I'm starting to think that many of the most successful tech companies of the past decade are not real monopolies but succeeded purely because the centralization of capital made it difficult for alternative projects to compete for a limited period of time. Even projects with strong network effects are unlikely to last forever.
The reason why all these dominant companies won't last forever is simply because every new generation of ambitious workers needs a way to legally take ownership of the capital which was accumulated by the previous generation. People who inherit free capital from their parents or relatives will never be as smart, hard working, determined or as capable as those who've had to struggle all their lives; especially now with an internet where essentially all knowledge is in the public domain. As monopolies get bigger and stronger, smart and ambitious people will adapt to the environment in extreme ways and find legal ways to subvert them.
When you see extremely high valuations which assume that the company will have a monopoly in 20 years, it's a red flag because in 20 years' time, political and economic control will have already been passed on to the next generation; a generation which will have no skin in the game and 0 interest in seeing that company succeed.
Big money doesn't equate smart money.
But now that the dollar is cheap (by 1995 standards) and the billionaires aplenty, maybe we should look at 5 or 10-billionaires for our next study.
[ Edited to add: Actually you do not even need to downsize 25% to 20%. Take a 1% erosion per year and you get there anyways. So basically the odds of someone losing billionaire status were about 1% per year. Quite a low chance of failure. And quite a high chance of death in comparison.]
a better label for your stats is that it takes 20 years for a family to figure out how to hide their wealth.
But your inter-generational theory has a major contradiction. You're asserting that each generation of ambitious workers takes ownership of the capital of previous generations, and that this same capital is inherited by incompetent heirs. They can't both be true.
If the heirs of capital continued to exist from one generation to the next, then there would be a vested interest in Uber's success across generations, undermining the argument the poster is making.
While their valuation might be too high now, it is really good business that doesn’t require a monopoly to be successful.
The logic I kept hearing repeated is ride-sharing is a winner take all market. Like once you have a network of drivers setup giving people the lowest times for rides, you can force other competitors out and raise prices.
Time has proven how wrong this thinking was. It's almost impossible to stop competitors in ride-sharing because the cost of switching for customers is low, there are no legal or capital ex competitive barriers, and you can be picked apart city by city. Even drivers are incentivized to download as many of these apps as possible.
The whole situation seems awfully similar to Living Social and Groupon.
This is so true. I only ever take rideshare to/from airports, and those trips are sufficiently expensive that it makes sense for me to spend the extra minute to launch the four different ridesharing apps I have installed and comparison-shop the cheapest one. It's a no-brainer to spend a minute to potentially save $40 or more, depending on surge conditions.
And four might be a little extreme, but I hardly know anyone who uses rideshare at all who doesn't at least have both Lyft and Uber installed. And even two players in a competitive market can drastically fight prices to the bottom. Ridesharing is not a duopoly situation.
That afternoon was a very costly surge for Uber.
I don't think "anti-taxi" was why most people picked up Uber, rather it was cheaper. So if that isn't the case then going to a taxi rank makes a lot of sense in many cases.
I am spoiled by the ride hailing apps; a medallioned taxi is a distant last resort for me personally. I may never call for a cab again in my life and that'll be just fine for me. Walking up to an airport cab stand is convenient and certain, so that's still in play.
But, to the degree that some people are using them to replace other forms of transportation, including car ownership at the margins, price does matter. A lot of rides people take today would probably not be taken at 2x pricing.
A dollar bill is auctioned with these two rules:
1. (As in any auction) the dollar bill goes to the highest bidder, who pays whatever the high bid was. Each new bid has to be higher than the current high bid, and the game ends when there is no new bid within a specified time limit.
2. (Unlike at Sotheby’s!) the second-highest bidder also has to pay the amount of his last bid – and gets nothing in return.
