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Can Uber ever make money?

economist.com

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Re: Can Uber ever make money?

#341

Post by speedplane »

cge wrote: post #340
cbhl wrote: post #136

Earlier quoted context omitted.

What are your thoughts on Uber Select / Uber Black / Lyft Lux / Lyft Lux Black?

Uber Black, at least for me, is not a good option because it usually (seemingly every time in LA) results in getting a giant SUV. These are not comfortable, and are not discreet, by comparison to good sedans.

> Uber Black, at least for me, is not a good option because it usually (seemingly every time in LA) results in getting a giant SUV. These ... are not discreet, by comparison to good sedans.

I am dubious. You live in LA and want to be discreet?

Re: Can Uber ever make money?

#342

Post by lpcam33 »

If I was a car manufacturer I would invest heavily on Uber. The fact that people need to have a new car to work for Uber is one of the main factors that keep the auto industry out of recession.

Re: Can Uber ever make money?

#343

Post by Simon_says »

geofft wrote: post #334
Simon_says wrote: post #268

Earlier quoted context omitted.

Yes, this is how supply and demand works in a healthy market. Riders should pay higher prices for tasks that drivers are less willing to do, and concomitantly drivers should get paid more for those tasks.

That's a "healthy" market in the sense of a liquid market with high levels of information communication. That's not necessarily the same thing as a "healthy" market in the sense of good public policy. For instance, very few people would say that a "healthy" labor market has no minimum wage or discrimination protections, trusting supply and demand to solve those adequately. Similarly, letting the market price trips to…

> very few people would say that a "healthy" labor market has no minimum wage or discrimination protections ...

Unfortunately, you're talking to one of those few people. I'm against government mandating minimum wages or mandatory maternity/paternity leave. If you want those things, you can try to negotiate for it.

> customers already seem not thrilled with surge pricing

This is a true statement, but I wonder about these people. I don't share their view.

Re: Can Uber ever make money?

#344

Post by [deleted] »

__jal wrote: post #267
remote_phone wrote: post #237

Earlier quoted context omitted.

>As I understand it, Uber is playing a sort of TicketMaster-ish game, demanding exclusivity (no having your own drivers, no using competitors) and funny terms about hosting your menu designed to make you dependent on them. This is false.

I'm really curious about this. I've known one of the people I talked to a long time, and while I don't audit his business, I believe him when he says the contract says he can't hire his own drivers. What, exactly, is false?

[deleted]

Re: Can Uber ever make money?

#345

Post by URSpider94 »

lugg wrote: post #312
cyphar wrote: post #287

Earlier quoted context omitted.

> I'm left feeling like the fare - strictly from the perspective of a consumer - is actually too high. Not to mention personal risk if you consider how dangerous some Uber drivers are. However if you consider the cost of car maintenance, annual depreciation on a taxi-like vehicle, and petrol the fares are actually very low. I would be willing to bet that a lot of Uber drivers are wavering around breaking even on the…

The beauty of the uber model is that drivers don't even need to break even. Very few I speak to are doing it full time to make money. Most are doing it as a side hustle for a little extra cash before or after work. Or they're using the money to justify spending more on their dream car. They don't need to break even, they needed the car anyway, it would depreciate roughly the same amount anyway. Or at least the extra…

A lot of drivers are acting irrationally (in the economic sense). The number of miles you put on driving for a car service will almost certainly be consequential to your car’s service life, if you are making any money at it. But, new drivers see cash in their bank account every week, and it’s hard to link that to having to splash out $25k for a new car down the road. I expect a lot of these drivers will bow out when their current cars become too old or damaged to keep driving for hire, since they won’t actually have saved enough money for a replacement.

Having people who don’t understand how to calculate their costs in the market drives down wages for everyone.

Re: Can Uber ever make money?

#346

Post by Haga »

The same way Amazon can make shareholder money back. Stay out of reach of the law forever. In ueber case it bets on cutting out the trad taxicompetition- one way or another.

Means ueber will want to be the market structure provider like Amazon for rides Haring and bets on becoming mandatory for all mobility related services.

It really jars the mind- all those billions betted against trust busting.

Re: Can Uber ever make money?

#347

Post by URSpider94 »

Simon_says wrote: post #268
kelnos wrote: post #221

Earlier quoted context omitted.

The problem there is twofold: 1) Many drivers from your town would likely geofence themselves to your town, reducing the supply of drivers that will drive to the metro area, increasing wait times and driving up prices, making riders unhappy. 2) Drivers would use this feature to avoid driving to "bad" parts of town, making transportation discriminatory. (In ways that are illegal for traditional taxi companies, so Uber…

Yes, this is how supply and demand works in a healthy market. Riders should pay higher prices for tasks that drivers are less willing to do, and concomitantly drivers should get paid more for those tasks.

Here are a couple of replies: 1. As a society, we don’t allow people to discriminate against protected classes in commerce. Most of those “bad” neighborhoods are actually not bad, they are just populated by people of different race or social status. 2. Unregulated auctions work well when there is symmetry of information and negotiating power. That is not the case when I’m standing on a street corner trying to get home.

Re: Can Uber ever make money?

#348

Post by URSpider94 »

axaxs wrote: post #338
Skunkleton wrote: post #79

Earlier quoted context omitted.

As it stands the price you pay for a ride in an uber is unfairly low. Driving it even lower would be irresponsible.

But it's really not. At one time it was, but at least in my city, it's sanely priced. When I travel for work for example, an Uber takes my wife and child to school and back. The roundtrip time is about 15 minutes, and the cost is usually 12 to 14 dollars. That's at minimum 48 dollars per hour, which is the upper end of middle class here. My most recent trip to SF, my ride from Berkley to Downtown each day was about 3…

A few issues with your calculation: 1. Drivers are not productive 100% of the time, 50% utilization is more common, so knock that hourly rate in half. 2. That’s revenue, not profit: you have to pay for gas, maintenance, depreciation, and probably higher insurance premiums for driving commercial and/or high mileage. The IRS deduction for business mileage for 2019 is 58 cents per mile, this is meant to be a median all-in cost, so subtract that from your fare, and subtract half again for the miles spent driving between fares or getting home after the last ride of the day.

Re: Can Uber ever make money?

#349

Post by URSpider94 »

aglavine wrote: post #114
Skunkleton wrote: post #79

Earlier quoted context omitted.

As it stands the price you pay for a ride in an uber is unfairly low. Driving it even lower would be irresponsible.

The way to change it is affordable EV cars ===> less fuel costs

Fuel costs aren’t a huge factor for most cars. It’s the time and vehicle depreciation and maintenance that add up.

Re: Can Uber ever make money?

#350

Post by shafyy »

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…

> Self-driving cars were supposed to lower labor costs, but that's not going to be a thing for decades if it ever works.

Decades? Maybe half a decade until it starts rolling out in major markets.

> But even if it does, it won't be an exclusive technology.

Of course it will be exclusive if the developing company decides not to make it publicly available. And why should they?

> If their costs go down, so will everyone else's and they won't be able to undercut the competition without continuing to lose money.

This is econ 101. There will be an equilibirium price. Or do you think just because it's easy to make pizza since hundreds of years and there are probably a million pizza suppliers in the world, the price of pizza went to 0?

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