
Uber’s Algorithmic Monopoly - chrisgd
http://mattstoller.tumblr.com/post/82233202309/ubers-algorithmic-monopoly-we-are-not-setting-the
======
apendleton
This article is written under the assumption both that Uber's only competition
is cabs, and that once cabs are gone (and I agree that this seems inevitable),
it will operate as a monopoly. At least in my market (Washington, DC), the
former is not the case, and I see no reason to believe the latter will be the
case anywhere.

Given that, it's appropriate to evaluate Uber's market-forces claims with a
view towards a larger market that includes more players than just Uber.
Anecdotally, I've found that their claims about surge pricing mostly hold
true: their service, while being priced higher at times of peak demand, seems
to generally stay available in a way that cabs or other services don't, and at
least sometimes, that has been worth it to me, and I've been willing to pay 2x
the price to have a ride in ten minutes. That said, if it weren't, there's
always Lyft or Sidecar (or, for the moment, traditional cabs), which would
inevitably offer different tradeoffs of price and dispatch time, and I'm free
to use any of them instead. If lots of consumers do the same, eventually Uber
will lose, or market forces will force it to adjust how it balances
availability with price.

In other words, exactly the way a market is supposed to work.

~~~
zenogais
This is a relatively ahistorical, naive view of the operation of markets. Even
with competition, assuming fixed price cabs eventually get driven to
extinction, then what? There would be nothing to stop the collusion of
existing market competitors (Uber, Sidecar, and Lyft) in order to drive up
pricing or perform market division (customer allocation) - that is assuming
that monopolies don't begin to form in the market as they are liable to do.
There is tremendous incentive and pressure from investors for them to both
divide markets and fix prices (eg, maximize profit). New firms may enter the
market in an attempt to undercut these forces, but they will likely be unable
to compete with monopolized pricing by the large companies and thus be driven
out of business before reaching any sort of reasonable scale. These kinds of
phenomena, far from being anomalies, are the traditional way in which really
existing markets work [1][2][3][4][5]. Ultimately, the resolution of such
problems occurs not through the markets - which instead create such problems -
but instead through the mobilization of state forces (eg. lawsuits and
monopoly busting).

This article just highlights the strong potential for these problems and more
to form in the developing taxi service market some time in the near future and
the algorithmic obfuscation used to give these forces the appearance of
neutrality and legitimacy.

[1]: [http://www.fbi.gov/news/stories/2013/september/guilty-
pleas-...](http://www.fbi.gov/news/stories/2013/september/guilty-pleas-show-
high-cost-of-price-fixing-in-auto-industry)

[2]:
[http://en.wikipedia.org/wiki/Sherman_Antitrust_Act](http://en.wikipedia.org/wiki/Sherman_Antitrust_Act)

[3]: [http://www.theverge.com/2014/2/1/5368098/apple-hit-
with-840-...](http://www.theverge.com/2014/2/1/5368098/apple-hit-
with-840-million-damages-claim-in-ebooks-lawsuit)

[4]: [http://www.tomshardware.com/news/microsoft-office-price-
fixi...](http://www.tomshardware.com/news/microsoft-office-price-
fixing,7533.html)

[5]:
[http://en.wikipedia.org/wiki/Price_fixing_cases](http://en.wikipedia.org/wiki/Price_fixing_cases)

~~~
apendleton
Right, I wasn't proposing a completely-unregulated market. Presumably
collusion and other anti-competitive behavior would remain illegal. In any
event, different behaviors towards fluctuating prices are already observable
as differentiators amongst different competitors in this space (Lyft has surge
pricing, but it's less aggressive, and Sidecar lets drivers set their own
prices rather than controlling it centrally). What evidence is there to
suggest that that would stop once cabs disappear?

------
michaelt

      A lot of people are focused on the company’s use of surge 
      pricing, [...] Kalanick notes “we are not setting the price, the 
      market is setting the price.” But then, non-ironically, 
      immediately adds “we have algorithms to determine what that
      market is.” In other words, the prices his company sets in the 
      markets that his company controls are somehow, well, natural.
    