This peculiar game leads to a bad case of buyer’s remorse. The highest bidder pays far more than a dollar for a dollar, and the second-highest bidder pays far more than a dollar for nothing.
once uber/lyft cut out the dispatcher, reduce no-shows a tiny bit, increase utilization a bit, off-loaded cap ex/risk to drivers, where do the killer profits come from?
when you do a five forces analysis, the only place they have some leverage is on the drivers (supplier-side), whom they've already squeezed down to below minimum wage (on average).
walmart can eek out huge profits from a low-margin business because they provide essentials that are hard to subsitute at their price point. ride-hailing is not nearly as essential and has a number of substitutes available in most places.
One does wonder if the self-driving promise here was:
1. A cynical con job to get investors on board from the beginning
2. Not quite so cynical but nonetheless recognized by management as a hail mary pass
3. Uber just got swept up in the overall industry overoptimism/groupthink around self-driving dates and capabilities
but there was basically zero chance that self-driving cars of the sophistication and scale needed by uber would be widely deployed within 10 years (i'd wildly guess a 50% chance of its existence in 30 years), as anyone employing a critical mind for more than a few minutes could surmise.
However, you've only had to read this site over the past few years to see the huge number of people who bought the Level 5 is right around the corner story hook line and sinker. In all fairness, I attribute a lot of this to people who so wanted to believe they'd never need to own or drive a car that they weren't as critical as they should have been.
I find it "interesting" how quickly the narrative has shifted. A lot of the same people who were more or less making the aggressive promises pretty much all changed their stories in near-unison. One suspects they all knew or had come to known at some level but felt they had to wait for others to back off too lest they be seen as laggards.
It's just an inherently large imbalance, and the only way it doesn't exist is if there is a shortage of employees in the sector and the ROI per employee is high. This is a pretty small percentage of jobs.
Unions are one way to try to curb exploitation, but I don't know how effective they are in practice. If retail workers tried to unionize what is to prevent the millions of people who are equally qualified from replacing the entire union?
See the strike of grocery workers at Stop and Shop earlier this year: https://en.wikipedia.org/wiki/2019_Stop_%26_Shop_strike
They are effective in practice.
(Some possible first-principles reasons why this might be true: training replacement workers is hard and the labor market is not quite that liquid; new workers will want union representation too; new workers will want good wages too; the fact that the Teamsters respected the strike and union truckers refused to deliver across picket lines meant they'd have to find replacement non-union truck drivers too.)
It's a bit like herd immunity.
We know the answer to that because film extras (and most screenwriters) are of a comparable replaceability to retail workers but the Hollywood unions are strong.
US: Uber / Lyft
South East Asia: Grab / GoJek
Australia: Mainly just Uber (lots of smaller players but none with very significant market share)
If VCs keep funding Uber, Uber is unstoppable. But as soon as that money runs out, they're just another taxi company. Except they're a taxi company who loses $350 million dollars every month. That's not hard to compete against.
(I think UBER is comically over-valued, but I also think their core business is probably quite profitable.)
Being a more profitable taxi company doesn't mean much when most of your employees are also employees of your competitors, and most of your customers are also customers of your competitors. There's just no lock-in.
Considering they sold their business to Grab, I think you could safely say Uber+Grab are as close to a global service as you can get, and probably represents a significant fraction (though maybe not 50%+) of the global market
One of my takeaways was that building a mobile app which feels polished and actually works as advertised is _hard_ - not one of the local competitors managed it. Most of them didn’t even bother to distribute their app outside the US App Stores (a common issue with American companies) making it next to impossible to use for international visitors.
Uber and Lyft are not immune to some of this though - Lyft still do not appear to accept international credit cards correctly, though fortunately they do accept Apple Pay which is a reasonable substitute. And Uber’s GPS navigation is unspeakably bad in most metros, offering idiotic routes.
On this tangent: I took a few Lyfts around LA recently, with the driver following Lyft navigation. For the longer airport rides, that navigation was indeed "unspeakably bad", diverting onto surface roads that ended up adding 15 minutes to a 45-minute trip.
