dealerships being independently owned was a useful benefit. I don't see any reason why both models can't coexist.
    - austenallred 11y ago
      > There is a significant consumer safety element to the way Taxis are regulated. Whatever those safety elements are, I've certainly never experienced them. Theoretically they're there, I guess, but my (admittedly anecdotal) experience has been that Uber is safer in every way than taxis are.
      - emodendroket 11y ago
        Well, I'd say they're twofold: * Obviously, whether the guy is going to try and kidnap you. Well, Uber has rating, but the background checks are pretty flimsy. Still, I'll concede that it may well be just as good. * The second thing affects non-customers and it's ensuring the roads aren't congesting with a glut of taxis driving around looking for fares all day (with all the attendant problems that causes). While the average car spends 2 hours or less on the road in a day a taxi or an Uber is going to spend a lot more than that. I'm not really convinced Uber has an answer to that. There are also issues like insurance/liability and so on that are rarely encountered, but are something of a big deal if they do come up. And there's the worker protection aspect of it.
        9872 11y ago
        > it's ensuring the roads aren't congesting with a glut of taxis driving around looking for fares all day Ever hear of this thing called supply and demand?
        emodendroket 11y ago
        You're missing the point, which is that the costs are not borne by customers but by everyone on the road. Supply and demand is not a mechanism to solve this kind of problem
    - mahyarm 11y ago
      I think taxi regulations are there to deal with a world way before mobile computing. The regulations addressed at it's heart an information asymmetry between taxi drivers and riders, especially with tourists. With current ride sharing apps, a lot of that goes away. You don't worry about tampered meters and being driven the long way around, because the trip is GPS tracked on both sides for example. You don't have to worry about getting in a random car in a city with a complete stranger, because reputation systems have pre-vetted your drivers and your driver's cars. a If taxi drivers get angry at you for using credit cards or for short trips, you can complain to a central agency that will deal with it. In developing (and some developed) nations, these ride sharing apps have a better safety margin than the local regulations do. Inefficient systems like taxi lineups at airports are not necessary anymore. The international nature of these ride sharing apps also give you a universal set of rules as you travel, and make it you can communicate your destination without being able to speak the language. The advantages go on and on. The companies making and creating these things don't really matter, but the general app really does and we shouldn't smother them with regulations.
- brianmcconnell 11y ago
  In the case of using the "independent contractor" loophole to avoid paying UI, social sec tax, minimum wage, etc, it's an issue of making sure everyone plays by the same rules. Operators who abide by these rules should not be punished for doing so.
  - pjhile 11y ago
    Are you implying that taxes/regulations are punitive?
    - brianmcconnell 11y ago
      No I am implying that companies that avoid paying them are getting an unfair advantage versus the companies that treat their workers as employees.
  - pbreit 11y ago
    I can't wait until Uber starts scheduling drivers at min wage plus bennies and makes even more money.
  - ghufran_syed 11y ago
    The quote from one of the lawsuits suggests that the 'independent contractors' really weren't very independent... "Cleaners are unable to provide any additional information before jobs are assigned. For example, a Cleaner cannot tell Homejoy that while she may have picked different zip codes or cities as part of her territory, she only wants to stay within one zip code, or within one small part of a zip code, each day. Instead, if a Cleaner chooses Oakland and San Francisco as part of her territory, Homejoy alone determines whether the cleaner will stay in Oakland on a given day, stay in San Francisco on a given day, or travel in between the two cities multiple times on a given day. Furthermore, Cleaners cannot tell Homejoy whether they want a little or a lot of down time between each job, or each job start time or end time. Cleaners cannot tell Homejoy how much driving they prefer to do, whether the jobs need to be near public transportation, whether the Cleaners prefer to be stuck in rush hour traffic or instead on routes that are reverse commutes, how many jobs the Cleaners want to perform each day, or whether or not they want to return to a previous customer." http://arstechnica.com/tech-policy/2015/03/startup-workers-sue-to-be-recognized-as-employees-not-mere-contractors/ http://arstechnica.com/tech-policy/2015/03/startup-workers-s...
- thatusertwo 11y ago
  Regulations exist for a reason, some maybe old or irrelevant but they all evolved in response to the industries they regulate.
  - mycroft-holmes 11y ago
    There's a such thing as regulatory capture.
    - thatusertwo 11y ago
      Agreed, but that doesn't discredit all evolved regulations.
- s73v3r 11y ago
  If that was the question, then these companies would be lobbying to get rid of those regulations. Far too many of them see their ignoring of regulations to be a competitive edge.
  - 9872 11y ago
    Lobbying is expensive and time consuming. If you ignore regulations and do a good job, the population will lobby for you, for free.
    - mycroft-holmes 11y ago
      Exactly. The new entrant into a market isn't the one who can afford to get into the lobbying game.

