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Can Uber ever make money?

economist.com

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Re: Can Uber ever make money?

#21

Post by dcolkitt »

tguedes wrote: post #16
rat9988 wrote: post #8

Earlier quoted context omitted.

If uber drivers make enough to make their cars a worthwile investment, then I'd assume a fleet of driverless cars are profitable.

Uber drivers use their cars for stuff other than Uber. It's a way to make additional money from something you already have. That would not be the case if Uber had its own fleet.

Why couldn't the same logic work in the post-self-driving future?

If I own a self-driving car that sits in my garage from 8 PM to 8 AM, why not just put it on the Uber network and have it make money while I sleep?

As long as people still own cars, why does Uber ever need to own their own fleet? If anything without the actual pain-in-the-ass of actually having to be a driver, I'd think a lot more people would crowdsource their idle vehicles.

Re: Can Uber ever make money?

#22

Post by TruthSHIFT »

rat9988 wrote: post #8
TruthSHIFT wrote: post #7

Keep in mind that this may not change when driverless cars become widely available. Maintaining a fleet thousands of driverless cars may prove to be more expensive than crowdsourcing a vehicle fleet.

If uber drivers make enough to make their cars a worthwile investment, then I'd assume a fleet of driverless cars are profitable.

The drivers may not make enough money:

https://www.ridester.com/how-much-do-uber-drivers-make/#2

As a general rule, drivers should devote 20% of their earnings to insurance, maintenance, gas, and repairs. When this is accounted for, the average Uber driver earnings are barely above the poverty line.

Re: Can Uber ever make money?

#23

Post by ghaff »

prolepunk wrote: post #18
skywhopper wrote: post #15

There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs. The Uber app was the original innovation, but it's not particularly innovative anymore. Besides Lyft, traditional taxi companies have similar apps in some markets. Skirting regulation and good labor…

If self-driving technology is mature enough to be used and there are several implementations to choose from, what stops care manufacturers to go after that market directly and undercutting everyone else? * They have industrial facilities to build cars * They have dealership networks to repair cars * They have capital or can borrow easily to do it I can even argue that all that stops car manufacturers from operating t…

The same thing that largely keeps them from operating dealers (yes, now there are laws and contracts, but it was the manufacturers who wanted dealers in the first place) and rental car companies. Although there are legal impediments, companies often want to focus on a specific part of the value chain rather than having to own the whole thing.

Re: Can Uber ever make money?

#24

Post by bradstewart »

TruthSHIFT wrote: post #22
rat9988 wrote: post #8

Earlier quoted context omitted.

If uber drivers make enough to make their cars a worthwile investment, then I'd assume a fleet of driverless cars are profitable.

The drivers may not make enough money: https://www.ridester.com/how-much-do-uber-drivers-make/#2 As a general rule, drivers should devote 20% of their earnings to insurance, maintenance, gas, and repairs. When this is accounted for, the average Uber driver earnings are barely above the poverty line.

Right, but with an AI driver all of those earnings that put a human slightly above the poverty line go into Uber's pocket.

Re: Can Uber ever make money?

#25

Post by luckydata »

TruthSHIFT wrote: post #22
rat9988 wrote: post #8

Earlier quoted context omitted.

If uber drivers make enough to make their cars a worthwile investment, then I'd assume a fleet of driverless cars are profitable.

The drivers may not make enough money: https://www.ridester.com/how-much-do-uber-drivers-make/#2 As a general rule, drivers should devote 20% of their earnings to insurance, maintenance, gas, and repairs. When this is accounted for, the average Uber driver earnings are barely above the poverty line.

The best way to think about Uber is a reverse loan on your car. If you need money in a pinch that's a way you get it but it's not a way to actually make any sort of decent living.

Re: Can Uber ever make money?

#26

Post by dcolkitt »

TruthSHIFT wrote: post #7

Keep in mind that this may not change when driverless cars become widely available. Maintaining a fleet thousands of driverless cars may prove to be more expensive than crowdsourcing a vehicle fleet.

