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Uber launches flat fares in San Francisco through subscription (uber.com)
121 points by nikunjk 456 days ago | hide | past | web | 172 comments | favorite

Uber has taken $12B of capital, broken the regulatory regimes and opened the drive-for-hire markets, marketed the benefits of drive-for-hire and ride-sharing to drivers and consumers, and helped drivers finance vehicles – but now there seems to be no barrier to entry for any competing service except writing an app. I'm happy to let VCs pay for my comfortable daily ride to work but I don't see how this is sustainable...

> but now there seems to be no barrier to entry for any competing service except writing an app.

Except network of drivers, network of riders with the app installed, name recognition, capital to run the backend systems and delve into mapping algorithms, etc.

Almost every NYC Uber driver I've had recently has at least one of the other apps installed and picks up rides from whichever is offering the best driver incentives at the moment. And every Via and Juno driver I've asked bought their vehicle to drive for Uber and then switched.

That's my point: Uber has done a lot of the hardest work for their competitors, but now has to match them on price or watch them eat away at their market. I don't see any strong network effect – what's the advantage to me as a passenger or driver of using Uber because you use Uber?

That's basically the barrier to entry of running a cab company minus the licensing fees.

Yeah I think barrier to entry is misunderstood as a technical attribute of a company.

Of course it's possible to build some app that tells people nearby to pick them up with metering/billing services built in.

From a business standpoint, it would almost be impossible to duplicate what they have today.

I entirely disagree. I don't see proprietary technology that can't be duplicated or bought. I see _some_ network effects but ultimately the drivers will go to the highest bidder and the riders will go to the lowest price. I see _some_ brand equity, but not much. Maybe a little economy of scale, but not much. Yes, they have a head start, but they are far from enthroned.

Ultimately, this space will operationalize out to the company that can manufacture safe and reliable self-driving cars most efficiently. That's kind of how you can tell uber hasn't won yet: if a company came along that was doing that, it would eat their lunch.

Further, faced with the awesome self-driving car company, uber's hungry huge capital needs thus far will be nothing but a burden.

I believe they timed this all wrong -- they are myspace and in the wrong business.

My points exactly – but I don't see how self-driving cars can ever work in midtown NYC without dedicated lanes. If you can't credibly pretend that you are willing to hit another vehicle, you'll just get cut off continuously; if you can't credibly pretend that you are willing to get hit, you can't change lanes. Self-driving cars can't do either – and will be the nemesis of hire drivers who will cut them off just to slow them down.

Ultimately, this space will operationalize out to the company that can manufacture safe and reliable self-driving cars most efficiently.

Assuming, of course, the fleet cap- and opex makes autonomous vehicles a more profitable proposition than driver share without fleet costs, and it gives them a competitive advantage over smaller autonomous taxi fleets. I'm curious what their internal projections look like in that regard.

at least not without a 10x improvement in some area.

If someone can get the cost down to 1/10th or speed it up 10x etc, then uber may find itself down and out (or racing to catchup).

If you're talking about scale: Just build an app which cherry-picks part of the market -- either specific users or specific locations or specific use cases -- and then fails back to Uber (automatically, or manually) when unavailable.

i.e. I could build "the Uber for when you want to go out on a date and impress someone in the car" as an overlay service.

>> i.e. I could build "the Uber for when you want to go out on a date and impress someone in the car" as an overlay service.

There is a service for that. It's called Uber Black.

Obligatory quote (I should write a blog post on this subject some day):

"The most common cause of failure in leadership is produced by treating adaptive challenges as if they were technical problems" - Ron Heifetz

>Except network of drivers

Good thing Uber has conveniently created that for you.

1. This exact program they're launching helps build a barrier (subscription)

2. Uber Pool requires a large number of drivers and customers to make it work. This is a real network effect and benefit, as having 2-3 customers in a car is more efficient than 1. This requires having other customers on a similiar route.

3. Customers want the closest car to them, meaning the company with the most cars gets a benefit

4. There are driver and customer acquisition and switching costs

Half the time I take an Uber pool I end up riding alone. My guess is the margins on it are not stellar.

I'm not sure that Uber offering some sort of subscription model creates any sort of barrier to entry for competitors wishing to participate in the market.

Sure it does. If you already have an Uber subscription, then you're comparing $2 for a subscription-subsidized Uber ride versus $(more) for a ride from Lyft or some other competitor. The competition won't be able to compete on price at that level.

It's not sustainable. Uber is trying to drive competition out of business, so it then has monopoly pricing and can charge what it wants. We've seen a preview of this in China; the day Uber and Didi signed their agreement fares went significantly up because both companies dropped all their promotional discounts.

Even worse, Uber and Lyft threw a hissy fit in Austin and now there are competitors getting traction.

Once you've got one city down, scaling it isn't that hard.