I assume what he really means is "we set prices to make us as much money as
possible but it's not fashionable for CEOs to admit that, so here's some stuff
about algorithms and markets in the hopes you will not attribute our actions
to us."

Being surprised when a company tries to increase revenues and reduce costs
while avoiding PR blowback is like being surprised when a dog humps your leg.
That's just naturally what they do. If they could charge a million dollars for
a ride, not pay their drivers, and get all their competitors banned they would
do that too.

~~~
josu
While maximizing their profits, they are also matching the highest number of
consumers to the highest number of producers (service providers), thus making
the process more efficient.

And there are plenty of substitute goods (services) for the service they are
providing, so I'm really not sure about their ability to set prices as you
suggest.

~~~
nhaehnle
Is that actually how it works? Not having used Uber, my understanding based on
articles is that it does not work like an order book at an exchange, where the
price is determined by where buy and sell offers cross. Instead, Uber
basically dictates the price, and then whoever is happy with that price will
be matched. Correct me if this understanding is wrong.

What this means is that, as a first approximation, it is Uber that sets the
price, not "the market" (whatever that is). Obviously, Uber still needs to
take into account how both drivers and passengers react to the prices, but
those are second order effects, and the resulting price is quite likely to be
different from what you would get with a neutral platform that simply matches
order books.

In the end, I guess this all boils down to the truism that "the market" does
not exist. There are many, many different markets, all somehow defined by the
rules society sets up for them, and the resulting prices and relative benefits
to participants necessarily depends on those rules.

~~~
shabadoop
>What this means is that, as a first approximation, it is Uber that sets the
price, not "the market" (whatever that is).

The market is the aggregate of all other people providing a similar service.
Taxi companies, other Uber-like services, are all competing for the same
consumers.

If Uber is setting its prices too high, they'll lose customers to the
aforementioned competitors and they'll potentially earn less money if the
higher price doesn't offset the drop in customers. That's what people mean
when they say "the market sets the price".

I'm sorry, it just sounds like you're giving a very cliched "the market
doesn't exist" response in a situation where it just doesn't apply at all.
This is a market with competing firms, not a monopoly.

~~~
nhaehnle
_That 's what people mean when they say "the market sets the price"._

I know that that's what people mean. What I'm saying is that people are making
a mistake by not looking at the mechanism of how "the market" works.

Let us compare two worlds. World A is our world, where Uber sets the price for
its drivers and passengers. World B is a world in which drivers and passengers
place bids directly. Let's say that drivers' bids contain a basis price + per-
km price as well as the range within which they are willing to travel, while
passengers' bids contain start and end point and maximum price (perhaps with
the possibility of saying "market price"). Uber then matches those bids when
they cross in a manner similar to an exchange order book.

What I understand from your comment is that you believe that the price for a
ride in world A will be equal to the price for a ride in world B. That seems
like a rather bold claim that requires an extraordinary argument to back it
up.

And no, the "if Uber sets prices too high/low in world A, passengers/drivers
would move to competitors" argument is not sufficient, because nobody really
knows what the "correct" price is exactly (what does it even mean for a price
to be objectively correct? [0]). So there is a range of prices in which the
loss of passengers or drivers would happen rather slowly or not at all.

Where does the choice of the exact price within that range come from, and why
should it be the same in both worlds? Why shouldn't Uber be able to exploit
this uncertainty to increase their revenue by a few percent? Mind you, I don't
know whether this would benefit drivers or passengers relative to a different
world. The key point is the question of whether the worlds are the same or not
- and if they're not, then it's problematic to claim that "the market" sets
the price.

