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0 pointscamgunz1y ago0 comments

I think we're doing a lot of work to get into the mind of cab companies, but along those lines: they weren't interested because the market isn't really that large. Uber is barely profitable now after raising rates tremendously and aggressively fighting any kinds of workers rights initiative. That means two things. First, people don't think a typical ride is worth very much, and second, people don't really have that many places to go. The destination list is 90% work, the airport, and nightlife. These are not the underpinnings of a multibillion dollar business... unless you invent self-driving cars or achieve a good old fashioned monopoly (a lot of the reason many cab companies went out of business as you say is that Uber failed to invent self-driving cars).

But overall this was pretty bad investment for humanity. Let's just stipulate it's a lot easier to get a ride at a reasonable price and that's a good thing (not a given considering increased traffic and greenhouse gas emissions, plus decreased pressure for cities to move away from car-dependency). Was it worth multiple billions of dollars and software engineering hours? Like, assuredly not. It's a big "LOL" drawn in lipstick on a portrait of the efficient market hypothesis. It turns out the private sector is also great at just setting huge piles of cash on fire.

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6 comments · 2 top-level

bluGill1y ago· 2 in thread

The problem is cost. For most people owning and driving their own car is much cheaper than hiring someone else to drive them. Many people would like someone else to take care of the car and driving, but drivers need a reasonable income - if a driver works for your 2 hours per day that implies of your 8 hour day at work 2 hours are spent working to pay for that driver (of course drivers typically make less than a "white collar professional" but still a significant portion of your income goes to your driver). Which is why taxis always hung out at airports - often they would wait in line for an hour to pick someone else, with smaller amounts hanging around around hotels and bars - the few places where people who owned a car had reason not to use it.

Self driving is the only way uber or a taxi can be a large business. The cost of labor is just too high and so most people are forced to learn to drive.

Even with the above I question if self driving is really worth it. If you own a car and have it parked nearby it is ready to go when you want to leave, and better yet you can store your stuff in it. Combine that with rush hour - most people are traveling at about the same time every day, and some people wanting nicer cars than others and it is hard to see how it can work out. (unless you live in density such that parking is hard - but then transit must be your answer not individual cars since self driving cannot solve traffic)

DrScientist1y ago

The other problem with the business model is with self-driving cars, unless you have exclusive self-drive technology, the barrier to entry to other carpooling options is quite low.

In fact you could easily see car manufacturers offering such services - something like Zipcar but more convenient as the cars can self redistribute.

I find it hard to believe Uber will ever break even ( not on the day to day costs - recouping all that upfront investment ).

Having said that, the likes of Uber have changed the world - so the money wasn't entirely wasted.

bluGill1y ago

I don't think car manufactures will offer that service - it gets too deep into weird monopoly laws and the like that they want to avoid. Plus it is a distraction from their business. They will instead sell to others who offer that service.

Generally shared cars only make sense when someone drives very little anyway. Cars are expensive and so shared cars are either too expensive to be used often, or very hard to get at. Renting a car for a weekend is about half the cost of a monthly payment on the same car, but if you buy the car you have it the rest of the month (and if you buy a car you have used options or keeping the car after it is paid for to bring the total cost down - you will have to pay maintenance costs but those tend to be much less).

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empath751y ago· 2 in thread

Every business in a competitive market is "barely profitable", that's how capitalism works. If a company is raking in massive profits that's a sign that the market is distorted somehow -- a monopoly, collusion, regulation, etc..

camgunzOP1y ago

Maybe, but the point here isn't that Uber underperforms, it's that their innovations didn't sufficiently expand the market. I'm arguing cab companies saw that coming, whereas Uber/SV didn't and spent billions of dollars finding out.

It's an indictment of the VC model where essentially you build a company that hogs all the value for investors. If you think this is a good model, i.e. that investors make better decisions than governments, labor, and the market, then I think you have to reckon with the utter wastefulness that is Uber. A better thing here would have been to just build a ride hailing app for existing cab companies.

kibwen1y ago

Yes, but P implies Q does not mean that Q implies P. IOW, a competitive market implies a lack of profits, but a lack of profits does not imply a competitive market.

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