Why I don't believe in Uber's Success • Hacker News Board

Re: Why I don't believe in Uber's Success

#311

Post by dasil003 » Fri, Jan 20, 2017, 2:41 AM UTC

nerfhammer wrote: post #214

avn2109 wrote: post #68

Earlier quoted context omitted.

TFA and a lot of commenters here don't seem to understand that Uber doesn't want to compete with taxi services, which are a niche business to be disrupted en route to the real prize. It wants to compete with your car - imagine 12 lanes of L.A. traffic composed mostly of Ubers. That's their dream. They even admit this in public. [0] The day they can get cost per mile one penny below what you'd spend owning a Toyota Ca…

Is there a reason to believe that Uber will be able to beat a Toyotas On Demand service that Toyota will inevitably launch? Seems to me that the manufacturers will always be able to undercut on price once cars are fully self-driving, eliminating the value of the driver network.

Considering Toyota's publicized software problems with relatively simple embedded systems, I wouldn't be surprised if they are culturally unable to field a competitive on-demand driving service at all.

Re: Why I don't believe in Uber's Success

#312

Post by ghaff » Fri, Jan 20, 2017, 2:47 AM UTC

vannevar wrote: post #111

CoffeeDregs wrote: post #92

Earlier quoted context omitted.

That is clearly not true. See, for example: [Industry publication] A clarification: I meant that if you would show a net loss if you summed the net income of each airline in the industry since inception. To be fair, while it definitely isn't clearly not true, my statement certainly is not clearly true... ;) Some non-industry pubs backing my not-clearly-true statement: http://faculty.haas.berkeley.edu/borenste/downloa…

Maybe so, since it would include a lot of government-owned and government-controlled airlines whose fares were subsidized by tax money in the interest of the public good. In that sense, they're a bit like Uber, which is subsidized by its investors in the interest of...well, attracting even more investors and keeping the whole pyramid scheme going.

Even if you leave out the government-owned and government-controlled airlines, there have been a lot of massive bankruptcies associated with the airlines even if you just limit the field to the US. Indeed, large bankruptcies were almost the norm. Even relatively recently, the statement that commercial aviation had posted net losses through its entire history was indisputably true. It may or may not be true given recent consolidation and considerable profitability.

I doubt the same "never made money" statements could be made about most industries.

Re: Why I don't believe in Uber's Success

#313

Post by __derek__ » Fri, Jan 20, 2017, 2:49 AM UTC

mikeash wrote: post #263

pdeuchler wrote: post #190

Earlier quoted context omitted.

AWS makes almost no money compared to their core business, it's around 10%, maybe a little bit more. The profit from AWS, however, is something like 50% of Amazon's total profit. That said, it's not hard to occupy a huge percentage of profits from Amazon since they purposefully run almost every other facet of the business at razor thin margins.

I always understood "make money" as referring to profit, not revenue. A business with $1 trillion in revenue and $1 trillion in expenses makes no money.

"I have a trillion-dollar business: I take dollar bills from one person and give them directly to another and repeat that a trillion times a year."

Re: Why I don't believe in Uber's Success

#314

Post by bogomipz » Fri, Jan 20, 2017, 2:52 AM UTC

CoffeeDregs wrote: post #52

The commercial airline industry has lost money over the whole of its existence. If I'm flying from NYC to DAL, I'm flying the cheapest carrier (with a slight nod to Frequent Flyer programs). I'm not sure how Uber, Lyft, etc are any different than Southwest, American, etc. Cab companies (which I hate) and airlines saw this years ago and promoted regulations to protect their fees (and, thereby, wages). Airlines lost th…

>Airlines lost those regulations under Reagan"

It was actually Jimmy Carter that signed the Airline Deregulation Act, this was in 1978. 3 years before Reagan took office. The transition was complete by the end of the Reagan's first year in office in 1981.

I'm not trying to nit pick but for some reason Reagan always gets credit for this.

Re: Why I don't believe in Uber's Success

#315

Post by catcow » Fri, Jan 20, 2017, 2:57 AM UTC

I've been an Uber driver for 2-years in a metro-area of about 1-million people. The first year was rough, as Uber aggressively lowered rates and royally screwed me over income-wise. But now, I'm making more than ever thanks to the service scaling.

The author of this blog post admits that he hasn't run any numbers, and his conclusions make that obvious. I've run the numbers, and I make part of my living as an Uber driver (it's not busy enough in my city to do this full-time). Uber doesn't worry about my expenses because it's not their job to worry about my expenses. Their job is to run their servers and make an app that customers want to use, and they've been doing a great job at that IMO. My job is to worry about my expenses, and yes, I've accounted for fuel, maintenance, and depreciation of my vehicle, and I am making enough profit to make it worth doing.

