
Cheap cab ride? You must have missed Uber’s true cost - nkurz
http://www.theguardian.com/commentisfree/2016/jan/31/cheap-cab-ride-uber-true-cost-google-wealth-taxation
======
tomasien
This was the most meandering anti-tech piece ever. "PE is subsidizing growth
and Apple hoards cash overseas and some little University project in Iceland
died RABBLE!"

There are LOTS of great reasons to be skeptical of Uber but come on.

~~~
eibrahim
I agree. I almost disagree with every point the author makes. It sounded like
just whining to me.

I do see the risk of an Uber monopoly but that's highly unlikely and if it
does happen there will be consequences from governments, customers and
drivers. I think there is enough safety triggers in the system.

For now I enjoy uber's great service and excellent prices.

~~~
chrismcb
What would those consequences be? Perhaps some sort of regulation?

~~~
eibrahim
customers defecting to competitors. employees protesting/unionizing,
lawsuits... and if all fails, eventually government regulations.

------
twelve40
Sorry having trouble parsing this:

> rates so low that they didn’t even cover the combined cost of fuel and
> vehicle depreciation

> percentages from its drivers’ fares ... 30%

So apparently Uber managed to find some drivers who are willing to drive
people for less than fuel+depreciation, _and_ share 30% of that with Uber?
Something must be off in these statements, since I doubt any driver is stupid
enough to drive people at a loss. Do the drivers get paid a different amount
for a ride than what I see on the screen?

I'm sure there is a potential threat of Uber wiping out the cabs and jacking
up the prices, but this article is not very clear.

~~~
empressplay
When Uber offers free and discounted rides to passengers, the drivers still
collect their percentage as if it was the full fare. Often the discounts are
transparent (there's no notice that you've received a discount). So yes,
sometimes drivers do get paid a different amount than (a flat percentage of)
what you see on the screen.

~~~
pfarnsworth
If Uber gives a discounted rate, they eat the cost, the driver doesn't get hit
with the discounted rate.

------
pfarnsworth
The article is terrible. It's conflating VC investing with taxation of global
companies with global revenues, like Apple and Google. The reason why Apple
has hundreds of billions offshore is because they earned it outside the US.
That's simply how taxation works.

------
taxicabjesus
This article has some good points. Most of the apologists for 'duper have no
idea how the transportation industry is actually regulated. For example,
somehow Uber and Lyft found a way to fully comply with New York State's
transportation regulations, but ignored them everywhere else, until their
lobbyists took care of those pesky, gutless state governments.

I drove for a taxi company in Arizona for a few years.It was a lot of fun, at
the beginning. The company I drove for built its reputation/brand over 25+
years, and incorporated the latest technology as it became available. The
arrival of the "super-duper-not-a-taxi-apps" ruined the economics of the
business for the companies that were complying with Arizona's free-market
approach to taxi regulation. The companies are adapting, but it's hard to
compete with well-funded venture capitalists.

People who have a sense of self-preservation should not use the services of
predatory _not-transportation_ companies. There are times when people really,
really need a ride, and the smartphone app won't be able to send somebody to
pick you up. (It's more than running out of battery power while at the bar -
those people were whiners.)

~~~
calciphus
Your screen name informs me that you're an unbiased source for thoughtful
analysis.

------
prostoalex
There's an implied assumption that revenues collected from federal taxes
("Look at Apple, which has recently announced that it sits on $200bn of
potentially taxable overseas cash") will somehow materialize on
municipalities' accounts (city of Cupertino and Santa Clara county, I suppose)
as if there's some mysterious revenue-sharing program with the money flowing
from the federal government to the municipalities that are lucky enough to
host major corporate headquarters.

~~~
Consultant32452
Corporate income tax is levied in 44 states. I'm not sure if any
counties/cities have corporate income tax. Presumably if Apple et. al. have to
pay federal corporate income tax they'll surely have to pay the state
corporate income tax as well.

~~~
prostoalex
My understanding from reading this California FAQ
[https://www.ftb.ca.gov/forms/misc/1083.pdf](https://www.ftb.ca.gov/forms/misc/1083.pdf)
is that only "income from sources within California" is taxable (and in case
of global corporations they resort to some formula to calculate their fair
portion), so repatriated cash wouldn't matter for local coffers - Cupertino
(or Santa Clara County, or California) would have as much claim on income
earned somewhere in Zurich, as Trieste has on an income earned off a cup of
fresh Illy espresso brewed in Cupertino.

Perhaps I'm wrong, or maybe California example is very different and not
indicative of general picture.

In any case, it seems that companies either register their headquarters in
some "cooperating" states like South Dakota
[http://www.marketplace.org/2009/03/25/business/borrowers/sio...](http://www.marketplace.org/2009/03/25/business/borrowers/sioux-
falls-town-credit-built), or approach the states directly about making a
special exception to the tax rules in order to win their business (like Tesla
and their Gigafactory in Nevada, or Toyota moving to Texas, or Nissan moving
to Tennessee). The game is even easier at the city level - cities will
introduce special tax breaks for a 99 Cent store or a new gas station, leave
alone a major Fortune 500 employer.

------
Splines
So what's Uber's long term game plan? Wiping out local taxi companies could be
one, but people aren't going to disown their less-driven car anytime soon, nor
is public transportation going to go away.

At some point I assume they're going to turn the corner and either need to
raise profits or cut expenses. You can build a moat with cash for only so
long.

~~~
imron
Self driving cars according to their top execs.

------
dominotw
but chicago cabbies are rude, stink, are talking on the phone in foreign
language, demand cash( some even yell at passenger for not having cash), drive
cars with no functional air conditioning, drive aggressively to out compete
other cabs,demand tips, play annoying ads on the little screens attached to
seats....

never again cabs. thank you uber for existing.

~~~
empressplay
The point of the article isn't that Uber is hurting taxis, but that it's also
hurting other forms of public transport, and other startups in that space
(such as on-demand bus services.)

Just because Uber > taxis doesn't mean Uber > everything.

