
Ride-hailing’s NYC dominance, and the impact of DeleteUber - lil_tee
http://toddwschneider.com/posts/analyzing-1-1-billion-nyc-taxi-and-uber-trips-with-a-vengeance/#update-2017
======
throwaway_80bf3
7 years ago you'd have to jump into a yellow cab before telling the rider if
you were going from Manhattan to Brooklyn or Brooklyn to Brooklyn. If you told
them before you got in, they'd speed off.

You used to have to walk to arterial roads in hopes of finding a yellow cab
(in the outer boroughs). That is if you lived in neighborhoods that the
article points out now skews towards Lyft. Well to do, post gentrification
areas. If you didn't live in those neighborhoods, forget finding a yellow cab.

If you didn't find a yellow cab, you call a car service like Arecibo or
Eastern. You say "73 Atlantic Ave, at Hicks st.", they say "10 minutes" and
hang up. 25 minutes later a beat up town car with an illegal tint job pulls
up, and you walk to the passenger door and knock on the window, or, if the
window no longer works, open the rear passenger door -- but you don't get in.
Instead you say the neighborhood you are going and the guy sort of waffles and
says... 20. You say, forget it and go to close the door (but you don't), he
says 18. You say 12, he says 15. You get in the car. Last week you paid 10 for
the same ride.

The last time I called an UberT, a few years ago, the green taxi pulled up and
someone ran over and threatened to fight me since they'd hailed the cab first.
That's the last time I messed around with the old way of doing things and it
sounds like a lot of New Yorkers feel the same way.

~~~
x_throwaway80bf
I had to make a throwaway as well just because I couldn't believe this
comment. This is so utterly false. You're essentially claiming that the value
of these services is all based on the innovation of the _hailing_
functionality, but there are countless apps that recreate this functionality
_exactly_ whether for 'regular' taxis or separately licensed cars. If what you
want is for a driver to come to your exact location very quickly, you can get
that _anywhere_. This, as a business model alone, is like Dennis on 30 Rock
with his basement coffee business. It's so easy an ubiquitious that it's not
worth mentioning as a differentiator _at all_.

Separately from this, it ignores the fact that there are cost-based reasons
for these kinds of behaviors. Drivers, for example, have to think about round-
trip cost. If you ask me to drive you from Washington Sq. Park to Astoria, I
have to think about what fare to charge you such that it covers my expenses on
the longer trip _as well as_ the likely problem of not picking up a return
fare that takes me back to a high-traffic area.

This is all discussed with much greater statistical depth in the Naked
Capitalism articles on Uber, but the basic problem is that none of the ride
hailing services have found a way to make this any cheaper, except through
massive subsidy (to pay drivers to be the ride stock in low-profitability
zones they others wouldn't be in). And even with an innovation like self-
driving cars, it would only make a difference if it is not a commodity. If it
is a commodity (which, IMO, is the overwhelmingly most likely outcome for
self-driving cars), then either Ubers completely captures all relevant IP for
end-to-end commercial solutions ahead of any competitiors, or else Uber is
licensing out the cars just like everyone else, and for whatever cost
reduction it buys them for getting rid of drivers, it just creates a new price
war race to the bottom on who can charge the least for the self-driving based
rides.

I'm just so tired of all the mental gymnastics defending them. It really is
total ownership of all IP for commercial self-driving cars or bust for this
business model.

And if it busts, you'll see that all the niceties you describe in this comment
are mostly the product of either (a) massive investor subsidy, or (b) easy and
cheap-to-copy innovations like a map and location-enabled hailing app.

~~~
throwaway_80bf3
> This is so utterly false. You're essentially claiming that the value of
> these services is all based on the innovation of the _hailing_
> functionality, but there are countless apps that recreate this functionality
> _exactly_ whether for 'regular' taxis or separately licensed cars.

There wasn't before Uber showed up. Last time I took a Juno, the driver asked
me if he could text me a promo code so I could send it to me friends, that's
when I stopped shopping around

> Separately from this, it ignores the fact that there are cost-based reasons
> for these kinds of behaviors. Drivers, for example, have to think about
> round-trip cost. If you ask me to drive you from Washington Sq. Park to
> Astoria, I have to think about what fare to charge you such that it covers
> my expenses on the longer trip _as well as_ the likely problem of not
> picking up a return fare that takes me back to a high-traffic area.

