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Disrupting Uber

jacobinmag.com

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Re: Disrupting Uber

#131

Post by barney54 »

Spooky23 wrote: post #99
pfarnsworth wrote: post #63

Good luck with the co-op idea. The problem is that drivers feel like their services are worth a lot, and passengers simply don't believe it. The reason why Uber is a success is that they created new demand by dropping prices. Everyone I know, including myself, would never have taken an Uber as frequently as we do if the prices were as high as taxis. You can't replicate this unless you keep pushing prices down, and th…

How much of Uber is the ability to burn down the massive investments made into the company? As they transition to a more normal company that needs to make money, can they afford those incentives?

The incentives likely don't matter in the future because the future of Uber is driverless cars.

Re: Disrupting Uber

#132

Post by aembleton »

rgbrgb wrote: post #103
pfarnsworth wrote: post #63

Good luck with the co-op idea. The problem is that drivers feel like their services are worth a lot, and passengers simply don't believe it. The reason why Uber is a success is that they created new demand by dropping prices. Everyone I know, including myself, would never have taken an Uber as frequently as we do if the prices were as high as taxis. You can't replicate this unless you keep pushing prices down, and th…

> drivers feel like their services are worth a lot, and passengers simply don't believe it That's an interesting issue. We see the same thing in real estate -- seller's think their homes are worth way more than anyone will pay for them. I think this is one of the reasons For Sale By Owner (skipping realtor fees) hasn't taken off yet in the US. The FSBO seller will price too high, the home will sit on market for a whi…

Sounds like another industry ripe for disruption.

Re: Disrupting Uber

#133

Post by Avshalom »

Spooky23 wrote: post #99
pfarnsworth wrote: post #63

Good luck with the co-op idea. The problem is that drivers feel like their services are worth a lot, and passengers simply don't believe it. The reason why Uber is a success is that they created new demand by dropping prices. Everyone I know, including myself, would never have taken an Uber as frequently as we do if the prices were as high as taxis. You can't replicate this unless you keep pushing prices down, and th…

How much of Uber is the ability to burn down the massive investments made into the company? As they transition to a more normal company that needs to make money, can they afford those incentives?

Well some of it is from them ignoring business regulation that taxis had been held too. When there's no medallion over head you can charge less and that applies to a hypothetical dispatch co-op too.

Re: Disrupting Uber

#134

Post by ams6110 »

rgbrgb wrote: post #103
pfarnsworth wrote: post #63

Good luck with the co-op idea. The problem is that drivers feel like their services are worth a lot, and passengers simply don't believe it. The reason why Uber is a success is that they created new demand by dropping prices. Everyone I know, including myself, would never have taken an Uber as frequently as we do if the prices were as high as taxis. You can't replicate this unless you keep pushing prices down, and th…

> drivers feel like their services are worth a lot, and passengers simply don't believe it That's an interesting issue. We see the same thing in real estate -- seller's think their homes are worth way more than anyone will pay for them. I think this is one of the reasons For Sale By Owner (skipping realtor fees) hasn't taken off yet in the US. The FSBO seller will price too high, the home will sit on market for a whi…

It's simple market economics. Driving for Uber requires basically:

1) Owning a car

2) Having insurance and good driving/criminal history records.

3) Willingness to do the work.

Even assuming Uber also has minimum age requirement, that's a very large supply of potential drivers, which is going to prevent wages from rising very high, unless there is artifical pressure such as regulation.

Re: Disrupting Uber

#135

Post by acgourley »

abannin wrote: post #55
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,…

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 m…

I think your analysis it on point except for one part: the barrier to entry for becoming a driver is actually non-trivial and perhaps more importantly there is not a large supply of drivers in a given region. The pool of people who are looking for a new job, do not mind being a taxi and have a suitable car is somewhat small, and this is why uber and lyft must campaign heavily to recruit these folks. If this pool of people took collective action it would be very hard for Uber to come in and replace them - they could likely flip a single region to a new coop if they could self-organize.

That said the fact it could happen it not really related to if it should happen - as you say it's unclear how much extra money would actually flow to drivers as potentially Uber is operating on thin margins.

Re: Disrupting Uber

#136

Post by dnautics »

svanderbleek wrote: post #98
Kalium wrote: post #92

Earlier quoted context omitted.

It's highly unlikely that a small, disorganized co-op is going to be efficient enough to take advantage of the situation and be able to out-compete Uber. That said, the reality is irrelevant here. Jacobin is the kind of magazine where economic reality is treated as a suggestion, to be discarded as is convenient.