No, Austin kicked them out for bullshit reasons, citing safety of riding with un-fingerprinted drivers, when if you simply go out downtown in Austin now or before Uber, you'd see dozens of people knocking on random car windows and offering them cash for a ride. None of whom were fingerprinted. The competitors who have gotten traction also do not fingerprint, but as they are decentralized, there's not really a way to regulate them out.

Uber and Lyft should relaunch there with self-driving cars (the mayor is all about self-driving cars) and change their logo to a fingerprint.

Austin kicked them out? That's news to me as a resident because the distinct impression I got was that we the people voted we wanted drivers fingerprinted, and if they could do that, they could stay but apparently it was more cost effective to launch a million+ dollar campaign against the proposal and try running a sitting councilmember (who, sure, I'll admit, probably doesn't have good approval ratings) out of office and then left when the people voted in favor of the fingerprinting rules.

The same rules that Uber and Lyft seem to have no problem working under in Dallas and Houston.

Austin didn't kick anyone out, they left and good riddance I say. Fare and Fasten aren't perfect, but I will much more readily support a local company than Uber.

I don't understand. Uber's a disruptive startup, surely that means they are right. Regulations are for companies that aren't startups disrupting. Taxpayers should be able to be disrupted by startups.

You may want to indicate the sarcasm for those at home.

> The competitors who have gotten traction also do not fingerprint, but as they are decentralized, there's not really a way to regulate them out.

So, that would be why the city was overwhelmed fingerprinting drivers. Uh, yeah, let's see some evidence behind your statements.

And Austin didn't kick them out, Uber and Lyft LEFT. Uber and Lyft tried to hold Austin hostage, and, surprise, the Austin VOTERS bit them.

I have long held the same position. The only thing I can think is that the pricing is based on an estimate of what will be sustainable once self-driving cars are used instead of drivers.

Uber is, in fact, launching self-driving already in, wait for it...Pitsburgh.


So, maybe that's the deal.

> but now there seems to be no barrier to entry for any competing service except writing an app.

If that's true, why isn't Lyft doing well?

Because Uber is outcompeting them on VC subsidies.

The point of the parent is: How does Uber turn all these subsidies into an actual profit someday? It's easy to undersell your competitors when you're burning money. Once the VC dries up, how does Uber compete with any other entrant?

If Uber grows to a point where they can set their prices to get a reasonable profit margin. If their competitors can't really undercut and make money then they have to rely on VCs who are willing to burn cash to help a competitor grow. But why a VC do that?


True sometimes, not at all other times. Or else we would all still be using Friendster. I agree in this case there are significant barriers to entry and that once Uber captures the market they will likely have it all the way through to self-driving taxis (10 years?), but there's some VCs out there that like to fund the underdog under hopes that it can leapfrog and then got the overpour of an already existing market that has learned that a technology exists (whether that be the technology of logging on and seeing what all your friends did today or the expectation that you could press a button on your phone and have a driver show up at your door in 5 minutes)

A new entrant would have an undifferentiated product (and no drivers)

If writing an app is all there is to a business, why hasn't Facebook been replaced yet?

Uber = Network effects. And not just that, but a two-sided market too! Combine that with the verb "to uber" and you have huge barriers!

Apparently Uber makes a lot by monetizing data that it collects about the riders. Cheaper rides serve as a mechanism to have more passengers on board. The more data, the merrier.

I wonder if they will succeed with autonomous fleet, or will burn through all the cash and reserves way before that...

I used Pool last night in the city. Took me from the Fidi to Inner Richmond. $2.37. It was almost cheaper than Muni. I can't imagine the drivers are making much at all.

I had the same reaction when I rode UberPool from the south bay into SF (a 45 minute ride) for just under $18, and nobody else pooled with me. How could this be fair to the drivers? So I asked the driver how much he was getting for the trip. I believe he said something like $50. Fortunately, he wasn't getting shortchanged.

Later, someone pointed out to me that Lyft and Uber are aggressively competing right now. It seems that Uber might be artificially deflating its prices to try and kill the competition, or discourage new companies from even entering the market. If they do manage to kill Lyft, you can be sure they will raise their prices again.

Margaret Thatcher once said "The problem with socialism is, you eventually run out of other people's money", which makes it ironic and humorous that Uber, the poster child of Valley Objectivism, has basically the same problem with their "price dumping funded by VCs" model.

The key difference being that in the case of Uber, those VCs and investors gave their money voluntarily.

Voluntarily, but not without expectation of recompense. At some point the monopoly will start focusing on another source of money...

The entirety of capitalism is voluntary transactions with expectation of recompense. I'm not sure what your point is.

When you run out of other people's money, you start looking for other other people's money.

Presumably (hopefully) the socialist government for this hypothetical nation would have been voluntarily put in place by the voting public.

Some of the voting public.

LOL. Go look at Europe. The answer to that is a definite hell-no.

Socialists have historically been some of the biggest proponents of democracy. You're probably trolling, but it'd be amusing to know which countries you think have socialist governments in place by force.

