
Uber and Lyft competitors ready if service is suspended in California - prostoalex
https://www.cnbc.com/2020/08/19/uber-and-lyft-competitors-prepare-to-grab-market-share-in-california.html
======
asperous
My prediction is that in the cities, things mostly won’t change. In rural or
suburban areas, cost and wait times will explode, if service is offered at
all.

With minimum wage enforced, waiting in areas where drivers don’t make minimum
wage on average will vanish since scheduled services are risk adverse and have
lots of information. Before drivers might service those areas hoping to get a
ride taking them to urban areas. Drivers don’t have good statistics on where
to wait. Coordinated services do.

~~~
Barrin92
> In rural or suburban areas, cost and wait times will explode,

Utilization of ridesharing in rural areas is low[1]. It's a mode of
transportation mostly used by urban affluent individuals with plenty of
expendable income and as far as other reasons are concerned internet and
credit card access trump any sort of supply problem.

 _" Suzanne Ashe was once the only Uber driver in Haines, Alaska — population
1,374 — and said she kept getting kicked off the platform because there
weren’t enough people asking for rides. She also found that some places
weren’t on Uber’s maps, so clients couldn’t enter their destination, and
internet could be spotty. For these reasons, Ashe quit Uber and started her
own ride-hailing business called Red Cab, named for her 2010 Red Chevy HHR,
the only car in her “company.” She charges a flat rate of $10 per ride and $30
per hour. “In order to cater to rural areas, especially areas where there
isn’t a saturation of network, then a cab company makes a lot more sense,” she
told Chilkat Valley News."_

It seems to have become fashionable to rush to Ubers defense by framing it as
some sort of necessary mode of transportation for the undersupplied when
instead every piece of data suggests the opposite. It's luxury transportation
for the upper middle-class on the back of disenfranchised metropolitan army of
reserve labour.

[1][https://www.vox.com/the-goods/2019/1/11/18179036/uber-
lyft-r...](https://www.vox.com/the-goods/2019/1/11/18179036/uber-lyft-rural-
areas-subscription-model)

~~~
mehrdadn
I don't see Uber as class- or luxury-related at all. They have all kinds of
customers. Sure they have affluent customers but e.g. college students
actively seek each other to split Uber fares too. Many people would prefer to
drive instead of taking an Uber, but they do the latter because often there's
something preventing them from so (like lack of parking space, or any car to
begin with). Are cars luxury upper middle-class commodities now too?

And when utilization is high, ride-sharing is arguably more carbon-friendly
too. The same affluent folks you're talking about could be driving a car
instead of sharing rides with other people if they were left with that option.
Even _if_ you think ride-sharing is somehow a sign of affluence (which it very
obviously isn't, if you've lived in other countries where entire cities
function on hitching rides with strangers every day), you shouldn't want to
discourage it and look on people using it with disdain.

~~~
paulgb
Not sure why you're being downvoted. A lot of the Uber/Lyft users I know were
(pre-Covid) Uber Pool/Lift Line users. Cramming into a car with strangers that
takes 2-3 diversions on the way to your final destination isn't really luxury;
it's a stop-gap for when the trip you're making is underserved by transit.

For my lifestyle, owning a car would be the "luxury", not ride sharing.

~~~
mycall
Unfortunately, Covid is killing regular transit in ridership and next year,
taxes.

------
mdorazio
A lot of Uber and Lyft proponents don’t really consider this. If both of them
leave the market, the demand will still be there and will be served by other
entrants that have more viable business models (including adherence to laws).
This is exactly what happened in other markets where Uber and Lyft left for
various reasons. Granted, the experience might be a bit worse for riders (Ex.
waiting longer), but I’m 100% ok with that.

~~~
908B64B197
Posted it in an other thread [0] but do we really want to go back to the
medallion system?

Pre-Uber, either the driver rented the car to a middleman who rented the
medallion from a rich owner, or said owner was selling and financing (most
banks won't touch these medallions!) a medallion at a ridiculous interest rate
to a driver that planned to use it as his retirement savings (an extremely
volatile asset and not very liquid).

The more I spoke to cab drivers the more it seemed their industry was a
pyramid schemed aimed at helping established rent-seeker take advantage of
often poor new immigrants. Uber brought a breeze of fresh air: Someone could
simply buy a car, calculate the depreciation and it's value on the market
(since unlike medallions cars are relatively liquid assets!) do rideshare and
calculate their profits or loss. They can get out of the game at anytime, and
they know exactly how much they are going to get for the car they have should
they sell it.

Also, the argument on Uber/Lyft drivers not being contractors since they can't
set their own rates and decide which ride they take strikes me as weird since
medallion drivers were contractors, had to charge the price set by the city
and could only pick-up customers in the (arbitrary) zones covered by their
medallions.

[0]
[https://news.ycombinator.com/item?id=24225648](https://news.ycombinator.com/item?id=24225648)

~~~
thewebcount
> Posted it in an other thread [0] but do we really want to go back to the
> medallion system?