There's either two possibilities for the self-driving future.

1) Hardly anybody owns cars anymore. When we want to get from point A to point B, we just call a driverless car from the network. But this type of service is a natural monopoly.

When people are ridesharing everywhere, the network with the biggest fleet, becomes the stochastically fastest and cheapest option. Plus add in the fact that they're collecting a lot more data to constantly improve algorithm. This is a winner-take-all market with fat monopoly margins for whoever wins. If Uber prevails, it's likely that their profits will be larger than the entire global auto market.

2) People still mostly own their own cars. They're driverless, but people like the convenience, customization and sense of personal ownership with having their own vehicle. Ridesharing is still an out-of-the-ordinary option for unconventional lifestyles or special occasions.

But in this world, Uber doesn't need to own their own fleet. The same crowdsourcing logic still works. Personal vehicle ownership means a huge number of idle vehicles sitting in people's driveways. Without the pain-in-the-ass factor of actually having to be the driver, expect a lot more people to put their car on Uber's network.

Re: Can Uber ever make money?

#28

Post by Pamar »

ghaff wrote: post #23
prolepunk wrote: post #18

Earlier quoted context omitted.

If self-driving technology is mature enough to be used and there are several implementations to choose from, what stops care manufacturers to go after that market directly and undercutting everyone else? * They have industrial facilities to build cars * They have dealership networks to repair cars * They have capital or can borrow easily to do it I can even argue that all that stops car manufacturers from operating t…

The same thing that largely keeps them from operating dealers (yes, now there are laws and contracts, but it was the manufacturers who wanted dealers in the first place) and rental car companies. Although there are legal impediments, companies often want to focus on a specific part of the value chain rather than having to own the whole thing.

Car2Go is a subsidiary of Daimler, though. And I suppose that being able to produce a large number of cars (all identical models and setups, all the same colour etc.) is something that an automotive company can easily leverage.

Re: Can Uber ever make money?

#29

Post by TuringNYC »

skywhopper wrote: post #15

There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs. The Uber app was the original innovation, but it's not particularly innovative anymore. Besides Lyft, traditional taxi companies have similar apps in some markets. Skirting regulation and good labor…

>> There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs.

I dont understand this comment. Traditional taxis made money for generations, why cant Uber? If anything, Uber has more advantages.

EVEN: Traditional taxis had the "rent" of medallions. Uber has the rent of Corporate HQ costs.

DRAWBACK: Uber gets raw deals in some cities because the local Taxi commission has sweetheart deals with the city (Case in point: NYC, NYC TLC, and Mayor DeBlasio: https://www.nytimes.com/2012/07/18/nyregion/de-blasio-reaps-...)

BENEFIT: More efficiency, less wasted miles w/o riders.

BENEFIT: Group rides are highly efficient.

BENEFIT: National/international scale

BENEFIT: National/international scale to get better loan rates, prices, and even self-loan to drivers.

This isnt to say they dont have to raise prices, but I dont see how they can never make money.

Re: Can Uber ever make money?

#30

Post by tjohns »

ghaff wrote: post #23
prolepunk wrote: post #18

Earlier quoted context omitted.

If self-driving technology is mature enough to be used and there are several implementations to choose from, what stops care manufacturers to go after that market directly and undercutting everyone else? * They have industrial facilities to build cars * They have dealership networks to repair cars * They have capital or can borrow easily to do it I can even argue that all that stops car manufacturers from operating t…

The same thing that largely keeps them from operating dealers (yes, now there are laws and contracts, but it was the manufacturers who wanted dealers in the first place) and rental car companies. Although there are legal impediments, companies often want to focus on a specific part of the value chain rather than having to own the whole thing.

Silvercar was recently acquired by Audi, so that's an example of a auto manufacturer running an car rental business.
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