
Uber revolution will not last - dannylandau
https://www.washingtonpost.com/news/tripping/wp/2016/09/26/is-uber-the-next-big-thing-that-goes-kaput-this-guy-thinks-so/
======
mc32
This is gold...

"So, yeah, it’s great: you hit the app, and the car shows up now in 10 minutes
instead of a 35-minute wait. But now the traffic congestion is so bad that
you’re sitting in that car for 20 minutes longer to get anywhere... cities now
are starting to discuss and deal with: traffic congestion. The traffic
congestion is so much worse.

Now, is it all because of Uber? Not it’s not...you suddenly have a new service
that’s committed to just flooding the streets with cars, putting thousands of
more cars on the street. Is it any surprise that now the streets are more
congested?"

This is total stream of consciousness. Is Uber multiplying the taxi fleet? How
can one put so many competing statements together like that and think it's
coherent? Should we revert to poor taxi experience? Will that bring down
traffic congestion? What's the point?

~~~
WalterBright
I won't believe cities are serious about reducing congestion until they fix
the traffic lights to dynamically maximize flow.

No, it isn't done already. Too often, I am in a platoon of 20 cars that has to
slam to a stop so one car can cross the intersection on the cross street, and
then there's yet another minute of red with nobody in the intersection.

You'd think with cameras already installed on the lights that this would be a
far, far simpler job than self-driving cars.

~~~
bambax
In Paris the idea is to make the city more hostile to cars (any car, your
private car, taxis, ubers) by reducing the number of roads they are allowed
onto.

The city voted yesterday to close the main road through the city ("quais rive
droite") after the equivalent road in the other way ("quais rive gauche") had
been closed 3 years ago.

I think London is thinking of doing the same (plans to close Oxford Street?)

How it will end is a mystery to me; not everyone is comfortable using public
transportation (esp. the elderly). In London the subway is kind of okay... in
Paris it's horrible.

~~~
webjunkie
I never understood the interior layout of subways in Paris... they have seats
positioned right at the door, where people would stand normally. It seemed to
me like everyone was always stepping on each others toes, and on each stop the
whole train was shuffeling around for people to get in and out.

~~~
bambax
This will be hard to believe but it's true: for years and years, the Paris
subway authority considered that people would not accept to "be transported
laterally", which means seats HAD to be either facing the front or the back of
the train, NOT the side.

It still goes on today; some of the newer trains now have a few seats facing
the side, but that's as far as they'll go.

This thinking, based on absolutely zero evidence but deeply ingrained, wastes
an incredible amount of space aboard subway trains.

------
memco
As a legally blind person living in the urban sprawl of LA, I rely on Uber and
Lyft heavily to be able to commute and run errands. There is a lot about these
companies that remains ethically and economically questionable, but until the
public transportation options in the area are as quick and accessible as these
services I will continue to use them. The pricing is the most unnerving thing
for me. In some cases, I am now able to get an Uber for less than the bus. I
am not sure how profitable that pricing is, but it is amazingly helpful that I
can now go almost anywhere a sighted and licensed person can go and not have
to carve out huge chunks of my day, plan for walking with potentially heavy
loads or paying too much for this service.

Recently, I took a trip to Africa. It was interesting to me that even though
they do not have a fancy app, you can walk out the door and find someone to
take you almost anywhere you want to go. Part of our current situation is due
to societal and cultural factors that don't necessarily exist everywhere. But,
if we don't have Uber, I think there's still a market for affordable, on-
demand rides.

~~~
norikki
Yea, in Africa they have what is called a free market. Here we have local
political corruption in the name of 'safety regulation'. I suppose it is
cultural in the sense that we have come to expect terrible service and
products.

------
prostoalex
The "labor-exploiting" argument seems a bit disingenious to me. It's not like
someone sees an ad for Uber and tells their boss to shove it, as they're
quitting their full-time job, forfeiting all the benefits and 401(k) matching
to start a brand new career as an Uber driver.

The alternative for many drivers is simply unemployment. While there's zero
possibility of labor exploitation, it reminds me of Flight of the Conchords
quote "There is no more unethical treatment of the elephants. - Well, there's
no more elephants, so..."

