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Ride-hailing’s NYC dominance, and the impact of DeleteUber

toddwschneider.com

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Re: Ride-hailing’s NYC dominance, and the impact of DeleteUber

#71

Post by x_throwaway80bf »

rockshassa wrote: post #54
throwaway_80bf3 wrote: post #7

7 years ago you'd have to jump into a yellow cab before telling the rider if you were going from Manhattan to Brooklyn or Brooklyn to Brooklyn. If you told them before you got in, they'd speed off. You used to have to walk to arterial roads in hopes of finding a yellow cab (in the outer boroughs). That is if you lived in neighborhoods that the article points out now skews towards Lyft. Well to do, post gentrification…

another Brooklynite here. this is 100% true. You absolutely needed to "trick" the driver into letting you into the car. I've had taxis drive off, or refuse to let me in. When I was in the car, they would say they can't take me to my destination because their "shift was ending" and they had to go in a different direction. Many of these incidents happened in the LES, which is right next to the bridge I had to cross! Ta…

This still doesn't address the fact that the reason Uber experiences are different from this is purely down to subsidy. If drivers weren't being subsidized to provide the unprofitable rides that yellow cabs are forced to provide by law (and which drivers try to avoid), then Uber also wouldn't provide this.

Basically, your comment is the same as saying, "I am glad VCs are giving me reduced-cost rides and subsidizing drivers to provide ride stock for intrinsically unprofitable routes and locations."

You're not saying that the Uber experience is better than the old yellow cab experience. You're saying that the experience where VCs give away money for free in order to finance a ride you could otherwise never expect to get (except at much higher price) is nice.

This isn't a property of Uber or any transformation of taxi services. It is just a temporary property of VCs being willing to artificially increase supply, artificially increase car quality, and artificially reduce prices via subsidy, while not providing any evidence that it could persist without subsidy.

Re: Ride-hailing’s NYC dominance, and the impact of DeleteUber

#72

Post by Spooky23 »

isostatic wrote: post #64
Spooky23 wrote: post #51

Earlier quoted context omitted.

Normal car expenses are around $0.55/mile for an average car. The average joe pays about $8,000-$8,500 annually for all car related expenses. Some pay more for fancy stuff or utility. That's why suburbs exist. Financially, it's a much better deal for families on just about any axis.

With an average 13-15k miles a year, at 20-30mpg that's about 400-750 gallons a year, or $1000-$2000 a year in gas, leaving the vast majority of expense in deprecation and maintenence.

Just for commuting my options are:

- Uber/Lyft would cost about $5k/year for me, and I live about 4 miles from work.

- Bus $360/year, but it would take 60-90 minutes vs 10 via car.

- Cab $7k/year

By the time you add grocery trips, recreational drives, vacations, etc cars make a shit-ton of sense. Not only does a car save money, but it saves time and provides flexibility. There's a reason our entire society is organized around cars.

Re: Ride-hailing’s NYC dominance, and the impact of DeleteUber

#73

Post by epc »

x_throwaway80bf wrote: post #69
epc wrote: post #52

Earlier quoted context omitted.

Consumers do not care about market externalities. Consumers do not care about the "cost based reasons". Yellow taxis were given a monopoly in NYC, the trade off was to accept all rides within the City. I lived in Brooklyn Heights and DUMBO for years, and quite routinely filed TLC complaints about drivers who refused to take a trip from even Lower Manhattan to DUMBO. I live in Manhattan now, and after a series of extr…

I agree generic consumer opinion won't really take into account the subsidy and unprofitability situation. That is in fact my entire point: because generic consumer opinion or anecdotes don't qualify themselves based on the subsidy mechanism, it means generic consumer opinion or anecdotes are largely irrelevant for purposes of comparing with older taxi experiences or assessing a claimed value-add of a newer ride-hail…

An analytical perspective which ignores consumer sentiment in a market economy is academically moot.

Medallion owners could have been more flexible with leasing terms as Uber flooded the zone, but did not.

Taxi drivers could have ceased discriminating against outer boroughs, but did not.

Medallion owners relied upon the monopoly to extract as much money from the market as possible without investing in vehicles or drivers or technology.

Taxi drivers frittered away the minimal public support they receive with strikes against GPS and credit card machines.

Re: Ride-hailing’s NYC dominance, and the impact of DeleteUber

#74

Post by liveoneggs »

mancerayder wrote: post #45
liveoneggs wrote: post #29

Earlier quoted context omitted.