That's how economic reality should be treated. Our own reality is primary. We will take back our lives. What Jacobin is working towards is admirable. We believe in progress, that a better way is possible, and that the current state of affairs is suboptimal. We should encourage alternative economic thinking.

You're confusing "economic reality" with "economic narrative". That's a superset of "capitalist narrative", "free-market narrative" (distinct from "capitalism"), and "socialist narrative". All parties (as you just did) spin their own stories about what ought to happen or why what does or should happen is morally justified, and all of these stories run up against the reality (measurable or unmeasurable) of coordination of supply, demand, and the interaction of voluntary and coercive power with that.

Re: Disrupting Uber

#137

Post by jonknee »

rdiddly wrote: post #31
dotBen wrote: post #24

> "competing with Uber might seem intimidating, but in many respects the company is a paper tiger. Its massive valuation, which stood at $62.5 billion in January, comes from intellectual property — its brand and data — rather than from tangible assets." Right... except that the brand is what creates the demand side of the market, the data is what makes the platform efficient and the IP provides strong defense against…

Uber's brand did not and does not create the demand for catching a ride. The 400-year continuous existence of some form of ride service, starting with horse-drawn hackneys, tends to indicate a pre-existing demand, as does the fact that "taxi" is the same word in different languages all over the world.

I would argue Uber has definitely created demand for catching a ride. I use Uber tons more than I have ever used a taxi. That's because it's faster, cheaper, cleaner and has better customer service.

Re: Disrupting Uber

#138

Post by honkhonkpants »

rgbrgb wrote: post #103
pfarnsworth wrote: post #63

Good luck with the co-op idea. The problem is that drivers feel like their services are worth a lot, and passengers simply don't believe it. The reason why Uber is a success is that they created new demand by dropping prices. Everyone I know, including myself, would never have taken an Uber as frequently as we do if the prices were as high as taxis. You can't replicate this unless you keep pushing prices down, and th…

> drivers feel like their services are worth a lot, and passengers simply don't believe it That's an interesting issue. We see the same thing in real estate -- seller's think their homes are worth way more than anyone will pay for them. I think this is one of the reasons For Sale By Owner (skipping realtor fees) hasn't taken off yet in the US. The FSBO seller will price too high, the home will sit on market for a whi…

But the problem with Uber is not that sellers are listing too high, it's that Uber keeps jacking up the spread. This is not a true functioning marketplace because the buyers and sellers don't have good information. Only the market maker itself has all the information.

Also it isn't really true that Uber lowers prices for riders when they lower prices for drivers. Uber practices active price discrimination to discover the highest price a rider will pay. If you get ten people together on the same street corner and everyone calls for an UberX, you'll get ten different prices.

Re: Disrupting Uber

#139

Post by Nullabillity »

Kalium wrote: post #120
tanderson92 wrote: post #119

Earlier quoted context omitted.

> * Function, scalable, and does not operate much like a co-op at the level of service delivery. REI falls into this category. No true scot? The definition of a co-op is a group organized to meet economic or social desires through jointly owned business. What does this have to do with any particular approach to service delivery? You appear to be defining cooperatives as some unworkable theoretical concept and then an…

Workers at REI get sub-$12/hr. REI is structurally and technically a co-op. They are just a co-op that does not exhibit the benefits of a co-op that Jacobin would suggest will flow from being a co-op. If it's structured like a co-op and exhibits none of the benefits of a co-op, what's been gained? I'm saying that co-ops generally have to sacrifice at least one of: structure, functionality, scalability.

> If it's structured like a co-op and exhibits none of the benefits of a co-op, what's been gained?

At least you've cut out Wall Street and co.

Re: Disrupting Uber

#140

Post by honkhonkpants »

nickparker wrote: post #74
svanderbleek wrote: post #68

Earlier quoted context omitted.

Read the article more carefully, "they might be willing to switch to a co-op model that offers a cheaper price and solid service". A co-op can have lower prices and pay it's members more because they don't have to funnel profits to support the bloat of a central corporation like Uber.

Can they, though? The corporation isn't some money-sucking black box. It's dispute resolution, software development to match rides efficiently (Uber Pool is tricky), and advertising. Yes, it also skims money off the top to pay for things like driverless car R&D, but is a small, likely disorganized co-op going to be efficient enough at all the above to take advantage of that margin?

I would say at this stage Uber really is just a money-sucking black box. The revenues they get from their commissions in established cities they pour into marketing and just flat out buying business in new cities. All existing drivers are working to expand Uber, and they do not benefit from that in any way. The point of a co-op would be to recapture the spread and put it back in drivers' and riders' pockets.
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