Perhaps you have heard of the People's Democratic Republics of East Germany, Poland, Romania, Hungary, Yugoslavia, Latvia, Lithuania, Estonia, Czechoslovakia, and Albania? Socialism was imposed by a foreign occupying army.

Or take the Soviet Union itself. The democratically elected Provisional Government was overthrown by force. Even the socialists-only Constituent Assembly election was simply voided and ignored by the Bolsheviks when they overwhelmingly lost.

Your claim is empirically false. Socialism has historically been imposed involuntarily at gunpoint in almost all cases where it has achieved any measure of real power. Moreover, once established, its show elections are a farce, with only pre-selected Party approved candidates allowed to win.

You will no doubt reply that none of this was done by "real" socialists, and that <insert your favorite sub-sub-branch of socialism here> are the only "real" socialists. This is the "No True Scotsman fallacy".

History is split. Marxist-style socialism was installed by force in Eastern Europe, Russia, and other places. Democratic socialism was installed by free elections in northern Europe, and continued there in later free elections, with candidates of multiple parties allowed to run.

Ideally, political change can happen without violence or bloodshed. But we don' live in an ideal world. We never have, and we never will.

Pretty much ANY political system gains power through bloodshed. The United States, Canada, England, France, Germany, pretty much the entirety of South America, Africa and Asia... With the wide ranges of political systems that span all these places, each and every one of them was put in place by violence.

You point out the horrible regimes that adopted the word "Socialist" or "People's" in their name and point out all the atrocities that they have committed. While adopting those monickers != actual socialism, you've headed off that argument, so I'll give you that. However, don't lay violence as a means of gripping power at the feet of Socialism... That's a human trait.

Disengenuous to ignore the appallingly violent way Socialism has historically grabbed power and suppressed their populations. Very different from rebellions for independence for instance.

Sure. The Stalinist were a horribly violent.

So were the US backed gorrillas in every violent uprising in South America in the 1980's.

So were Belgian trading companies in the Congo.

So were the French people during the Reign of Terror.

So were the Catholics during the all of the Inquisitions.

So were the Spanish during the expulsion of the Moors.

I could go on. The point being that this is not a Socialist trait. The first two were done with Capitalist intent. The last two were carried out with both political and religous power in mind. It's clear that you don't like Socialism, and that's fine... to each his own. But it's "disingenuous" to ignore history for the sake of proving your point.

Ok lets make a list of Socialist societies that formed through rebellion and the formation of popular governments? Its seems to be a Socialist trait that it cant happen without being forced on a population by intelligentsia. Is that fair?

> Its seems to be a Socialist trait that it cant happen without being forced on a population by intelligentsia. Is that fair?

No, given the evidence, it's not fair. You could say the exact same thing for Capitalism.

Please. Now you're just being purposefully insulting.

I'm not confusing Colonialism with capitalism.

What do you think the purpose of Colonialism was?

"Colonialism" does not exist as such. It's merely a sometimes useful intellectual abstraction, not a real thing. It has no objectives or purpose, because it does not and never actually existed as a real thing. It's merely a summary shorthand for a certain set of ideas.

Trying to impute motives to an unreal analytic abstraction is the reification fallacy.[1]

[1] https://en.wikipedia.org/wiki/Reification_(fallacy)

> "Colonialism" does not exist as such.

That is an empty refutation...

Colonialism was(is?) as very real practice. I really don't understand how you can claim that it is an "intellectual abstraction"

You went to Wikipeda for the definition of reification, but not for the definition of Colonialism[1]?

[1] https://en.wikipedia.org/wiki/Colonialism

It's disingenuous to call attention to US-backed guerrillas in South America without also noting that the supposedly "indigenous people's movements" in the region that these guerrilas were fighting against were not actually local in origin at all.

They were universally created, armed, trained, and funded by the KGB as part of a massive decades-long social engineering program designed to make people think that there were organic third world socialist movements which had spontaneously emerged from the local population's great love of socialism. In reality they were all -- 100% of them -- created and operated by remote control from Moscow.

They served the interests of the Soviet Union exclusively. They were interested in the needs or betterment of local peoples only insofar as this also served to expand Soviet control and influence in those places.

As the local third world socialists usually naively did not realize this reality, the locals who actually worked and fought in the "indigenous" movements were internally referred to as "useful idiots" within the KGB.

Communism has always been an explicitly internationalist movement with the conversion of all countries worldwide -- and especially highly industrialized countries, above all the United States -- to Communist rule as the open goal. Under these circumstances, the US response of funding counter-operations abroad to counteract these KGB operations was appropriate.

See e.g. the Mitrokhin archive, https://www.foreignaffairs.com/reviews/capsule-review/2006-0..., etc.

Everything you said is irrelevant.

You completely ignored (or didn't understand) my point. I spread the attributions of violence around to show that using abhorrent violence to grip power has nothing to do with political inclination, economic system or religion. It is innately human.