~~~
xg15
Except they're "disrupting" the taxi industry to get to that point. So they're
destroying jobs and replacing them with less secure, less paid ones.

(Wether or not that disruption has a positive effect for society in the big
picture is another debate - but in terms of labor you can't ignore it)

~~~
prostoalex
> replacing them with less secure, less paid ones

My understanding is that people got in deep debt to the medallion owner, which
they slowly repaid from taxi revenues. Are taxi jobs at the lowest rung that
secure and well-paid?

~~~
pdkl95
The "medallion" system has its own problems, usually relating to monopoly
power. The debt issue you mentioned is an example of that.

However, Uber (and similar businesses like airbnb) are really little more than
the exploitation of legal loopholes to bypass the usual costs of employment
law and industry-specific regulations. Socializing expenses is always
profitable, and its easy to beat existing players if you aren't paying the
same expenses.

Regarding job security, normal employees at least have a collection of legal
protections that cover the employer-employee relationship. It's obviously not
going to stop every type of abuse, but it's better than nothing. Some
jurisdictions have started to catch up and force Uber _et al_ to act properly,
but as usual law is (very) slow to update.

~~~
icebraining
Taxi drivers were already considered contractors. In fact, they are in a
lawsuit against the taxi companies over that:
[http://articles.chicagotribune.com/2014-03-26/news/chi-
suit-...](http://articles.chicagotribune.com/2014-03-26/news/chi-suit-taxi-
drivers-should-be-considered-employees-20140326_1_taxi-drivers-yellow-cab-
taxi-industry)

Which costs of employment that taxi companies paid is Uber bypassing? Please
be specific instead of relying on rumor and propaganda.

------
quanticle
I don't understand the point he's making about traffic congestion. He's
claiming that "Uber is putting more cars on the street". More compared to
what? Compared to everyone driving themselves?

If Uber wasn't around, the alternative would not be people taking public
transport. The alternative wouldn't be people waiting 35 minutes for taxis.
The alternative would be people driving in themselves, causing greater
congestion, because they'd rather sit in traffic for an hour rather than stand
out in the rain.

~~~
kayoone
Uber is not available in Germany but when i can't get a cab i will usually
resort to public transport because i mostly use a cab when i am not allowed to
drive anymore or parking in that area is impossible. Also a 20 minute Taxi
ride alone can easily be 15-17EUR in Berlin, so it's kind of a pricy
alternative when public transport would be 2,70 EUR for the same distance.

~~~
quanticle
Europe is not comparable to the US. Your public transit systems are _far_ more
developed.

Even in Seattle, (which has a decent public transit system compared to where I
grew up) you can be expected to wait an hour or more for a bus if you're
traveling in off-peak times. Buses from the city to the inner-ring suburbs
stop running around 11:30pm, so if you're planning on staying late in the
city, driving or Uber are your only realistic options, given that many taxis
show extreme reluctance to take people out to the suburbs.

What's worse, is that sometimes the buses don't even show up. I remember once
I showed up to the bus stop 10 minutes ahead of the last bus. I waited for an
hour and the bus didn't show up. I tried calling a taxi, but as it turns out
taxi companies want you to be at an actual address - giving them a random
intersection doesn't cut it. Fortunately, I was able to call a friend who, to
his eternal credit, drove me home, but if I'd had Uber in that situation, it
would have been a lifesaver.

------
pfarnsworth
One of my Uber drivers in the SF Bay Area told me that she went from making
about $30/hr working in IT at a Fortune 500 company to making $40/hr driving
for Uber. She has been driving for over a year, and quit her job about 9
months ago and had been driving full time, during the day. She knew how to
work the incentives and the surge so that she maximized her earnings, and
instead of working 8+ hrs a day, she opted to work 5-6 hrs a day and maintain
the same life style. I asked her about the costs, and she has that all
accounted for, including gas and depreciation. She wishes she had known about
the Uber lease plan because she said that was superior because it gave free
maintenance and the ability to change cars once a year. I don't know enough
about it to comment, but she seemed to be pretty happy about it and 90% of the
drivers I've talked to are more than happy.

~~~
foepys
Can't Uber dictate the price? Like if Uber doesn't feel like being expensive
at rush hours to promote their service, drivers are paid less, aren't they?
Also, what happens if more people learn about this and start driving for Uber?
Wouldn't this lower the price for everyone?

