The Wheels Come Off Uber • Hacker News Board

Re: The Wheels Come Off Uber

#51

Post by emodendroket » Thu, Jun 22, 2017, 5:04 PM UTC

cs702 wrote: post #7

The most worrisome aspect of this essay is that it questions whether Uber has a viable business model. The OP argues that Uber will never be able to charge prices in excess of the level required by a traditional taxi/limo operator to be profitable for long enough to recoup the billions of dollars the company has burned by subsidizing the price of rides. Put another way, even if Uber drives every competing taxi/limo o…

Well, yeah, exactly, that's what the guys on Naked Capitalism have been saying for a while. Even if they establish their monopoly there is no barrier to entry for new competitors.

Re: The Wheels Come Off Uber

#52

Post by emodendroket » Thu, Jun 22, 2017, 5:05 PM UTC

SilasX wrote: post #50

cs702 wrote: post #7

The most worrisome aspect of this essay is that it questions whether Uber has a viable business model. The OP argues that Uber will never be able to charge prices in excess of the level required by a traditional taxi/limo operator to be profitable for long enough to recoup the billions of dollars the company has burned by subsidizing the price of rides. Put another way, even if Uber drives every competing taxi/limo o…

> Put another way, even if Uber drives every competing taxi/limo operator out of business, as soon as the company raises prices to cover costs -- vehicle, insurance, maintenance, fuel, credit card processing, license fees, and (at least for now) labor -- new entrants (and revived old entrants) would quickly come into the market, preventing Uber from keeping prices up. Not true -- Uber has a permanent moat, which is t…

Even if they didn't do that, there's nothing stopping a competitor from having the same policy.

Re: The Wheels Come Off Uber

#53

Post by prostoalex » Thu, Jun 22, 2017, 5:06 PM UTC

cs702 wrote: post #7

The most worrisome aspect of this essay is that it questions whether Uber has a viable business model. The OP argues that Uber will never be able to charge prices in excess of the level required by a traditional taxi/limo operator to be profitable for long enough to recoup the billions of dollars the company has burned by subsidizing the price of rides. Put another way, even if Uber drives every competing taxi/limo o…

Price comparison against current taxi services operating in the US is akin to a price comparison of a complex medical procedure across US medical providers - there's a lack of transparency around pricing, and a bunch of gotchas, such as the driver not taking the optimal route or frowning at you for a mere 10% tip.

So until taxicab operators in major cities get a nifty app with guaranteed pricing most of people would just limit the price comparison to Uber vs Lyft.

Re: The Wheels Come Off Uber

#54

Post by meditationapp » Thu, Jun 22, 2017, 5:06 PM UTC

SilasX wrote: post #50

cs702 wrote: post #7

The most worrisome aspect of this essay is that it questions whether Uber has a viable business model. The OP argues that Uber will never be able to charge prices in excess of the level required by a traditional taxi/limo operator to be profitable for long enough to recoup the billions of dollars the company has burned by subsidizing the price of rides. Put another way, even if Uber drives every competing taxi/limo o…

> Put another way, even if Uber drives every competing taxi/limo operator out of business, as soon as the company raises prices to cover costs -- vehicle, insurance, maintenance, fuel, credit card processing, license fees, and (at least for now) labor -- new entrants (and revived old entrants) would quickly come into the market, preventing Uber from keeping prices up. Not true -- Uber has a permanent moat, which is t…

Just don't tip. It's a bug if they can rate your tip.

Meanwhile I like not being a dick to drivers. What's the big deal?

Re: The Wheels Come Off Uber

#55

Post by emodendroket » Thu, Jun 22, 2017, 5:07 PM UTC

clairity wrote: post #24

cs702 wrote: post #7

The most worrisome aspect of this essay is that it questions whether Uber has a viable business model. The OP argues that Uber will never be able to charge prices in excess of the level required by a traditional taxi/limo operator to be profitable for long enough to recoup the billions of dollars the company has burned by subsidizing the price of rides. Put another way, even if Uber drives every competing taxi/limo o…

the article is frustratingly light on actual reasoning about why uber can't become profitable. the tl;dr is basically "it looks bad so they're going to fail". it does look very bad but that in itself (even with the various details mentioned) doesn't shine a light on the path that uber will take to failure. it only shows that any path they could take is treacherous. it's an opinion piece with a bunch of facts thrown a…

The reasoning seems pretty straightforward. Uber is only cheaper than taxis because investors are subsidizing the operating costs. They won't be able to do that forever and become a viable business, and there isn't a very high barrier to entry for competitors even if they somehow manage to snuff out all other traditional cab operators and Lyft etc, because once they raise the prices new competitors can swoop in.