> It's illegal in NYC for a yellow cab to refuse a ride request to any of the five boroughs. This is true and only a direct threat of report as they start to drive away will occasionally stop them. "I had my Off-Duty light on, I don't have to take your anywhere at 5pm" is the normal reply

The people who get punished here are the tourists and people who are new to town. If you're new and don't know the rules, or you don't speak English natively, it might be hard to argue against some yellow cabbie who suddenly shakes his head and mumbles and points out the window while you're anxiously trying to get a cab for the second or first time in your life. Also if you report them they do have a GPS tracker that…

yeah I had a yellow cab pick me up from Chelsea Piers once and not turn on his meter. It was a short trip and the driver turns around and asks for $20-something. I laughed in his face and left. I'm sure he got plenty of tourists on the same scam.

Re: Ride-hailing’s NYC dominance, and the impact of DeleteUber

#75

Post by x_throwaway80bf »

epc wrote: post #73
x_throwaway80bf wrote: post #69

Earlier quoted context omitted.

I agree generic consumer opinion won't really take into account the subsidy and unprofitability situation. That is in fact my entire point: because generic consumer opinion or anecdotes don't qualify themselves based on the subsidy mechanism, it means generic consumer opinion or anecdotes are largely irrelevant for purposes of comparing with older taxi experiences or assessing a claimed value-add of a newer ride-hail…

An analytical perspective which ignores consumer sentiment in a market economy is academically moot. Medallion owners could have been more flexible with leasing terms as Uber flooded the zone, but did not. Taxi drivers could have ceased discriminating against outer boroughs, but did not. Medallion owners relied upon the monopoly to extract as much money from the market as possible without investing in vehicles or dri…

> An analytical perspective which ignores consumer sentiment in a market economy is academically moot.

Nobody is saying to ignore it... where are you getting that? I'm saying to analyze it _more carefully_. We definitely should analyze the fact that consumers like the app experience, increased supply, etc.

But you are saying to stop there and declare victory for Uber. But I am saying go further.

Then you see the experience exists only because of an intrinsically unsustainable subsidy, so it's not actually comparable to preexisting taxi services, driver behaviors, etc. Only after this point of carefully analyzing consumer sentiment qualified by the factors actually driving it can we realize that the consumer sentiment on its own really doesn't matter _in this particular case_.

I think you're trying to say that consumer sentiment, if not backed by an actually profitable business model, is like selling a dollar for 90 cents, and the happy consumer sentiment would totally not be indicative of a business model that can sustain the factors that the customers actually like... which is also what I am saying!

Re: Ride-hailing’s NYC dominance, and the impact of DeleteUber

#76

Post by phil21 »

ghaff wrote: post #14
jbob2000 wrote: post #8

Earlier quoted context omitted.

Thankfully, Uber exists. Otherwise I'd have to download and register on all sorts of dinky city-specific apps any time I travel. Uber, for all of its faults, is the only one that works in every city I've traveled to.

I won't say it's vanishingly small but, relatively speaking, there aren't a huge number of people who have a problem with needing taxi services in a bunch of different cities. I travel about 100 days a year and I don't use these services very much and I don't think I've used Uber in a year or two. Worldwide availability of a brand just doesn't seem like a huge deal.

You're correct that there are not a huge number of people who travel for a living and need this, but for those that do they have very likely been early Uber adopters and I'd guess are over-represented in their current customer base. They also likely spend far more per year on car services than average.

I know I only use Uber simply due to the whole "I really don't want to install 2 dozen apps" problem. My girlfriend who is in sales travels 70% of the time to about 3-4 dozen cities per year - if there is no Uber available she simply rents a car for the day. "Installing random app #34" is not even on either of our radar, and I don't think we're the exception to the rule.

As Uber/Lyft/etc. get larger of course this segment of the riding population becomes less and less important. I of course find this sad for selfish reasons!

Re: Ride-hailing’s NYC dominance, and the impact of DeleteUber

#77

Post by x_throwaway80bf »

ghaff wrote: post #42
x_throwaway80bf wrote: post #37

Earlier quoted context omitted.

> I generally don't consider the long term sustainability of the companies I purchase goods from. We could probably go on at length about the moral problems here, but likely not productive in a comment thread. > That said, I'm a software developer and my very generous salary I'm not sure how to read that. I am also a software engineer, and even very high salaries in wealthy urban zones are typically not 'generous' in…

Perhaps I shouldn't have been, but when Dara Khosrowshahi got put in as CEO, I was a bit surprised that part of his mandate wasn't to adjust fares to the point where is was a sustainable business and, if that turned out to be impossible, turn off the lights. I know things like self-driving get held up as some sort of magical pixie dust coming RSN, but close your eyes and hope a miracle happens doesn't seem the best a…

Rather than 'turning off the lights' Uber is surely planning to find some means by which they can use hype to drive their valuation higher in preparation for an IPO.

When a company in this situation goes to IPO, it is generally a tool for the existing investors (who know that their investment is not worth the perceived, hype-driven valuation) to externalize the losses out onto unwitting regular folks who passively come to own Uber stock through some random 401(k) manager or speculative day traders.

