
The $99B Idea: How Uber and Airbnb Won - ereli1
https://www.bloomberg.com/features/2017-uber-airbnb-99-billion-idea/
======
greggman
Uber sounds pretty evil

> The FTC claimed that Uber was advertising an annual median income of over
> $90,000 per year for uberX drivers in New York and more than $74,000 for
> uberX drivers in San Francisco. But, as the commission found out, less than
> 10 percent of all drivers in those cities actually make that much. The
> complaint also alleges that Uber was inflating the hourly earnings on job
> boards like Craigslist.

> New drivers who financed a new car through Uber's Vehicle Solutions Program
> found out the company's claims were too good to be true as well. Although
> Uber told new drivers they would be able to lease a new car for around $119
> per week, the actual lease rates never dipped below $200 from late 2013 to
> April 2015. And, despite it's promise of delivering "the best financing
> options available," it turns out that Uber's rates were actually worse than
> consumers with similar credit scores could have gotten elsewhere. Adding
> insult to overpriced injury, Uber tacked on mileage limits to lease
> agreements that were advertised with unlimited mileage.

I like “taking an Uber" but if they’re screwing people over by false
advetising I’d consider boycotting them. Been in several Ubers where the
driver had just bought a high end-ish car specifically to be an Uber driver.
It sounded risky to me and I was sad the driver was taking such a big chance
although assumed it’s possible his calculations showed it would work out. Now
thought it’s apparent that Uber lied about how much he’d make, lied about how
much the car would cost, and lied about the lease terms.

Continuing to support Uber seems problematic knowing I’d be helping screw
people into more debt and poverty.

Oh yea, and they're a YC company

Oh and don't get me started on AirBnb. I've documented all kinds of issues on
my blog. The latest is they removed a negative review. Log in and it says I
never submitted it. Not only did it used to be on their site I still have the
confirmation email for it.

~~~
hkmurakami
Airbnb is a YC company. Uber is not.

~~~
XJOKOLAT
They're a bunch of scumbags too. Well, senior manatgement definitely - and
that probably trickles down to their systems and who they hire but I'll
reserve judgement.

~~~
tim333
I've used airbnb a few times as both a host and a guest with few problems. Any
evidence for the scumbaginess?

~~~
XJOKOLAT
Anecdotal.

I've used them also. It's when things go really wrong when you'll understand
the issues with them.

This might not be the majority experience, and I accept that, but I wouldn't
touch them with a barge-pole based on my experience.

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Illniyar
that, or - they found a heavily regulated market, ignored all the laws,
invented a business model that didn't squarely fall into legal precedent and
that the people in charge of enforcing the law (city officials) aren't very
keen to enforce it.

We applaud them only because we believe (and probably rightly so) that those
regulations are there only to prevent competition for entrenched interests.

It's not sharing economy if the majority of the people offering the service do
it full-time.

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nojvek
I always think about the time when Facebook and Google were bleeding money.
They were thought of as terrible businesses.

When you have a shit ton of eye balls, you have a money printing machine:
"Ads". Just plaster them in the face of users. Now with machine learning and
average user expecting little privacy, you can really target the ads and
customize it per person.

It's amazing Wikipedia hasn't gone in the path of ads. I'm grateful for that.

If uber's self driving car gizmo works out, which there is a good chance. They
can make zero profit on rides and make them $1/10 mile trip. Make the cream
off in car entertainment and services.

They can have average person buy the car and rent it out to Uber network.
Airbnb already loans money to home owners to renovate their houses.

~~~
hkmurakami
If a large user base were the only metric, then shouldn't Twitter have more
robust revenue numbers? (Though I think I can see a world where Uber has more
relevant tracking data than Twitter)

Also, I hate flying airlines where they'll keto allowing you ads on their in
flight screen (I think I had one flight where there was no entertainment and
just ads). I'd happily rider on a competitor with higher prices that didn't
thrust a bright ad laden display on me during the trip.

~~~
MusaTheRedGuard
Twitter also has what somewhat ridiculous costs

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Palomides
read the article, what was the idea?

spamming craigslist users to bootstrap your userbase?

using venture capital to undercut existing businesses and get the public on
your side, allowing you to dominate local politics?

~~~
aianus
Offloading risk and capital costs to ordinary members of the public that
already owned underutilized assets. Love them or hate them, it was pretty
genius.

~~~
deepakhj
Lyft (zimride) started the first carpool site. Sidecar started the first
rideshare app. Uber used excess black cars capacity to start. I would say
sidecar and lyft were pretty genius but Uber won the game.

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010a
> How Uber and Airbnb Won

The game never ends. No one wins. They can only be "winning".

~~~
zappo2938
Like Charley Sheen?

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arturmakly
in defense of Uber, here in Argentina ( where the taxi industry is run by the
"mob" ) Uber's ability to instantly provide a safe and steady stream of income
to thousands on the verge of middle-class collapse has been a godsend.

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maverick_iceman
I always wondered what's exactly the value that AirBnB is providing? Why can't
a website with reviews by guests and hosts (with money handling) be run at a
much smaller cost?