That's all entirely beside the point. The post was responding to another post claiming that historic socialists have been particularly great advocates of democracy, which is empirically false.

Whether other systems have also been undemocratic is irrelevant (the "tu quoque fallacy").

> Socialism has historically been imposed involuntarily at gunpoint in almost all cases where it has achieved any measure of real power. Moreover, once established, its show elections are a farce, with only pre-selected Party approved candidates allowed to win.

I simply making the point that gripping power through undemocratic means is not a trait of a particular political belief, but rather a trait of human kind in general. Not agreeing with huac, and not agreeing with you.

You're quoting fallacies while not understanding what's being said around you.

Maybe democratic socialists. But the track record of explicitly socialist nations is pretty much the exact opposite of pro-democratic. There's a decent argument that those governments were coopted by corruption and never actually turned into true socialist governments, but that's also a flaw in the system, as it relies on humans to not act in their own best interest across the board.

There is also a difference between state-capitalism and socialism, many of the socialist / communist examples we have are actually state-capitalism.

Gotta love politically inflammatory remarks by "throwaway" accounts.

I wish people had the balls to stand behind their politics.

I'm thinking new accounts could be unable to comment until they'd viewed 100 different subjects over at least a week? Make it harder to mint these 'troll' account.

One can still run out of voluntarily obtained money.

Obviously that's true, but it's not really relevant to the intended meaning of Thatcher's (obviously oversimplified) quote.

You could argue the VCs in fact gave other people's money - investors money, possibly including your pension - to Uber.

More importantly, it's not my money. I could care less if they lose it all.

Now taxes, that's a different story.

The strategy, of course, being to make their competitors run out of other people's money first.

Price dumping is the precursor to monopoly/cartel which then results in unassailable market barriers to entry and consequently large premiums.

If you're paying too little, you've got to expect that situation is not sustainable - either that good deal withers, or the vendor's lock on their customers means they can raise prices arbitrarily.

It might not be the customer they squeeze though. Could be the drivers.

This happened in china before with didi and kuaidi. User used to get discounts like 10 yuan off the first ride every day. And the result is those two companies merged. But with competition law here in US I'm curious to see what's going to happen.

> It seems that Uber might be artificially deflating its prices to try and kill the competition

That is indeed the case: http://www.seattletimes.com/business/technology/will-ride-ha...

>for just under $18, and nobody else pooled with me. How could this be fair to the drivers? So I asked the driver how much he was getting for the trip. I believe he said something like $50

Quite the business model. I wonder if they really believe they're earning goodwill at the rate of an Andrew Jackson per ride?

If they can kill the competition they can then crank the prices back up and profit of this for years and years. It feels slightly 'evil' but it does make business sense, especially if they know they can outlast their competitors.

> If they can kill the competition they can then crank the prices back up and profit of this for years and years. It feels slightly 'evil' but it does make business sense, especially if they know they can outlast their competitors.

They can do that, if they want anti-trust problems. I bet Uber wants Lyft to survive so they can have a substantially similar competitor to point to when the government's lawyers come knocking.

I'm not so sure I agree. If you crank up the prices, a lot of users who are users because of those prices will just stop being users. You don't exactly have a good way to lock users into it, so this strategy doesn't seem as effective. I imagine that the most locked in user will be one that sold their car to solely ride uber, and they can just go get a car if the the cost analysis tips more in favor of the car. "Worst" case for this user is they need to buy a vehicle, slighly better but still bad case, they pay more, but less than owning a vehicle but still reaped years of low low prices.

As you say, there is no effective way for them to lock users in, but they don't need to. They can outspend and outlast Lyft to make them run out of cash and/or devalued to the point where they can acquire them and shut them down.

At that point, any (future) new entrant to the market will face a steeper uphill battle than Lyft did. In the process, they may lose some customers to real cars or public transit, but they'll remain the only player in this space.

No they won't face a steeper uphill battle. They'll have a much easier time: legislation will be clearer, drivers will already be driving for uber so installing another app is trivial, riders will already be familiar with app-hailed rides and so installing another app is trivial.

These are good points, but at the end of the day, a provider is going to have to pay out to drivers (and collect fares). Uber will be difficult to compete with on price for the exact same reasons that Walmart and Amazon are difficult to undercut consistently.

I wonder if this holds true once it's determined Uber drivers are employees and not contractors. That bill will be quite the bite.

Those users who were only in it for the cheap fares would have left anyways in a world where Lyft survives but fares increase to profitable levels.

If Uber succeeds in killing Lyft, they can dictate pricing more effectively and harvest a surplus from the remaining consumers.

Okay and then one of the 13 other startups doing this suddenly become able to undercut Uber because they have VCs who are willing to gouge the actual balance sheet in order to put Uber out of business.

Crucially, Uber doesn't own the cars nor the drivers. Anyone willing to throw more cash to drivers and take less cash from riders (with the infusion of VC funding) can instantly steal both the supply and the demand from Uber.

