IPO? No way. They'd have to publish audited numbers. What's leaked out is bad enough. The real numbers have to be worse. Notice that leveraged loan in 2016. All the details of that have to be disclosed in the prospectus for an IPO.
Uber may or may not take over the world at some point, but Uber needs another round of investment in the next 18 months just to survive. If the existing investors refused to play ball, they could kill the next round, which really would kill Uber.
And here's another important moral of this story for founders: Kalanick has a controlling interest in Uber, so on paper, nobody could have removed him as CEO by shareholder vote. But despite complete control over the vote, you don't really own your company if you're dependent on future investment.
No matter what the cap table says, if you're not profitable, it's not really yours yet.
If you look at founder/CEOs who have made that leap, they all tend to be very young (Jobs, Gates, Zuck, etc) and had very strong teams behind them.
Someone like Kalanick - who has run multiple startups to various exits - has been running startups all his professional life. His management style likely works very well at a startup, where failure is assumed so risk tolerance is high. At a startup, you need a field general leading the troops into battle.
But at a large, maturing company, you need a different skill set. Risk tolerance becomes a negative attribute once the company grows so large you can't control the risk anymore. Rather than a field general, you need a therapist capable of massaging the egos of the executive team and the board of directors. The job becomes more strategic and political -- execution is assumed, and failure is no longer an option.
I don't think Kalanick is that guy, and I think the board finally convinced him of that. But if I was an investor, I'd still be happy to listen to his next startup pitch...
And in Jobs' case, it took an absence from the company of more than 10 years…
Edit: Downvotes for simply stating a fact?
Edit: I imagine it's this interview at AllThingsD. Ed jumps into this topic right off the bat.
He was an asshole of monumental proportions before and after. I am so far removed that I am a poor judge, what would be a good place to look into this.
More like "CEO of a growth startup" to "fixer who can pull an over-valued startup out of a nose dive." That's a much tougher leap.
I'd argue that a "mature CEO" is not a fit for Uber which needs to keep growing or die.
The valuation can be quite high if you assume that the value in the exponent is low.
But I personally think that the "autonomous vehicle revolution" is not going to pay off as well for Uber as they had hoped. It's becoming more clear that the market for autonomous vehicles isn't going to look like the market for human-driven ones -- and vehicle manufacturers are going to be looking to build their own self-driving auto services rather than sell self-driving vehicles directly to consumers.
Uber's biggest innovation was their app. Even complex apps like Uber are not hard to clone if you have any sort of budget. There's an assumption a lot of investors make about their brand value: it assumes that another, already strong brand does not enter the same market. Seeing as Tesla has made no secret of their intentions to compete directly with Uber in the ride-hailing space, I don't think that's a fair assumption. Would you rather call an Uber or a Tesla at this point?
And what does buying a Tesla in that scenario even look like? Do you buy a car and rent it out a la Airbnb when you're not using it? How much money do you get for that, and how much of a cut does Tesla get since it's their algorithms actually driving the car?
Don't get me wrong; the brand value is actually really high because hundreds of millions of wealthy customers worldwide know Uber. Even if the company fails spectacularly, someone will buy them for a few billion in a fire sale just for the brand.
You realize that nobody will care as much about most of the things they currently care about when buying a car. Performance? Mileage? Handling? Horsepower? Fucking irrelevant if I'm chilling in the back seat and my car is just getting me to where I need to go.
So what still matters? Price. Comfort. Amenities. The upsell becomes the main sell. At a certain point, Tesla isn't even selling "cars" so much as it's selling mobile offices to one segment, and mobile living rooms to another segment. I could also see Tesla finding a way to place the burden of price elsewhere and offer effectively "free" cars to consumers. For instance, leasing or selling fleets to employers. Or to cities. Or to Uber. Or to Amazon.
Uber, on the other hand, sees a world in which nobody owns a car, nobody drives a car, and everyone hails an automated car whenever and wherever. Like that scene in Minority Report.
Both of their strategies are banking on the idea that cars, as we currently understand and experience them, will eventually become pure commodities. The difference is that Tesla is seeking margin and Uber is seeking volume. The cliche that Tesla is Apple and Uber is Amazon is sort of true in that respect.
That's why ultimately, I feel Uber will end up being the Expedia/Priceline of the self-driving car industry. If you don't control the means of value production, you become a middleman. There's a reason they were working on their own self-driving tech rather than licensing from someone else -- everyone who is actually building this tech likely told them "go shove it, we can recreate what you do far easier than you can recreate what we do".
Sure in large walkable cities with constantly circulating fleets car ownership might go away. For those of us in the suburbs who HAVE to drive everywhere, not so much. Even waiting 5 extra minutes for every errand (optimistic, given that my most recent lyft took 10-15 minutes to arrive) adds up fast. Let alone going out into the rural areas where Uber/Lyft scarcely exist and the nearest human structure can be miles away.
I could, however easily see a model where people rent their self-driving car out to Uber/Lyft when they're not using it. Driver fees would be gone, and they could take a greater cut that might even put them towards profitability.
Anyone who is price sensitive won't want to pay the hourly rate to have a car sit in their garage all day/night doing nothing. Nor will they want to pay the up front cost and/or interest to hold a controlling share in the vehicle.
And configurability means you can take a 2-seater when you are going to work, take a 4-seater to lunch with you coworkers, take a hatchback to the farmers market to pick up your groceries, and then an SUV to the mountains, preconfigured with a roof rack with your ski rentals already on it, sharpened and waxed, and then take a mobile office for the drive home so you can get some work done, and a mobile bedroom for your trip down to LA so you can catch up to sleep.
But yes, the wealthy will still own private cars because they can have it waiting, just like private planes. Also, cooties.
Driving is a day-to-day task. My time's already short, if I have to add an extra 5 minutes waiting for pickup every time I want to go anywhere (once again an optimistic estimate, it would likely be closer to 10), on a busy day that's a minimum extra hour a day of time I've lost just standing on the sidewalk. Margin matters, even an extra 15 minutes a day adds up to over 90 hours a year.
Also these rental services/configurations will hardly be free. So the cost of the car/maintenance isn't eliminated entirely. For my situation, given that I've been driving the same car for the last 11 years, and it was ~16k when I bought it, plus maybe an average $1200 a year in insurance, and maybe an average of $300 a year in maintenance that means I've spent an average of $2,954.54/year over the last 11 years on car ownership. And that number is only going to get smaller unless I buy another car.
But in this scenario I'm losing a minimum 90 hours per year on the margin. If those were work hours, then at my current take-home rate I can decrease that number down to around $1065/year going forward. Given that I'm likely going to make more money as the years go by, these continuous rental services are going to have to be awfully cheap to be worth it for my situation, and I don't think I'm too far from the average.
Now sure, if you're buying a new car every 4 years like some people do then it might be worth it. Or if the cost of insurance is prohibitively high in your given location. Or if your job sucks and you just can't afford a car. Or if you actually need a broad variety of vehicles on a regular basis. There are lots of factors that go into it, but for anyone who's middle class or better I don't think it'll supplant ownership entirely. Or maybe it will and I'll just be with the sour-grapes number-crunchers in the corner ranting about margin to anyone who'll listen. :)
Nope, but they will be commoditized. If you have a car that all you have to do is pass it an API key and a location, there's not much value a ride sharing service can add to that -- which means there will probably be a bunch of them. Which means that the price to the consumer should be something close to [ (marginal cost of ride) + (depreciation cost of ride) ] * 1.03. And the cost side of that will benefit from scale for the business, but not the consumer.
Basically, once it's commoditized, it will cost you more to do it yourself than to pay someone to do it for you. Just like with currently commoditized services like AWS, there can still be good reasons to do it yourself -- but those tend to be special cases rather than the norm.
> But in this scenario I'm losing a minimum 90 hours per year on the margin.
Err, I'll play along. If you were in an autonomous car (or even a current ride-share), you could just work while en route rather than drive. I'm willing to bet you spend more hours sitting in traffic today than you ever would waiting on a car to arrive.
As for the rest, keep in mind we're comparing renting an autonomous car vs owning an autonomous car, not renting an autonomous car vs driving. So the actual rides are equivalent. The time difference is me getting in my car and telling it where to go vs me hailing a car, waiting 5-10 minutes for it to arrive (where my capacity to do any meaningful work is basically nil) and then tell it where to go, a minimum of 3 times a day. Maybe up to 12 times a day on a busy day. That's not an insignificant time loss over the medium/long term.
Granted it's all hypothetical and the actual value of the time lost would be highly situational, but it would be one of those small daily time-sucking inefficiencies, like walking into the other room to get paper towels as opposed to just putting a roll in the kitchen. When you do them every day, those add up.
You'll notice a common thread throughout Elon Musk's "big bets" (Tesla, SpaceX, etc.) He is extremely conservative with operational spending, and all of these companies are very capital-intensive. Just look at the difference between a "Tesla Store" (small, maybe 3 or 4 employees, cars can be stored offsite wherever is cheap) and a normal auto dealership (huge, dozens of employees, majority of expensive real estate is used for parking cars). The Tesla store is very efficient compared to the auto dealer.
When you have high capex, it makes it easier to fund your company through debt rather than equity since those loans/bonds are backed by capital assets with a non-zero liquidation value.
Tesla has a brand value higher than any other car. It's not an app that can be easily replicated. The dynamics are not the same as Uber.
By definition rental is going to be more expensive than ownership.
I don't doubt that companies will have fleets of cars for their employees, etc, but personal vehicles are not going to go away.
> but personal vehicles are not going to go away.
For the vast majority of the population, yes, they will go away.
Look at the quality of the interior of the average cab and you will see why a lot of people would prefer to own.
young people, old people, and homeless people.
Everyone else needs a car frequently.
Mileage is a critical component of cost of operation, and of range without stopping, which are pretty much (along with capacity and comfort) the things that matter most if you aren't driving and the car is just taking you from A to B.
That's even true if you don't own it (even the cost factor, since that—assuming an efficient market—still controls what you'll pay to use it.)
Autonomous cars are a side bet. A few hundred millions in R&D that would also attract good talent and nice PR for Uber.
But I don't think investors were stupid enough to invest billions into Uber based on that bet. Specially considering the fact that anyone who gets that technology first can make it big and Google had a few years of head start.
What has he done besides Red Swoosh? btw, Red Swoosh was sold to Akamai and then later disassembled when they realized there was no "there" there.
Another is that the board could have threatened to sue Kalanick for violating the loyalty and duty obligations that corporate officers have to shareholders - e.g. for suppressing systemic sexual harassment, withholding details about the Otto acquisition, etc.
I also don't think the examples he cited are violations of those duties.
Suppressing systemic sexual harassment violates his duty to report management problems to the board. Same with any meetings with Otto's founder a week prior to them leaving Google and founding Otto.
How does a company so big not make a profit/could possibly go bankrupt?
My current understanding is companies either focus on growth (at a loss) or choose to focus on profit (with the risk of competition overtaking them or decay over time).
But lets say they go bankrupt in 1 year, couldn't they just switch to "profit mode"?
If there is no "profit mode" ... then why are people investing in the first place?
They are thinking more along the lines of "how can we make 10 billion dollars per year, for the next 150 years." Think General Electric.
That's why they require huge amounts of money from investors, so they can aggressively grow to a size where other companies can't touch them.
The huge amount of capital is sort of like a moat.
When you're larger, you have something called economy of scale. Which means you have enough resources to do stuff the smaller guys can't do.
When you're larger, you also have something called a data advantage. Which means you know so much more about your customers, you can predict things and make decisions the smaller guys can't.
Consider Facebook and Google. Together they're worth over a trillion dollars. Now ask yourself: what's the combined net worth of the second-biggest search engine and the second-biggest social network? Nothing close.
In a business where being second or third place is pretty good, you can switch to profit mode as you please. But Uber's valuation only makes sense to me if it lets them dominate a market like Google or Facebook does, setting prices and terms for the industry. I think that if they switch to profit mode, people will start to value them like a normal business, which would mean a giant drop in valuation.
I presume that's why board members supported an aggressive jerk for so long: Kalanick has been undeniably good at seizing territory, and if one sets aside little things like morals and externalities and long-term consequences, one could argue that aggressive jerkiness is exactly what Uber has needed.
Honestly, this market never struck me as one where dominance was even possible, so the investors' theories never made sense to me. But that's my best guess as to why they've been allowed to keep burning money like this.
Well that they might have to try and do now. But usually it is hard to move to 'profit mode' - you upset your customers when you start to charge double. The idea is that before you do that you have either killed of the competition or your competition 'moat' is so big that everyone wants to keep using you because of $reason and so you can charge what you like.
>If there is no "profit mode" ... then why are people investing in the first place?
Nobody is ever sure if any startup will get to 'profit mode' you simply look at their market / numbers etc and if you decide to invest then you hope the startup can figure it out. This is the investing gamble.
Stay. Wait... wait.... go fetch!
Stop growing maybe, but going bankrupt and shutting down?
Uber's problem is taxi companies have lower overhead because among other thing their drivers sometimes get hailed by people at street level. Which means their either taxi prices are lower and people stop using Uber or they pay drivers more and drivers mostly stop working for Uber.
I would assume that would also depend on how much of their fixed costs they can shed in conjunction with that. Uber may not die quickly but it could still die slowly if they lose the ability to move forward because they had to cut too much of their R&D and sales infrastructure to get to that positive number.
Plus such a massive layoff would be a big red flag to customers too. By Uber's nature, a particular ride isn't a long-term commitment, but I think people would start looking for a stronger-looking horse even so. One of those differences between homo economus, who every time they need a ride rationally examines all their options regardless of the future and realizes that as long as Uber can complete this ride the internal state of Uber doesn't matter, and homo sapiens, who will take into account the fact that Uber doesn't seem to be doing well even if doesn't rationally matter at this particular point.
> someone is going to eat the valuation hit
Liquidation preferences mean earlier investors (and employees holding Common Stock) take the hit of a down round.
Let's say Company X has 9,000 shares of common stock outstanding. It raises $1 million at a $10 million post-money valuation with a 1x non-participating liquidation preference. Its cap table is thus 1,000 shares of Series A preferred stock on top of 9,000 shares of common.
