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Disrupting Uber

jacobinmag.com

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Re: Disrupting Uber

#51

Post by bradyo »

davidf18 wrote: post #37
tanderson92 wrote: post #34

Earlier quoted context omitted.

> The[y] appear to be complaining because Uber is lowering the cost of overly expensive taxi fares when they should be working on a system that provides rides for less money while still helping drivers get more pay (if that is important to them). This is a magazine for American Leftists, so they're really quite clear what they want: they want valuable services rendered to people with profits shared among the workers,…

I'm afraid I don't understand this, nor why I was downvoted. Just as in buying computers, buying food, education, airplane fares, consumers want lower prices which is a good thing. In the case of taxis, that means the elderly who often need them because they can no longer drive and are on a fixed income can more readily afford them (surely a leftist notion). There is no disagreement that "economic rents" are harmful…

What is so hard to understand about this? These drivers could create an app that results in the exact same price for consumers, except that any profits go to the drivers instead of Travis Kalanick's pocket.

Re: Disrupting Uber

#52

Post by davidf18 »

winstonewert wrote: post #44
vegabook wrote: post #36

Earlier quoted context omitted.

well put, if your axiomatic paradigm is laissez-faire economics, whose credibility is fast being eroded as its negative consequences (exclusive returns to capital only) become all too awfully apparent. Terms meant as derogatory such as "economic rents" basically mean allowing some friction to the free market so that labour may obtain more of the returns, and consequently, workers may find some dignity, income stabili…

It seems to me that economic rents typically end up being friction that allows the owner of capital to capture returns, not something that helps workers get it.

It applies to both labor and capital. Overuse of licensing for jobs, including barbers and hair stylists.

Regarding labor, guilds or labor unions, or the American Medical Association that makes it more difficult for foreign doctors to work here than Israel makes it for foreign doctors to work there. And so on.

Re: Disrupting Uber

#53

Post by davidf18 »

vegabook wrote: post #36
davidf18 wrote: post #28

These "disruptors" need to work on wealth creation and not installing "economic rents." Economic rents, a term in Microeconomics, is trying to achieve profits beyond those in an efficient market (for example, creating artificial scarcity). The appear to be complaining because Uber is lowering the cost of overly expensive taxi fares when they should be working on a system that provides rides for less money while still…

well put, if your axiomatic paradigm is laissez-faire economics, whose credibility is fast being eroded as its negative consequences (exclusive returns to capital only) become all too awfully apparent. Terms meant as derogatory such as "economic rents" basically mean allowing some friction to the free market so that labour may obtain more of the returns, and consequently, workers may find some dignity, income stabili…

Economic rents apply to workers as well: guilds and labor unions. Licensing for any work including barbers and hairstylist with licensing requiring expensive courses.

Even in medicine, it is much harder for foreign doctors to work in the US than in Israel, a country with lots of competent medicine.

It really applies to any group that uses politics, regulation, to give profits beyond those in a healthy, efficient market.

In the case of taxis, it is helpful to eliminate economic rents so that fares are more affordable.

Instead of using economic rents to ensure that drivers get undeserved income which works against wealth creation, the workers should focus on eliminating economic rents that creates higher living costs, chief among these are the use of zoning density restrictions to create artificial land scarcity which results in higher rents.

Since a significant portion of one's salary goes towards renting an apartment or house or paying for an overly expensive mortgage, then eliminating the onerous zoning laws will go much farther towards improving the economy.

It is because of zoning density restrictions that housing is so expensive in SF, NYC, Boston, LA, SD, and other coastal cities.

Re: Disrupting Uber

#54

Post by skybrian »

jessaustin wrote: post #20
skybrian wrote: post #16

What they're missing is that higher wages depend on some barrier to entry (there are many kinds) that protects the people who have jobs at the expense of anyone who is looking for a job. As someone who works for a company with high hiring standards and correspondingly high pay, I have mixed feelings about this. It seems like there should be some jobs that are easy to get without much training, and taxi driver is a go…

I don't disagree, but why would Uber have lower fences than Swift? At least some of the part-timers must be surge-seeking: do their higher pay requirements reflect that they have higher skills than the 13-hour-day drivers?

If you have some other obligations so you can't work full time, that already rules out most jobs, so it could be a barrier to entry all by itself.

I don't know how many people that is. It would be interesting to find out.