It's illegal in NYC for a yellow cab to refuse a ride request to any of the
five boroughs. As for the livery cabs, the pricing was inconsistent for the
same trips, over and over. Doubt any of it had to do with anything other than
maximizing fare, which is their prerogative, since there there are no checks
in place for that kind of behavior.

> This is all discussed with much greater statistical depth in the Naked
> Capitalism articles on Uber, but the basic problem is that none of the ride
> hailing services have found a way to make this any cheaper, except through
> massive subsidy...

I understand this. It doesn't invalidate the sea change in the experience of
moving around NYC, particularly in the evening and late night.

> And if it busts, you'll see that all the niceties you describe in this
> comment are mostly the product of either (a) massive investor subsidy, or
> (b) easy and cheap-to-copy innovations like a map and location-enabled
> hailing app.

Let's hope (b). I doubt these innovations would have spontaneously arose from
the taxi commission or the livery cabs.

~~~
x_throwaway80bf
> It's illegal in NYC for a yellow cab to refuse a ride request to any of the
> five boroughs...

Yes, of course. But the reason you don't see Uber drivers doing the same thing
(or outright avoiding these unprofitable trips) is that they are subsidized to
provide that unprofitable ride stock in areas where it's intrinsically not
economical to provide ride stock. When you compel a yellow cab to do it, it
means the prices have to be higher. This is why it makes less sense to compare
the Uber experience to the yellow cab experience. It's like saying, "Would you
prefer if a celebrity donated their first class Emirates seat to you, or a
coach seat with United?" It ignores the mechanism by which the experience can
be afforded to the end user (in Uber's case, huge subsidy, with no sign that
the prices could be sustained absent the subsidy).

Overall I understand your comment and I realize you are aware of the
counterpoints I'm making. The thing for me is that highlighting the good
experience actually _is not a useful point of comparison_ with older, crappier
cab experiences, specifically because everything we experience with Uber right
now is inherently part of this huge ambient subsidy-based perception
distortion field.

~~~
throwaway_80bf3
Ultimately no one did anything about the experience I brought up in the OP
until Uber. This isn't an endorsement of Uber, more of a statement of fact.
That anyone can now avoid all the old PITA of moving around NYC is good.

I generally don't consider the long term sustainability of the companies I
purchase goods from. I do try to apply a vague and probably non-uniform
ethical filter to them.

That said, I'm a software developer and my very generous salary is the
indirect (via the demand curve) result of the destruction of manifold
entrenched business models at the hands of VC subsidies. If I spent all day
hailing yellow cabs it wouldn't make a difference.

~~~
x_throwaway80bf
> I generally don't consider the long term sustainability of the companies I
> purchase goods from.

We could probably go on at length about the moral problems here, but likely
not productive in a comment thread.

> That said, I'm a software developer and my very generous salary

I'm not sure how to read that. I am also a software engineer, and even very
high salaries in wealthy urban zones are typically not 'generous' in the sense
that good software labor creates a vast wealth surplus for the shareholders
and ownership, to such a degree that the high salaries are still not very
fair.

> the indirect (via the demand curve) result of the destruction of manifold
> entrenched business models at the hands of VC subsidies.

Sure, but usually companies are expected to demonstrate evidence that the
subsidy wouldn't be _permanent_ .. that there is evidence of a path to
profitability.

The reason it's worthwhile to draw much more attention to the VC subsidy
situation with Uber is that they have not been able to do that, and have
instead generated unprecedented losses without making any progress towards
profitability. It makes it incredibly different than typical cases when VC
subsidy creates a short term runway to profitability. That is not what's going
on.

~~~
ghaff
Perhaps I shouldn't have been, but when Dara Khosrowshahi got put in as CEO, I
was a bit surprised that part of his mandate wasn't to adjust fares to the
point where is was a sustainable business and, if that turned out to be
impossible, turn off the lights. I know things like self-driving get held up
as some sort of magical pixie dust coming RSN, but close your eyes and hope a
miracle happens doesn't seem the best approach to business strategy.

~~~
x_throwaway80bf
Rather than 'turning off the lights' Uber is surely planning to find some
means by which they can use hype to drive their valuation higher in
preparation for an IPO.

When a company in this situation goes to IPO, it is generally a tool for the
existing investors (who know that their investment is not worth the perceived,
hype-driven valuation) to externalize the losses out onto unwitting regular
folks who passively come to own Uber stock through some random 401(k) manager
or speculative day traders.

Uber's IPO will inevitably be a massive wealth transfer from regular folks to
Uber investors, who will get good returns on the original investment (because
they will be able to sell their stock at the hype-inflated prices), followed
by a massive stock correction lowering the price to the true valuation that
correctly prices in this subsidy effect and the strength or weakness of the
business model.

After that correction, the price movement will reflect aggregated beliefs
about whether Uber can innovate and find solutions for these problems. But the
problem is with that initial externalization of losses from the IPO. Once
original investors and early employees are paid out of the proceeds of that,
they are free to leave and don't need to care about the long-term
profitability of Uber, which in turn means that as long as they can keep
levering up the valuation through hype now, they don't need to fix any of the
fundamental problems (and, sadly, they are acting rationally, unless people
find ways to ensure their portfolios do not come to include Uber after the
IPO, and refuse to buy until they wait out the correction).