It then raises $10 million at a $50 million valuation with similar preference terms. Its cap table is now 2,500 shares of Series B preferred stock on top of 1,000 shares of Series A preferred stock on top of 9,000 shares of common.
Let's contemplate a $100 million exit. Everyone converts to common at $100 million / 12,500 shares, or $8,000 per share. Series A bought at $1,000 and thus sees an 8x return; Series B bought at $4,000 and thus sees 2x.
Let's contemplate a $50 million exit. Everyone converts at $50 million / 12,500 shares, or $4,000 per share. Series A gets 4x; B comes out flat.
Let's contemplate a $25 million exit. Series B does not convert. Instead, it demands its 1x liquidation preference and gets $10 million. This leaves $15 million on the table, or $1,500 per share. Series A converts and sees its 1.5x return; B comes out flat.
Let's contemplate a $15 million exit. Series B does not convert and gets its $10 million. This leaves $5 million on the table, or $500 per share. Series A does not convert and demands its $1 million. Series A and B come out flat; common gets $4 million / 9,000 shares, or about $444.
Let's contemplate a $10 million exit. Series B gets its $10 million and comes out flat; everyone else gets screwed.
Let's contemplate a Theranos exit. Everyone gets screwed. Turtleneck doesn't go to jail.
TL; DR Later stages are least volatile. They get screwed last, but also see upside last. Lower rungs' returns pay for this safety.
> Can you walk me through the math. How does one arrive at 1K of Series A preferred from 9K of common stock? How is that being derived? I'm not following.
At time t=0 (probably at founding and when hiring its first few employees) Company X issued 9,000 shares of common stock. At time t=1 it decides to issue 1,000 shares in a series A offering (most likely to VCs and outside investors). They are separate events.
1000 shares x $1000/share = $1m raised for the company in the series A.
> Also what is meant by "post-money" valuation? I'm assuming there is a corresponding "pre-money"?
In this case, pre-money valuation of Company X = $10m - $1m = $9m
> Lastly by "coming out flat" you mean made whole again i.e recouped their initial investment?
>"Let's say Company X has 9,000 shares of common stock outstanding. It raises $1 million at a $10 million post-money valuation with a 1x non-participating liquidation preference. Its cap table is thus 1,000 shares of Series A preferred stock on top of 9,000 shares of common."
Can you walk me through the math. How does one arrive at 1K of Series A preferred from 9K of common stock? How is that being derived? I'm not following.
Also what is meant by "post-money" valuation? I'm assuming there is a corresponding "pre-money"?
Lastly by "coming out flat" you mean made whole again i.e recouped their initial investment?
And there aren't too many NYCs in the world.
Uber is far more expensive in NYC than other cities such as Chicago.
Now that Uber has allowed tipping and since there is a rating system, everyone must now tip otherwise risk getting low ratings which effectively makes NYC rides even more expensive than they had been.
Most people don't own cars in Manhattan so that they either have to take mass transit or use Uber/Lyft/Taxi. There are many elderly on fixed incomes that have trouble ambulating (moving around) where lower cost taxi service is important.
In NYC at least, Uber doesn't need all of that corporate overhead and perhaps they should spin it off into some low-overhead operation.
- There is already a rating system for drivers, and riders, so this isn't a "will be" thing, right?
- The rating system is not currently blind, as far as I know. Certainly riders can see drivers rating, and I believe drivers can see riders rating as well.
Even if they cost more I have no idea how I'm going to get around when I travel. The other options are so disgusting I'm not going back to that.
I would use them even if prices went up 30%.
There are a few costs like background checks that may go down when they stop expanding, but fewer than you might think.
Uber demand is definitely elastic.
I don't understand why that would decrease overhead?
I also don't understand why the other aspects of overhead (dispatcher, offices, taxi lots) don't add up to more than Uber (whose only cost is servers and support)
More than a team of four can manage certainly.
It does not, however, take a constant number of engineers to maintain the infrastructure that lets a single engineer push a feature to millions of users. (P/I)AAS can help, but you still need people to monitor performance, find regressions and bugs, and track them down.
Uber only works if there are enough drivers so that I can always get a ride. If I get told that I have to wait 30 minutes for a ride more than a tiny handful of times I'm uninstalling the app. Growing organically in region would be very tough since it would take too long to get enough drivers in place that users could rely on the service and conversely drivers would be unwilling to sign up because not enough users where bothering to use the service.
Those 4 can handle everything backend related too?
There is always demand for Uber/Lyft just because there isn't a taxi cab nearby 24/7. How is that difficult to understand?
There's certainly a market for app/phone jailable cabs because there isn't one within street hail range at all times, but regular cabs have been phone hailable forever (it's the only way to get one outside of a few major urban cores) and are increasingly app hailable. Aside from regulatory supply restrictions (flouting which may not be sustainable) there's no real basis for a market for alt-taxis as anything but interchangeable competitors supplying the same substitutable commodity as regular taxis.
For me, this wasn't particularly true, especially in San Francisco. The dispatch was unreliable and slow.
Other areas, sure!
Now that the idea of phone-trackable dispatch has become commonplace, regular taxi companies are starting to do this too.
With Uber you also get know the fare upfront, the time of arrival, no need to tell them your address, there is a driver reputation filter, passenger insurance and it's safer than normal cabs in many countries.
Not the same thing as a phone call.
Turns out the car service business isn't very sticky at all (even the drivers work for multiple companies...).
Drivers start to leave and the downward spiral begins. They just couldn't get to self driving vehicles fast enough - which may be why they were trying to borrow technology from Google.
When Uber started and raised its first investment rounds, self-driving cars were too far away to be part of a business plan. I doubt the latest investors take that view either - spending billions per year until self-driving cars happen is a way too expensive way to build up a fickle user base who will switch the moment a competitor offers 10% lower rates.
And when self-driving cars do arrive, there is no reason to believe that Uber will have exclusive access to them. Google and other software companies will be licensing the technology to anyone who pays for it, car manufacturers will be selling cars to anyone who pays for it.
It may kill taxi driver as a career, but there is no defensible advantage to Uber compared to Lyft, Hailo, Taxify, and so on.
Uber as a play on driverless cars is a smokescreen to distract people from the fact they have little advantage over other companies and can't for the life of them turn a profit.
At this point why doesn't Uber just lay off a HUGE portion of their staff and kill the R&D. It's hard to imagine if they downsized significantly and quit investing in self driving cars, that they couldn't tip the needle into profitability.
Isn't that a fairly common move for a startup? Burn money to get off the runway, then downsize to stabilize?
And when will that be exactly? This entire thread is overflowing with nothing but fantasies of Uber dying - basically raw emotional hatred - and little else.
Eight years on, they've never had a serious problem with raising capital and there's no evidence to suggest they'll struggle to do so now. The absolute last problem that Uber has right now, is money.
Except that there are no shortage of people who have maintained this view long before Uber's CEO was asked to resign and before Susan Fowler's blog post. Also there are also plenty of people who have commented here that believe Uber's prospect without Travis Kalanick as CEO are not good and also believe he should not have been removed.
>"Eight years on, they've never had a serious problem with raising capital and there's no evidence to suggest they'll struggle to do so now."
You might want to look up the term "irrational exuberance":
"drivers start to leave" where are they leaving to?
The thread link is: https://news.ycombinator.com/item?id=14456973
Not even sure if I installed Uber last month when I got a new iPhone.
So yea when billionaires are paying your taxi fair to try and drive the local taxi firms out of business naturally they're everywhere.
But when that cash runs out the necessary price hike could just as easily drive them out of business. It's not like the drivers have any great loyalty.
We really need pro-competition legislation to stop this sort of predatory capitalism.
$5 per hour per driver goes to Uber
Assume 80,000 drivers (half of # U.S. Uber drivers) drive 8 hours a day, 7 days a week
52 weeks in a year
So about $1.1 billion just in the US. The only expenses are at headquarters (engineering, operations, design, legal, marketing, support) and the tiny field support offices they have in each city (local, entry-level employees).
That's a non-sequitur
This conclusion refers to the idea of VCs(billionaires) subsidizing rides in order to remove the entrenched player(taxis.) How is that a non-sequitur?
I think the confusion stems from saying pro-competition legislation will prevent competition.
As it is, Uber doesn't need to do too much to hit break even. Some central costs cut, and a slight rise on price.
That creates a bit of a puzzle for industries with very thin operating margins that want to make significant investments in R&D. Generally they don't do it. That is why innovation at the Grocery store or in Long Haul trucking is so slow. From an engineering point of view, they are ripe for disruption, until you bring in an accountant to tell you that the disruption doesn't pencil out. Uber, like everything else, said to hell with it we're going ahead anyway. So how can they make things pencil out?
One option is to raise unit revenue in the future, which in an industry that's currently competitive means driving out the competition. IMO Uber was originally targeting this. But it turns out -- and really anyone could have told you -- that what Uber is doing isn't technically difficult. The heavy lifting is smartphones, GPS and Maps, whose availability made Uber/Lyft possible. Uber doesn't own any of the key technologies that make Uber possible, nor do they have a track record of being able to tackle really hard technology problems. They've had huge problems scaling and when Uber started using its own maps, it was a disaster. Bad maps is the #1 problem with Uber. Lots of new competitors have sprung up already that give basically an equivalent user experience, so Uber is not going to get real pricing power.
The next option would be "Lower unit costs in the future", But so far, that means spinning tales about self-driving cars, which is way beyond their technical ability as well as decades out even for those that have the chops to pull it off. IMO this only works because the latter round investors are naive about technology and the current investment climate is conducive to reaching for yield.
So while it's perfectly possible for Uber to continue existing as a concern, I don't think it's possible to satisfy their investors, and this means, unfortunately, that Uber may not make it. Many companies engage in a lot of self-destructive acts to meet unrealistic profit or growth goals set by investors, but in this case, Uber has only themselves to blame for setting these expectations. This is a shame, because I prefer Uber to Lyft and think they've created enormous value for both riders and drivers.
Why "win"? There's no moat. I suppose there will be patents, but those expire or can be worked around.
More likely is that whoever gets there first will make all the mistakes that others can learn from. Every major car company has a self-drive effort now. Apparently Tesla, GM, Ford, and BMW are pretty far along. Lyft has a few partnerships here. It's only a matter of time before most cars drive themselves to some degree.
self driving hardware+software is much more complex than just writing some software... a non player can't trivially get into the game just because someone else have higher advancement
No mass produced self driving appliances that any dumb human can use improperly. The industry won't take that chance of a poor impression and destroy public's confidence all together.
In urban/high density locations, a ride hail company leveraging driverless vehicles can make a killing.
It's not actually dying and it's not going to die.
Routinely skeptics here will point out that Uber is selling a $1 service for $0.75 (or a similar invented sum). Said skeptics then intentionally, comically ignore that Lyft is and has been doing the exact same thing and has radically less capital & valuation to play that game with. The name of the game is: last company standing; that's going to be Uber because they can afford to be and Lyft can't. It's that simple.
The downside of this approach is that Lyft doesn't have anywhere near the upside potential that Uber has. If Uber pulls off all of its ambitions it will be larger than Lyft could ever dream of being. The upside for Lyft's more humble goals is that it's chance of reaching them are much larger.
Unless Uber is willing to change its DNA and scale back its ambition, give up on its long term goals, and stay just a basic ride dispatching service then your analysis is incomplete. However perhaps this scaling back is what the CEO change is fundamentally about.
If internal, I gusss that's true. But we don't hear much about Lyft's internal workings. We don't know the morale of workers or how productive the company is.
About controlling costs - that's why I mentioned losses. Lyft is only in the US yet its losses are worse than Uber. It makes Lyft looks worse to me. Has Lyft said it is profitable anywhere or even break even?
But then Uber's insane valuation is not helping itself. I guess both companies are in bad positions, hard to say which is worse. And I agree it will be interesting to see how Uber does over the next year with new top executives.
Has Lyft said it is profitable anywhere or even break even?
The CEO said in a recent Forbes interview that their losses are currently coming in "under budget" and that they have a definite path to profitability. Make of that what you will.
And yeah agree with Kalanick and Uber by extension seem to be only content with winning everything. They only gave up on China after spending a ton of money and clearly not being able to win. Luckily they were able to get a decent stake in Didi from the merger and leaving China.
The drivers certainly care.
Travis offended and insulted the drivers, while Lyft is chugging along quietly. As long as people have brand loyalty to them (which they sure do), they'll win the ridesharing battle as it's looking like Uber is teetering
Yeah... that's why they have so much investment from car companies... ;-)
I'm blown away that you have to read more than half way down all the comments to get to this observation. It should be an automatic reply every time someone echoes the fantasy that Uber runs out of money and Lyft is magically left to take over. I don't understand the mental gymnastics and contortions one needs to make to arrive at this absurd idea.
Not sure what "its" is, but characterizing Lyft as a lifestyle business seems absurd. It's not as highly leveraged s Uber is, but that's one of the few companies I can think of that one might consider more aggressive.
Well, if you're spending more than your revenue, that is the eventual outcome if money stream from investors dries up.
Uber doesn't really have many physical assets that could be liquidated. Their value is entirely based on profitability. Which is currently negative.
In some cases this lack of maturity is particularly striking.
I think it's far to say you don't have a sustainable business model yet if you're dependent on future investment.
Even a company that is fully owned, with a sustainable and profitable business model, needs to ask the question "can I lose all this?" every day.
If the metric for "you don't have a real company" is you could potentially lose it, then nobody has a real company.
Would wait to see what'll happen to his equity before take a bet, but gonna guess will be sold high and eventually rebought after the crack when K will try to step back in at a better condition, with less stakes and more hard cash.
If there's a next round, it will probably involve a big haircut for the early-stage investors.
No, they could be crammed out by later investors' liquidation preferences. Depends on how down the down is.
Though these two types of events are obviously correlated (a down round makes a smaller exit more likely) they are not the same and should not be confused. A financing at a valuation that is a billion dollars less than the last round would be a down round, but a sale of the company at that same valuation would still far exceed the liquidation overhang.