I feel like your Uber driver is gambling with their income by quitting a
stable paying job. Then again maybe the job wasn't that good.

~~~
mvid
I don't think you will find many uber drivers who quit a stable job in order
to drive.

------
barney54
From the title I hoped it the article would make an interesting argument, but
most of it was the same complaints about Uber that we have heard for years
including that Uber evades livery laws. Well, livery laws are terrible and
unjust, as are taxi medallions. Complaining about Iner drivers not being
professional also misses the mark because they are much better than regular
taxi drivers in my experience. Has this guy actually tried Uber?

~~~
necessity
The whole article sounds like a PR piece, I'm surprised it was so well
received here.

~~~
tonylemesmer
I agree. Found myself liking Uber more after the first couple of questions.

------
PakG1
The quality of the article isn't that great. But it made me think about this
anyway. If Uber can achieve Kalanick's stated end game goal of driverless
cars, it will absolutely last. A lot of Uber's pressures come with having to
deal with drivers. I don't know what percentage, but it's significant.
Variable costs, legal issues, ride quality, and so on. If all of that
disappears, Uber is playing an entirely different game that it is much better
poised to stick around for long-term.

That the OP criticizes Uber's Pittsburgh efforts is disingenuous because it's
only a beta-phase pilot. Of course, it's that simple right now. You'd want
them to go through this careful pilot phase because the concept released on
the streets without full testing is so dangerous. It's an extremely tough nut
to crack. But IF they crack it, they're in for the long haul. "Big Taxi" as he
calls it doesn't have the desire, technical expertise, freedom, or guts to
achieve the self-driving car vision. For one thing, the business is structured
too much around drivers paying franchise fees. In the meantime, Uber has
already multiple times shown a willingness to throw a big FU at its own
drivers, so it's not actually that hard to see them one day discarding their
drivers for self-driving cars and keeping all of the profit rent.

~~~
pfarnsworth
It's the opposite.

Once fully self-driving cars are completely actualized, then ridesharing
companies like Uber will collapse, because the entire thing becomes a
commodity. Right now, there's a lot more to Uber and ride-sharing than just
matching cars and riders. There are layers of complexities that are created
because you need to deal with real humans on both ends.

Once you get rid of human drivers, anyone can build a ride-sharing system. It
just takes enough money to buy enough cars, and the ride sharing app, and
that's it. Uber would then be competing against anyone and everyone, and then
it's a race to $0, maybe even it turns into a free ride if you watch ads all
drive long.

~~~
PakG1
Yeah, but the self-driving tech is a proprietary trade secret. Tesla's not
sharing their self-driving tech. GM is not sharing their self-driving tech.
Uber is not sharing their self-driving tech. If that moat is not easily
surmountable, Uber has a long-term fighting chance. Uber does not have a long-
term fighting chance if they stick with traditional drivers.

It's like ISPs, no? Back in the day, anyone could become an ISP, just lease
various telephone lines for running 33.6kbps to customers, and if you wanted
to go fancy, T1. At the end of the day, telecom providers found it much nicer
to keep their lines and become the ISPs themselves. It wasn't profitable for
3rd parties to lease those lines and try to be an ISP. Ridesharing companies
similarly don't have their own cars and tech, they need to use someone else's
cars and tech. Car manufacturers are making a similar switch as what ISPs did;
they see a logical road that leads to becoming ridesharing companies. Uber is
trying to flip the game and develop their own technology to become an ISP that
owns its own lines. They're not trying to manufacture the cars though. They're
just trying to manufacture the tech that goes on top of the cars, since they
don't have manufacturing expertise. It'll be enough to just buy the cars from
someone else and put their tech on top.

~~~
jacques_chester
> _Tesla 's not sharing their self-driving tech. GM is not sharing their self-
> driving tech. Uber is not sharing their self-driving tech._

Tesla, GM et al will gladly share their tech, in the form of a car.

Vertically-integrated self-driving-with-app companies will be slaughtered by
Google and others setting up auction sites for such services.

------
kfe
As others have already noted, uber is not about replacing human drivers with
human drivers, but about going driverless.

To me a more interesting question is the whole sharing economy and it's
relation to traditional regulation.