No, but that doesn't preclude us from stopping Uber and Lyft. We can have a
different system where there are no medallions, the number of cars aren't
artificially constrained, but the companies running them need to obey existing
laws.

~~~
wtvanhest
It could be interesting to artificially constrain the number of cars and
auction the slots on a rolling 12 Month basis so that the tax payers get the
full value of the licenses rather than speculators

~~~
LegitShady
welcome to the medallion system

~~~
aeternum
It should not be just cabs, it should be all cars

------
momokoko
California is the 5th largest economy in the _world_. There is no way Uber and
Lyft will just leave that market. These are the emptiest of threats.

Uber and Lyft’s board would absolutely loose their mind if executive
leadership decided to just exit, once again, the 5th largest economy in the
_world_

~~~
bthrn
Keep in mind Uber operates in almost a thousand cities worldwide. Of course
certain places will earn Uber more than others, but it’s not a huge hit to
their revenue.

The real threat, as I see it, is other states enacting similar laws that will
have a domino effect.

~~~
Invictus0
Uber does operate in many cities, but its revenue is disproportionately
concentrated in California:

> “In 2018, we derived 24% of our Ridesharing Gross Bookings from five
> metropolitan areas — Los Angeles, New York City, and the San Francisco Bay
> Area in the United States; London in the United Kingdom; and São Paulo in
> Brazil,” Uber writes in the S-1. “An economic downturn, increased
> competition, or regulatory obstacles in any of these key metropolitan areas
> would adversely affect our business, financial condition, and operating
> results to a much greater degree than would the occurrence of such events in
> other areas.”

[0] [https://nymag.com/intelligencer/2019/04/uber-s-1-new-york-
ci...](https://nymag.com/intelligencer/2019/04/uber-s-1-new-york-city-could-
destroy-uber.html)

------
johnnyb9
I recently requested a Lyft “wait and save” and had to suffer through 3
cancellations (I was going to the airport). I think there are definitely
cracks in the “independent contractor” model if Lyft can quote me a definite
timeline (15 min wait), have 3 drivers cancel on me because the fare was too
low.

~~~
icedistilled
Same, tried to get both either an uber or lyft in an upscale mountain town
recently. Their algorithms seem completely unable to cope with rural areas,
especially in these covid times.

Zero drivers. No drivers to even reject the horribly underpriced fair for our
4 mile trip. Both uber and lyft assumed the driver would be already near our
location, not 4 miles away.

Lyft and uber started quoting the ride as as about $9. Lyft never changed it.
Uber did actually up the price to $20something after it failed to find
drivers.

Local taxi company charged us $60 bucks. $30 + tip would have been what I'd
think as reasonable starting for lyft or uber. That's 3x what either of
showed.

------
dalfonso
The cities need to step up and set up their own ride sharing services e.g.
[https://www.metrolacampaigns.net/](https://www.metrolacampaigns.net/) in LA

~~~
marcell
I’m sure the institution that brought us the Los Angeles public school system
and the thriving Los Angeles public transit system will surely succeed in
building an Uber competitor.