– Dune, Frank Herbert
- God Emperor of Dune, Frank Herbert (a prescient book on social feedback loops, my favourite in the series)
-- Erich Fromm ( https://www.youtube.com/watch?v=Cu-7UDT0Xe4&t=1m34s )
> The danger of computers becoming like humans is not as great as the danger of humans becoming like computers.
-- Konrad Zuse
And when Picasso said that computers are useless because they only provide answers, was he just being witty, or pointing at an abyss, knowingly or not?
It is what we mean when we claim someone is "incapable of <x>" such as murder. It does not mean they do not physically possess the means, but rather that they lack the psychological impetus to do so.
More relevantly, a person who is both capable and willing to restrict your freedoms, potentially even unto death, has more control over you than a person who doesn't.
This isn't abstract theory. This is a description of "government". Would you pay any attention to the people claiming to be "the government" if they didn't have credible mechanisms for backing up their demands?
It is preferable that government not be solely founded on this power relation. It shouldn't be considered "sufficient" for good government. But it is certainly "necessary".
It's why "non-coercive government" is an oxymoron.
Say you can kill a man, but irregardless of the threat to their life said man would refuse any and all of your orders, who can then be said to have 'control'?
In the end control means the ability to influence outcomes. There are many metrics, and for some choice of metric the capability of destruction is control.
They could smell the liquidity ...
I think they made a huge mistake in pushing Kalanick out, but I'm an outsider. There is surely something dark at play here, that we don't know about.
If true, this seems far more likely to be a cause of Uber's death than Kalanick resigning. That, and the valuation being as insane as it is, which is also Kalanick's fault, which as you point out, makes it hard to find greater and greater suckers.
Perhaps they'll be better off all around without Kalanick, assuming they can get the business side on track and get the burn rate under control, and perhaps make their business sustainable rather than a gigantic handout of VC money.
Also known as losing money on every ride but making it up in volume.
In fact, the central concept of venture capital is premised on the idea that businesses start out unprofitable but become profitable as volumes scale.
To what extent any of this is the case for Uber is worth debating. So feel free to have that debate, and bring forth new information or new arguments that support your thesis.
And if you're subsidising rides below cost because you're trying to grow your market and you have piles of VC cash so you don't care that you're burning through money, then eventually you're going to run out of that money and will be in trouble if you can't raise any more.
Time will tell whether Uber was building a sustainable business or just burning through VC cash.
Winners don't quit, so Uber is dead to capital now: it was always based on maximum evilness and all the stuff about disrupting and ridesharing was mere window dressing.
Note to capital, wherever it is: this is what you get when you go by personality rather than studying the fundamentals of a business. You can't simply pick the most toxic individual or company, claim they're going to kill everybody else, and then prop them up with valuation. The valuation didn't fail but your pet Dr. Evil did, and that was your proxy for maintaining the 'killer' behavior. Unless or until capital can be personified as evil AIs that cannot die, this was never really an optimal strategy for capital.
Particularly not if you can't set up an operation in an Western city with expensive taxi services without losing money on every ride you operate even before centralised overheads are taken into account.
From their 2015 financials, it looks like revenues have been consistently higher than cost of sales.
According to financials from 2015, they have higher revenues than cost of sales:
This suggests to me that marginal rides are profitable, even if they aren't profitable enough to cover fixed costs of software development or investments into new geographic markets.
Quick Forbes link I found https://www.forbes.com/sites/ellenhuet/2014/07/02/ubers-newe...
Nonetheless, my impression is that this is more the exception than the rule, based on the financials I linked to earlier.
I'm not saying this will ever offset their increasing losses, but that is what always seemed the long term goal of monopoly.
> I thought the whole point of subsidizing rides was(as OP comments pointed out) to raise demand, both for drivers and riders, they first entice both ways with the promise of lower rates and higher payoffs, then slowly increase their cut of the pie against the driver's payoff and increase the rates on riders.
Right, and by the logic that decreasing prices raises demand, increasing prices will decrease demand.
That's my point, and the point of critics that are often ignored. Their customers will bail the moment they start getting charged the $25 their $10 ride actually costs. And that increase will be to break even. Not make any money. Just break even.
Uber will never achieve a monopoly. There are buses, bicycles, and used cars for $1500. People aren't going to pay $600 per month on a ride hailing service. I've already ditched Uber, and so have many of my peers, in favor of alternatives that save money. And that's without significant price hikes yet.
The fundamental economics of having a private driver have not changed. An app doesn't change what it costs to pay someone to drive you everywhere. I hate being critical because it's often a waste of time, but Uber is sincerely one of the worst investments that Silicon Valley has ever produced.
Yup, that sounds about right.
This is true for almost any good.
I'm not sure if you're disputing OP's idea that Uber subsidizing rides is (at least in part) of an effort to kill the taxi industry, but my logic is, if you don't have any competition, why wouldn't you raise rates?
While transportation is something everyone needs, I'm (as priviledged as I am in my salary) not going to pay $20 for an uber if it's $2 on the bus.
I'll take uber when it's $10, compared to $2.
They could possibly raise their rates some, but to answer your question specifically: because there are other factors involved in their price/demand/profit/market share equation, besides just competition.
People won't pay to use the service if Uber charges what it actually costs to deliver it. They're heavily subsidizing each ride. When you pay for an Uber, they're basically giving investor money to the driver to cover your fare for you. Investors have been paying for your transportation over the past few years.
At some point, they have to actually make money, and the only way to do that is to raise prices. The issue is no one will stick with the app at higher prices. I've already abandoned Uber/Lyft/others for a $300 bike and a bus pass, because it's much cheaper and much healthier. If they double or triple their prices, which is about what they'd have to do just to break even, lots of people will be following suit.
The self-driving car game was supposed to save them, but I don't think they're guaranteed to win that fight. Tesla seems further along than anyone, and I have far more faith in Musk's ability and track record of executing than I do in Travis (or whatever committee is replacing him). Not to mention every automaker is working on self-driving cars right now to boot.
Uber has no guarantee they'll dominate that market, and considering they can't even break even in their current market, I see them as a ticking time bomb.
Agreed. I'd argue that existing car-sharing companies like Car2Go are better positioned to dominate the "self-driving taxi" market. They've already solved the challenges of owning and maintaining a shared car fleet profitably. The day self-driving technology is ready, they'll already be miles ahead of Uber.
edit: I forgot what green name means... green btw...
Newly created HN accounts are colored green so members can recalibrate before responding to troll-like contributions from new accounts (I think).
I think we need more of it though...
I've yet to see an Uber driver who started rolling in cash after the rates were dropped. 100% of my anecdotal conversations (and that's not 99.9% rounded up, but a straight up 100%) reminisce about the good ole days.
And I have a really hard time believing companies plan to fail.
It's a very clear case of dumping, or whatever it's called in English. Unsustainable low prices, suffocate your competitors, raise prices.
Such a great quote
Sounds like a '90s startup. Companies acting like this en masse was what caused the 2000 crash. Uber isn't going to make it out of this alive, and they're going to take the rest of the industry with them. I think the whole culture of VCs looking for "unicorn startups" is going to go away when the unicorns all die.
Kalanick has serious issues but he's demonstrated unquestionably forceful (and polarizing) leadership that mere "managers" will never be able to replace.
I've been bullish on Uber despite all their mistakes and internal issues because at the end of the day, the guy at the top was irrationally emotionally committed to _winning_. Now I am a bear on Uber.
They are not. There are ways in which being an asshole ay be good for founders (cf Steve Jobs). Kalanick is just an asshole, and even take-no-prisoner ask-forgiveness-later businesses run much better with a bit of attention to human decency.
I'm sort of baffled by seeing someone say this in a comment that's supportive of Steve Jobs. Are there tons of "the human decency of Steve Jobs" stories I've missed? Because I would have said that I've never heard of Jobs showing even a scrap of that, and it worked out pretty well for him.
The things happening under Jobs were different than the things happening under Kalanick, sure. But I don't see where that's a function of anything like decency - it just looks like a cultural difference in what kind of inhumane hostility was happening. Jobs was a perfectionist, but he was also manipulative, cruel, and dishonest in ways totally distinct from that.
I don't think anyone's suggesting that sexually harassing women is good for business.
I've commented all over this thread (as a sister comment points out) because it appears there is a narrative that his attitude towards his employees misbehaviour is at least closely linked to the personality traits that allowed him to be successful. That can be seen, I believe, by the many comparisons to Steve Jobs, for whom it's accepted more widely that it was often hard to work for him because of his perfectionism, but that this was a necessary trait for his success.
The danger here is that people (mis)understand the situation and start excusing inexcusable behaviour, or even imitate it, because they think it's linked to success. It is not. You have to separate the strip-club-going bravado from the other law-breaking, which could at least in theory explain Uber's success.
Honestly, this feels like a white-wash. Jobs was exceedingly demanding, but that's hardly unique. Jobs was also dishonest, secretive, and simply cruel to the people around him. This comes up over and over, even in his non-business interactions.
I agree that it's an error to lionize Kalanick's behavior. But it's also wrong to say that Jobs' behavior was radically different, or that Kalanick's party-boy bravado is clearly separable from his disregard for the law. Realistically, I think we'd be better off admitting that an urge to ignore boundaries usually applies across many topics.
If Jobs was more capable Kalanick, I don't think that was a function of his nastiness somehow being more noble. He seems to have simply brought a lot more skill to his task.
It also is weird that matt4077 repeatedly contrasts Kalanick with Steve Jobs in this thread, despite Apple having been accused many times of mean culture, sexism, harassment and cover-ups too.
Like any good late-stage US capitalist, he outsourced it.
so he was standing over watching with approval as his employees were accosted? I doubt it. I think what's more likely is he didn't know about the extent of harassment (or didn't care, if you want to be cynical) and the initial HR non-response was likely just a really poor quality HR department designed to manage PR rather than solve employee problems. Organisations are more than just their CEO and while you can lay plenty of blame on him for allowing such a poor quality workplace culture to evolve, that doesn't necessarily mean that he's a big fan of sexual harassment in the workplace.
I bet you do, because nobody in their right mind believes that, and you are obviously attempting to cast the notion that a CEO might know what happens in their company as absurd.
Or do you also think that others believe oversight committees on BoDs literally stand over the managers and nod or grimace?
If he didn't know what HR was up to, he was incompetent.
> that doesn't necessarily mean that he's a big fan of sexual harassment
And... exactly nobody I've read here or anywhere else has asserted that. If you want to argue, do so in good faith.
If he didn't know what HR was up to, perhaps he wasn't the director in charge of HR? You can't expect a CEO to know 100% of what's happening in a larger company.
> And... exactly nobody I've read here or anywhere else has asserted that. If you want to argue, do so in good faith.
> ... managed HR's nonresponse to it.
your quote seems to imply that he went out of his way to make sure HR did nothing about the harassment. I'd be inclined to argue incompetence (or just a lack of ground-level micromanagement) over malice.
Unless the facts on the ground are very different than what we've heard, Uber HR had a policy of protecting some people accused of harassment because they were highly valued. In other words, a decision somewhere was made that policy was to prefer key-player retention over the risk of lawsuits, because, obviously, that sort of policy is pretty much guaranteed to lead to lawsuits.
I have a great deal of difficulty imagining the HR exec who doesn't realize that - that would be beyond incompetent, well in to senility. I also have difficulty imagining the HR exec who will personally take on the risk of mandating policy about balancing disparate business risks (slowing down by losing productive harassers vs. lawsuits and bad press). That can end careers, and anyone capable of landing a management job at an Uber is exceedingly unlikely to take that risk without taking it up the food chain.
Finally, I find it remarkable that so many people are willing to credit the man with extraordinary genius in business execution while simultaneously arguing his incompetence when it happens to absolve him of shitty behavior.
And with this, I'm done with discussing things I didn't say.
 Moving on to speculation, making that choice makes perfect sense in an environment with a value system emphasizing winning at any cost and burning down anything in the way. If they thought first-mover advantage was literally everything and they thought they had enough money to weather any resulting legal problems, that's the rational choice. And especially if you think you're the smartest guy in the room and can get away with it. Not unlike hypothetically deciding to gaslight regulators or steal IP from competitors or invade medical privacy to discredit opponents. For example.
 I don't know about other states, but in California, HR for firms over some number of employees are legally required to ensure employees have been trained on sexual harassment law. I'm sure it takes other forms, but generally we get to watch these awful law-firm Flash videos of cartoons being either awkward with or awful to each other, and then have to answer questions about which actions are harassment in order to make sure we paid attention.
Nowhere has he said this. You're conflating two very different issues. No one is disputing that he is an asshole, etc. OP was making a different point.
If you peal back the layers, probably most rapid growth, hard driving large companies have left a wake of upset and screwed over people behind it. Nobody "gives" you a hundred billion dollar company.. Uber's leadership was just particularly inept at pivoting from "scorched earth" to a slightly less savage strategy.
This will be an interesting pivot to watch, I've been kind of betting with myself when will the first week come with no news or good news for uber. I thought they'd have spun up the pr machine months ago, talking about co2 saved by carpooling or something. Giant company, currently fixed runway, all eyes on it and damaged culture. If uber doesn't die, the next CEO is a superstar.
For human rights issues, yes, I tend to agree.
Anecdotally, famous Nordic startups include Spotify, Skype, Mojang (behind Minecraft), King (behind Candy Crush, Farm Heroes), Rovio and Supercell.
1. Nordic countries have more über wealthy per capita.
2. Nordic countries are social democracies.
Then he draws the conclusion, with no corroborating evidence, that these two things are inextricably linked. No data to link these two points at all. Nordic countries in general have a high GDP PPP, and that is probably not solely (or at all) due to being social democracies. Scandinavian systems need to be efficient due the nature of their environment, e.g. they have a lot of land and not a lot of population, and fairly harsh climate (e.g. poor farming conditions). I would almost argue that "being cold" is probably a better indicator of national wealth per capita than "being a social democracy" (though admittedly, I haven't done thorough research either). I mean, look at Canada. Look at the non-farming bits of the US vs. the farming bits. Look at North versus South Italy. etc. Industrialization is more efficient and effective in regions where alternative methods of production weren't great in the first place.
