
Study Finds Uber Doesn’t Put Taxi Drivers Out of Work But Does Drive Down Pay - SQL2219
http://fortune.com/2017/01/28/uber-taxi-oxford-labor-data/
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johnnyg
Another way to title this would be "Taxi Services Now 10% Cheaper Because of
Uber" or more aggressively "The 10% Taxi's Used To Take Now Returned To
Customers In The Form Of Lower Prices".

Of course, for those to be all the way true and fair, Uber would need to be
making money and not leveraging a sea of VC money.

None the less, why is pay down immediately bad? It's only bad if it is down
and things cost the same. Shouldn't purchasing power be the relevant metric?

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jpatokal
The market for all services also expands. Previously, if I had missed the bus,
I would _never_ have called a taxi: costs too much and no certainty whatsoever
that it would arrive any faster than the next bus (~30 min). Now, I will on
rare occasion grab an Uber, because the cost is tolerable and it's virtually
guaranteed to be at my doorstep within 5 min.

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trendia
It goes farther than that in my opinion. I would be willing to ocassionally
take an Uber Pool, which costs more than a bus but less than a taxi. That
whole market (of ride sharing) did not exist previously in the US. (It has
been pretty common in Turkey though)

~~~
dx034
And if you travel with others, an uber can often be as cheap (or even cheaper)
than public transport. In London, if you travel with 4 people it's often
cheaper to take an uber for many distances compared to the tube (if you don't
reach your daily cap anyway). A tube ride is ~£2.5, uber can get you quite far
for £10 outside of rush hours.

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thinkloop
Uber pool is becoming a real and separate disruptor that seems to compete more
with public transport than taxis. I would like to see stats on what's
happening with buses and subways. In Miami it's about the same price to take
an Uber pool ($2.50-$3) as it is to take a bus ($2.25), while being
significantly better. UberX feels like Netflix's DVD phase, a precursor to the
real, defensible, network-effect dependent, technologically more challenging
[1], core competency of pool.

1\.
[https://en.m.wikipedia.org/wiki/Shortest_path_problem](https://en.m.wikipedia.org/wiki/Shortest_path_problem)

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becarefulyo
They should require larger vehicles. Cramming three people into the back of a
compact sucks.

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twblalock
If you don't like it, don't take the least expensive level of Uber service.
Uber has already segmented the market to provide more space and luxury to
those willing to pay for it. Take Uber X, or Uber, or Uber Black.

~~~
MarkMc
I think becarefulyo's point was that Uber hasn't segmented the market enough.
There needs to be a pool-without-cramming option. If Uber doesn't provide it,
someone else will.

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twblalock
If I were a taxi driver, I would sell my medallion while it still has some
value and start driving for Uber and Lyft, doing deliveries for Prime Now and
Grubhub, etc.

~~~
edblarney
"If I were a taxi driver, I would sell my medallion while it still has some
value and start driving for Uber and Lyft, doing deliveries for Prime Now and
Grubhub, etc."

You would sell your piece of market share, and then go work for an entity that
has absolute power over you, and will drive your surpluses to zero - or even
into the negative at the greatest pace they can?

When Uber has a monopoly, the 'short term' income of most drivers will be
under minimum wage (because there's no income regulation) - and because so
many drivers do not properly account for 'wear, tear and insurance' \- the
'long term' net may actually be negative.

Uber's business is about paying drivers the equivalent of a short-term 'pay
day loan' on value of their car as it degrades over usage, after which real
income is negligible.

Or at least, that's the economic end-game.

Uber has demonstrated fanatical adherence to market principles - they leverage
their power as hard as they can. The natural thing for them to do in a
monopolistic scenario would be to jack up prices massively, jack up margins
massively, and make sure drivers earn next to 0, and consumers benefit next to
0 - so that they capture all of the surpluses.

If anyone things that Uber will not do this they have not been paying
attention. Uber will price at the 'profit maximizing' point for them - which
in a monopoly situation is 'very high prices' (i.e. a shade below what you
wouldn't be willing to pay) for consumers, and 'lower than minimum wage' for
drivers (i.e. a shade above what they can possibly get away with).

Travis's comments on his hearing were pretty clear - he's a free market
fundamentalist of the 'scary kind' (and by that I mean, economically
illiterate, parroting the virtues of the ideology he espouses without actually
understanding the scope of them).

So long as there is real competition, Uber will be limited by that, but if
they ever get de-facto monopoly, the only winner will be them. They will
ensure they get all of the surpluses.

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jamez1
Uber doesn't form monopolies as far as I can see, everywhere there seems to be
a competitor or two, so that pricing pressure will keep Uber in check. I'm not
sure why you think Uber has the power.. they have a lot of cash and first
mover advantage which might obscure the true nature of what they can do.

As for the taxi plates.. they're going to be worth 10% of what they are now,
it doesn't matter if you make less income with Uber if you have to wear such a
huge capital loss. (in the order of 100k+)

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stuaxo
Many small taxi firms have gone out of business.

When I came back to the part of London I used to live in, my local small
business taxi firm where I knew the guys had disappeared.

Small Taxi offices used to be a common sight, there are way less of them now.

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TheOtherHobbes
Uber have replaced a consumer-hostile oligopoly with a worker-hostile future
monopoly.

This isn't bad for consumers now, but the future will be less appealing.
Undercutting the competition on price is classic monopolist behaviour.

I suppose VCs tolerate it because when the competitors are down and out, the
rewards will be huge.

Unfortunately for Uber I think their technology will become less and less of a
differentiator because it will become easier and easier - and cheaper - for a
small and scrappy competitor to copy it.

If the competitors add extra services - e.e. B2B courier/logistics, or B2C
pick-up/delivery - Uber probably won't have the clean run it expects.

