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Can Uber ever make money?

economist.com

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Re: Can Uber ever make money?

#171

Post by moltar »

napier wrote: post #150
losteric wrote: post #144

Earlier quoted context omitted.

Or that terrible customer experiences which are currently "exceptions to the rule" end up becoming the norm at whatever they pay drivers/charge customers... there are only so many good drivers and customers/contractors burned by bad experiences will not come back to Uber's platform.

See how well Gojek and Grab are eating Uber's lunch across Asia. Better experience and lower costs.

Wouldn’t say Grab is a good experience. I find drivers less trained, cars more beat up (less QC).

Also drivers can be weird. On two occasions they were trying to sneakily take pics of my wife when she was alone. My wife’s Caucasian.

This is in Thailand by the way.

The only thing is good (for me) about grab is price. It’s unsustainably cheap, like Uber.

Re: Can Uber ever make money?

#172

Post by stanleydrew »

cc439 wrote: post #135
joncrane wrote: post #105

Earlier quoted context omitted.

Don't forget the other group of people who benefit: the users of the app.

How much of that benefit is purely short-term though? In a hypothetical world where Uber and Lyft's current pathway to profitability never pans out, what are the ramifications. The most obvious one is that their fares will increase by 25-50% depending on the market, pricing them well above the legacy taxi services that existed before the arrival of these VC-backed companies. The second most obvious ramification is th…

I don't really understand the point you're making. Why do small taxi companies have any more right to exist than Uber/Lyft? Or what exactly are they better at than Uber/Lyft that would justify keeping them around?

Any driver who was formerly driving for a small taxi company could simply drive for Uber/Lyft. So what is the benefit of having management be local vs centralized?

Re: Can Uber ever make money?

#173

Post by alkonaut »

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…

Are you saying in any city with an un-regulated taxi market means all taxi companies operate at a loss? That doesn’t sound right (Stockholm, Sweden for example would be a counterexample).

Perhaps I misunderstood “mass market”?

Re: Can Uber ever make money?

#174

Post by idlewords »

rchaud wrote: post #74

Looking at Uber, WeWork, JustEat etc., I get the feeling there's a growing gap between what we were brought up to believe about entrepreneurship and innovation vs. what the reality is. We're all familiar with the '>50% of small businesses fail' stat (not the real number) and that we should be toiling and not taking a salary for years until we break even, i.e. reach a point where we're no longer losing money on every…

The current VC-funded startup economy manages to combine the worst vices of central planning (capricious allocation of resources) with laissez-faire capitalism (impoverishment of those not at the top). It really is a terrible failure pattern.

Re: Can Uber ever make money?

#175

Post by IanCal »

parksy wrote: post #58
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…

But in a way, that's the beauty of disruptive use of technology. Without the innovation of the Uber app, the traditional taxi cartels would have no incentive to improve their services and the fact that they have been forced to do so in order to compete benefits the consumer. They're not quite there yet, and are still catching up. The next logical step is a lift aggregation service that creates a marketplace. I want a…

> Without the innovation of the Uber app,

I had local services with an app before Uber, I'm sure. It's really not much of a shift from a phone call either.

But then, all Uber cars are the same as private hire cans anyway here.

It seems like the real innovation was being big enough to ignore the local rules. That and being able to say it's "ride sharing" with a straight face.

Re: Can Uber ever make money?

#176

Post by bluGill »

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…

Vertical integration like this is generally considered bad in business. Sure it is possible, but it is better for car companies to work on making a better car than split their attention and risk not paying enough attention to either...

Re: Can Uber ever make money?

#177

Post by xyzzy_plugh »

jfim wrote: post #116
TuringNYC wrote: post #53

Earlier quoted context omitted.

I see your point, in theory, but the increasing medallion investment/rent just lowered profit further and further until the profit to drivers was some very low wage. The driver is not usually the medallion owner, and hence the rent for the medallion goes elsewhere. The driver just ends up with the metered fare net of medallion costs. Similarly, Uber leads to a sort of perfect competition equilibrium ( https://en.wiki…

Economically, it does lead to a competition equilibrium, but it does not take into account the cost of externalities such as additional traffic and pollution generated by having more drivers.

At appropriate saturation the number of cars being displaced by riders is significant, though I wonder what that is and how it trends over time.

If I was in college today, I might never consider buying a vehicle.

Re: Can Uber ever make money?

#178

Post by bluGill »

schnable wrote: post #149
dcolkitt wrote: post #26

Earlier quoted context omitted.

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 l…

Not following how this is a natural monopoly. There aren't barriers to multiple companies operating large fleets.

In fact the market is likely large enough that multiple large companies will.

Re: Can Uber ever make money?

#179

Post by amvalo »

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…

Pooling is a nice cost saving innovation.

Re: Can Uber ever make money?

#180

Post by petra »

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…

UBER won't be a monopoly. But UBER and Lyft could offer lower costs than taxis, because of cheap labor, no medalions, and less empty rides they could offer their drivers.

So it's basically a UBER/Lyft duopoly, after the growing phase. And Duopolies are good businesses to be in.

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