For reference, here is the population density of the nations he was comparing (in people per km^2):
Iceland - 3;
Norway - 16;
Sweden - 22;
US - 33;
The US has 11x the population density of Iceland. Easier to have shared wealth when each person in your country can have 11x the land they could have in another country (with the caveat, of course, that this only applies if you are an industrialized nation).
I mean, just look at one of his "indicators" - billionaires per million people. By that metric, iceland is at that top. But there is only a single billionaire in iceland. Statistically, then, it's easier to be a billionaire in iceland. In practice, however, that is not the case. Things like population subsets need to be considered. In the US, you have a very large population, which is obviously going to impact per capita stats. However, you need to ask what proportion of those people are actually pursuing wealth in a way that could ever result in becoming a billionaire. e.g. a grocery bagger, probably never to be a billionaire. A plumber? Same. A hippy in a commune? Same. No data has been shown to adjust for lack of competition. At the end of the day, you have to look not at the total population, but at how many people are actually competing to become uber wealthy. Because, while attaining wealth isn't a zero-sum game, it certainly isn't an "everyone wins" game either.
Scandinavian countries have a very high proportion of jobs that don't really have a cap on upper income, such as software/game development, banking, music production, etc. because they have exceedingly efficient economies (as he actually touches on).
However, there is not clear reason to believe that they are efficient because they have social democracies. In fact, the converse (they became social democracies because they already had efficient economies) is just as likely, if not more so.
Can you elaborate on this supposed link between population density and shared wealth in developed nations? I don't understand the logical underpinnings of your argument. Developed countries almost by definition are less reliant on local geography.
Moreover, I don't see how space metrics are even relevant here. Iceland may technically have a lot of available "land" - but more than half the country lives in Reykjavik. A similarly lopsided urban / rural population distribution holds true in other Nordic countries.
My point about geography and population density needs to be related to my point about industrialization to make any sense.
It is this: Nordic countries have modern economies weighed very heavily towards industrialization/mechanization, but most importantly, they are efficient. As you say, they also have a "lopsided urban / rural population distribution", which is a much better way of saying (thank you) what I was trying to say: Nordic countries have land, but it's not good for the classic wealth generator - farming. This is why the population is focused in urban areas and is not spread out. However, luckily for places like Iceland, modern cities don't really care how good the land is for farming. An oil refinery doesn't care about the health of the soil. A modern factory doesn't care if the terrain is a bit rocky. Solar panels don't care. Mines don't care. etc., etc. Basically all modern industry is fine in a place like Iceland.
This an unexpected and immense boon to making a modern industrialized nation efficient, because on the one hand, you have major population centres with not much in-between (due to the lack of farming), which is in itself efficient, because areas you need to service with public services are greatly reduced. But on the other hand, you have plenty of space to put modern things like factories or new cities or what have you.
Compare this to the US, the country with more arable farmland than any other country on earth. Sure, the US has big population centres, but they are spread out, and many of them are still driven by rural economies. This greatly reduces efficiency, and is generally why the spread out states seem to be further behind the small / densely populated ones.
I've included the percentage of population that is urban below for comparison, according to The World Bank, from 2015. Also, I think it is slightly different when the rural population is doing something like fishing (Nordic) vs farming, but I won't go into that here.
US - 81%
Sweden - 86%
Iceland - 94%
Comparing anything to the US is a little bit silly though, because the US is comprised of 50 states, all of which are quite a bit different from each other. For instance, I bet the uber wealthy per capita in say California or New York is much, much higher than the Nordic countries. So the obvious answer to this video is probably "move to New York or California if you want to make a lot of money". I will say that would probably require more initial capital than a nordic country, but if you have the initial capital, then your chances are probably better. SO THE ACTUAL ANSWER IS: Get a great education and livelihood in Norseland while you're young, get some seed capital, and move to Cali/NYC/etc to really start making bank.
Obviously if you want to become a billionaire, you're not going to move to Plano, TX. Yet Plano is affecting the per capita stats.
Sweden has a population of 9.8 million yet it has produced Skype, Mojang, Spotify, King, Klarna 
Australia has 2.5x the population but only two unicorns. The UK and London market themselves as the capital of unicorns in Europe yet with 6.5x the population they have either the same number of unicorns or just four more (depending how you count them).
That is remarkable for a country like Sweden, especially when considering the strength and size of the Swedish expatriate community in tech around the world (many tend to leave).
In terms of similar results, I think only Singapore is in similar or better unicorn per capita territory.
 "unicorn" isn't the best measure since it is a private valuation and you can get different answers depending on who you ask, but most people would recognize those Swedish startups as being successful.
Skype is Estonian.
We are technically a UK incorporated company, headquartered and half our staff in Sydney and many of our staff and customers in the USA.
I still consider us Australian though.
I see many clever companies where I live in Melbourne - however I am saddened by what I perceive as the neglect the government is showing for the tech sector, especially startups; I'm looking e.g. at how share options are taxed. I believe there's a lot of lost opportunity here.
I'd rather have a real work life balance (it's not so called, it's very real) than any amount of abuse working for a US style startup would throw at me.
Most of my colleague would as well.
To have the disdain for life you seem to display you must live in a very distant place from a sane version of reality.
"Mr. Smith: I move my finger one inch to use my turn signal. Why are these assholes so lazy they can't move their finger one fucking measly inch to drive more safely? You wanna know why?
DQ: Not particularly.
Mr. Smith: Because these rich bastards have to be callous and inconsiderate in the first place to make all that money, so when they get on the road, they can't help themselves. They've gotta be callous and inconsiderate drivers too. It's in their nature."
Edit: you did say 'almost'.
The company is what is pertinent to the discussion :)
Morals are relative.
I don't know how old you are, but public morality towards sexual harassment just in the U.S. has changed in my lifetime. (For the better, although it is currently ugly and messy, as these changes always are.)
Even attitudes about what constitute harassment vary by culture between similar cultures. Compare Italy and Germany.
Look at Google; they're firmly business-minded and have often butted heads with regulators and so forth, but most people like google, not least because of that 'don't be evil' branding and and their habit of giving people Nice Things.
If your margins are razor thin. You have to be ruthless. That permeates to your culture.
Do you things are any better at Amazon, Foxconn or other warehouse places?
That has nothing to do with sexual harassment. And to imply that the two must be linked is false.
Does 'highly demanding environment' == 'Harassment' to you? If yes then you have far bigger problems. Any demanding mission ever might be out of reach to you per your value system.
Work conditions, overall demands of productivity et al will be brutal. And that ultimately gets to cause all sorts of other problems. People who just can't catch up with all the rush ultimately feel discriminated.
Non sequitur. You're also generally espousing some pretty reprehensible ideas. We as a society do not take the view that business success overrides all soft concerns, especially with regard to their employees. If ruthlessness and discrimination is the grist that your mill requires, find another mill.
Also please avoid working in management.
This is obviously wrong. Have you ever bought a iPhone? Or any other Apple product. Have you ever ordered anything from Amazon.
How do you think Walmarts and Targets of the world can sell you things for so cheap? Behind all this there is some guy being sent through some real hard ships.
As a consumer you have already made that choice.
The reader will note that this is a classic example of the 'tu quoque' fallacy.
My answer to that is then there is something fundamentally wrong with your business model. Basically, what is the point in running a business under which such conditions are the norm?
Any demanding mission ever might be out of reach to you per your value system.
This is fallacious. Of course there are times when struggle is necessary. A rewarding life (however you define reward) certainly requires an investment of effort, and at time that effort will be very difficult. Sometimes we are faced with very trying circumstances such as natural disaster or war or serious economic insecurity, and we have to work very ahrd to survive.
But a key word here is sometimes. If you deliberately construct such an environment where survival and advancement are only possible through 'brutal' work conditions and demands of productivity, then you are actively making the world a worse place, because you are establishing such brutal conditions as a norm and implicitly telling people that their life choices boil down to slavery or death. Why would any sane person want to create the conditions of slavery? Slavery is a condition of life that people rationally wish to escape.
There seems to be this attitude that if people are not constantly driven by necessity then they'll get too comfortable and lazy and never do anything. This is not borne out by the evidence. Some people would, not least because they're constantly bombarded with messages to consume, consume, consume whenever they can as a relief from their economic anxiety. But few people are fundamentally motivated by gluttony. Given the opportunity most people opt to develop their capabilities and contribute or create rather than merely consume.
Choosing to promulgate brutal working conditions is essentially promoting brutality as your preferred model of social organization. That's basically a displacement of sadistic and/or masochistic impulses into the economic sphere. You may very well feel that nothing of value happens except under harsh compulsion, but that seems to both ignore all the evidence to the contrary (an irrational bias) and abdicate responsibility for the consequences (since brutality is well-understood to result in wholly avoidable injuries).
It seems to me that your value system rests on some rather extreme assumptions that are not justified by the available evidence, and insofar as it imposes compulsion on others rather than being used to motivate yourself, it's intolerable. Put another way, if you only feel alive and productive under conditions of harsh necessity, that's your business. But as soon as you insist that this is the way of the world and that others must get with it or be cast aside, you're infringing upon the freedom of others. And at a social level, through regulatory process, experience of litigation and so on, we've agreed that the creation of such conditions is not an acceptable means to pursue arbitrary ends.
As usual : 'Value'. All these affordable iPhones and seamless Amazon deliveries happen because they have a work culture that optimizes for every single $. I agree with your premise that these are not for everyone. But this is precisely why we have freedom. Nobody should sign up for a job they think is too hard for them.
As we talk there are doctors who are training by the clock, sleeplessly working towards becoming surgeons. This is necessary for various reasons. If it were any easy, people would become bad doctors with less training. This is bad for society. The fact that work conditions are harsh- that isn't wrong or discrimination or even harassment. The very demands of the job are such.
The top percentage of any profession are this way. That comes with the job. You just don't go and say why don't they make it easy to me to be the next Zakir Hussain. Mr Hussain has set pretty high practice benchmarks practicing his instrument pretty much his whole life. Was it worth for his to have undergone all that pain and punishment to get there? May be that fits into his value system.
If you want to beat Jeff Bezos you have to at least perform at his level or higher. You just have to chose your mission based on the mileage you think you have.
No, but that's not the point. How quickly we forget that we don't need dude bros to create a hostile environment for women. That GitHub situation was created by a woman, one who wasn't even an employee. We really don't give women enough credit.
Toxic work environment is everywhere. Remember the spreadsheet that Googlers started to compare salaries? I'd argue the Apple-Google-X pact to not poach one another is worse than anything Travis could imagine.
If there was crass behavior at Uber, I'm inclined to be more lenient because I think it is at a more primitive level than a well thought out plan to increase shareholder value by illegal collaboration to push down worker cost. If these people who criticize Uber really care about their employees, they will start publishing all details about how much salary and benefits and whatever money each employee makes.
Talk is cheap. Actions speak louder than words.
Here in India, I go by the office cab to home everyday. I generally chat with the drivers as to why they don't drive for Uber/Ola etc. The answer is they need to make a good 1300 rupees on a round trip to be profitable, at a minimum of 6 trips per day. A trip with Uber/Ola etc costs 300 rupees(With pool). But even then!
So that's like these people need to start charging a minimum of 5x extra to make profits. At that price these people are no longer a viable means of transport.
To be profitable you need to back to the yellow taxi medallion thingy all over again.
EDIT: Fix a mistake.
So if the (now edited) original intent was exponential, "more like 10x than 1x (or 100x)", then calling 5x an oom is fine. If the intent was linear, then yes, rounding 5x to 10x is 100 percent error (difference/actual). :)
I'm headed in the opposite direction and reinstalling the Uber app tonight. This is a very convincing capstone to a 180 degree course correction away from everything I disliked about Uber. I also hope Travis can learn and come back and lead the company again in the future.
I'll grab my popcorn, this will be fun to watch.
Traditional firms will generally prefer debt to equity as you will generally get a better shareholder return on debt. VC backed firms do not usually raise debt -- even if it is preferred -- because they are viewed as too risky by banks. When VC-backed firms raise debt it is because they are transitioning out of high risk to the stability of a established and predictable firm.
In some Nobel-winning economic theories the best capital structure is all debt: https://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theo... https://en.wikipedia.org/wiki/Capital_structure
If the only thing about this loan that makes it "leveraged" is its interest rate of 5% then that is probably preferable to equity and not a red flag.
The lender takes the risks as to share value and liquidity. If presented early in Uber's climbing valuation curve, it probably would have looked like a good opportunity to lenders.
It's actually would be a major news point I think. Whether or not Travis sells his shares is what's gonna be decisive of his position in the company and possible future ambitions.
Do you have a source for this?
I suppose there's some tipping point of "very valuable" and "not that badly behaved" where the argument is actually valid (see: all the Steve Jobs references in this thread). But at that point I guess the ethical solution is to make it very clear what new hires are in for, and pay a healthy "dealing with this person" bonus (see: Steve Jobs, again).
What matter are: Cash In Bank, Cash Coming In, Burn Rate.
Counterpoint: businesses in good shape don't just drop CEOs. This move might just help it die slower.
Highly unlikely. Why? Investors who stomach multi-billion dollar annual losses will probably just shrug off the recent bit of trouble. If the choice is to either write off $15 billion or to give another couple to help the company go through a rough patch (what a buying opportunity!) I think I know what investors are going to do.
Kalanick's head has now rolled (not that it really hurts him much personally though, it's probably even a relief for him) but seriously a whole nother level of crap would have to happen with Uber before investors start getting comfortable with the thought of letting go those $15 billion.
Bear in mind that the company's growth has been driven by its ability to run a very, very highly-performant backend -- and that's in turn a matter of getting the very best engineering talent on board.
Some, perhaps most of that talent is already pissed off about the fratty work environment and questionable leadership decisions. Recently, their options exercise window changed from 30 days to 7 years.
Angry employees + management turnover/uncertainty + limited runway + new rule that basically you don't lose your options when you quit = I'm officially an U-Bear.