Why would Uber let a competitor undercut them?

Because they have a finite pile of VC cash to burn through.

But one larger than the new entrant.

I don't know. Right now? It costs me ten bucks a day to uber pool from my house in Santa Clara to my gig in mountain view and back. At those rates, I am totally paying and reading. But if that were twenty or thirty a day? Maybe not, or at least it would not be an every day thing.

The problem for uber is that I am paying the majority of the cost of owning a car, the parking space, either way, so switching back to driving myself has a low cost. Housing situations I want that don't come with "free" parking are few and far between in my area.

Now if uber would bully the city into letting someone build a parking free tower of studio condos? Yeah o.k. Maybe they could exploit the lack of competition to get me to pay a lot more for transport, but as it is, they need to keep the price below what I would pay to read for twenty minutes rather than drive, and I am not sure that would add up to a market clearing wage without some vc largess.

> Now if uber would bully the city into letting someone build a parking free tower of studio condos? Yeah o.k. Maybe they could exploit the lack of competition to get me to pay a lot more for transport.

If Uber gets big, expect this to happen in addition to blocking the construction of effective bike lanes.

Well they are built off ignoring regulation, so I guess they just figure they will get away with ignoring laws against monopolies.

It's just an anecdote. On the other side of this, I have gotten a pool ride from the airport that took 3 riders including myself. We all got dropped off within a few blocks of each other. Uber must have made 2x on that ride.

It'll look better when they dont have to pay any drivers anything at all

so i suspect they are trying to kill of Lyft, then replace drivers with autonomous driving and keep the prices relatively constant by having loyal customers join in on a subscription model like pool pass and use it as your daily commute. I am actually already taking Pool, with pool pass every day in DC for $1.00 per ride, $30 up front fee. Only way this is sustainable is to eventually replace drivers. Also to really have high customer volume and keep occupancy high they have to keep prices relatively close to a metro fare.

So they are building a worse rail?

More like the last mile to stem the gap in coverage by Metro. Metro will always beat surface streets within downtown.

This is actually unclear. A lot of our metro systems are held together by crumbling infrastructure (like DC) and are becoming extremely slow, delayed and rely on unsafe tracks. To make matters worse a lot of competing jurisdictions are cutting public funding to maintaining the system. A commute from Vienna, VA to Metro center in DC has regularly been taking 1.5 - 2hrs. 3 years ago that trip was 45 min. its still about 30-45 min by car.

The only real benefit to public transit at this point is that it allows you to dodge the cost of parking your vehicle for a day while you are at work. But Uber has figured out other ways to successfully allow people to dodge that cost.

With Uber pool my commute takes roughly the same time as metro, is door to door, and now cheaper and in many ways safer than taking the metro.

Full loads have been offsetting partial loads all along for airport shuttles, trains, buses, cargo, planes etc, the maths is probably in Uber's favor even without having to compete with Lyft.

> It seems that Uber might be artificially deflating its prices to try and kill the competition, or discourage new companies from even entering the market.

Or they are just trying to tread water until they can remove drivers as a cost. If Uber can use VC money to pay current driver and then use more VC money to purchase a self driving fleet, they just have to wait it out until their current prices become profitable.

I was chatting with my Uber driver last week and he said he preferred Uber, because they guarantee $1500 a week provided you accept a certain amount of rides. This is in SF.

That comes out to a guaranteed $73k/year, even if you take 3 weeks of vacation. For a family where both parents are driving uber, that comes out to a family income of almost $150k/year. Considering the only skill you need is the ability to drive a car, that's insane.

They only guarantee gross pay -- that figure doesn't include Uber's cut or operating expenses[1][2].

Together, that would make your taxable income something like 60% of the figure.

[1] http://therideshareguy.com/what-to-make-of-the-2016-uber-hou...

[2] And seriously, phrasing the guarantee as before their own cut? Come on, guys.

I cannot understand, why even highly educated people fail to make this distinction between gross pay and the net pay.

If that "provided you accept certain amount of rides" keeps increasing since more people will make use of such subscriptions, the operating expenses (fuel + wear and tear) continues to increase.

Plus gas. Plus depreciating your car. Plus paying your own benefits. Plus 1099 double taxation.

Yes that's pretty disingenuous.

After deducting the IRS per-mile amount, the 1099 double taxation drastically drops.

> And seriously, phrasing the guarantee as before their own cut? Come on, guys.

I see your point here and am annoyed by this tendency, but to be fair, in the US, this is pretty common. After all, salaries are reported pre-tax, despite a $100K salary meaning wildly different post-tax nets depending on where in the country you live.

I wasn't objecting to pre-tax, I was objecting to pre-Uber's-cut. It's like if I said "I'll pay you $1200/week to work for me" and when your paycheck comes it's only $1000 (pretax) and I say, "oh yeah, that's my finder's fee".

Nothing wrong with a finder's fee. Lots wrong with promoting the pre-fee value.