~~~
joking
I see nothing more consumer-hostile than the surge pricing algorithm uber
uses.

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jpatokal
Which would you prefer if you really need to get somewhere fast: an expensive
ride, or no ride? Because without surge pricing, all you get is no ride.

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pessimizer
That is a rationalized calculus for wealthy people. The actual question is
whether you would prefer to have the same small chance as everyone else to get
a ride, or a guaranteed ride because you have more money than other people can
pay. Your question supposes that congestion is caused by something other than
_more people than usual_ successfully getting a ride.

~~~
Dylan16807
High surge prices should pay an oversized amount of wages and profits, in
theory leading to lower prices at non-surge times, right? That's a benefit
that I will happily give up a _chance_ of a ride for. A 50% chance of a ride
is worth much less than half as much as a guaranteed ride.

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vingt-2
Which amounts to the same thing. The market is more crowded with taxi drivers,
the competition being fierce, eventually, some taxi drivers will be force out
of work if they cannot keep up.

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nilved
With any luck this will be 90% soon. Not 100% or those idiots will drive for
Uber and we'll need to start over.

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brianwawok
You can vote out bad Uber drivers. Can't do that with bad taxi drivers

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astrodust
Cab drivers depend on their licenses to operate. If cities had a better way to
provide feedback then revoking a license dould be a threat and bad drivers
would shape up or get booted.

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brianwawok
But they don't. At least Chicago doesn't. So the free market came up with a
better solution.

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astrodust
The "fuck laws and regulations market", which in other countries we call the
"black market".

~~~
benchaney
In the situation where "laws and regulations" mean dysfunctional government
enforced monopolies, in ok with a company saying fuck that. Even if people
like you will characterize it as a "black market".

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astrodust
I'm just calling a spade a spade.

People have legitimate grievances against the cab industry, I'm one of them,
but that doesn't automatically legitimize what Uber is doing.

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Gimpei
A brief scan of the article suggests this relies on a difference in difference
identification strategy. Not normally the most convincing approach... But it
does shift my prior a little bit.

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_andromeda_
Uber has provided enormous value to consumers everywhere. The efficiency Uber
has brought to consumers greatly outweighs any perceived inefficiencies. I
attribute it to the great leadership style of Travis Kalanick.

I think Travis receives a lot of backlash because of envy. Many a people think
Uber is a stupidly simple idea that they themselves could have done and as
such hate on Travis for doing it first, fast and well.

~~~
angry-hacker
It is 'easy' if you have money to break the law. Most of the people don't. I
have thousands of good ideas that would bring in a lot of money and in many
cases would be beneficial to people if I could break the law and call it
disruption or whatever is the buzzword they are using.