On a related topic, I think people's schadenfreude for Travis is getting out of control and he's becoming a bit of a totem for everything that's wrong with SV....while his issues are largely self-inflicted ("boob-er" / treating drivers like crap on camera / etc), all the hatred directed toward him seems excessive in context. The guy just lost his mother, maybe cut him some slack?
Agree this is good for Uber employees and I'm happy they have significantly less of an impediment to leaving than most other workers at pre-exit startups.
Uber has been pushing hard on self-driving cars (I mean, in the long term, it strikes me as their only viable business model, so it makes sense). By my best estimates, salary for delivery drivers for Amazon packages run somewhere between $6B and $10B per year (for comparison, if I remember correctly, Amazon's revenue is somewhere around $35B/yr). Automating delivery could be a HUGE deal for them, and an opportunity to scoop up a major player in the autonomous driving space might look very appealing.
Then again, with Washington State throwing the doors open for autonomous testing, Amazon could likely develop their own system on their own turf for less, even if Uber's valuation goes WAY down.
I don't think Kalanick had much to do with it. He created the product, but it pretty much sold by itself -- similar to how Zuckerberg created Facebook, which sold by itself.
I'm very optimistic about this change. To me, Kalanick, and the culture he bread, were toxic to Uber.
I'm reminded of how Microsoft's share price jumped by 12% the day Steve Ballmer's retirement plans were announced. Microsoft has been on a major run ever since. Let's hope that we see something similar here.
Nope, This is wrong. Kalanick stood in front in the fight against the City officials and Taxi unions across the globe. Uber could've been done and dusted had it been left as a product to be sold by itself. Kalanick pushed Uber up high against the current of water, which is not exactly similar to running a Social Media Company.
Don't kid yourself, this fight was fought by lawyers and lobbyists.
Uber financed one side of this fight, but seeing as the outcome of this fight was critical to Uber's business model, that wasn't some genius insight, that was self-preservation.
If anything, there's a proportion of people who supported local government rules and existing taxi services over the American interloper, a counter-balance to the anti-union and anti-municipal crowd.
Please be mindful that the American experience does not translate globally, even to other english-speaking western countries!
And regardless of that, it doesn't matter: by the time Uber started operating in Australia (or any non-US country, for that matter), they already had a history of pushing hard against existing norms. Uber would have never even gotten to the point where expanding outside the US would have been possible if it hadn't been for Kalanick.
Sure, he's a jerk, but to claim that he had nothing to do with Uber's expansion after launch is just absurd.
'Software company, Not a taxi company' argument was used extensively to circumvent license and medallion regulations. On top of it they used VC money to drive down the prices by 4x-5x.
Several tens of thousands of drivers in every state in every country they went to got shafted because of these moves.
So yes he was very brutal and ruthless upfront. You can't replace that kind of human quality easily.
Your wages will dilute to a point it will be hard for you to make a decent living.
Haha don't know where to start. Facebook could have gone to shit in so many ways just like all the predecessors like Myspace and Friendster, but they made all the right decisions and won. Same goes for Uber.
This is not the case for 100% Internet based businesses like Facebook.
So they're really completely different models and therefore the competitive landscape can't resemble each other. It's more fair to compare the Uber-Lyft dynamic to rental car businesses like Enterprise-Hertz.
People do move, and the convenience of one app to hail taxis everywhere is appealing. But then again, people don't move that often that installing the local taxi app is too much of an assle.
Kalanick's right decisions are now based on how much he was lying when he said he hadn't divested the slightest bit from Uber. I'm guessing that everyone read his character well, and that he was in fact lying on a massive scale and has many lifetimes worth of stashed-away wealth. Right now, winning for him means avoiding prosecution and jail (probably easy to do) and Uber is over, already.
So Uber lost, and anyone still clinging to Uber has lost (but there will be amazingly few of those). It's the frog and scorpion fable, really. Travis isn't the scorpion, and Uber isn't the frog. Uber is the scorpion and Wall Street is the frog.
I am talking about how execution matters, because parent said Uber just worked on its own to get where they have, just like Facebook worked on its own to get where they have. None of these are true.
My comment has nothing to do with wall street or shorting or whatever concepts you bring up.
Facebook may have won. I think you'll find Uber didn't win, because Wall Street needed Uber to remain the Travis Uber, in spite of any laws or limitations, and that's clearly no longer true.
Nobody would seriously argue that there's no difference between the two because Uber doesn't exist yet in 'stock' terms. They need to translate the initial investor enthusiasm into an IPO, so short/long spells out the likely climate for said IPO.
Uber has lived in Unicorn land thus far. The potential to turn a profit has buoyed them but that cash bubble seems to be running out of fumes. They could sell for 1/10th of what they raised money at. Time will tell.
It's a bad time for Travis to be handing over the reigns because he clearly hasn't built a command team to takeover and the fraternity atmosphere is toxic enough that as these new leaders step in I'm afraid the middle management will view them as "illegitimate" leaders.
Time will tell. I hope for the sake of all the people who hold Uber stock as part of their compensation that they get a pay day but it's a gamble.
We don't know exactly how much influence Zuckerberg had in all the decisions. For example the common theme for years was for there to be uproar after any major feature or change.
Like the news feed that is now ubiquitous. A worse company might have feared the backlash and slowed down on features and growing the news feed.
I assume Zuckerberg was also fundamental in acquiring Instagram and Whatsapp. Instagram is worth tens of billions now. Whatsapp has 1.2B or so monthly users. There were many comments on how overpriced and silly the Whatsapp purchase was. But most of it was in stocks and the cash at the time may have been a lot ($4B), but Facebook gets that much per month now. Whatsapp tripled its users since its acquisition.
A lot of tech people disliked the Messenger split off. But that seems to be working out for the business too. It is becoming its own platform now and can also boast 1B+ users per month.
Maybe anyone would've done all this. I don't know. But I do know it was Zuckerberg in charge when all this occurred.
The irony is that in growing, FB traded down that cachet -- but managed to transition from cohort value to network value fairly successfully.
This is an argument I've made for years, I'm happy to see that I'm not the only one -- danah boyd has mentioned it several times as well.
I'm not saying Zuck didn't execute well -- the advantage still could have been blown (and I've only just learnt of a similar network started IIRC at Columbia University which didn't go as well). But for all the things Zuck can claim, building Harvard's social appeal is not one of them.
It's called execution...
The reason I compared Uber's success to Facebook was because demand for the product was so great, it was viral. It's hard to mess up a product that is so incredibly popular.
Perhaps Instagram would have been a better example to communicate my point. Its initial success was clearly not anticipated even by its founders, and its success continued despite numerous hiccups and screwups in its early days. I posit that its founders ability, which was clearly limited (by their own accounts), had much to do with its success.
But it was a premature optimization because those responsible for turning 'viciously competitive evil guy' into raw capital failed to acknowledge that he'd screw them in turn as soon as he needed an exit strategy. You simply cannot turn to childish human dominance battles as a model for what will work in large systems and interdependent markets.Even propping up your 'pet winner' with near-infinite capital won't save you forever.
Yahoo for example is coasting along at a market cap of 53.40B down from its high of over $125 billion. In 1999 dollars. Is it "dead"?
But if they cut it too much, they'll stop growing.
The problem is they need to sustain their 70 billion dollar valuation for investors to be happy.
To be worth 70 billion they have to be either:
Growing at a very fast rate (which requires a very large burn rate to sustain)
Or be generating billions in profit each year. Even with a cut burn rate, they aren't going to be generating billions in profit. So they won't be worth $70 billion.
People will stop using Uber if the wait times get really long, which they will if most of the drivers leave.
Their profitability problem isn't just one of opex. They don't have margin, either.
My main takeway: revenues are higher than their cost of sales. In other words, they are earning money on marginal rides served. Not losing money.
To me, this suggests that profitability is plausibly achievable if they end subsidies into small markets and drastically cut development costs.
How could Uber, barring wholly incompetent leadership, completely implode?
And many/most Uber drivers also drive for Lyft. There's no harm in leaving both apps on and grabbing a more-elusive (but higher) Uber fare when one comes along.
My gut tells me that Uber's financial performance won't change
If they cut ad spend and raise costs, then their growth story stops and other competitors have a window to move.
The go-to reading (at least a few years ago) for handling the difficulties of burn rate at a high-growth company is 'Mastering the Rockefeller Habits' by Verne Harnish, the chapter on cashflow. I think 'The hard thing about hard things' also talks about how this situation can kill your company if you're unlucky or unprepared
They will change the company's current culture. Slow down the pace of growth to try to adjust what is wrong. Probably focus on where they have margin to operate. This is clear in Gary ( Uber Co founder) text on Medium.
"In a highly competitive market it is easy to become obsessed with growth, instead of taking the time to ensure you’re on the right path. Now is that time… to pause"
This is death. I mean, it's sensible talk, in another context it would be seen as enlightened, in a larger sense it's the right answer.
Uber aren't IN another context. They depend completely on Wall Street continuing to think they are the biggest shark that ever sharked, and now that's ruined and the only big investment opportunities are in betting AGAINST Uber. Most likely the smartest money is already out.
This is death. Shouldn't be, in a more sensible context, but it absolutely is. You can't tell Wall Street 'it is time to think sustainability' when they bet on you eating the goddamn world for them.
Companies at this stage in an ultra competitive market (not talking about ride sharing, but self-driving) need their founders to lead and grow. It is just too early and critical to bring in a professional CEO. See Apple.
Just look at the numbers in this article - they need scale economics of two times the cost of the driver of the cab to archive GAAP profitability, which, obviously, is impossible even with self-driving.
The Yellow Cab special interests paid off politicians so that there was a limit of 13,000 Yellow Cab medallions for 8.5 million people. The price of the taxi medallion was $1.2 million. While people in Manhattan could get a taxi, there were no taxis in Brooklyn, Queens, Bronx, ... Because of the artificial limit on medallions which only benefited medallion owner but not New Yorkers, a driver leasing a cab for a 12 hour shift could pay $125 just to lease the car.
When Uber and Lyft came, the rates were lower, one could use Uber Pool to have even lower rates and save on greenhouse gas. Now taxi services have some availability outside of Manhattan. Now many Yellow Cabs are idle and the value of the medallions went for $1.2 million to about $700,000 or less.
In NYC, the Yellow Cab medallion owners tried to get the mayor to put restrictions on the growth of Uber/Lyft, but New Yorkers protested.
Uber/Lyft have increased customer value, lowered greenhouse gasses while not forcing drivers to pay excessing leasing fees for vehicles.
Uber final product is good for society. And other companies can provide the same product (in my city, São Paulo, there are other 3 good companies in the same space).
Uber practices as a company are toxic for its employees and some of the toxicity leak to society.
If such calculation was possible, I believe it would show a net positive impact in society. But a company with good practices and the same product would have an even larger net positive impact.
As a society, I believe we should not settle for bad companies making good products, that's why I believe all the protests are legit.
Leaving any motorcycle safety conversations aside, I think Uber has been the sacrificial jerk of the rideshare industry. Lyft probably would have attracted some of the same issues if there hadn't been someone more brash and more willing to flout their law breaking ahead of them.
Now Uber's explosive expansion and the resultant "they're gonna do it anyway, may as well accommodate 'em" reaction of the regulators has more or less normalized the good parts of the rideshare industry. Lyft and perhaps other competitors-to-be can benefit without taking nearly as much flak. Hopefully you're right in terms of the ability to provide a much bigger net positive in that situation.
Uber is the pace car and the police pulled him over, Lyft saw this and applied their brakes.
And no, we don't use horses anymore.
Leaving aside broader questions, I think we can take a guess at what happens after Uber gets pulled over. Someone will take their place. What soneca said above makes reasonable sense.
OTOH, I'm not sure how useful this culture of rebuke and scolding really is. I think it's a bit extreme to wish for regular corporate collapse because of scandal. Reform needs to be an option here. Then again, maybe an occasional sacrificial lamb is good for making the other lambs ride slower. If it doesn't really matter who it is, may as well be the jerk.
*Smokey (as in the bear) being CB slang for highway police due to the hats.
See: http://freakonomics.com/podcast/uber-economists-dream/ or http://www.nber.org/papers/w22627.
> So we found that in 2015, if you extrapolate to the whole U.S., we found that the overall consumer surplus added up to almost $7 billion. So people spent about $4 billion on Ubers, but they actually would have been willing to spend about $11 billion. So for every dollar people spent on Uber, they got about $1.50 worth of extra joy that they would have been willing to pay on average above and beyond what they did pay. And to put it in a context just how big this consumer surplus is, the total amount of money that went to what Uber calls the driver partners, the people who are driving the cars, was something like $2.5 billion. So the consumers got more than twice the benefit of all the money that went to the drivers. And Uber itself only got to keep about $1 billion.
Of course, none of this makes Uber immune to criticism for the way they operate as a company. And there are sufficiently many alternatives that, even without Uber, society is likely to continue reaping benefits from ride-sharing as a technology.
Note that it doesn't follow that Uber would make more money simply by raising prices -- consumer surplus measures the amount Uber could make by charging each user their "true" value, but if Uber simply raised prices, then they would lose demand.
However, Uber is actually starting to use price discrimination (i.e., charge different users different prices based on their characteristics), which would eliminate consumer surplus .
If Uber raised their prices, the average real value would drop from its current real value of $2/hr, to...
Hell if I know, but it could well be negative.
Yesterday, Uber co-founder Garrett Camp wrote "Uber has become a global service providing roughly 15 million rides per day across 500 cities" at https://medium.com/@gc/ubers-path-forward-b59ec9bd4ef6
The most recent estimate I could find on Didi Chuxing is 20 million rides per day as of October, 2016 as stated at https://www.techinasia.com/china-didi-chuxing-20-million-dai...
It's reasonable to assume that Didi has noticeably grown since October 2016, but none of these numbers are easily verifiable externally to these companies.
(Lyft's market share is unclear to me, but perhaps 2 million rides per day, more or less?)
It was apparent that Didi had achieved the network effects necessary to overcome Uber in volume. Both companies wanted to focus on revenue so it was savvy of Didi to purchase UberChina so they could reduce ride subsidies.