Restaurants, hotels, taxies, etc have long been heavily regulated to ensure
that so you don't get salmonellosis, don't have to deal with cockroaches or
die in a car crash because of an incompetent driver.

As the whole "sharing economy thing" is about information - the question is -
can better movement of information replace the need for traditional government
regulation in those fields (in the form of ratings, web of trust, etc)?

------
rajeck
Bizarre answer to this question. How is he shorting Uber? In his own mind?

Q: Do you really think Uber is going to collapse or be bought up by another
company?

A: Look , I don’t have the internal numbers to – I’m not like . . . the hedge
fund guy, Jim Chanos, who shorted Enron. He had lots of research and
researched this stuff. . . . Let’s put it this way: I’m shorting Uber.

~~~
a13n
Yeah I think he means he's bearish rather than he's actually got money
invested in Uber losing value

------
Animats
As criticism of Uber goes, this is kind of weak.

Uber's big problem is simply that they lose money. They still have to use
investor capital to buy market share. That shouldn't be necessary at their
present size.

Also, Uber has run out of investor financing and is now using leveraged
loans.[1] Those have to be paid back. Their 2015 financing was a six year
convertible bond. The bondholders get the right to participate in any future
IPO at 20%-30% below the IPO price. Their 2016 financing is similar.

Uber may be Webvan 2.0. Anyone remember when Webvan had their little trucks
running around everywhere in major cities?

[1] [http://www.wsj.com/articles/uber-raises-1-15-billion-from-
fi...](http://www.wsj.com/articles/uber-raises-1-15-billion-from-first-
leveraged-loan-1467934151)

~~~
linkregister
Ironically, Amazon has resurrected Webvan with several of its former higher-
ups [1].

Maybe Amazon will wait for the Uber/Lyft flameout and hire the nascent
companies' experts to make its own profitable service.

[1] [http://www.reuters.com/article/net-us-amazon-webvan-
idUSBRE9...](http://www.reuters.com/article/net-us-amazon-webvan-
idUSBRE95H1CC20130618)

~~~
Animats
Not quite the top "higher-ups". Amazon had no use for George Shaheen, Webvan's
CEO. The people Amazon got were the operations people and the Kiva robotics
guys.

------
Fricken
Certainly, sooner or later the liliputians will come in and tie Uber down, but
it's a giant now. It's a little too late to be proselytizing about the
company's imminent demise.

And in spite of supposedly losing in China, Uber managed to negotiate some
pretty favorable terms. Uber now has a board seat and a 20% stake in Didi, a
30 billion dollar company growing about as fast as Uber was when it was that
size.

~~~
norikki
Unlike the USA, China doesn't allow foreign companies to compete there. The
only exception is Apple, and that's after they almost had a revolution from
the unmet demand, and Apple is still given a hard time.

~~~
linkregister
Was there a regulatory obstacle to UberChina that was in the news? I was under
the impression that Didi simply outperformed UberChina, from having a superior
local perspective. The difference between Didi and dead or dying car-sharing
services was that Didi had enough financing to withstand the race-to-the-
bottom on pricing and driver incentives.

------
nawtacawp
GM invested $500 million in Lyft earlier this year. I guess, they have a
different view on where the market is headed.

[http://www.reuters.com/article/us-gm-lyft-investment-
idUSKBN...](http://www.reuters.com/article/us-gm-lyft-investment-
idUSKBN0UI1A820160105)

~~~
jimminy
The valuations and conditions between Lyft and Uber are drastically different.

Lyft with the funding from GM has only raised $2B over it's lifespan which is
comparable to that of Uber. Uber has raised nearly $13B and blown through most
of it.

At their last round, Lyft is valued at about $6B and Uber is valued at $68B.
One of these is reasonable based on the taxi market size (domestic $20B), the
other is about 2x over the assumed value with decent market share and margins
it could attain.

The only way for Uber to express the value on the books is to replace car
ownership, which is unlikely with the turnover rate of individuals replacing
their cars, they'll need about a decade or more runway to justify the current
valuation.