[0] Yes, yes, it's the price where supply and demand are balanced. But how are
supply and demand formed in the first place? Conceptually, people ought to
have beliefs such as "a ride from A to B is worth X to me". But even if people
have such beliefs, those beliefs are necessarily based on what the previously
observed prices are. So at best, you get a feedback loop that goes like:
observed prices -> people's beliefs about what prices should be -> supply and
demand -> observed prices. They who control the mechanism that outputs the
observed price are in a rather special situation to (attempt to) manipulate
this feedback loop in their own interest.

------
sqrt17
In many places, the supply for cabs is artificially limited by the fact that
there are only a limited number of licenses, which you then have to "rent out"
from a licensee if you want to drive a cab.

The article raises a valid point (Uber sets itself up as a monopoly), but is
very thin on criticizing the existing system.

In fact, nothing prevents existing cab dispatch companies from offering an
app-based service like Uber does. That they don't is either due to the fact
that the current regulations mean they don't have to adapt, or that it's
Uber's business model rather than the app that makes the difference, in which
case the app would just serve to sidestep regulations that only benefit well-
connected incumbents.

The question here is how much you can separate the roles of

a) drivers b) the dispatch service (telephone or app) c) the entity policing
both drivers and customers d) the entity setting the prices

~~~
Pxtl
The problem is that the limited licenses exist for a good reason: roads are a
limited resource 100% subsidized by the tax payer. Unless a city implements
global pay-per-mile and pay-per-second fees for parking, idling, and driving,
the city is subsidizing all businesses that operate on its roads.

Normally this doesnt' cause a problem because most folks using the roads are
using them in roughly even proportion. Cabbies throw that out the window -
they idle and meander around the densest and highest-value parts of town,
which are of course places where roads are the scarcest resource. They exploit
that subsidized, scarce resource far beyond any other user, creating
congestion.

So, to control this tragedy-of-the-commons scenario, cities limit and tax
cabbies heavily.

Uber dodges that completely by claiming they're a car service, when in reality
they straddle the terrain between car-service and taxis. Uber drivers
absolutely _do_ meander congested areas hunting for fares.

~~~
dnautics
>Uber drivers absolutely do meander congested areas hunting for fares.

When they do that it's usually because they're former cabbies with old habits
that are hard to break. Doing a meander makes absolutely no sense. I work for
an uber competitor, and typically I will go to hotspot, find parking, stop
there, and wait for a ride.

Also, roads are usually subsidized by gas taxes.

~~~
pessimizer
Gasoline Taxes and Tolls Pay for Only a Third of State & Local Road Spending

[http://taxfoundation.org/article/gasoline-taxes-and-tolls-
pa...](http://taxfoundation.org/article/gasoline-taxes-and-tolls-pay-only-
third-state-local-road-spending)

------
rahimnathwani
This article only makes sense if Uber has monopoly power in the markets where
it operates. If it is successful in its lobbying efforts, won't it be easier
for Uber-like competitors to spring up?

I realise there are network effects in a two-sided marketplace, but how strong
is the lock-in on the drivers' or passengers' side? Wouldn't either use
multiple services and go with the one which offers the best price at the time?

~~~
nhaehnle
Uber is in the position of a network provider, and hence in a position where
it can naturally become a monopoly via network effects.

Any market with network effects has high barriers of entry and therefore
reduced competition, unless regulation exists to lower the impact of network
effects (e.g. mandating interoperability).

~~~
wisty
I don't think it's that strong a network. Drivers are businessmen - they
aren't going to shun another app just because it's too much trouble to sign
up. So there's big no chicken / egg problem - any competing network with half
a chance of taking on Uber will get plenty of drivers.

It's kind of like eBay stores, not the "sell and buy junk from strangers"
eBay. And since there's only one product, the customers won't flock to Uber
because they want variety.

I'd rate it lower than eBay and far lower than Facebook in terms of the
strength of the network.

------
a2kadet
Except the largest barrier to entry in the cab market is politics protecting
the status quo in the regulated cab business. By tearing this down, Uber is
effectively paving the way for competitors such as Sidecar and Lyft to disrupt
them.

Also, I personally am sick of people complaining about Surge pricing. It's
supply and demand. The tradeoff is ability to get a ride. When it rains, the
supply of cabs stays the same but demand sky rockets. This surplus is passed
to the consumers who are lucky enough to get a cab but many are literally
caught in the rain. Uber raising the price is simply allowing the person who
wants the ride the most to benefit from it.