I think that the success of UberChina, along with Yum! and Wal-Mart, demonstrate that it is possible to prevail in the difficult Chinese market.
What were the differences?
It was used as an example to illustrate that Didi did the little things that remove friction for its customers. Didi also recruited drivers in smaller cities; its coverage was superior to UberChina's.
It seems to me that to be successful in certain countries requires skills that don't translate internationally - for example, understanding the quirks of one big country, or negotiating the political situation.
And this is again a failure of government, not capitalism. As an analogue, you cannot say that socialism is a flawed system purely because of what happened in russia-you must not mix up economic and political philosophies.
And on the contrary, I absolutely do hold the failure of the Soviet system against central planning and command economies, even socialist ones. Given that, I find democratically-executed socialism using markets for prices (some consider this market socialism) much preferable.
Telecom monopolies are not by government intent by rather by regulatory capture.
As a capitalist, I hella want to exclude others from the market. If I can get the government to do this for me, then I'm willing to pay the lobbyist fees to make that happen. In the IP space the only reason I'm willing to slave away at invention is the possibility of a patent, a right to exclude, a limited monopoly.
As a capitalist, the absolute last thing I want is a free market. Thiel puts it this way: competition is for losers.
On the other hand, software patents.
We have generally forbidden dumping barrels of spent oil in rivers, for example.
Likewise, a non-capitalistic system can forbid or not pollution.
They were government regulated until that didn't work, then broken up. After the subsequent deregulation, the monopoly is in the process of re-creating itself now.
So you are saying that the investors, i.e. the capital, pressured Kalanick out for reasons of profit rather than due to pressure by the state in the form of multiple lawsuits. You are mistaken.
In particular, there is no evidence that Uber's naughty bro culture is any less profitable than a mature egalitarian culture. Lack of profit wasn't why Kalanick was shown the door.
The Waymo lawsuit is still very much up in the air. Kalanick's involvement is already public: he collaborated with Levandowski to acquire a team of self-driving-car engineers and their work over 8 months. The key demands of the Waymo legal team were rejected in their injunction. Judge Alsop did not see a clear nexus between the Waymo designs and the Uber lidar, referring the matter to trial.
Based on what? Uber isn't public, they aren't forced to release any information on their ride sharing, and what info they do release isn't subjected to any real verification.
The only article I see is based on "number of app downloads" - that has literally no relevance in the number of rides they're servicing. I've got Uber on my phone and I haven't used it in 3 months and I don't see that changing anytime soon. They didn't lose me outright as a user, but they, for all intents and purposes, lost my business.
Did the courts say that Kalanick is barred from being the CEO of Uber? Or, is it the case that Kalanick's actions have put Uber at risk fines and further litagation?
My (admittedly uninformed) take on the situation is that Uber's investors weighed the costs and benefits and determined that Kalanick needed to go. While the regulatory environment probably influenced the decision, it wasn't the government calling the shots.
Capitalism by itself looks at profit. In the United States capitalism is held in check by a legal+political+free speech system. A company (Uber) is not held in check by more capitalism; it is not held in check by competition. As an aside, this breaks down with regulatory capture.
When VW cheated on its emissions testing it was not checked by a more efficient and competitive Tesla. It was held to account by a legal system external of capitalism.
And Travis was not held accountable by a legal system - his investors (i.e. capital) asked him to step down.
I think we're all saying the same thing, it's just your conclusion is incorrect.
Capitalism is about future profits, by definition. I can't invest money in Apple in 1997. I have to invest it today, and my only concern is what happens after that investment. The Uber boarding kicking him out is entirely a capitalist reason. They've invested money, and his presence will (they believe at least) negatively affect the return on that investment going forward.
Your only concern may be what happens after an investment but you'd be foolhardy not to take past performance into account. Undervalued (Apple in 1997, return of Steve) is one thing. Throwing good money after bad is another.
$2.8B is just a ton of money to lose and for a startup it's insane (thinking of Amazon but Uber's losses dwarf Amazon's early losses). Frankly, I think the board is using this as an excuse to do now what they should have done a couple of years back. Boards are human. They aren't homo economicus incarnate. Ascribing rationality to the outcome of a board meeting because capitalism makes no sense. Really, they lost $2.8B last year.
No one is suggesting that. When people say "this is capitalist of the board to do" they're talking about the individual board member profiting from a successful exit. Put more simply - investor puts $1 in Uber on day 0 and expects to make $100 on day 1,000 and makes a $99 profit. They're axing TK because they want to make their $99 return on investment.
Which reason would that be? Which reason is there for a investor to ask a CEO to step other than to protect his/her investment?
By allowing it to willfully break laws in dozens of countries, contributing to lowering standards of living and high stress at work, tracking users at all times, having a hostile workplace, then becoming the most important provider of such services in the world?
Yeah, that's totally capitalism doing its work, and not the painfully obvious "throw VC money at it until it works" scheme, right
As a previous comment pointed out, Uber created a consumer surplus of almost $7 billion in 2015 alone.
I really don't think they could've broke into the market by asking politely; it took some fire in the belly. However, the side effects are pretty devastating as well.
So you're basically saying that stuff like treating women like shit was NECESSARY to provide a good "taxi" service?
None the less, let's not pretend yellow cab other taxi livery companies never mistreated any of their employees (male, female, lgbtq, etc.)
Mistreatment is not an uber only specialty.
Users got a better experience from Uber, but it's not clear it was at the expense of the service side of the population being treated worse than they were treated by the incumbents, therefore all other things being equal Uber would still be a net positive.
The alternative isn't the legacy system, which nobody's saying is better. The alternative is an Uber with decency (even if still bold to break into regulated markets). Or an Uber competitor.
They broke into markets with disregard for the law, often it backfired, often it didn't.
Allegedly(as it is being investigated) they also "stole" IP from Alphabet in an attempt to get ahead in the self-driving gold rush.
They repeatedly ignored several sexual harassment reports in order to protect someone who they referred to as a "high performer", in the name of growth, they could not afford to lose a high performer.
In the startup/VC/unicorn hype world growth is king, it comes before profit, revenue, employee wellbeing, customer satisfaction, business and work ethics.
Uber is not the first guilty of this, it's just the extreme case.
There are many entrenched, incumbent interests that try to make money not through healthy wealth creation but by trying to appropriate wealth through politics (e.g., granted monopolies) which to some degree the taxi industry was.
Uber and its competitors did a great service to many people and ultimately really angered monopolistic incumbents.
No, but its possible they were two facets of the same quality.
While the aggressive, see-what-we-can-get-away-with attitude is useful (and probably necessary) in fighting the entrenched local monopolists who have local government protecting their vested interests, it turns out to be a serious liability with respect to workplace norms and stealing of trade secrets.
its also revealing that you would even bother entertaining this idea. why not just say "yea. they shouldn't do that."? im pretty sure there are companies that have "disrupted" industries that were not filled with toxic culture.
In other words you're here to scold me.
> it shows a need to explain a bad thing by saying that a good thing caused it.
It does no such thing. It explains the nuance of someone else's argument which I thought was being misconstrued. That is, a thing can have positive and negative aspects.
> while i wont deal with the substance of the argument (which i personally reject), its my experience that this argument's format shows up an awful lot when there is a bias that someone has to bend reality to preserve.
Huh? That is to say "I will ignore your argument (but dismiss it) and jump ahead and make value judgements about your motivation and biases."
> its also revealing that you would even bother entertaining this idea. why not just say "yea. they shouldn't do that."? im pretty sure there are companies that have "disrupted" industries that were not filled with toxic culture.
What I find revealing (and amusing) is that you admit you are ignoring the plain meaning of my post, but prefer to look for thoughtcrimes in the subtext.
I think it's a good think to break down monopolies and open up competition.
What's even the point here? You're aware that no one has to protest a company they don't know or use. And that "you can't protest one if you don't protest all of them" is a fallacy.
The outer boroughs, and every neighborhood in the city, has had car service options for decades, where you call a phone number (or often walk to a local storefront stand) to get a ride.
This is the exact market segment that Uber has entered. Literally. There wasn't and still isn't a restriction on the number of TLC car service cars on the streets.
This idea that there "were no taxis" in the boroughs and now there are is ridiculous. There weren't many yellow cabs before and there still aren't. There used to be thousands of TLC cars before and there still are. Except now people use an app instead of calling Arecibo or Carmel.
Street hailing was and still is prohibited, both for Uber and for phone style car services.
The massive innovation, of course, is the use of a smartphone app for hailing, which made it technically possible to create the market that we see today. Uber, Lyft, and the other companies that built internet enabled hailing solutions certainly do deserve credit for building out that innovation, but that change was just an obvious outgrowth of the technological change to everyone having a handheld always connected small computer. It was inevitable.
The dynamic you're describing for NYC just doesn't really fit the facts. Nor does the idea that a lot more people taking a lot more rides in cars is reducing greenhouse emissions, but that's another matter.
Taxis were notoriously bad. They'd intentionally take slower routes to run up the meter, refuse passengers trying to go to locations the drivers don't want to go (despite this being illegal), etc. Not to mention this is all made more attractive due to our failing decrepit subway system.
The smartphone app innovation you speak of was not inevitable. Taxis indeed had a monopoly, and thus had absolutely zero incentive to developing an app. The competition induced by the ride sharing services destroying them is what incentivized them to finally launch an app, but I don't have it on my phone nor do I know anyone who has, and it's probably inferior to that of its competition.
Their first hailing apps was simply an extension of this, but it used the phone's gps, and you would press a button in the app for "a taxi, now, here", but the underlying systems were at least already there.
After Uber entered the market, they made their apps better, and you can now attach a payment method to pay through the app, and there's gps tracking of the car you're waiting on, same as Uber and similar.
But Stockholm never had a medallion system or other caps, and there's no monopoly, but there is some sort of oligopoly where some companies get better access to major taxi destinations such as airports and train stations. As usual, healthy competition is the key. :)
We're talking about something called livery cars which have existed forever and were also very widely used before Uber as well. You used to arrange for pickup using your phone. You still arrange for pickup using your phone.
The car, the driver, and the laws surrounding both are essentially the same as they were before. What's actually changed is your phone.
This distinction is quite different in cities that aren't New York, where there were taxis and nothing else, and Uber has in fact created a new category of private car transportation service. But here in NYC the non-taxi car service market segment existed already and was vibrant, the parent comment claiming they broke some kind of monopoly is just incorrect.
> the parent comment claiming they broke some kind of monopoly is just incorrect.
Are you saying taxis are not a monopoly? Or are you saying ride sharing apps did not break the taxi monopoly? If taxis were a monopoly, and if we are not using taxis now because of ride sharing apps, then it would seem ride sharing apps broke a monopoly.
Add to that the incentives induced by the rating system and fares determined before you hail the ride, and you also get a far superior riding experience.
So no, the innovation here wasn't just that the hailing is done via an app. This alone would not have spurred the dramatic improvements we've seen.
Decrepit I'll give you, and even a low grade, but failing?
2016 subway ridership: 1.76 billion = 147 million per month
2016 global Uber ridership in October: 40 million
Not the same league.
The subways could improve, but I prefer them (and walking) by far to taxis and cars. I guess I just don't have experience since I take maybe one or two taxi rides a year and have never used car services. You seem to take them much more.
I actively avoid the subways as much as possible, especially in the summer when the stations are uncomfortably hot/humid. I mostly walk, ride Citibike, or take Uber/Lyft. Luckily I'm able to do this because I live reasonably close to my office in Manhattan.
Uber Pool has been a godsend because it's so cheap. I can often Uber to/from the office for about $.50 more than the price of a subway side. Granted traffic in the city is horrible so it's not all sunshine and rainbows - my Uber Pool today from midtown east to west of Penn Station took absurdly long due to standstill traffic, but at $2.03 I'm not complaining, and I'll take any excuse to avoid the subways.
The few times I tried to take those services the service was horrible, horrible.
Now, thankfully, Uber is available and they have much better service and they have a single identifiable reliable brand and they take credit cards.
Uber pool where unrelated riders ride in the same car are going to have less greenhouse gas than riders taking separate cars. This is logical.
I am writing this from Brooklyn, where I have lived for about 20 years.
> Before Uber there was no hailable service.
There still isn't. Street hails are only from medallion cabs, plus the green outer borough cabs which came just a little bit before Uber showed up and are still around.
There wasn't street hailing before and there isn't now. This isn't complicated. You used to use a phone to get car services before and you still do now. The laws and the dynamics of that aspect really didn't change much.
The innovation is that now your phone has a computer in it and GPS so you press a button and use an app instead of talking into the thing to a dispatcher guy in an office. It's a technological change that happened.
> I don't take these services much in the outer boroughs
As mentioned, I live in the outer boroughs, Brooklyn specifically. You should come check it out sometime, there are about three million of us here. We got along pretty well before Uber, we just called Arecibo. They were fine, and still are, I use them to get to the airport now since the drivers are way better.
Pricing is honestly pretty similar now to what it was five years ago, with very short trips being a little cheaper on Uber/Lyft than they were in the old system. Plus all the promos and so on.
It's way better now to just press a button on the phone, and have your payment info stored, and all that. No question about that. But those are technical innovations.
Your argument is that their innovation had to do with changing the dynamics of supply and demand in a restricted market. But that didn't really happen, and to the extent it did it was because smartphones made it possible. Steve Jobs probably has more to do with the declining price of medallions than Travis Kalanick.
> Uber pool reduces greenhouse gases because multiple unrelated parties can ride in the same taxi instead of using two different vehicles. Elementary.
Unless they were previously taking the subway, of course. The world isn't quite so facile.
Things I miss about those pre-Uber days:
- The drivers knew exactly where to go just off of an intersection. If you told them you were going to Tompkins and Hancock, they'd get you there often without needing to ask any clarifying questions. Now drivers have no idea where anything is.
- Music in cars from the driver's collection. Hearing random cumbia or ghazals or hip hop. It made you feel like you were in New York. Now drivers are catering to a generic millennial audience and all I hear is bad top 40.
- Overall just how human the interactions with drivers felt. I once had a driver come up into a house party with us, and ended up having a very weird/memorable night. Now everything is sanitized and rarely do I get a driver from Uber or Lyft that is willing to even have much of a real conversation for fear of getting a bad rating.