If you're still following, I want to give a more thorough response, since I don't think my other one got to the core of your point.

I think your point is that it's common practice to not mention all kinds of add-ons when listing prices, so there's nothing particularly unusual about Uber doing it, even if we'd prefer everyone to agree to stop doing it.

But even so, I think there's a big difference: in the case of taxes (retail or labor), there's a valid defense: "I don't know tax rates in your municipality", "I don't know how many deductions you have or what your family income is". Even so, when paying a vendor, you know how much you're deducting from their payments for yourself, so you don't really have an excuse for reporting a figure that includes a part that you know you have to personally take out.

The scumminess would be more obvious if Uber e.g. claimed that rides in a certain interval would get a 10% bonus, without also mentioning that they increased their take to cover it all. It would no however, be scumy if they simply failed to mention that "oh, this might push you into a higher tax bracket".

It's like saying the income of a waiter is equal to the check totals they serve.

Thanks, that's a better example, though with a more extreme difference: "Come work at ElegantPlace! Pull in $2000 a night!" -> "Hey, I only got 400." -> "What? Your tables definitely paid 2000."

The catch is that the guarantee promotion won't last forever. We all put our fates in others' hands to some degree as employees, but this definitely turns it up a notch to be a relatively unskilled worker depending on artificial temporary subsidies to set up your life.

An analogous example is Japanese salarymen working many dozens of hours of overtime per month, becoming dependent on those extra hours and extra pay, structuring their life based on this inflated amount. When the financial crisis hit and firms tightened up, reducing or outright barring overtime work, these families suffered.

Evey Lyft/Uber driver I've ever spoken to always prefers Lyft. Then again I've never used Uber.

1500 is not bad

I can't imagine the drivers are making much at all.

Thing is, how many people does it take to run a medallion/dispatcher cab company? Aside from the drivers, maybe 10-20 people? An app-aided service could flourish with many fewer employees, so when you have Uberlikes trying to define a market they're doing so at a chosen price point. There's nothing that says that a sustainable price point can't be (much, much) lower. If a service can do 80% of Uber functionality/reliability/satisfaction, they might be able to easily undercut them on price and still have everybody be happy.

The base cost for Uber Pool (and Lyft Line) is $4.75. You got some discount that gives half off Pool rides.

Anecdotally, I used Lyft/walked to work for a week and got a similar week of half off Pool rides in SF.

Wow, PT Cruiser? You poor, poor uber rider.

Check your invoice - you'll probably see the current 50% off promotion

No promotion listed on mine. here's the last 4 pool rides i've taken (4.0-5.3 miles):


$2.37?! Wow. I use uber pool almost everyday and I never get deals like that!

Eg:- http://m.imgur.com/a/5CtfQ

Because you use it everyday they haven't targeted you for a promotion.

I believe it is a factor of how likely they think your ride will get matched.

I have been riding uber every day for the last few weeks after a skateboard crash. Pools from home->work are almost always ~$7.50 and pools from work->home are almost always ~$2.30. I believe it is because i work at an uber hot-spot and live in an uber dead-end.

I use it every day. I've used it every day for nearly a year. I almost always get the promo discussed.

I got something similar (though on a shorter trip, mission to TL, circuitous route). UberPool quoted $4.50, but then I only got charged half of that because of some nebulous discount.

Drivers are making more than this, Uber is paying them. Uber is just giving away VC cash to consumers.

The copy on this page is super unclear. I just realized(after signing up) that the subscription is to get the special $2/ride pricing, not the actual ride. Put another way: after you have the $30/month subscription, you can get UberPools for $2/ride.

I thought that was clear. What were you confusing that with? I'm trying to understand what you initially thought it was.

not op, but i assumed the 'upfront' would fund the rides as well, vs. just 'unlocking' them. i read it as more of an initial prepayment.

Same; this is how it read to me. I was confused seeing this in the comments.

The unclear part was the portion where you select how many rides you want. $30/40 rides doesn't exactly clearly imply that you're paying to pay for flat rates. Not saying that it's not on the page, or that they're hiding details, just that they definitely obscured that element.

Agree, not really sure what the alternative would be?

I would pay that in a heartbeat because daily commute costs via Metro is $2.50 (ignoring any pre-tax discounts I get). So for a four week month it costs $50 to take public transportation twice daily. For $110 I get a shared ride door to door? Sign me up. Except of course neither this or UberPool is offered in Houston so I guess we can all just suck it. Oh well. It would be nice.

Population density is actually increasing in Houston's inner city. It would be an interesting experiment for Uber to at least try pooling inside our 610 loop area.

The ride also has to begin and end in the given area (north of Cesar Chavez street). And if the ride is over $25 you pay the difference. That means SOMA to sunset at 1.7 surge won't be the flat rate at all.

I pay more than that in tolls going to work in a month, let alone gasoline, wear-and-tear, and frustration.