austenallred 11y ago

> The long-term winners will be companies like Flywheel that recognize this and focus on providing that service to existing operators, much like payment processors. I don't think this creates a very big moat - that's essentially what Uber started out as (dispatch for private driving companies that already existed); they started letting anyone drive in order to meet demand. If all the services are interchangable (and now, at least for ridesharing, it seems like they are), the winner will be the app that's used by default.

psadri 11y ago
Uber is different than Homejoy. You would use the same house cleaning professional over and over again but you will likely never ride with the same Uber driver again. This means that the Homejoy house cleaner can bypass Homejoy but the Uber drivers/users can't do without it.
- ProblemFactory 11y ago
  > you will likely never ride with the same Uber driver again. In theory, having your "own" driver would not be a bad thing. But the main difference is in scheduling. With taxis and Uber, you want a car to show up in 10 minutes at any time of the day without advance booking. This requires a large pool of drivers on standby and a middleman to handle the communication. A cleaner can visit pretty much any time during the week, and is usually pre-booked for every week indefinitely into the future. This doesn't need a middleman, since you can arrange the details directly.
Retric 11y ago
Defaults can change really quickly. Unlike Facebook Uber has basically zero network effect between cities. So, a competitor can win one or two small cities and just keep growing. Consider there are only 40,000 taxi drivers in New York. All it takes is for a company to find the top 5-50% of Uber/Lift drivers in a city offer them a minimum income of a few k/month assuming they take A% of rides and work y hours and boom instant driver network. Sure, doing it now when Uber is flush with cash is a bad idea, but after it pop’s there is no way they can stay competitive without paper thin margins long term.

superuser2 11y ago

There is a great deal of schlep involved in generating supply and demand, and more importantly developing good technical controls to promote quality and reduce fraud, and the human support to handle the disputes and quality issues that slip through the cracks. There is nothing thin about the layer. Interchangeable maybe, but Uber et al are not going to be replaced by pure software anytime soon.

prostoalex 11y ago

Dispatch services where by design you interact with a variety of vendors work because there's no value in building long-term relationship on either side. But dispatch services where worker-customer relationship can evolve into long-term are indeed not adding much value outside of the original lead generator.

pbreit 11y ago

Nope. The Uber/Lyft experience is so far superior, for both drivers and riders, that it is the obvious eventual winner. How drivers are employed/compensated is a mere technicality. Uber could pay some drivers minimum wage + benefits and probably make even more money.

jondubois 11y ago

I think ride sharing companies like Uber are a bit different though because the dispatch system (the element of coordination and availability) is critical for that type of service. This is different from cleaning because people don't need down-to-the-minute availability. Homejoy had to find a way to lock their cleaners into ongoing agreements to prevent them from bypassing them. I agree that it's natural with these services for consumers to want to 'bypass' the middleman if possible. Unfortunately, under capitalism, creating value and capturing it are two very different things. There are a lot of business ideas which have potential to create amazing value for society, but these businesses will not be able to exist because they are not capable of capturing that value.