~~~
meow1032
I have a feeling that the lack of faith that Americans have in their
government ends up being a self-fulfilling prophecy. I work closely with a lot
of government employees, and it really seems like 95% of the work is about
avoiding "boondoggles" \-- i.e. highly visible failures. This is because
boondoggles can be used as political tools, and ultimately, politicians are
more concerned about getting reelected than getting anything done. The upshot
of this, is that they would rather risk low visibility failures way more than
high visibility failures. As an example, about 10 years ago, they were looking
to install wifi in one of the buildings that I work in so they bought a bunch
of routers. One of the higher ups wanted to assure that this wouldn't cause
any security issues so they ordered audit after audit after audit. Eventually
they just stopped trying and the building still doesn't have wifi, and they
wasted all the money on those routers and audits. The problem is that they
don't even have any sensitive data or data to be secured on that network. It's
like this for _everything_. I think a better system would be to tolerate some
very visible failures vs basically guaranteed non-visible failures.

~~~
AnthonyMouse
Federal receipts as a percentage of GDP have been basically the same since
WWII. (Before that they were significantly less.) One of the reasons for this
is that we started spending around the "maximum size of government" level
during WWII for obvious reasons, i.e. the point past which raising taxes
doesn't increase government revenues because they're offset by shrinking the
economy, and never receded from there because there was never anyone who could
cause it to stop and had the incentive to. What changes is really only who
gets the money.

So all the spending is effectively zero sum. The real tax rate never really
goes up or down very much, so if you want to do something, you have to find
something else to not do.

All of the incentives then fall directly out of that. If you're getting money
and nobody is paying attention to you then the most important thing is to have
them continue to not pay attention to you so that you can keep getting the
money. Meanwhile, if you want to get money for something, find someone else to
make look bad so you can justify taking it from them.

Obviously this doesn't produce good results, but the problem is structural.
The populist reforms made in the first half of the 20th century deleted all of
the checks and balances on federal spending (compare how much of the budget of
EU countries is the EU itself), which requires government programs to compete
based on political power rather than merit because you can't just say that a
program is worth the money, you have to find something else to displace whose
advocates are weak enough to defeat because the trough is already full. Which
has little to do with whether your program is better than theirs.

Imagine if we spent half as much money but the reduction came out of the likes
of ludicrous military boondoggles and de facto subsidies for pharma companies.

------
dawnerd
I hope drivers end up being forced to be employees with a set schedule. It
would hopefully weed out all of the REALLY bad drivers both platforms have
that I even wonder how they have licenses.

------
innagadadavida
Does this men taxi medallions are good investments again. Sometime back there
were articles about how the medallions market had completely crashed due to
Uber and Lyft.

------
_red
No doubt the competitors will be closely connected to politician families?

~~~
notassigned
This is the usual with these 'compassionate' government ideas. If you can't
compete with a company, lobby the government to force your competition out of
business, while calling it a kindness to the public.

------
iaw
> "Last week, top executives at Uber and Lyft said that, if forced to comply
> with the ruling, they’d likely have to suspend service in the state while
> reworking their businesses around the law."

>"[The law] once passed, Uber and Lyft claimed it shouldn’t apply to them,
prompting California’s attorney general and three city attorneys to sue the
firms for misclassifying workers."

So instead of taking the time to prepare to meet the new requirements of a law
that to some extent was directly aimed at them, the current ride-sharing
incumbents decided to play legal chicken and not prepare re-tooling for the
change.

~~~
tomdell
Uber and Lyft’s sole “innovation” is in driving down the value of driving by
reclassifying drivers as contractors and not having to pay benefits while the
drivers barely earn more than they spend to keep working, so I don’t think
they’re going to give in easily. It’s a shame the initial investors already
got away with IPOs and foisting the consequences off onto general investors
before the underlying business models collapse.

~~~
caturopath
> Uber and Lyft’s sole “innovation” is in driving down the value of driving by
> reclassifying drivers as contractors and not having to pay benefits

This is supremely untrue: a huge part of Uber and Lyft's value proposition is
not cost related at all. (Also, cab drivers generally aren't employees most
places.)

They are more faster in most places. Other than some urban cores and transit
hubs, it is much faster to get a pickup by Uber/Lyft than it ever was a taxi.

They are more reliable in most places. When you call a taxi, it may or may not
show up, and you won't be told whether they're going to no-show after you call
them.

They are more convenient. Ordering an Uber/Lyft is really easy. Most places,
if you want to call a taxi, you have to use the telephone or use an inferior
smartphone app. When they started growing, it was almost always the former.

They are a more pleasant experience. My worst experience in an Uber/Lyft ride
is day-to-day in a taxi. I've had truly terrifying experiences with taxis.

Many of these factors are actually irrelevant to their labor practices. Some
of them do relate (for instance, drivers are very vulnerable to rider low-
ratings, in part since firing them is easier than firing employees), to be
sure.

~~~
mamon
Ok, so it seems that taxi service in US sucks.

In Europe traditional taxi companies caught up pretty quickly, you can now
order taxi ride via app that has UX similar or even nicer than Uber, and you
get licensed taxi driver, car with taxi signs, so that you no longer need to
stare weirdly at all black Priuses approaching you, and the driver can speak
your language, and knows his way around the city. To recap: traditional taxi
service is of much better quality than Uber, and only slightly more expensive,
therefore much preferred.

The only time I used Uber was in the US, once I came back I don't miss it at
all. I don't know what exactly is wrong with US taxi market, but Uber and Lyft
aren't the only solution.

~~~
graeme
This ought not be downvoted. If this is correct, the UX of those taxi apps
handles everything I mentioned in my parallel comment.

I’m in Canada, and taxi UX really hasn’t caught up to Uber. But when I was in
Brazil there was a taxi app that was basically equivalent to Uber. Except
maybe you paid in cash. It’s possible for the taxi industry to improve parts
of their model. The north american taxi system may lack the incentives?