> Flat fares are designed to cover full fares for almost every trip, with a $20 limit for uberPOOL and $25 limit for uberX. You’ll be responsible for paying portions of the fare that exceed those maximums on each trip.

The pricing felt convoluted even before I saw this part. I can't see this being worth the effort, if you can't even guarantee the $7 prices.

The overage feels generous to me. I'm not sure there's much of SF you can't get to with $25, even in traffic.

It seems like this is their way of addressing the problem of "being in the car". If you get in the car with your $7 UberX pass, then demand to go to San Jose, something has to happen. Getting out of the car is probably worse for the customer, so they cap the amount this pass buys you, knowing you'll never hit the limit under the intended use case.

Going to San Jose is explicitly not covered "when your trip begins and ends north of Cesar Chavez St. in San Francisco."

You can go to New York and your trip could still begin and end north of Cesar Chavez St. in San Francisco.

Woah, they explicitly excluded Bernal? Harsh.

They do need some way to prevent people from taking a $500 trip on a flat fare.

However, it seems like they could handle that with something like "Must start and end in San Francisco, with a single destination" (meaning, not a "go here, wait for me to get back, then go here" trip).

Yeah, this seems like a step backwards from their promise of transparent prices ("what we do on UberPool, but for everything"). What the heck is the point of flat pricing if you have to pay for overages anyway?

Next step for Uber would be to create Zones like Caltrain, and charge subscription based on travel between zones. Then no need of coverage.

But going by Uber's history, this would be too transparent and wont workout for them.

It'll create an opportunity for someone to build a "exactly how far does each free trip get me?" app.

Back in September of 2009 JetBlue offered an all you can jet pass because September is traditionally the worst slump of the year. Summer's over, people start schools and jobs, travel drops overall.

This is the same trick to get you out there more. It's also inevitably the end game for Uber. Deliver value for less than your monthly car payment.

Someone is crunching the numbers right now figuring out exactly how much LTV they can extract from you in exchange for paying $500 a month every month to Uber.

Then when Uber wins that game by the end of next year many other CPG and big box retailers will follow suit, riding along the subscription box model.

By 2020 it will be normal for you to receive income from the government just so you can hand it over to lifestyle providers of all stripes every month to live how you personalized it to be.

Latest fashion every month from WalMart! Semi-prepped meals every day from Safeway! 30 day supply of customized toothpaste from Target! Just insert token.

Sounds like a communist utopia, just replace the big corps like Walmart and Safeway with GovMart and GovWay. Maybe Marx was unto something on how capitalism would evolve, just got some parts wrongs.

That was the best $500 I ever spent! I had just wrapped up a job and spent the entire month traveling the US and parts of the Caribbean all for the price of one trans-continental flight. I was really hoping they'd repeat the offer the following year, but alas it was a one-time deal.

Makes sense as a way to lock riders into Uber rather than Lyft. Wonder how drivers will react.

Interestingly, Ola in India had already done something like this very recently.


They launched this yesterday in San Diego also. I signed up.


Boston too - https://www.uber.com/info/plus/boston/

Edit: Looks like it's only available for uberPOOL.

I pay $3 to commute to my office in Uber Pool or Lyft--cheaper than Metro. Usually no other rider. I don't know how this is sustainable.

Well, it's not.

There is less money coming out of Uber than is being put into it by VCs.

Not sure why everyone thinks these are such business successes. It doesn't take a genius to burn piles of cash.

All electric vehicles that drive themselves will make it sustainable. They can afford to burn cash while they get the fleet going and then they replace all their expensive and error prone human labor with cars that drive themselves and don't need to sleep.

The word "sustainable" in your reply is a joke when you consider the unsustainability of the automobile for single rider transit. Electric or not, it's a tough sell compared to mass transit.

Not if one car serves, let's say, 200 people a day instead of a single owner.

One car serving 200 passengers a day is one passenger every 7.2 minutes. This equates to roughly 4 miles at 35 miles an hour. This assumes perfect routing and perfect loading/unloading (i.e. - the passenger magically appears and disappears in the car and that a new passenger is always ready to magically appear when the last one disappears). This seems rather short, and is a conservative estimate.

These 800 miles would be reimbursed at $460 using the IRS mileage rate which is for gasoline vehicles, but assume that only 1/3 of that is gas and the other 2/3 is depreciation, wear/tear, licensing, etc. then we see that Uber would need to have each rider pay $1.53 just to break even on the cost of owning the vehicle. This ignores the fact that self-driving cars are likely to be much more expensive when it comes to non-gasoline costs. I believe I read somewhere today that the Teslas takes ~3mile/kWh so this cost would need to be added in, this is ~$0.07/mile at 20 cents per kWh. Total cost to break even is then roughly $1.80 per passenger, plus whatever additional costs a new and experimental all electric fleet with undefined insurance statistics costs above a regular vehicle.