~~~
ghaff
Your doubtless correct. To the degree there’s a trade off between management
and investors getting the max cash-out and Uber operating as a profitable
business we all know which will take priority.

------
alexggordon
So since this information was so hard to pull out of the article, I've
summarized it according to the weekly ride-share dominance chart[0]. Pre
#DeleteUber, Uber sat at about ~75% of the weekly rideshare dominance.
Currently, Uber sits at about ~68.5% of weekly ride share dominance. While it
sounds like there were about half a million people that requested their
account be deleted, at least in NYC (remember these charts are JUST NYC ride
hailing) the campaign has had a negligible impact.

Judging by the demographic of people that protest, and are protesting on
twitter, I'd be more curious about judging the impact of #DeleteUber by
looking at ride-hailing rides around epicenters of people younger than 30.
Fortunately though, he covered this also, touching on Lyft's growth in
Brooklyn. I'd also be curious about ride hailing stats around universities
too.

[0]
[http://cdn.toddwschneider.com/taxi/update2017/ridehail_marke...](http://cdn.toddwschneider.com/taxi/update2017/ridehail_market_share.png)

------
lkrubner
This is one of the more interesting things that I learned from the article:

" _Uber’s share of all ride-hailing trips has generally declined since 2015 as
more competitors entered the NYC market, even as its total number of trips has
increased dramatically._ "

That would have me worried, if I was an investor in Uber.

~~~
godzillabrennus
I think in general investors are aware that Uber will need self driving cars
to stay relevant.

Transportation is going to become a monthly flat rate like a cable bill for
local travel via autonomous vehicles and the winners will be the companies
that own the fleets and get to charge the tolls.

Owning your own car will be a luxury item.

Owning a gasoline powered car will be an extremely niche luxury item.

Obviously this won’t happen tomorrow but it’s not hard to see the parallels to
the horse and buggy industry in this transition.

New players will emerge to be the big names in this new industry and Uber
investors hope it will be one of the winners.

~~~
ghaff
That would seem to be a very urbanite view of the world. A lot of people have
good reasons for owning their own personalized vehicle. (Gear, kids, mobile
storage locker, etc.) So long as you live somewhere with enough space that
storing a vehicle isn't expensive/difficult, given that most of the costs are
in mileage, it's hard to see most people giving up ownership.

And, in any case, full door to door autonomy, in at least most locations, is
likely a long ways off. Certainly outside of the relevant horizon for Uber
investors.

~~~
isostatic
Kids is a big thing -- needing specific car seats means taxis are out until
your kids are 12.

That said the average car costs $34k in the US and lasts say 10 years, that's
$3,400 a year. Maintenence, taxes, etc another $1500 at least, that's $5k/yr
before you move an inch.

While automatic cars may not get rid of everything, many 2 or 3 car families,
especially in the suburbs, may drop to 1.

~~~
Spooky23
Normal car expenses are around $0.55/mile for an average car. The average joe
pays about $8,000-$8,500 annually for all car related expenses. Some pay more
for fancy stuff or utility.

That's why suburbs exist. Financially, it's a much better deal for families on
just about any axis.

~~~
isostatic
With an average 13-15k miles a year, at 20-30mpg that's about 400-750 gallons
a year, or $1000-$2000 a year in gas, leaving the vast majority of expense in
deprecation and maintenence.

~~~
ghaff
>leaving the vast majority of expense in deprecation and maintenence.

Depending on the car, gas is probably between about 20% and a third of a car's
operating costs (which are typically in the 30 cent to 60 cent per mile
range). Although there are a few vehicle costs, like excise taxes, that are
more or less independent of distance driven, most car expenses will scale with
mileage--especially in regions where rust isn't a major issue.