Re: Disrupting Uber

#55

Post by abannin »

tanderson92 wrote: post #34
davidf18 wrote: post #28

These "disruptors" need to work on wealth creation and not installing "economic rents." Economic rents, a term in Microeconomics, is trying to achieve profits beyond those in an efficient market (for example, creating artificial scarcity). The appear to be complaining because Uber is lowering the cost of overly expensive taxi fares when they should be working on a system that provides rides for less money while still…

> The[y] appear to be complaining because Uber is lowering the cost of overly expensive taxi fares when they should be working on a system that provides rides for less money while still helping drivers get more pay (if that is important to them). This is a magazine for American Leftists, so they're really quite clear what they want: they want valuable services rendered to people with profits shared among the workers,…

1) There is an assumption that Uber is not only profitable, but wildly profitable. There is no data to support this claim outside of Uber's press releases (obviously biased) stating "oh, yeah we just raised another billion but I promise we're profitable in a few markets". To argue that Uber is withholding profit from drivers, one would first have to prove that Uber is making profit, not just a positive contribution margin.

2) The high liquidity of drivers would imply a functioning market (not to say that it's perfect). The most obvious solution for drivers who are unhappy with the pay would be to get a different driving job, right?

3) The core issue is that the barrier of entry to driving for Uber is very low, increasing labor competition. This also keeps the price of a ride low. The wage of the driver is the agreement between the rider and the driver for the service, Uber is acting as a mediator. There is nothing in this article that comes close to proving that Uber is not fulfilling it's role as a mediator.

4) It will be interesting to see if the app works, but the strategy seems flawed. The constrained variable are the riders; there are already plenty of options. Paying drivers more doesn't seem to be a very compelling reason for riders to choose a different service.

Re: Disrupting Uber

#56

Post by powera »

davidf18 wrote: post #35

Does anyone know why I would be downvoted for taking the time to explain what is going on. Does someone have a problem with lowering overly high taxi fares. Uber has been doing that which is a good thing.

There are barriers to entry to most jobs than don't fit your saying they are all harmful "economic rents".

Re: Disrupting Uber

#57

Post by powera »

davidf18 wrote: post #53
vegabook wrote: post #36

Earlier quoted context omitted.

well put, if your axiomatic paradigm is laissez-faire economics, whose credibility is fast being eroded as its negative consequences (exclusive returns to capital only) become all too awfully apparent. Terms meant as derogatory such as "economic rents" basically mean allowing some friction to the free market so that labour may obtain more of the returns, and consequently, workers may find some dignity, income stabili…

Economic rents apply to workers as well: guilds and labor unions. Licensing for any work including barbers and hairstylist with licensing requiring expensive courses. Even in medicine, it is much harder for foreign doctors to work in the US than in Israel, a country with lots of competent medicine. It really applies to any group that uses politics, regulation, to give profits beyond those in a healthy, efficient mark…

The phrase https://en.wikipedia.org/wiki/Regulatory_capture applies to what you're describing here more than "economic rent" does.

Re: Disrupting Uber

#58

Post by tanderson92 »

winstonewert wrote: post #50
tanderson92 wrote: post #34

Earlier quoted context omitted.

> The[y] appear to be complaining because Uber is lowering the cost of overly expensive taxi fares when they should be working on a system that provides rides for less money while still helping drivers get more pay (if that is important to them). This is a magazine for American Leftists, so they're really quite clear what they want: they want valuable services rendered to people with profits shared among the workers,…

"are in effect paying a portion of their profits for the right to take part in an economy." Not really, they are paying a portion of their profits for access to the connections to drivers that Uber provides. They have every right to participate in the ride-share market outside of uber.

Yes, and socialists believe in democratized distribution of capital (and the connections between drivers and riders is a form of capital since this has value) to workers. If the industry were to be truly disrupted the profits would go more to those doing much of the labor.

Re: Disrupting Uber

#59

Post by pfarnsworth »

hiou wrote: post #13
aresant wrote: post #5

"The drivers who don’t completely depend on their work with Uber to pay their bills — a group that makes up about half of the company’s workforce — depress full-time workers’ wages." I bet this creates a larger defensive moat than most competitors assume. Uber is a supply/demand driven model (eg success w surge pricing) and even modest additional supply generates lower rates. Lacking that same supply efficiency in fu…

Uber is a investment fueled churn machine right now. Supply and demand(even as overly simplistic that model is) has yet to come into the equation. We will not have any idea the validity of the business model until the never before seen massive expenditures in driver acquisition subsides. Which probably won't be for several years or more.

The CEO already said that the top 30 cities produced over $1B in profits. I don't think your information is correct anymore.

Re: Disrupting Uber

#60

Post by davidf18 »

ianai wrote: post #42
davidf18 wrote: post #32

Earlier quoted context omitted.

These "barriers to entry" is called "economic rent". https://en.wikipedia.org/wiki/Economic_rent Economic rents are harmful to the economy and keep new labor entrants out as you have pointed out making it harder for young people or others to get a job. A way to complete with Uber and existing taxi services is to provide greener vehicles such as electric or hybrid (the new yellow taxi medallion cabs in NYC are all hyb…

While they're harmful to the economy, the economy really seems to favor them.

It is because special interests have a greater influence in lobbying for their good than the diffuse interests of the general population.
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