Not being in a hurry, I let it play out on two trips. I looked at traffic conditions on my own phone and there was no construction or accident that would cause the diversion.
Are Uber and Lyft using their own nav solution, or are they contracting it out?
Where I live now, it doesn’t understand that Uber cars are registered as minicabs and can therefore use a variety of roads closed to normal cars. Consequently what should be a 2-3 minute pickup is often quoted as 15 or more as it suggests the driver will be going around the entire city perimeter when they can actually go across. Fortunately the drivers (usually) know that and completely ignore the GPS!
RideAustin was most definitely sub-par when it first came out, but considering it was rushed on a teeny shoe-string, non-profit budget, that's not surprising. I'm sure Uber and Lyft had lots of issues when they first launched, too.
Point being these days RideAustin is 100% adequate. It gets me from A to B at a fair price, quickly.
During that period, I rented a car each time I flew in.
It's also reasonable, especially if you're prioritizing time to market and especially if you know you may have a small window, you may decide that a lot of the edge cases just aren't very important. How much does JUMP really care if US visitors to Berlin can use their bikes or not?
Services like Uber are placing the class barrier front and center. They're making the differences between the have and the have nots bitterly visible. Which...I guess is a good thing? If you're into the whole class consciousness stuff. I'm not so sure myself. Perhaps that's because I'd be a bourgeoisie, not a proletarian.
The US is a nation of immigrants and migrants, and the cities that have decided "no we are full and only care about current residents" are the ones who have created this situation, not you. Do you have a paid off house, own land and try to keep people out? If not, you are not to blame.
Another problem is that it takes an Uber ride for you to experience the class difference. We have let class and racial segregation become an acceptable and even expected state of matters in our cities. We need to reverse that segregation in addition to reversing the "got mine, forget you" policies of cities that are driving up rents.
A white-flight situation is one thing, even if one advocates for busing as I do, there are practical limitations. But there's absolutely no excuse for micro catchment areas within a single municipal jurisdiction. That's just blatant pandering.
(Sorry to have gone off on a school segregation tangent in an uber thread ...)
Maybe it's the semi-predatory loans program. These drivers take out loans for cars, thinking they're gonna get paid a good salary, but then they make minimum wage and get locked into payments.
I can't shake the feeling that Uber is conning its drivers. And that we're culpable.
Since Uber says the drivers aren't employees, it does not provide them with any of that.
Also the benefits things is a uniquely American issue, in many other countries it is not.
In the past the exploitive bigco was walmart. Walmart is still the same, but we don't really talk about it anymore?
-has 'this is akward im out'ed on a motorcycle at 60ish a few times. Only recommended for the worst of conversationlists.
When it comes to companies that try to avoid the social obligations that employers in my country traditionally have or that try to win by monopolizing markets then yes I make the decision to not use them. This includes Uber, Amazon and a few others.
I get it you want to take a stand somewhere - sure.
On a meta point, the NYT and other media outlets run a story on one of the big tech companies literally every single daily. If it’s not about Google being nefarious because they’re working with the US government then it’s about FB, or about Amazon selling items that can be a choking hazard for toddlers. The outrage culture is annoying and it keeps these companies making money.
Maybe the difference is the relationship between employer and employee in that regard.
Uber customers are not generally deceiving Uber drivers, and if they want to feel better about themselves, they can tip. No one is forced to driver for Uber. The United States is a rich country in part because people can move to better job opportunities throughout the nation. That mobility does not deserve the "carpetbagging" slur.
The product has also gotten worse. People used to be happy driving for Uber, and you didn't have to pay a fare to both the taxi company and the driver directly ("tip"). Now Uber is just like taking a taxi; the driver is miserable (and let you know it), and they don't get paid unless you pay the fare AND give them extra money. It's a pain. I pretty much never use a taxi or Uber for this reason; it just seems evil to force someone to do work they don't like for very little money. That can't be good for Uber's growth.