I don't miss the need to negotiate price or the need to pay in cash. The apps are also cheaper for the most part. I do miss the gritty New York.
That said, even Manhattan has had phones for black cars. I've routinely called Dial 7, Carmel, and Skyline on different occasions on demand (primarily when it's raining, when it's really hard to get a yellow cab), and had no issues. I still do so when Uber surge pricing is ridiculous for my tastes.
In the LES where yellow cabs can be scarce, you had Allen Car Service and Delancey Car Service (who I'd call for airport runs).
The reliability of these car services was pretty good. They'd call you if they were delayed or were otherwise late. (Drastically different from San Francisco, where the taxis were pretty much a terrible crapshoot experience)
When Uber started to take off in NYC, some of the feedback I heard was "I get to look like a bigwig", when in reality, anyone can get a black car, and if you think it makes you look more important... it doesn't.
My point is, there's a lot of talk of "Uber was revolutionary" and "before Uber there was nothing!", when the sad truth is these folks never bothered to look?
I mean, anyone who's lived in NYC for some time can tell you the numbers for Carmel or Dial 7 in a heartbeat, and some may even be able to recite the jingles from their ads.
Uber was just yet another dispatch car service, but with an app.
I do think you're understating the importance of discoverability.
I lived in Morningside for three years. (This is in Manhattan, by Columbia University, for you non-New Yorkers.) I'd never heard of the car services you mentioned. Even though I could easily access yellow cabs, after a few awful cab rides to / from the airport, I would have been pretty eager to try out something different.
My point is, maybe I was ignorant, lazy, should have asked around, whatever. Clearly you are a savvier New Yorker than I was. But Uber/Lyft makes the process of getting a reliable, enjoyable experience way easier as a newb, or tourist, or lazy person who doesn't bother to find a Real New Yorker, or whatever. That would have provided real value to me.
I am so happy to never have to call Arecibo again. And now that Lyft service is good out here, happy not to use Uber either.
And a map confirming your pickup & destination, and a payment system. Yeah, not much different than talking to a dispatcher with your phone /s
Nope. No innovation here... /s
When Uber started in SF, the experience of getting a taxi was very frustrating. There weren't enough cabs, the cab drivers were over the top rude, they refused to take credit cards and were aggressive about tips, if you called a cab they would never show up, and they were (and still are) expensive. It was not necessarily about the app, it was just that it was reliable -- you could get a car when and where you needed it and not having to pay in the car made the experience far superior.
At the very same time, there were all these black cars rolling around the city and picking up passengers somewhat illegally. That experience was not great because you often had to negotiate a high rate, but this was mostly because there were no taxis available. In other words, there was a bunch of supply that could be utilized.
I think those conditions made Uber particularly ripe to work in SF and once it did, that proved that it could work elsewhere as well.
The app was also a huge benefit, but in context, I actually think it could have been just as useful in the beginning if you could have texted your address.
It goes to show that for something to be great, you have to get a lot of things right at once. :-)
In practice, it has replaced lots of Yellow cab journeys too.
Straightforward evidence: the large drop in the value of a medallion in NYC.
But just talk to New Yorkers. Lots of people use Uber instead of Yellow Cabs.
Even if we grant that Uber is a huge overall social good, it is clearly not sustainable at its current pace. Uber's burn rate is the highest in history, and the C-suite is barren. The board clearly felt that TK couldn't get Uber out of this mess. And the board, at the end of the day, only cares about long-term share price.
The vast majority of people have been criticizing Uber for breaking laws related to fraud, stalking and harassment, and a generally toxic workplace culture.
The product that Uber offers is good (and no one other than taxi medallion owners is really arguing that). But they've gone about delivering it in an unnecessarily bad way.
> not forcing drivers to pay excessing leasing fees for vehicles.
Err, the cheaper rates were due to uber subsidising rides with VC money, which was unsustainable. Uber also did start a leasing program for drivers.
The cheaper rates in NYC which are extremely high compared with the rest of the USA were because there was no $125 / 12 hour lease fee because there were no medallions.
Medallion owners would get mortgages (like houses) for the $1.2 million medallions and the high lease fee paid for the medallion mortgage. In fact the other special interests besides Yellow Cab medallion owners were credit unions who financed these mortgages.
A $125 / 12 hour lease fee comes to over $90,000 per year.
By not having to pay these excessive expensive leases, drivers could be paid less money and still make a profit. Drivers who leased the Yellow Cabs still have to pay for gas. Lower costs for taxi service means more time with customers in cabs. Everyone wins except medallion owners and credit unions with the mortgages and politicians bought off by these special interests.
This comes out as 8640 hours per year, which is 360 days.
So we're talking about the income a taxi owner can get from a medallion.
What an individual taxi driver had to pay to work is a much lower number. Typically a full time job is around 2000h/year.
As explained elsewhere in the thread, Uber does not and has not ever competed with medallion taxis for their main product (Uber X/Uber Black) in New York City. Uber's direct counterpart would be the for-hire cabs which are also regulated by the TLC, and are not required to have medallions.
Uber is already subject to the exact same requirements of the TLC that their predecessors were - Uber drivers in NYC have to have a valid TLC license. So there is literally no difference in supply-side regulatory cost there.
Whether or not they fill the same requirements, they made it so easy to get a car that it was easier than standing on a street corner and hailing a yellow cab.
And aside from that, they added accountability. Yellow cab drivers were rude, the cars were moderately clean at best, and generally took opportunities to rip people off. I remember leaving my phone in a cab around 2008, I immediately called it and the dude picked up, said he was around the corner and to meet him outside. He was more than willing to give me my phone back- for $60 and had a shit eating grin on his face. I had the same thing happen in an Uber about 5 years later- the guy dropped the phone off at my house free of charge with a smile.
There is a reason that NYC taxi medallions have pretty much halved in cost since Uber started here- because they are directly competing with yellow cabs!
I very clearly do.
Rather than respond to the anecdotes, I'll point out that I was rebutting the original claim: that Uber was cheaper because it (unlike medallion cabs) does not have to pay for licensing fees. Uber does pay for licensing fees, just under a different classification. More importantly, that's exactly who Uber's competition is on the drivers' side, which is exactly what OP was talking about. Uber drivers are generally people who have driven livery cabs for years and either split their time between Uber and other livery cab services, or have switched over to Uber for livery cab driving.
When talking about the price, it's more accurate to compare Uber to other livery cabs, and to say that Uber has caused the share of livery cabs in the overall cab market in NYC to increase, rather than to look narrowly at the medallion market, and ignore the regulatory field that they are in, ignore the costs of that regulation, and ignore all of the direct competition on the supplier side.
It is not about licensing fees, it is about that because of the medallions, taxi drivers had to pay $125 / 12 hours for the lease. Before Uber/Lyft those medallions which were restricted to 13,000 for a city of 8.5 million (as well as many visiting tourists, business people, and in a city where many don't own cars), the price of a medallion was $1.2 million. After Uber/Lyft the price decreased to $700,000 and many Yellow Cabs are idle. Prices are lower, service is far better.
But if your point is 'Uber was primarily successful because they found a way to get around the medallion system', then I don't think so.
The reason being, livery cars were around long before Uber, are much more comparable, and they also did not have to deal with medallions. So, why didn't livery cars put the taxis out of business a long time ago?
I think the real reasons for Uber's success are:
1. Livery cars were a hassle to arrange. Uber solved this by using smartphones with GPS.
2. Livery cars were slower to pick you up. Probably because there weren't enough drivers on the road. Which is probably because there weren't enough riders. Uber solved that catch-22 by subsidizing the rides to jumpstart a positive network effect.
Accountability and a feedback loop- if the guy did try to rip you off somehow, prior to Uber, you really had very little recourse. There is a process to lodge a complaint in NYC, but it involved paperwork, showing up to a hearing (which you will have to take time off of work for), and then maybe something might be done.
You kind of touched on it, but also just some kind of visibility into when exactly your car will arrive. When Uber was new in NYC, wait times were much longer, generally 10-15 minutes, which I didn't mind much because that's probably about how long it would have taken me to find a cab, and I could finish my drink inside the bar/restaurant and finish as the driver pulled up. This has actually gone downhill a bit over time- So many times I pull up the app to see a half dozen cars within 4 blocks of me, and then when I actually try to reserve, its a 7-8 minute wait. Or they accept the trip but then I guess got a better offer on Lyft or something and is just heading in the wrong direction- meaning you have to cancel and then fight with Uber over being charged a cancellation fee, which usually isn't too hard to do, but its just a hassle and a way drivers can currently beat the system.
I feel like a decade from now people are going to still be repeating this same old line.
It also seems awesome. Why wouldn't I want VCs to give away a bunch of money to its customers?
No, it is not going to run taxis permanently out of business. All you need is a car to do that. If this is really true, as soon as prices rise, another taxi company can start back up again and take market share.
Uber is still losing money hand over fist. It has to come to an end at some point, either when they finally raise prices or they just go bankrupt.
> It also seems awesome. Why wouldn't I want VCs to give away a bunch of money to its customers?
A couple reasons:
1. VCs don't "give away money". They invest, with the expectation that their investment will be returned many times over. Given that it is explicitly Uber's goal to have a monopoly on transportation, you can extrapolate what that means for their intended pricing strategy if they ever manage to take over.
2. While taxis may or may not be an example of this, it's important to realize that VC-backed dumpi^H^H^H^H^Hpromotional pricing can destroy existing businesses even if those businesses were competitive and sustainable. For example: wash.io, which I commented about here: https://news.ycombinator.com/item?id=13608376#13608798. They shuttered a whole bunch of laundromats in SF, which was all for nothing since they went out of business anyway. That's not a healthy dynamic.
Same goes for trying to hail a cab from the streets. Empty cabs would drive past you because they wanted to only drive passengers to the airport. I'm glad they are all going out of business.
Calling for a cab was extremely unreliable here. You could easily wait for an hour (because any driver coming to pick you up could, without ill effect for him/herself, stop to pick somebody up on the street). Some cabs took credit cards, some didn't. Some claimed to take credit cards but then "the machine was broken" so you had to pay cash.
Uber improved on every single aspect of the customer experience. And they did it while offering lower prices for the consumer.
However: to me, they haven't proven it's a viable, long term model. I highly doubt that they are paying their drivers enough to cover the cost of wear and tear on the cars (many/most of the drivers I see with Uber and Lyft are doing it full time, so they are crazy if they aren't factoring in the cost of the car and maintenance as part of their cost). And AFAIK neither company has proven they can make money.
So: this industry was due for a shakeup.
But it needs to be done by a company without rampant management problems, and it still needs to prove that there is a viable, long term business model that works for the company, the drivers and the consumers.
[edit: and, yes -- long term, there won't be drivers in these cars. But Uber has to find a way to survive until then, and I don't believe they can burn cash that long]
This type of thing sounds like the usual American "let the market sort it out" that other western countries don't have. Taxis are already government controlled (via taxi licensing) so why aren't they required to accept credit cards, as they are in Australia?
Paris also probably has laws against longhauling, doesn't mean Parisian cabbies don't do it to naive tourists.
Edit: And yes, some people (including me) do take the position that the market should be left to decide which payment mechanisms to accept (just like most people do in every other context -- who wants a law saying bakers have to accept credit cards?), so long as they're declared before the transaction, and there's (legally) free entry/exit into the profession. It's a strawman to characterize someone as being okay with changing the accepted payment methods after the fact.
I'm not saying peopl are ok with changing it after the fact: I'm saying the government should do what government is supposed to do and serve its citizens, in this case forcing taxi companies to accept credit cards.
Market/self regulation generally trends to work in two ways: the well off get to crow about how government regulation isn't needed, and the less fortunate don't get to use that service because they're never the prime market for business, but they don't have a soap box so the other side keeps barking on about how good it all is.
And no one gets stuck in an unfamiliar area while low on blood sugar?
>I'm not saying peopl are ok with changing it after the fact
Yes, you were! You brought it up specifically in the context of cabbies who refused CC after taking on a fare with signs and machine saying they could pay that way. If your point was just that "being able to pay with CC is nice so it should be mandated", then you shouldn't have pointed to the after-the-fact case as a danger.
>I'm saying the government should do what government is supposed to do and serve its citizens, in this case forcing taxi companies to accept credit cards.
And you're failing to ground it in any way that doesn't generalize to forcing arbitrary merchants to accept arbitrary payments, while focusing the majority of your rhetoric on grandstanding about "hey, I just think governments should help the people" instead of a concrete justification for how this helps the people, or any recognition of any downside of such a mandate (which you were able to see in the case of bakers and CCs).
>Market/self regulation generally trends to work in two ways: the well off get to crow about how government regulation isn't needed, and the less fortunate don't get to use that service because they're never the prime market for business, but they don't have a soap box so the other side keeps barking on about how good it all is.
Again, you're assuming your policy helps the poor and anyone who opposes it just doesn't understand it, instead of actually elaborating on the substantive mechanisms. Tomorrow you'll be right back lecturing us that credit card acceptance hurts the poor because merchants have to distribute the fees over all customers, including the poor unbanked who can't get one, and I'm just too privileged to see that.
How about confining your remarks to the pros and cons of various policies without dragging motives and demagoguery into it?
Well, to be fair, it's "let the market sort it out while severely restricting the market through regulation" which while I wouldn't say is the usual, isn't as uncommon as it should be. Either one has it's place, but together they generally don't work well...
Since Uber/Lyft has no problem attracting drivers at the rates they pay, this argument rests on drivers being financially ignorant enough that they don't notice they're losing money doing it.
Though they also have apps now.
Reducing greenhouse? Relative to what?
This is all one needs to read http://nyc.streetsblog.org/2017/02/27/its-settled-uber-is-ma...
Also, the overall increase was 3 to 4% according to the report. In NYC we keep hearing how subway ridership has been increasing every year. At any rate, a decrease of 10 million trips per year out of 1.7 billion is hardly significant.
Also, this simply states that perhaps we should be regulating private vehicular traffic in these areas, not restrict traffic that helps the public (and provides employment for low-skilled people).