~~~
jimmywanger
Basically trust and brand, as they said in the article. They had to come up
with both supply and demand at the same time. You wouldn't use a service with
limited supply, and as a renter, you wouldn't list your property on a service
without any people willing to rent your spare room/apartment.

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quentindemetz
> Airbnb can be considered one of the biggest hotel companies in the
> world—currently valued at $30 billion.

Priceline Group, owner of Booking.com, is currently valued at $79 billion.

------
kartan
"Uber Loses at Least $1.2 Billion in First Half of 2016"
([https://www.bloomberg.com/news/articles/2016-08-25/uber-
lose...](https://www.bloomberg.com/news/articles/2016-08-25/uber-loses-at-
least-1-2-billion-in-first-half-of-2016))

How is that winning? Is capitalism dead and profits don't count anymore? Then
what are the social benefits of company known for sabotaging unions and
fighting against labor protection laws?

The original idea, to share car rides, was really good and worth investment.
Now it is just a big bubble waiting to explode.

~~~
tomblomfield
People said this about Amazon for 20 years [http://www.ibtimes.com/amazon-
nearly-20-years-business-it-st...](http://www.ibtimes.com/amazon-
nearly-20-years-business-it-still-doesnt-make-money-investors-dont-seem-
care-1513368)

And for 8 years about Facebook
[http://www.theinquirer.net/inquirer/news/2219503/facebook-
gr...](http://www.theinquirer.net/inquirer/news/2219503/facebook-grows-
members-and-revenue-but-still-loses-money)

I wish I'd bought stock in both while they were still losing money.

~~~
sremani
Uber needs to hit its timeline esp. with self-driving car very fast, they are
for now branching into eats etc to buy some time. I used to think Uber is a
slamdunk, but their humbling in China and India, showed that they need to
protect Fortress America very bad and get Self-driving cars on the roads by
turn of the decade.

I am more long on AirBnB than Uber.

~~~
kartan
> get Self-driving cars on the roads by turn of the decade.

It is not the same to create an app than to purchase and maintain a huge
number of cars. That is a completely different business model.

Isn't the article about how "sharing economy" is so good. Then why Uber wants
to get rid of it so badly?

AirBnB is more focused in its core business. The equivalent for them will be
to create Hotels around the world. Hotel industry is a good one, but AirBnb
doesn't has the business experience to work on that. And that's why they
experiment on that in a less visible more realistic way
([http://www.businessinsider.com/airbnb-builds-hotel-japan-
com...](http://www.businessinsider.com/airbnb-builds-hotel-japan-community-
samara-yoshino-2016-8?r=UK&IR=T&IR=T)).

~~~
tim333
Also I see no reason to give Uber a high chance of being the first to develop
level 4 autonomous cars. Google, Tesla and Volvo all seem ahead. And then why
should they give the market to Uber rather than run their own taxis? Tesla are
already talking about competing.

("Tesla says it will roll out Uber-style ride-hailing program
"[http://europe.autonews.com/article/20161020/COPY/310209846/t...](http://europe.autonews.com/article/20161020/COPY/310209846/tesla-
says-it-will-roll-out-uber-style-ride-hailing-program)

"No, you can't use your self-driving Tesla to make money through Uber"
[http://mashable.com/2016/10/20/tesla-ride-sharing-
ban/#6Mklf...](http://mashable.com/2016/10/20/tesla-ride-sharing-
ban/#6Mklfcj1Ckq0) )

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baybal2
All of that was everyday reality for people outside of the first world
countries long before internet was a thing.

1\. Flats turned into mini hotels - existed since first highrise appartments
started appearing in 3rd world countries

2\. Carpooling - old as the world. In smaller Russian cities, people
absolutely don't mind driving strangers around for a symbolic sum. In "good ol
times" people used to do it for free.

3\. Food devilery - phone order pizzas anyone? I remember first internet
groceries started at around 1998, and they catered to really rich demographic
living in far off suburbs ($30 just for the delivery fee, a daily income of a
well off family back in 1998), but later internet only ones started to be
displaced by existing grocery chains

4\. "Microcommerce" \- I don't know why Americans classify just selling
anything with an app as such and why it is anything special

5\. Regional same day delivery couriers - same story

6\. Alibaba thing - classifieds in a newspaper?

All what Americans call the "sharing economy" or "economy 2.0" was what 80% of
small business was about outside of the "developed countries"

~~~
akum
True, but you had to know/trust the other person. These platforms solve that
problem through reviews and handling of payment.

~~~
graeme
Not so. Ride sharing in other countries often happens without knowing the
people you share rides with.

~~~
hkmurakami
What kind of social fabric do these countries have? What's the crime rate? The
US being a very diverse and relatively high crime country makes such acts
difficult.

~~~
kogepathic
> What kind of social fabric do these countries have?

In Germany it is quite common for people to carpool between cities with
strangers. We even have websites for pairing drivers with passengers
(mitfahrgelegenheit). These have existed since long before Uber.

Say you're driving between SFO and LAX to catch a flight. You put your
place/time of departure on the website, and other people can request to ride
with you.

Usually there is a small cost to the passengers to split the cost of fuel.

Passengers can then rate the driver/car on things like punctuality, comfort,
personality, etc.

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RobPfeifer
Presumably this a PR article?