(I love their open-source contributions, though!)
To add in some more anecdotal stories — the only times I really take a lot of Ubers and talk to the drivers are when traveling, and I’ve found the opposite. In Austin and Portland recently I talked to quite a few drivers that were happy with the job. And they all mentioned the flexible hours as a perk. One guy was retired and just liked getting out of the house and meeting people and making a bit of extra money to spend. A lot of people did it as a second job, but emphasized that if they don’t feel like it on any given day they can just stay home, which is very unlike any non-contract second job you could get. Obviously there are also some miserable drivers, like the ones picketing and wanting to be employees not contractors. But even though I’m pretty liberal on a lot of issues it’s hard for me to jump on the progressive bandwagon on this one because it seems so clear that most people, riders and drivers, are much better off than if Uber didn’t exist.
I do suspect that the cost of living and housing in these cities I mentioned has something to do with it. They’re still low enough that driving for Uber can make you real money, compared to somewhere like SF where everyone who doesn’t make like $150k or more is screwed.
I'm not sure they've thought it through all the way. They're not sick today, so they don't need health insurance. Their car is new and doesn't need any major work, so the finances of eventually having to replace their car don't matter. Basically, I fear that we're getting the low prices we get by mortgaging the future. One day, your driver is going to need surgery and 3 months off to recover. One day, your driver's car is going to need a new engine. He goes into debt and suffers, all so that we can pay $3 less for a ride across town after a night of drinking. That does not sit well with me. We need to understand the true cost of someone's time and materials and make sure we pay that for the ride.
I'm not saying it's ever been good. Where Uber gets you now, it was people loaning you money to buy a medallion. Medallions are now worthless and guess who is left holding the bag? Not the regulators. Not the bank that made the loan. Just someone who wanted to work for himself now financially ruined; no way to send the kids to college, no way to afford medical care, no way to buy food or shelter in retirement.
I think I'll walk.
Drive a low-maintenance, fuel efficient car (say, a Prius). Consciously curtail putting miles on that you aren't being paid for. Keep it clean, have water/chargers on hand for passengers, and be nice. Learn when the app/passenger is screwing you, and get better at avoiding those situations.
I can go out on nearly any weekday, spend roughly $12 on gas, and make $140 in fares after a tolerable amount of time. Weekend nights are even better, if I feel up for dealing with drunks. This pays my bills (including my car payment). By the time my car needs to be replaced, it will most likely have been paid off for a while. So I'll buy another. Rinse and repeat.
I don't see how this is any different from the majority of other entry level, lower wage jobs available out there-- except for how the working conditions are vastly superior, and how I can go home any time, how I can take vacation any time, and how I don't have to put up with jackass co-workers or managers. Oh yeah, and I can even block a passenger I don't like from future rides with me if I really need to (but after over 1,200 rides, I still haven't had the need yet). I think I can keep doing this for a while longer.
No, they need to understand the cost of their time and materials (IMO). It's not my role to ensure that every counterparty to every transaction is getting the best of it. If my supermarket charges too little for lettuce, my gas station too little for unleaded-87, or my cafeteria too little for the lunch special, I'm not going to spend a millisecond trying to dig into (or just imagine) their financials to protect them.
That point aside, I've spoken with many Uber and Lyft drivers; most seem to have a very firm grasp on the numbers and believe it's advantageous for them. (Presumably, the ones who don't think it's a good idea are vastly less likely to be the one driving me around at that moment.) I'd say fewer than 10% of them have the naive "my only expense is gas; I'm crushing it today!" attitude that so many Uber opponents seem to ascribe to them.
This basically happened to a driver I used regularly using Wingz. He physically can't drive due to an illness he incurred recently and can't pay for the procedures because he can't drive. I am getting txt's from his family members with links to GoFundMe's to help pay for healthcare costs.
He's an honest person and genuinely struggling. It breaks my heart, but unfortunately this is How it WorksTM in America.