Lyft and GM have an advantage in the race to replace ownership, with their
partnership. Lyft gets a partner that can reduce cost of vehicle supply costs
and maintenance, while GM gets a hedge against a possible headwind to their
current business model.

~~~
brandelune
The problem with Uber is not the business model, it's the hype that leads to
overvaluation as you properly show. Too bad the article does not make that
crystal clear.

~~~
jimminy
Part of it is business model, they've outsized their market potential which is
a failure of their model.

It's a bit of a chicken and the egg, because it's absolutely related to their
valuation. That valuation is based on a flaw somewhere in their model
potential, which feeds back into the model of potential (via expressing
oversized outside interest).

------
tjbiddle
People can say all they want: That self-driving cars will take over, that Uber
is over-valued, that Uber shouldn't have bet on China, that the industry won't
last, that people don't want xyz.

Things aren't so black and white - and the market is different in different
parts of the world, for better or worse.

I've been living in Indonesia (I'm an American citizen) for the past year and
GO-Jek is the big runner here. It's huge, all of my friends use it, and it's
damn well the most convenient thing I've used in a while - and it offers even
more than Uber: Motorbike rides, car rides, cleaning services, massages, food
delivery, item shipment, etc. It definitely has some kinks - but it's growing,
and fast.

Now Uber came in last year and I've watched it's growth - they're subsidizing
drivers by 50%; what would cost me normally $20 from a taxi driver on the
street costs me $8-10 with Uber, and the drivers get paid the same. But there
are also issues they have to deal with - such as restricted zones for pickups.

The idea as a whole is here to stay; it will be improved on continuously,
features will be added and removed, run-ins with governments and failed
investments will be a part of the process - but peer-to-peer transportation
and delivery will increase 10-fold.

~~~
jventura
It's called race to the bottom..

------
xmlninja
And Internet is just a fad

~~~
bcook
> And Internet is just a fad

I think a statement like "...and AltaVista is just a fad" is more appropriate,
considering that ride-sharing is likely to continue being relevant but the
companies that provide it will come and go.

------
summarite
Headline grabber, but not much more. That the 'sharing economy' will not
continue as today should be obvious though. Governments have to react to avoid
a breakdown of regular services like taxis, assuming that they want to save
them. More importantly, governments won't tolerate the tax evasion and
externalisation of costs - like unemployment benefits, health care, etc.
That's the main reason uber is cheaper, and it's simply not sustainable - all
taxis replaced with 'volunteer' drivers makes the streets not just a bit less
safer, but also will cause huge costs on welfare budgets that are not paid
through the regular cut taken from salaries.

~~~
linkregister
Lyft and Uber primarily market driving as a part-time way to get extra cash,
not as a full-time job. Lyft has targeted typical, otherwise-employed drivers
since its inception. Uber pivoted from a black car service to catch up with
Lyft and its pooling service, Lyft Line.

Though both services offer generous incentives to full-time drivers (extra
cash per 1000 rides in a month), I would expect this to recede after enough
part-time drivers can take over.

When it's a side job, the lack of benefits don't matter.

Many governments offer centralized health care that companies don't contribute
to. I think you should limit your scope to the United States.

------
okonomiyaki3000
The points the article makes about Uber's drivers are kind of meaningless
anyway since Uber won't even have drivers in a few years.

~~~
EpicEng
>in a few years

I think you're vastly overestimating the sophistication of driverless systems.

~~~
intrasight
But it may very well be a few years before a majority of riders would ride in
a driverless car

~~~
EpicEng
It's going to be far longer before driverless cars are even on the road

~~~
intrasight
Sorry, but they're already here in Pittsburgh

~~~
EpicEng
No they're not, those have people in the driver's seat. Completely different
ball game.

~~~
intrasight
But they are not driving

------
kayoone
Uber's biggest problem is the rate at which they burn cash and their $70B
valuation which imo will be very hard to justify in the next 5 years. If that
hype train stops getting funded, it might crash badly.

------
jpkeisala
I have welcomed Uber to Europe with open hands but I really don't understand
why they consider they should not apply to same laws as it has been put to
Taxi drivers?

~~~
shambala
Because the laws are outmoded and terrible.

------
DigitalJack
I'm sure uber just needs a blockchain.

------
xyzzy4
The transportation industry is just a fad, everyone.

~~~
maverick_iceman
I'm sure in the early 1900s someone said that automobiles are just a fad.