Uber's IPO will inevitably be a massive wealth transfer from regular folks to Uber investors, who will get good returns on the original investment (because they will be able to sell their stock at the hype-inflated prices), followed by a massive stock correction lowering the price to the true valuation that correctly prices in this subsidy effect and the strength or weakness of the business model.

After that correction, the price movement will reflect aggregated beliefs about whether Uber can innovate and find solutions for these problems. But the problem is with that initial externalization of losses from the IPO. Once original investors and early employees are paid out of the proceeds of that, they are free to leave and don't need to care about the long-term profitability of Uber, which in turn means that as long as they can keep levering up the valuation through hype now, they don't need to fix any of the fundamental problems (and, sadly, they are acting rationally, unless people find ways to ensure their portfolios do not come to include Uber after the IPO, and refuse to buy until they wait out the correction).

Re: Ride-hailing’s NYC dominance, and the impact of DeleteUber

#78

Post by throwaway_80bf3 »

x_throwaway80bf wrote: post #71
rockshassa wrote: post #54

Earlier quoted context omitted.

another Brooklynite here. this is 100% true. You absolutely needed to "trick" the driver into letting you into the car. I've had taxis drive off, or refuse to let me in. When I was in the car, they would say they can't take me to my destination because their "shift was ending" and they had to go in a different direction. Many of these incidents happened in the LES, which is right next to the bridge I had to cross! Ta…

This still doesn't address the fact that the reason Uber experiences are different from this is purely down to subsidy. If drivers weren't being subsidized to provide the unprofitable rides that yellow cabs are forced to provide by law (and which drivers try to avoid), then Uber also wouldn't provide this. Basically, your comment is the same as saying, "I am glad VCs are giving me reduced-cost rides and subsidizing d…

I finally understand what you are saying: it's as if Uber is like Kozmo.com and Uber's service of safe, convenient, affordable transportation, despite existing in reality now, won't exist in some near future, much like Kozmo's subsidized service of same day turnaround of food, groceries, alcohol, coffee, home goods, etc. was part of a fleeting moment never to be realized again...

Re: Ride-hailing’s NYC dominance, and the impact of DeleteUber

#79

Post by x_throwaway80bf »

throwaway_80bf3 wrote: post #78
x_throwaway80bf wrote: post #71

Earlier quoted context omitted.

This still doesn't address the fact that the reason Uber experiences are different from this is purely down to subsidy. If drivers weren't being subsidized to provide the unprofitable rides that yellow cabs are forced to provide by law (and which drivers try to avoid), then Uber also wouldn't provide this. Basically, your comment is the same as saying, "I am glad VCs are giving me reduced-cost rides and subsidizing d…

I finally understand what you are saying: it's as if Uber is like Kozmo.com and Uber's service of safe, convenient, affordable transportation, despite existing in reality now, won't exist in some near future, much like Kozmo's subsidized service of same day turnaround of food, groceries, alcohol, coffee, home goods, etc. was part of a fleeting moment never to be realized again...

Yes, that is a good comparison. With Uber though, it is dramatically worse, since all obtainable data about their finances shows that Uber has created, by far, the biggest losses among VC-funded companies in the start-up / post-tech-bubble era. The degree of Uber's published losses is _staggering_ to a level not seen before. And yet, there has so far been no accounting or financial data to support any path to profitability, let alone a path that could keep prices at levels that drivers and riders are happy with. So it's not just something like "will Uber make it or not?" It's more like, "with losses of X _billion_, when do we stop pretending the 'business' is anything other than a donation from VCs to consumers?"

Naked Capitalism's multi-part series goes into this with extreme detail on the finance and business model side.

https://www.nakedcapitalism.com/category/uber

Re: Ride-hailing’s NYC dominance, and the impact of DeleteUber

#80

Post by rockshassa »

x_throwaway80bf wrote: post #79
throwaway_80bf3 wrote: post #78

Earlier quoted context omitted.

I finally understand what you are saying: it's as if Uber is like Kozmo.com and Uber's service of safe, convenient, affordable transportation, despite existing in reality now, won't exist in some near future, much like Kozmo's subsidized service of same day turnaround of food, groceries, alcohol, coffee, home goods, etc. was part of a fleeting moment never to be realized again...

Yes, that is a good comparison. With Uber though, it is dramatically worse, since all obtainable data about their finances shows that Uber has created, by far, the biggest losses among VC-funded companies in the start-up / post-tech-bubble era. The degree of Uber's published losses is _staggering_ to a level not seen before. And yet, there has so far been no accounting or financial data to support any path to profita…

if the end-game of all this is driverless cars, I suspect that will greatly reduce costs and probably make Uber's model sustainable.
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