As for self-driving cars, Travis has publicly stated that Uber does not intend to own and maintain them, they are going to look to their former drivers to do that. I doubt Uber is planning on having a monopoly for self-driving cars, they just want to be in on a part of the action, but their main focus will probably always be the software of their core app.

Uber has created more jobs faster than any company in history, and this is something our economy sorely needs. They literally let everyone who passes a background check on their platform. That means no discrimination can even take place at the company level, which I think is something very very cool, especially since I have a serious health condition that has riddled my resume with holes. (Discrimination can still take place from riders however, as the ratings are what determine whether a driver stays as a driver or not.) Also, since I am my own boss, I can rest when I need to, which is essential for coping with my condition.

Re: Why I don't believe in Uber's Success

#316

Post by oculusthrift » Fri, Jan 20, 2017, 2:57 AM UTC

pstuart wrote: post #276

oculusthrift wrote: post #186

Earlier quoted context omitted.

either way this drives up cost because it raises the amount a driver must make a month. obviously we dont have concrete numbers but if people are switching to uber only they probably would want to save a lot every month versus owning a car.

But when the driver is a computer those wages become effectively zero.

yeah so they have to wait until then which is god knows how long.

Re: Why I don't believe in Uber's Success

#317

Post by DrScump » Fri, Jan 20, 2017, 2:57 AM UTC

arbuge wrote: post #238

cody3222 wrote: post #102

The network effects are pretty obvious actually: as the number of people on the platform increases, the amount of time a driver has to drive to pick you up becomes increasingly shorter, thus enabling the drivers to spend more of their time with a passenger in their car (which is when they are earning money). If drivers are making more money, Uber can pay them less (reduce the subsidy). Old taxi cab companies can't co…

Uber built its network city by city and a competitor could do likewise. As others have pointed out, most rides are local - if you live in Dallas, TX, you probably require rides mostly in Dallas, TX. If a hypothetically better (in some way) competitor came along that only served Dallas, you might be interested in trying it out. So a competitor could just focus on Dallas to start out, raising enough capital to hire eno…

  Uber built its network city by city and a competitor could do likewise.

A smart competitor would cherry-pick the most profitable markets and ignore the rest.

Re: Why I don't believe in Uber's Success

#318

Post by intrasight » Fri, Jan 20, 2017, 2:57 AM UTC

epistasis wrote: post #266

intrasight wrote: post #180

Earlier quoted context omitted.

We did see the same doubters in the early days of Amazon. And we see how that turned out. Personally, I'm not confident of either success or failure with Uber. They (and their investors) are making a big gamble. In their favor is that it is a very capital-intensive gamble, and I don't see any other companies stepping forward to make that investment. A large car company could do so, but they've not made the transition…

I think the doubts about Amazon were different though. The doubt was whether they would succeed at their goal, rather than whether the goal would actually constitute financial success. Wal-mart for the digital era is clearly a successful position, and Amazon didn't subsidize their product to the degree that Uber has had to.

I respectfully disagree. Amazon MASSIVELY subsidized their service. It was commonly stated, and I believe true, that shareholders were paying for that critical 2-day free shipping.

Re: Why I don't believe in Uber's Success

#319

Post by ghaff » Fri, Jan 20, 2017, 3:00 AM UTC

dasil003 wrote: post #311

nerfhammer wrote: post #214

Earlier quoted context omitted.

Is there a reason to believe that Uber will be able to beat a Toyotas On Demand service that Toyota will inevitably launch? Seems to me that the manufacturers will always be able to undercut on price once cars are fully self-driving, eliminating the value of the driver network.

Considering Toyota's publicized software problems with relatively simple embedded systems, I wouldn't be surprised if they are culturally unable to field a competitive on-demand driving service at all.

>culturally unable to field a competitive on-demand driving service

Or, they could easily decide that that's not their business model. Being a car manufacturer is different from being a fleet operator is different from being a finance company is different from (for that matter) being a car sales and service organization.

A company may decide to do one or more of those connected things and they frequently do in ways that are more direct or less direct. Culture's part of it. But it's also about focusing on capital requirements, core competency, etc.

Re: Why I don't believe in Uber's Success

#320

Post by DrScump » Fri, Jan 20, 2017, 3:01 AM UTC

spanktheuser wrote: post #192

Two possible ways Uber may expand the market, based on what I've seen in Chicago: * Uber seems to do a much better job of serving non-wealthy & minority neighborhoods. I can't find an online source, but distinctly remember a local NPR report that claimed over 2MM Uber rides originated or concluded in an underserved neighborhood, vs. about 200,000 taxi rides. * Anecdotally, Uber's superior experience is changing behav…

  Uber seems to do a much better job of serving non-wealthy & minority neighborhoods

When was the last time you took an Uber from O'Hare to the most dangerous areas of the South Side after dark?

Cab drivers are obligated by the terms of their licensing to take you, once you've hailed them. An Uber driver can just ignore you.