~~~
tps12
> This surplus is passed to the consumers who are lucky enough to get a cab
> but many are literally caught in the rain. Uber raising the price is simply
> allowing the person who wants the ride the most to benefit from it.

I think people understand that. But they might feel like distributing the
limited cab supply based on luck is more fair than based on who will pay the
most.

~~~
a2kadet
Why? If I'm running late to an appointment I will be willing to pay more than
someone who is heading home from work to unwind and is in no particular hurry.

I love the concept that my fate is in my hands. It's not a matter of skill or
chance in hailing a cab. I'm given all the information I need to make an adult
decision and get to choose if it is worth it or not.

Sorry, rereading that some of the language gives a condescending tone which is
very much not my intent.

~~~
alxp
So I don't actually know, does Uber flash up a big red warning when you're
about to book a cab that your usual $10 ride is going to cost you a lot more?
One of the reasons people dislike the surge pricing is that it was taking
people by surprise.

If Uber wanted to still please the people with more money than time they could
just add a 'bribe' button to add $5 or $10 or more to your ride request so
drivers will be more likely to accept that request.

~~~
aetherson
Yes, they show a big warning and make you type in the surge multiplier to
confirm that you've seen and understood it.

------
Pxtl
Honestly, my problem with Uber has nothing to do with surge pricing and
everything to do with the fact that they've completely circumvented all the
normal regulations surrounding cabs when realistically they're a cab company
in everything but name.

Really, though, it's on the municipalities to modernize their anachronistic
taxi regulations to properly handle services like Uber.

~~~
dnautics
they're not. The fact that they've circumvented the regulations is because the
regulations don't necessarily make sense: They don't "cruise" like taxis do,
so they cause less traffic congestion. They don't use taximeters, so you don't
have a device which needs to be calibrated and checked by the state. In the
case of UberX, they own their own cars, so they're less likely to be reckless
drivers. They don't require queues like taxis do outside of bars, or even
worse, at the airport, where a queue attendant has to be paid to make sure
passengers don't accidentally jump the queue. By having a rating system, there
is less of a need for enforcement of a 'taxicab bill of rights' which shifts
costs of monitoring and handling misbehaving cabbies onto the state, etc.

------
thenmar
I asked an Uber driver about surge pricing once, and he said that he doesn't
see what the surge rate is. He just gets texts from Uber sometimes saying,
"demand is off the charts! get out there!" So it's interesting to hear all the
almost-dogmatic free market rhetoric from the company, when it seems the
reality is that the market isn't very free at all.

~~~
isleyaardvark
How? "Demand is off the charts! Get out there! _Increase supply!_ " This is
free market basics.

~~~
p0ckets
Free market basics would be "this it the current price for your services,
would like you like to provide supply at this price?". This is more like your
boss telling you to get back to work because it's busy.

~~~
jerf
Is it? thenmar was not clear whether the text was advisory or an order.

Though either way, I'm not sure what bearing that would have on how "free" the
market is. Employers in some sense exist to entice you to do things you don't
fundamentally "want" to do, by compensating you for it.

~~~
nhaehnle
The point wasn't about whether it's advisory or an order, the point was that
the actual price was not part of the message. Given that market principles are
supposedly about using price signals, this is rather at odds with market
principles, don't you think? ;-)

~~~
jerf
I'm unclear on how the operators are going out there without information on
what to charge. It seems like we're making up "facts" here, then drawing
convenient conclusions.

~~~
thenmar
Users connect their card to the Uber app. Drivers simply press "start trip"
and "end trip" (on their own device, after having accepted the call and
arriving at the pickup location) - all the billing is done by Uber. The driver
isn't paid directly.

