Why I don't believe in Uber's Success

On the long run this is a financial equation, it might be more comfortable for consumers at the moment to hail a cab with their phones and use their credit cards to pay, receive better service, et cetera, but let's take into account the long term price paid by them. Letting foreign companies exploit both tax and regulatory laws to take as much money out of the country as possible before getting shot down is not a good strategy on the long term. Start-ups can get away with it, because at the end of the day the only thing that matters is that they seem "exciting" and "booming".

The same way we aren't especially happy with the people who got exposed in the Panama Papers, or Donald Trump publicly admitting that he doesn't care and will abuse the system, we kind of have to draw a line. If we all decide to do the same, because laws and taxes are not convenient to our short term goals or let other entities do it, it's just gonna backfire at the consumer on the long term, when infrastructure and lives depend on a government having money. Let us not even mention the whole international tax situation, it being as problematic as it is. (Just look at what's going on with Ireland)

It is possible that some future Uber innovation will make them profitable, but their current operation is smoke and mirrors.

In these comments (and other HN threads) I see the same pro-Uber arguments again and again so I will try my best to address them as I think they are misguided.

> Uber is doing all this in anticipation of self-driving cars, which will change the economics of the whole operation.

The first and most obvious issue here is runway. True self-driving cars that won't need a human in the driver's seat are probably 5 years away. Can Uber lose 1-2B a year until then?

The second problem is that Uber won't have a monopoly on self driving car tech. Google and others will get there around the same time. How will this be a competitive advantage to Uber and not to Lyft or some yet-to-come competitor?

> Uber is building network effects that will protect it from competitors.

Uber's network effect, if it has one, is at odds with the self-driving car strategy. Right now Uber has the shortest ride waits because it has the most drivers. If a driver is a robot, a well-capitalized competitor can just buy a huge fleet and take over any local market.

So you can't have both the network effect and the self-driving fleet. And without both, Uber is likely not worth anywhere near 70B.

> Taxis are just step 1. Uber is building a platform to bring anything or anyone from A to B.

A software platform for logistics would never be worth 70B. Period.

In Uber's meager attempts to generalize their own platform, such as Uber Eats, they have not done very well.

If total knowledge about driving patterns and navigation is the real money-maker, Google will have a big advantage with Maps/Waze data. In fact, most Uber drivers are using Maps or Waze to drive anyway.

> Uber's customer experience is so good I stopped using Taxis.

Uber's current dominance can be explained by one thing: price. Analysis has shown that every Uber ride is subsidized by about 50%, even in mature markets. If Uber suddenly doubled all prices they'd lose customers in droves.

As for driver quality, any long-time Uber user can tell you this has gone down to be about the same as a cab (slightly better, but not reliably better). The average uber driver is just some guy doing whatever the GPS tells him to do. It's low-wage work and Uber is pushing the wages down all the time, there's no way you're going to keep high driver quality indefinitely.