Assuming their current model of $8 per uberX ride is an example of what they expect to hit, then Uber is taking in $6.20 per passenger or $1240 per car per day or $452,600 per car per year assuming perfect efficiency.

The question that really matters though is how will Uber's fleet deal with peak passenger demand? These 200 riders are not spaced out evenly at 7 minute intervals - most of them all will want to ride at the same time. People will stop using Uber if the waits become too long and Uber will lose its competitive advantage.

How does this affect driver compensation?

Seeing from the point of view of an investment banker, the money that Uber was going to get at the end of the month ($20-$30) will receive it now a month advance and Uber investors can put it towards whatever investments they want and in this way make extra $$$ and have another revenue stream going.

Or Uber can pay off its drivers more earlier and in this way win more of their loyalty for Uber. Brilliant.

They also have flat fares in Chicago for $3.12 with uberPool, Monday to Friday 6am to 10pm. All trips must begin and end south of Irving Park, north of 71st Street, and east of Western Avenue. https://www.uber.com/info/chi-uberpool-312/

This is being offered in Seattle as well.

Hey Uber, it is very nice to offer this in SF, SD, Boston, but what about NYC? :-(

Seems like they offered something similar last month: https://www.giltcity.com/newyork/ubernycjuly16

Unfortunately, there was a limited number of offers and I was unable to get one. The SF, SD, Boston offers don't have that limit.

Clicking on the link launched the Uber app for me. I then rage quitted it before reading anything more.

Also happens in "no so" private mode on the iPhone. Apple should really fix that as it leaks information.

I do not really like Uber. The company does shady stuff quite often but also their drivers seem to be bad. They do not care at all about traffic laws. Illegal u-turns, stop wherever they want, etc.

I can't surely be the only one who experienced this?

> They do not care at all about traffic laws. Illegal u-turns, stop wherever they want, etc.

That's probably a quarter of the people I run into on my commute to and from work. People just don't give a shit about breaking traffic laws themselves. Of course they'll be sure to honk at and scream at the other people who do.

At least in the case of Uber, in my city, cops are a bit aggressive about making sure they don't do things like stop on a busy corner or do other stupid, anti-social maneuvers. I once had an Uber driver stop on a busy corner and block turning traffic. As I got into the Uber a cop ran up and literally ripped the door out of my hand as I was shutting it to scream at the driver he had 10 seconds to move or get a $1,000 ticket. Going out on the main strip during a Friday night, it isn't uncommon to see an officer deal with at least one driver.

>stop wherever they want

Have driven for Uber.

There is approximately nowhere to legally stop in a busy downtown area aside from parking garages that cost $35+. The best you can do is pick stopping places that minimize disruption to traffic (i.e. fire hydrants, no parking zones that could easily accomodate parking, the parking spaces too close to the stop signs) and get into/out of them safely, signaling, watching mirrors and checking for bikes. Be quick, and if a cop or more legitimate user of that parking space comes up, get out of it and circle the block.

If we insisted that drivers only stop in legal parking spaces, there would be nothing resembling delivery or taxi service in a busy downtown area, except at the handful of buildings that actually have taxi stands and loading docks.

There's a reason one of UPS's largest operating expenses is parking tickets. IMO that's perfectly fine. The city has to make it cost something so it's not taken lightly, but the service still gets to exist.

I am not talking about busy downtowns. If there is a good place to stop, even if it brakes the law, such as stopping in front of a fire lane, then just do that. I am talking about situations where these people stop in the middle of the intersection to pick up or drop someone off.

I get the frustration in downtowns, but I live in San Jose, which is not busy downtown and it annoys me every time these people do weird things and impede the traffic flow.

Because taxis don't do this??

As a cyclist (in Boston), it's somewhat easier to predict that a taxi might (suddenly) decide to park in the bike lane, and it's more surprising (therefore slightly more dangerous) when another car does it.

I wish that it wasn't the exception to be ticketed for that. I see it all the time, as long as drivers get off with a warning (and not a fine) it will keep happening.

Have you ever ordered a package from Amazon, had a pizza delivered, or taken a taxi? Been picked up by a friend or parent somewhere that didn't have its own parking spaces?

If so, I'm guessing you've benefitted from a driver stopping or parking in a place they weren't legally allowed to stop.

Do you think these services should go away, or what?

There is a difference in stopping somewhere illegally (e.g. in front of a fire lane for 5 minutes) or stopping anywhere and impeding traffic.

Just this morning I saw an uber driver stopping at the sidewalk but having the back of his car hanging in the lane making people having to drive around him. That is, in my opinion, just egoistic and annoying. On the other hand if you stop in front of the fire lane without impeding traffic, no one will care.

I knew this would be one of the replies! Just because others do it, it doesn't mean everyone else should be doing it.

Also, now there are not only bad taxis, but also bad Ubers!

I feel like there are a lot more Ubers in an area than there are cabs. So I will get annoyed more often by an Uber than a cab.

Yeah well thanks to Uber there are fewer cabs.

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