------
wmf
I don't understand this part:

 _As more people use Uber, there will be fewer people trying to hail cabs, and
fewer cabs picking up people, which will lead to reduced expectations cabs
will be available, and so on and so forth. Gradually the ‘open cab market’
will be displaced by a closed Uber service. I’ve already noticed it’s harder
to hail cabs where I live, capacity is often taken up by Uber riders._

Supposedly traditional cabs are ridiculously profitable, so even if Uber
reduces their demand somewhat they should still be profitable enough to stay
on the road.

------
pron
Uber is a complete and total mystery to me. I don't live in the US, but every
year I spend at least few weeks in NYC and SF. Yet, I have never seen (not to
my knowledge) an Uber car (though I have seen a couple of Lyft cars), nor
personally heard of anyone using it. On the other hand, I hear a lot about
this company in various online publications, and every single thing I have
ever heard about them was negative: that their CEO is an Ayn Randian fanatic,
that they hold the law in contempt, that they're exploiting their drivers,
that they're mistreating their drivers, and that they're leaving their drivers
out to dry if they get into trouble.

I have heard of people comparing Uber to AirBnB because they're both
"disruptive". But unlike Uber, I see people use AirBnB all the time, and I've
even used it myself on several occasions. I hear both positive and negative
things about AirBnB, but mostly positive.

Now, what's the deal with Uber? Seriously, I have never heard anything good
about this company nor seen any actual signs for its existence other than its
own advertising and lots of negative press. Who are they? Does Uber really
exist or is it a fictional internet meme? Is Uber just some boogyman the
internet uses to scare people of an imminent dystopia? Is Uber Keyser Soze?

~~~
scrumper
I can put your mind at rest a bit. Uber is definitely real, at least in NYC
where I live. You haven't seen their cars because they're unmarked, but there
are a lot of them everywhere. It's used by a large chunk of my social circle,
which has almost no techies in it.

Most of the drivers I speak to use it as one of a number of dispatch tools
funneling them rides. All have been broadly positive about it, their
complaints being mainly those of any professional driver (i.e. sometimes there
just aren't any passengers.)

------
malandrew
The number one feature we need to add to P2P transportation services is common
carrier laws. There is no reason that I need to check N different services to
get a ride. Plus, making it possible for all buy and sell orders to be
available across network does the most to protect the consumers and suppliers.

These companies should be free to operate their own apps, but they should be
require to make their buy and sell orders available to others so that a
generalized market can be built on top.

------
exelius
It all depends on what your goal of the taxi market is.

From a regulatory standpoint, the role of taxi regulations is to manage supply
in a two-sided market. The goal of managing this is often to balance
availability of taxis with the ability of the taxi drivers/companies to make a
profit without gouging the customer. Uber just formalizes the type of price
gouging that these regulations are designed to prevent. It's consumer-hostile
to take a market where fixed prices are the expectation and then say "Oh, well
everyone else needs a taxi right now too... so you have to pay more." I'm not
saying anything about its economic viability, but it makes the user experience
of Uber suck ass.

More problematic is the attitude many taxi drivers take towards money. Uber
assumes that every driver is trying to maximize profit; which is not always
the case. In my experience (and I take taxis on a daily basis in many cities)
the prevalent attitude is "well I needed to make $800 this week to pay my
bills. I've made $800, so I'm going to stop working and go hang out with my
family instead." Taxis drivers are generally independent contractors, so they
can do this. If this happens in a place with a regulated number of drivers,
helping them maximize profit quickly reduces the overall availability of
taxis, again driving up prices.

Frankly, I hate using Uber. Whenever I need it, the price is jacked up to
ridiculousness thanks to surge pricing. That makes it unreliable to me because
I'm not paying $50 for a 3 mile cab ride. It's gotten to the point where I
usually don't check Uber anymore. Thankfully, most of the local cab companies
have similar mapping apps now that replicate enough of Uber's functionality
that I am willing to use them.