The uber/lyft traffic increase issue is throughout the world.. not just in a specific part of NYC.
I've decided to solve this by 1-starring and no-tipping any driver that fails to yield to a pedestrian, drives in a bike lane, or exceeds the 25mph speed limit at any point in the ride (so, like, all of them), but of course, I take a cab once every three months, so that won't do much.
If we really want to reduce greenhouse gases, a better approach might be:
1. Properly funding the MTA (congestion charging)
2. Widening sidewalks, especially in Midtown
3. Grade-separated and camera-enforced BRT lanes and/or surface rail with signal priority.
4. Proliferation of bike lanes.
5. Charging market rate for all street parking.
Uber and Lyft have have increased car traffic in New York: http://nyc.streetsblog.org/2017/02/27/its-settled-uber-is-ma...
At least in Uber/Lyft you can rate a driver, there are many taxi drivers in NYC who drive rashly and don't do those things you listed and yet if you don't tip they will explicitly ask you to.
To me, the following are the most important things to use a ridesharing app:
Not paying any tip (In Yellow cab, many drivers demand for tip if you don't tip them)
Rating the drivers (It's a positive thing depending on how you view it)
Booking when you are drunk (While there are some apps that let you book yellow cabs we all know how bad those apps are)
Uber as a company or Lyft as a company may be disliked for some of the things they do, but ride sharing is a positive outcome. If the above three points are there for yellow cab, I will happily use them anytime. The way a driver drives is not something specific to uber or lyft.
Unlike AirBnB which does break NY City and NY State laws, Uber has been following regulations that are imposed by the NYC Taxi & Limousine commission (e.g., screening drivers, etc.).
An estimated 160.000 cars driving for Uber in the US, many of which doing so as a full time job will pollute less. Right. Riiiiight.
There is a lot of potential for such reductions to happen in urban areas. Shameless plug - the potential for pooling using Uber data is shown in Figure 8 (https://arxiv.org/abs/1701.06635)
Uber's great in that they give competition to an entrenched monopoly of Yellow Cab.
But put Uber in a monopoly position anywhere and you'll see the rates skyrocket.
There needs to be a number of forces in the ride sharing market to keep prices down.
For one thing, because cabs were so bad, Uber was able to do a lot of stupid and scummy things yet still be way better than cabs.
Also, it had an interesting effect PR-wise. For a long time, whenever I heard something negative about Uber, I just assumed it was taxi industry shills making up ridiculous lies. Because there definitely were taxi industry shills going around (online, newspapers, etc.) and making up ridiculous lies about Uber. Later I understood that some of the negative stuff I was hearing about Uber was a huge lie and some of it was totally true.
Let's look at the flip side here. They "disrupted" an industry by repeatedly violating the law and undercutting the competition by subsidizing nearly 2/3 of the cost of fares using investment funds. Is that innovative? I'd argue that nearly anyone could disrupt any industry with such a model, regardless of the actual merits of anything else they'd built.
Add on to that their horrible corporate culture, their seeming support of industrial espionage, and the underhand tactics they use to take advantage of their drivers.
It was smart of them to take on a corrupt, broken, and outdated system, because it allowed people, like you, to whitewash so many of their flaws and transgressions.
There are situations where ride services would encourage public transit utilization (last mile services), but I'd guess those are far from the dominant use case.
According to some estimates I've seen just constructing a car is equivalent to 3-4 years of carbon footprint of driving it.
You might say "buy used!". I would, but over the entire economy it would add up to the same amount, the net demand for new cars would increase.
The Guardian article is very deceptive:
"... the emissions from the manufacture of a top-of-the-range Land Rover Discovery ... may be as much as four times higher than the tailpipe emissions of a Citroen C1."
Did you see the trick they pulled there?
They took carbon emissions from manufacture of a large vehicle (Land Rover Discovery), and divided it by the tailpipe emissions of a very efficient small vehicle (Citroen C1) in order to concoct a large-sounding, but ultimately meaningless comparison "4 times higher". You may as well compare the manufacturing emissions of the Land Rover to the tailpipe emissions of a cow.
But even assuming your point about manufacturing emissions, while you don't buy a new vehicle yourself because of your use of ride services, the cars used for ride services will be replaced more often, because they are more heavily utilized, and hence will have to be replaced more often.
> cars used for ride services will be replaced
> more often.
According to EPA statistics a typical car gets used for 100-200K miles, for taxis that number seems to be easily 2x or 3x larger. So for the same amount of moving people from A to B taxis are mor CO^2 efficient.
Of course there are all sorts of secondary effects you're not taking into account. Once people don't own a car because they have something like Uber available to them, they're more likely to use a bike or public transport for a trip they'd otherwise take by car. Just compare somewhere like NYC to LA in terms of how much CO^2 a typical person emits while going about their day.
I don't know what the exact numbers are, but this is a lot more complex than what you're making it out to be.
There is absolutely no proof whatsoever, that people sharing a vehicle increases greenhouse gas. Citation is required that it would.
Public transportation better serves: the poor, those without smartphones, people with small children, people in trafficked areas, the handicapped...
Uber/Lyft fails on all of the above in most areas it serves, and potentially decreases overall public transit use (which hurts funding overall).
By your argument, because Uber/Lyft provides better customer service overall compared with Taxi service which is why they are commanding such a large market share, that is a bad thing because people are taking more cars over mass transit as a result.
Uber pool might lower the amount of greenhouse gases compared to everyone using individual Ubers, but that is a drop in the bucket compared to the increase from people using Uber instead of public transit
Why not argue for doubling taxi fares and banning Uber, equivalents altogether and force anyone without a private vehicle (which is the majority of people in Manhattan and perhaps even NYC) to take mass transit? It is a silly argument. Because Uber is provider better customer service at a lower cost, that is a bad thing? Really?
And even more in bad faith is your constant assertion that people who are not fans of Uber are somehow against poor people. Your entire second paragraph is filled with this. Based on that, I could easily say that, because of your comments of Uber love, you’re a huge fan of the kind of office culture that Susan Fowler wrote about. Would it be accurate? Probably as accurate as your assertion that those who are against Uber is against poor people.
But it's MORE greenhouse gas generated than if all passengers took the subway.
Unlike AirBnB which breaks NY City and NY State regulations, Uber does follow NYC Taxi & Limousine Commission rules imposed on them and Lyft and other services. But in NYC, the Mayor's unsuccessful efforts withstanding, we aren't trying to restrict market entry and basically asking that Uber drivers undergo the same screening as Yellow Taxi drivers.
Read this part of the article:
"Uber made a particular effort to deploy the tool in cities where it faced opposition from local regulators or rival taxi and transportation companies. One of those cities was Portland."
NYC did not bow to pressure from rival taxi companies and they did follow the law cooperating with NYC Taxi & Limousine Commission (again, unlike AirBnB which directly broke NY City and NY State laws and was sued by the NY State Attorney General). Uber was never in trouble with the law in NYC nor NYS and the only time it has trouble are with entities that try to block competition from the regulated monopoly.
"while not forcing drivers to pay excessing leasing fees for vehicles."
In the same way someone who owed money to the company store didn't have to start doing that, but due to predatory terms, once they did, things get pretty out of hand. And since Uber/Lyft are the ones who dictate those terms, they are to blame.
But focusing only on the benefits and avoiding discussion of the costs or new problems that something creates is sales talk; internalizing sales talk leads to cognitive bias.
Those positives will be brought about regardless of who it is, so lets make sure it isn't a company who acts as egregiously bad as Uber.
Last weekend, I was in Budapest. There is no Uber in Hungary (anymore), but the main taxi company (Fötaxi) has its own app which works brilliantly.
I honestly see no "moat" around Uber in markets where (large) taxi dispatchers have the insight to build a ride-hailing app.
It's only a matter of time before we are back to square 1, or rather, square 2.0:
* licensed, regulated taxis, either independent or through dispatcher
* all connected to an (api-)interconnected ecosystem of ride hailing apps
* payment to driver directly (cash or card), tipping discretionary
* receipts emailed to rider afterwards, with annotated map and start- and end time
This will weed out dishonest drivers, and will benefit honest drivers.
Uber's only differentiator in well-organised urban markets is its app.
The turning point for Uber's decline will be when NY and London mirror Uber's functionality in their own apps, with the benefit (in London) of cabs being allowed to use the cab lanes (or, in Amsterdam, the bus lanes).
Second, none of these apps I have seen thus far even attempts to make it easier for the user to add payment methods. Each time I need to put in my credit card information? Twice if I am on business? Nobody has taken advantage of Apple or Android pay integration.
I don't consider myself a heavy cab user, but I probably take at least ~200 rides a year, and unless the city is regulated (credit cards) I am using Lyft.
Most people only go to another city once or twice a year, so it's not a significant issue for them.
Personally, I use other apps when in NYC, but fall back to Uber when I'm somewhere else and can't find a local app.
Is that so? I'm not aware of anybody that never goes to another city multiple times per year and that includes infants and the elderly.
There, now we've both shared our experiences!
I've got acquaintances from all over the planet though, and even there most people travel with some regularity to other cities. Holidays, family visits and so on, and then of course there is business travel which I would assume is one of the larger customer groups for Uber/taxis.
Don't worry, once there are enough apps someone will figure out how to scrape and aggregate the info. The same thing happened when airlines and hotels started putting booking info online except at the time it was websites instead of apps.
Ride hailing is extremely fluid. Must be real-time. Must be able to provide GPS coordinates of the user to the service in question.
I don't think you'll see an aggregation app until there is some ride hailing standard that is adopted by the various providers.
But what does that API look like? What are the MVP operations required to make a successful ride hailing API? Will that API provide realtime location info of the driver, or allow payment, or <insert myriad of questions here>.
Without a standard, the Taxi API landscape will be a mess.
> Apps like "Transit App" will just integrate them all
This is a pretty major oversimplifications of this issue. Sure, this is technically possible, but it sounds like a horrible solution.
Bringing in the considerations about the actual API design, this also means that user experience may vary wildly depending on which service they're interacting with.
Can != should. If aggregating many systems is the future, we should push for a technical solution that doesn't suck.
Not having some API standard is usually how it's done with many services nowadays, and the market/comparison apps have to integrate multiple APIs. Big deal.
Again, I should reiterate: I'm not arguing that it can't be done or that it's not possible. I'm arguing that the result will be subpar. Let's remember that the parent discussion is about the creation of a system that rivals the Uber/Lyft experience. If you want to do that, someone (probably someone big like Google as suggested in another comment) is going to have to influence the design of these APIs so the end user experience is a consistent/good one.
There very well may be one ride hailing app to rule them all, but implementing it will be an entirely different beast.
However, as an example, when Uber and Lyft left Austin, one of the companies created locally (RideAustin) to replace the gap does allow payments via Apple Pay. Very convenient, and they also give you the option of rounding up to donate to a charity of your choice.
I guess it's just up to all the other options to realize what people want.
Apple Pay is great if you're immersed enough in that ecosystem, but otherwise? Uber and Lyft store CC info, allow for easy deletion, and take PayPal. I'm glad Ride Austin exists, but they still seem to be several laps behind on letting you give them money.
I would be fine with taxis if I didn't have to interact with the driver at all when it came to payment and could provide feedback right in the app.
Sounds like a free ride, to me. In my city cabs have to accept credit cards by law. This means if the machine is broken, the cab is unfit for service. If a driver refuses to take a credit card, you don't have to pay them. If they're rude about it, you can call 911, there's a whole division of the PD dedicated to dealing with cabs. The threat of having an officer show up and a possible fine or suspension is probably enough to "fix" their machine.
A rating system is actually superior to getting the government involved.
A ride experience where I don't have someone threaten me while I call 911 is worth some money to me.
This sort of reminds me of Usain Bolt in Beijing, actually. He lived on McDonald's chicken nuggets, not because he's averse to trying new things but because he couldn't risk anything upsetting his stomach during competition. For him, eating was instrumental, so he wanted predictability.
Even if you immersive travel, there are times when it's really useful to know what you'll get.
The small journeys around town aren't as likely to be as valuable, it's usually the longer airport fares which will make up the majority of taxi spending for people away.
EDIT: Alternatively, convince the taxi companies to open up their API. Then you can have one app that selects the correct API based on your current location.
What year is this? $YEAR_OF_BILLBOARD_INVENTION + 2?
> Alternatively, convince the taxi companies to open up their API.
I still feel like one company will take over. You cannot build a good product by federating APIs across different municipalities, governments, continents, (planets?).
The thing I find interesting is that MyTaxi is loosely coupled with the drivers. There is no obligation to pick up MyTaxi fares, you can go about your business as a cabbie and take MyTaxi fares when business is slow. Seems to work quite well for the drivers.
This morning I had to wait probably 15 minutes before a driver took my MyTaxi order, but considering how bad the phone-dispatch service is in Berlin I call that a win.
Everything else is very Uber-like: electronic receipt, pay in app if you like, tracking of the car on its way to you (more or less).
Oh, and two very neat features: you see your cabbie's full name (this feels safer to me) and you can save them, after rating, to a "favorite drivers" list, which I assume the service will use to help improve customer satisfaction.
As much as I don't like uber, surge pricing can be a really helpful feature that I would like to have with cabs as well.
> cabs being allowed to use the cab lanes
> (or, in Amsterdam, the bus lanes).
From talking to a few drivers (just asking them about Uber) my understanding is that at some point in Amsterdam Uber was just hiring pretty much anyone with a car as a driver, but then The Netherlands cracked down on it, and now they're all as legit taxi drivers as any other taxi.
So I believe you're posting on the basis of out-of-date information when it comes to Amsterdam.
Uber's decline in Amsterdam will be not only when the local market provides apps of equal caliber, but when they match Uber in prices, it's way cheaper than taking a taxi over here.
London black cabs have been available by app for a while (Hailo). The main reason people use Uber is that it's about 30% cheaper.
Common users aren't also aware that Uber is cheaper mostly because of their own subsidies. If this is gone soon feels like it'll only hasten Uber's demise.
I suppose it might be useful during shift change?
Lower cost is also a factor, relative to local taxis.