Re: The Wheels Come Off Uber

#56

Post by onion2k » Thu, Jun 22, 2017, 5:08 PM UTC

gaius wrote: post #30

onion2k wrote: post #15

Earlier quoted context omitted.

If this is true if uber, that it has no path to profitability, isn't it also true of ubers competitors? A lot of Uber's costs to date have been proving that ride-sharing is a thing that consumers want to do (market education) and that governments don't want to stop (lobbying). Their competition get the benefit of that Uber's investment in those things for free, so it might be the case that Uber will fail and their co…

Forgive me if I am being slow but what is the actual difference between "ride sharing" and "unlicensed minicab"? I mean that seems to be the crux of all Uber's regulatory woes - that they are either unwilling or unable to articulate it.

On the face of it there is no difference. Uber's reasoning seems to be that even if the driver is the same as a minicab that's nothing to do with Uber. All they claim to do is connect drivers with passengers in a convenient app. They say they're no more liable for the legality of the ride as the phone company is if you call a cab company that isn't compliant with the law.

Many people disagree.

Re: The Wheels Come Off Uber

#57

Post by emodendroket » Thu, Jun 22, 2017, 5:08 PM UTC

gaius wrote: post #30

onion2k wrote: post #15

Earlier quoted context omitted.

If this is true if uber, that it has no path to profitability, isn't it also true of ubers competitors? A lot of Uber's costs to date have been proving that ride-sharing is a thing that consumers want to do (market education) and that governments don't want to stop (lobbying). Their competition get the benefit of that Uber's investment in those things for free, so it might be the case that Uber will fail and their co…

Forgive me if I am being slow but what is the actual difference between "ride sharing" and "unlicensed minicab"? I mean that seems to be the crux of all Uber's regulatory woes - that they are either unwilling or unable to articulate it.

Their lobbying has actually been pretty successful; a lot of states have enshrined this stuff into law. Consider the linked (in the link) article: https://hbr.org/2017/06/uber-cant-be-fixed-its-time-for-regu...

Re: The Wheels Come Off Uber

#58

Post by emodendroket » Thu, Jun 22, 2017, 5:09 PM UTC

alejohausner wrote: post #31

People misunderstand Uber's motives. They are not slimy. Quite the opposite: they are a public good. The company is the front end for a giant charitable effort by venture capitalists. They are pouring money into uber, to help it drive down the costs of urban transportation, enabling people in cities to have more money available for necessities like rent, diapers, and food.

Is this satire or what?

Re: The Wheels Come Off Uber

#59

Post by SimbaOnSteroids » Thu, Jun 22, 2017, 5:09 PM UTC

cs702 wrote: post #7

The most worrisome aspect of this essay is that it questions whether Uber has a viable business model. The OP argues that Uber will never be able to charge prices in excess of the level required by a traditional taxi/limo operator to be profitable for long enough to recoup the billions of dollars the company has burned by subsidizing the price of rides. Put another way, even if Uber drives every competing taxi/limo o…

I don't believe this non-equitable business model holds true when automated vehicles become an option. That is, I don't think Uber itself has a viable business model because they've sunk too much cash too quickly to be around long enough for it to be a great model.

However whomever has a fleet of automated vehicles could easily divert resources into an uber-like ride sharing app.

Re: The Wheels Come Off Uber

#60

Post by meditationapp » Thu, Jun 22, 2017, 5:10 PM UTC

ethanhunt_ wrote: post #35

Noxchi wrote: post #16

It's a question if uber can race to self driving cars fast enough. That's really the only way their financial model can make sense. They should really be seeing this as essential to their survival, like nuclear bombs in WWII. Nazi Germany had maybe 1000 people working on their version. USA had 180,000(!). I suspect in this analogy, uber is not USA. Someone else will get this rolled out first. But I'm not 100% sure.

Self-driving is an engineering problem so I think a good guess is that a strong engineering company will get it to market first: Google. If that happens, wouldn't Google just start their own ride-sharing service, and drop it right into google maps so customers never even try uber?

Waymo has already indicated they will partner with Lyft.