~~~
AJ007
What city do you live in?

My ratio of good to bad Uber experiences is moving toward bad. In NYC it is
about 1:1 now, while other cities still weigh heavily toward positive.

~~~
exelius
Philadelphia. It's not hard to hail a taxi in most places anywhere near
downtown, but when you can't find one, Uber's not really a better option
unless you're willing to pay over $50 for a ride.

Uber definitely has a niche where it is useful, but it's not going to displace
taxis as a whole.

IMO Uber was born out of a specific fucked-up regulatory marketplace for taxis
in San Francisco. Most of the taxis there are "limousine services" that are
allowed to answer hails on the street. I found the situation pretty annoying,
because rates are negotiated up front and are always more than what a metered
taxi would cost. Many cities prohibit this because taxi drivers routinely use
it to scam tourists (hence why taxi regulation exists.) Uber is a great
solution for the regulatory situation in SF; but most big cities have better
taxi regulation than SF.

------
MarkPNeyer
> Uber thought its capital would be best used to run a fleet of cars, it would
> simply hire people straight out to be drivers. That it’s not doing that
> suggests something.

Uber buying a bunch of cars and hiring a bunch of people to drive them is FAR
less in line with market principals than using that capital to help other
people start their own small businesses, so they can work on their own terms
and set their own hours.

~~~
rayiner
I wouldn't put it that way. There's an economies of scale advantage to buying
cars and hiring drivers. So that option isn't any less in line with "market
principles."

The reason Uber doesn't buy cars and hire drivers is: 1) it insulates them
from legal liability; and 2) they get to use other peoples' capital instead of
putting up their own.

~~~
dctoedt
> _The reason Uber doesn 't buy cars and hire drivers is: 1) it insulates them
> from legal liability ...._

Uber _hopes_ it will do that, and to a certain extent it very well might ---
but personal-injury plaintiffs' lawyers are remarkably creative in coming up
with arguments why they should be allowed to recover damages (and percentage-
of-the-recovery contingent fees) from any deep pockets in sight. Sometimes,
some of those arguments succeed in persuading judges.

On a tangential note, I predict someday soon some subset of Uber drivers will
be suing Uber for overtime, unemployment benefits, etc., on grounds that, no
matter what the contracts say, under the law the drivers purportedly are
"employees," not independent contractors. [1] This is a not-infrequent
occurrence with delivery-service drivers; _see, e.g., Narayan v. EGL Inc._ ,
616 F.3d 895, 898-99 (9th Cir. 2010) [2].

[1] I've long thought that much of legal advocacy could be summed up in two
words: _Yeah, but ...._

[2]
[http://scholar.google.com/scholar_case?case=1839421424161903...](http://scholar.google.com/scholar_case?case=18394214241619035573)

------
dsugarman
It is a feature that they set the price, because like a store with a ton of
inventory, it is complicated to sort through all your options if every cab
sets it's own price. It makes complete sense that surge pricing occurs when
there is a supply demand imbalance and it makes complete sense that it evens
out the imbalance.

------
mcguire
" _In fact, Uber is even starting a financing program for its drivers, so they
can get loans for cars._ "

Whoa. I did not know that, although I should have expected it.

Now I have Sixteen Tons stuck in my head.

------
hershel
Since private marketplaces over the internet seem to spread everywhere and do
have some monopolistic power ,i wonder, is there a more open strategy that
works against such markets ?

~~~
gomox
Interesting - like most new marketplaces this seems to be a "winner take all"
situation. The online marketplaces really tend to converge into huge
monopolies by virtue of network power.

~~~
stonemetal
It obviously seems to behave that way, but I wonder why. Much like search
there is very little lock in. Nothing stops a user from having 3-4 different
car apps, or one third party car app that checks 4 services.

Maybe it is the drivers? If you driver for Uber can you not drive for another
service? I could see that tilting things in their favor. Everyone uses Uber
because that is where the drivers are and drivers join Uber because that is
where the passengers are.