------
jdlyga
In NYC, Juno is cheaper in most circumstances, and you get better drivers.
Otherwise, Via or Lyft. There are so many options instead of cludgey old Uber.

~~~
jbob2000
Thankfully, Uber exists. Otherwise I'd have to download and register on all
sorts of dinky city-specific apps any time I travel.

Uber, for all of its faults, is the only one that works in every city I've
traveled to.

~~~
ghaff
I won't say it's _vanishingly_ small but, relatively speaking, there aren't a
huge number of people who have a problem with needing taxi services in a bunch
of different cities. I travel about 100 days a year and I don't use these
services very much and I don't think I've used Uber in a year or two.
Worldwide availability of a brand just doesn't seem like a huge deal.

~~~
seanmcdirmid
There are some places where brands like Uber is extremely valuable, like
Manila, where taxis are very apt to rip off free-off-the plane foreigners.
Heck, most of SE Asia (there are local services also, but I’d rather not track
them down before each trip).

~~~
ghaff
That may be the case but my point was that hopping off-the-plane in SE Asia
and grabbing a cab is not such a routine occurrence for most Westerners as to
be a viable business model for VC-backed companies.

~~~
isostatic
Outside of america, how many people routinely travel by taxi/rideshare/etc. In
my experience, most locals take public transport. The international
businessperson (on expenses) is a large market -- look at the size of the
market for hotels, airlines, etc.

The one place I see taxis in use as mass transit by normal people is
Singapore, where they are mostly ubiquitous (in the centre) and cheap. Even
then getting a taxi if you're a couple of miles out (say in Hougang, where I
spent a month) is hard work - Uber wasn't perfect but it worked well enough.

~~~
seanmcdirmid
China: taxis and ride sharing is extremely popular with the middle class.
"Most locals" do take public transit, but given 10 million people in Beijing
alone, some is still a large number.

Most developing Asian economies have thriving taxi industries where taking a
taxi isn't considered a niche service/extreme luxury. Heck, taxis were never
that popular in America, nowhere near how they were popular in China in even
1999.

~~~
isostatic
I took a taxi in beijing a few years ago. Was in it about 40 mintues, traveled
about a mile. Paid the driver a 20 Yuan note (about $3) and went into the
hotel. Driver came running after me with 8yuan in change.

I assume taxis are still insanely cheap, and traffic is still insanely bad.
Last time I was there I took the train and metro. I do the same in Moscow -
why sit in traffic?

~~~
seanmcdirmid
Have you seen Beijing's subway? I travelled to and from work off hours, so I
would go to work around 6:30 and come home around 3:30-4, taking the taxi to
and from each day was totally feasible and affordable. Even in peak traffic,
you still might win in a taxi vs. a subway depending on where you are going.
When the whole system melts down, sure, take the subway as a last resort.

~~~
ghaff
I took Beijing's subway around quite a bit last summer. At least where I was
going, it seemed preferable to sitting in traffic. Payment seemed easier to
navigate as well compared to the prior time I visited. I'd have said it was a
pretty decent subway system overall.

~~~
seanmcdirmid
I think if you are exploring the city during rush hour, sure subway makes
sense. If you have a fixed route you go between everyday and know when the
traffic ebs and flows, taxis are much more convenient. If you are out at night
after rush hour, then taxis are the obvious choice.

Beijing's subway system is crowded, some routes are super crowded (line 10,
ugh), interchanges can be long and windy, and can also have their own long
lines (e.g. transferring at dongzhimen during rush hour). There are a lot more
lines definitely then when I started living there (2007, line 10 didn't even
exist yet), but there are very good reasons didi is still extremely popular.

~~~
isostatic
The system can be crowded, but not as crowded as Tokyo or even London IME
(very limited experience of course)

------
Endy
See, I guess I'm funny about cabs. For my lifestyle, I mostly ride the MTA -
buses, subway, etc. I plan based on that cost and timing. When I've had an
interview and needed to take a direct above ground route, I always take a
yellow cab. I also make it very visible to the driver that I'm photographing
the driver's number and name before I enter the vehicle. I don't do Uber/Lyft
because I don't trust their consumer protections as much as I do those from
the City or the T&LC.

Of course, I also have a prepaid phone & I have no desire to waste my data on
hailing a cab. And I prefer to pay in cash where possible.