In the U.K. they’re not sick today so they don’t need the NHS so they don’t mind that Uber pays no Employer’s NI.
Also, if self-employed people pay less tax than employees, that's not their fault. Again, it's a tax avoidance scam primarily perpetuated by the government (guess why? so that the lawmakers and/or their proteges can pay less tax themselves!). People respond to incentives, as they should.
I suspect there is a business opportunity lurking here. Setting up the financial, legal, and political infrastructure to stand up this kind of "non-contract second job" structure in as many jurisdictions and as consistently as Uber did is a gargantuan accomplishment. Uber is only monetizing it in a few, narrow, specific ways. This overall platform is useful in many other contexts that other businesses would use, but Uber hasn't opened up to them, AWS-like. There are plenty of other competitors that are trying to reproduce Uber's technical and non-technical infrastructure for other verticals, but I don't see recognition of the value of delivering the infrastructure itself for ad hoc, rapid, emergent workforce for general utilization by other smaller enterprises.
Prosaically for example, if a utility company that hasn't yet switched to entirely-Net-based meter reading yet could distribute their meter reading activity using Uber's infrastructure, then it would save tremendous wear and tear on the centralized meter reading teams' capital equipment and let them transition into more supervisory, QA, and customer support management roles. Uber worked out the logistical details of background checking, badging, etc. and leverages the same experience to apply to the new, distributed meter reading workforce.
Capitalism always works better when people have enough economic freedom to say "no, I'm worth more than that," or "I can make an investment with this money and even if it disappears I'll still be able to eat." Pretty much all economic models assume that people have enough economic independence. It falls down when people are desperate and have no choice and have to take whatever is given to them. All of a sudden the system that allocates resources to the those who use them best starts to exploit people that have no other choice, and the resources start getting wasted.
Uber's recent years have all been about exploiting drivers that have few other options; they position themselves as a side job, but it's become the job of last resort that everybody is doing on the side, but dislikes the extreme pressure from every single interaction.
It'd make way more sense for an existing car company to build the features into the car and let the owner rent out the car when they don't need it. (Telsa, GM/Cruise).
Another option is to simply build the best technology and use ungodly piles of money to finance building the cars. Only Google or Apple could really do this.
Uber could raise the capital for it on the stock market. The problem that I see is that Uber doesn't have the technology.
In a world where self driving cars are a commodity, Uber's brand could be an advantage. But in reality, by the time Uber gets access to the technology the market has already been taken by others.
So you have an asset--your car--that let's just assume you're fine with it being something economical to drive and you don't need to keep a bunch of personal stuff in it. Now you rent it out.
So you're in the single vehicle fleet management business. Your asset depreciates mostly on a per mile basis. (Not entirely but a good first approximation.) Say 50 cents a mile cost (including fuel). EV eventually brings this down but who knows what incremental hardware will be required for autonomy.
So two possible outcomes here.
One is that reimbursement costs drop to near operating cost. Some people will want to borrow from their future selves or will figure that their costs are enough below the average to make it work. In any case, it's not a great deal for the car owner.
The other is that reimbursement costs somehow embed a nice profit for the car owner. In this case, why on earth wouldn't the sort of companies that manage car fleets today get into the business, especially given that they can do things like maintenance less expensively than an individual.
Like if you have a kid and drive your kid to places in your car then you probably leave loads of kid stuff in your car, and if the kid spill something you probably don’t worry too much about cleaning it to pristine state immediately. But imagine after every school run or activity or playdate you had to valet your car immaculate so strangers could use it. No one will do this.
And with that exclusivity comes the right to personalize your experience, from features to things for your kids to bumper stickers to blasting your music rather than having to ask the driver for another station or listen to your music on air pods.
The luxury of owning your own car may not appeal to everyone, but I do not see car shares and ride shares replacing cars for everyone at this time, it would take a major cultural shift and then several generations to age out of the market and die off before it ceases to be an economic factor.