~~~
aetherson
You can absolutely drive for UberX (not sure about UberBlack) and another
service. I work for Flywheel, an Uber competitor, and we regularly see people
who drive for UberX, Lyft, Sidecar, and us all simultaneously.

Uber and Lyft, the big players, definitely push more passengers than smaller
companies like we do, so drivers do tend to congregate to them. Passengers,
though -- there really isn't much of a network effect. Lots of services in SF
can get you a car. Your friends using Uber doesn't make the service any better
or worse for you.

And some people do hop services. I think that there are people who use UberX
most of the time, but hop to us when Uber is surging.

I think that most of the lock-in you see has to do with marketing and funding,
though. Uber and Lyft have both been funded to the tune of a quarter-billion
dollars. They get in front of a lot of people who haven't heard of the smaller
players. The broad "get a ride with your smartphone" space has: Uber, Lyft,
Sidecar, Hailo, TaxiMagic, InstantCab, us (Flywheel), and several other people
taking a go at it (Yellow Cab has an app, for example). I don't think it's
particularly destined to be a monopoly.

~~~
gomox
You are right about lock-in, but there is a significant convenience factor. I
mean network effects as in eBay (more buyers, therefore more sellers, GOTO
10), not like Facebook (i.e friends).

If Uber has the largest fleet it really makes it hard for other services to
compete as no one wants to check multiple apps for that (and the existence of
aggregators a la Kayak needs some sort of open API, which I don't think
exists).

------
cmarschner
"‘uber’ is a German word which means ‘over’ or ‘better than’ or ‘the
ultimate’."

The word is "Über". "Uber" doesn't mean anything. In 2014 one should expect
people to find &Uuml; or \u00DC. Since the two dots stem from a superscript
"e", "Ueber" would be ok. Uber is not.

------
forrestthewoods
I think Uber would be much more efficient if the drivers were just employees
of Uber and paid a flat salary. Instead they have to do a song and dance to
skirt around various regulations. It makes the whole thing vastly over-
complicated.

------
revelation
Nitpick: _uber_ is not a german word, if anything its a version of the actual
german word _über_ where someone garbled the encoding. It also doesn't mean
the best, it simply means _above_.

~~~
jdmichal
_Über_ in German has had both a physical and abstract sense for a long time,
like 16th century long time. While English usage is a bit looser, it's not as
completely unfounded as you make it sound. Wikipedia actually covers usage
better than I would have expected:

[http://en.wikipedia.org/wiki/%C3%9Cber#In_German](http://en.wikipedia.org/wiki/%C3%9Cber#In_German)

------
Spooky23
This is a fundamental problem with services that need to be public
goods/institutions and already happens with cabs today.

The public safety/consumer issue that led to taxi commissions is that dense
areas would be choked with cabs of questionable safety quality and the rates
would vary greatly. So the solution is a price ceiling. The local taxi
commission controls the number of licenses issued and sets prices. Lots of
issues there... for example, the rates are locked in while the costs for
operating cabs (fuel, labor) is variable.

IMO, Uber is a net-benefit to the market because they are breaking the
regulatory monopolies enshrining cab companies. They have first-mover
advantage, but other apps or services can emerge to compete for drivers and
customers.

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return0
Does Uber hold patents which prevents competitors or the cab companies from
entering the same market?

------
mmmtacos
stopped reading at:

"As more people use Uber, there will be fewer people trying to hail cabs, and
fewer cabs picking up people, which will lead to reduced expectations cabs
will be available, and so on and so forth. Gradually the ‘open cab market’
will be displaced by a closed Uber service. I’ve already noticed it’s harder
to hail cabs where I live, capacity is often taken up by Uber riders."

for a supposed "financial journalist" he literally has zero comprehension of
basic economics. open is closed and closed is open. wut?