The other problem is that people would have to stop seeing cars as a status symbol. A not insignificant portion of women I know think it's hot if a guy has a cool/fast/whatever car. That will be harder to change.
IMO the fantasy of car sharing is naive and I'd even say it's counterproductive for the supposed goals. Just a few bits to consider:
- empty cars are going to drive a lot of junk miles. More resources to be burned, more wear on cars.
- car-sharing companies will try to keep brand-new fleets. Reliability, image and whatnot. What are we going to do with used-but-drivable cars?
In a lot of couples, people still own their "own" cars, keep their stuff in them, customize them for specific uses (am I going to get an Uber with kayak cradles?), and so forth. Even if the finances worked out, there's no way that I'm dumping my vehicle for a generic shared car.
The problem with your logic is the connection to Uber. Uber doesn't control the cars their drivers use. Sure they can set restrictions but they never collect actual data that is useful for self-driving. The only data Uber collects is when and where people want to travel. Google & Apple both have this dataset (probably superior) through their map apps.
The real data gathering will come in the way Tesla does. Gather data from real-time drivers by putting the necessary sensors in cars you sell.
Maybe Uber could force their drivers to install kits but I doubt it. Self-driving cars will emerge over time as new features in cars you buy. This is already happening (ie brake assist). You'll then just get updates to your car when new features become available.
There's a pretty good talk about the future self-driving cars here: https://www.youtube.com/watch?v=iwcYp-XT7UI
What's going to happen and is already happening is cars will offer certain self-driving features. Things like lane-keeping, brake assist, highway driving. Car companies will also put in all the necessary sensors to collect training data. Then provide over the air updates. Tesla & GM(Cruise) are already doing this.
There's not really a way for Uber to get to level-5 first and at that point, why build a kit that integrates with your old Honda to give it lane-keeping?
The only dataset Uber has is a general sense of where and when people want to travel. Google & Apple probably have much better data through their map apps. They both also have an ungodly amount of money to both acquire the best researchers and create & distribute these kits.
In my opinion, self-driving cars are a race between auto companies and these cash-flush tech giants. Uber/Lyft/Didi all don't really have a chance.
The auto companies and their suppliers like Bosch. And, if Apple, for example, were to come up with a really good system for autonomous driving or a subset thereof, don't you think they would be happy to sell it to automakers who already buy a huge number of component systems. After all, they already do with CarPlay. (Which is better than any automaker system I've used.)
Are they going to own and maintain an absolutely massive fleet of self-driving cars which they can’t afford? If they’re leasing self-driving cars from the owners, you’re right back where you started, paying people to use their cars. Or is the idea they somehow figure out self-driving technology, license it to Ford or whoever, and then shut down the whole taxi business?
But that certainly does not explain why Uber would try their hands at developing self-driving tech themselves (or why the company should be excessively valuable)
Uber should serve as a warning imo - speculation drove the valuation so high on what is a very fragile business model. Are we seeing a tech bubble?
Different apps have unique vibration patterns, as well. A text message on my iPhone is two buzzes, but a NYTimes news alert is one. Perhaps if you detected a single buzz, and then picked up motion because I'm double-clicking the home button, you could presume that I'm switching apps to respond to the notification.
Most drivers would have sound on and not purely use vibrations, because the phone is not in their pocket.
If the URL is not identical for any reason, it has to be manually addressed.
What it takes for this to happen is a second submission some time after the first, when the first didn’t attract attention. This gives the article a “second chance,” and HN is actually interested in good articles getting second chances.
Like the entire employment sector?
At the core of it, all Uber/Airtasker/AirBnB etc. are doing is cutting out the middle man and replacing it with a far more efficient technology. Regulations will come, but they won't undo the existence of these platforms because they're more efficient and better for everyone except the middle man.
> stealing tips in order to make them seem like they are sustainable or growth businesses
Like the US restaurant industry?
Is this documented anywhere?