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Can Uber ever make money?

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Re: Can Uber ever make money?

#391

Post by rahimnathwani »

GordonS wrote: post #216
rubicon33 wrote: post #97

Earlier quoted context omitted.

Call me a snob, but Uber's criteria for what qualifies as an acceptable car has dramatically declined to the point where even Taxis are sometimes "nicer". Combine that with the fact that the drivers often don't know the neighborhood and rely exclusively on GPS (so tend to be worse drivers than a taxi). I'm left feeling like the fare - strictly from the perspective of a consumer - is actually too high.

> Combine that with the fact that the drivers often don't know the neighborhood I used to travel to Houston quite a lot. Not sure if this is representative of taxis in general in the US, but the taxi drivers never knew the neighbourhood. I couldn't say "I want to go to Acme Stuff in X district", I had to give a "Cross road" (a very US thing, that) and the driver would use satnav based on that. It did seem that a lot…

"At first, this was a surprise, as in my native UK I can literally give a street name within 50 miles of where I am, and the driver cocks their head for a second, gears whir, and yes! They know it!"

I'm not sure where in the UK you are, but if you pick a street at random (i.e. give all streets within 50 miles equal weight, and pick a name out of the hat), it's far from guaranteed that a taxi driver would know where it is, and how to get there.

- - ~606 square miles: The area of Greater London, within which London taxi drivers must know the main roads.

- ~7800 square miles: The area "within 50 miles of where I am"

Re: Can Uber ever make money?

#392

Post by repolfx »

cabaalis wrote: post #266
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…

For #1, it seems the market would adjust. We already see complaints about drivers not knowing the area they're driving in. Would it reassure riders to know that their driver spends 99% of driving time in an area they're riding? For #2, sincere problem for which I am not aware of a good solution.

Solution is to repeal the laws that make driving non-discriminatory. It'd be painful in the short run but ultimately a place being so bad cabbies won't drive there is a signal there is a serious need for other forms of intervention, probably by policing changes. Wallpapering over the symptoms may relieve short term pressure but is no long term solution.

Re: Can Uber ever make money?

#393

Post by repolfx »

SquishyPanda23 wrote: post #271
parksy wrote: post #58

Earlier quoted context omitted.

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…

Sure, but I wonder if this was the best way for it to happen. Couldn't we have gotten to taxi-hailing apps without allocating a bunch of capital to companies that might never turn a profit? I'm just curious. I don't personally care because my money isn't invested and my rides are subsidized by the people who did invest.

You don't even have a pension? A lot of money finds its way to companies like Uber from sources almost everyone has. Even with no pension, your bank is speculatively investing the money in your account to try and earn interest.

Re: Can Uber ever make money?

#394

Post by repolfx »

rayiner wrote: post #282
parksy wrote: post #58

Earlier quoted context omitted.

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, 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. The taxi “cartels” can’t “compete” with Uber or “improve their services” to match Uber. Some of the key things that make Uber attractive to customers is low rates and the ease of booking through an app. Taxi…

That may well be the case, so I voted you up as I'm not sure why you were greyed out for pointing this out. But taxis are heavily regulated partly because the taxi lobby itself demanded these sorts of barriers and taxi lobbys have been notoriously effective at shutting Uber down. They appear to have a lot of political power, and convincing politicians to let taxi firms use new technology should be the easiest lobbying gig in the world.

Reality is, even in parts of the world where taxis are not heavily regulated, no taxi firms got even close to Uber's competence and sophistication. They simply don't have access to the right people or technical knowledge to produce the same experience (evidence: my local taxi apps that are trying to compete with Uber are all buggy incompetent messes).

Re: Can Uber ever make money?

#395

Post by repolfx »

bobthepanda wrote: post #88
jsloss wrote: post #83

Earlier quoted context omitted.

I'm not sure about the future profitability of this space, but I think you're disregarding a few key points. 1. The innovation was less the app and more solving supply problems. No app will be able to change that for the taxi business. 2. Competitive advantage in this space is having more drivers and less wait time. That drives folks to use one provider over another. The lock in isn't the tech, but the availability o…

1. The regulations that Uber skirted around and then loosened up to provide more drivers can also be used by other companies. The gates are open, but not only to Uber. 2. Drivers and customers are fickle. My market used to be mostly Uber and is now mostly Lyft because all the drivers hate Uber. When Uber and Lyft run out of cash to blow on subsidies, they don't really have much of a selling point. The problem with Ub…

Are you sure there are no economies of scale?

Everyone I know uses Uber exclusively for taxis now and it's partly because whenever they travel Uber works great, but using local taxis is a pain. The "taxis are local" argument is right some of the time but many people use taxis primarily when travelling, and that's a market that really only Uber and Lyft can automate with any degree of success. I don't want 50 half-baked taxi apps on my phone.

Re: Can Uber ever make money?

#396

Post by Skunkleton »

URSpider94 wrote: post #348
axaxs wrote: post #338

Earlier quoted context omitted.

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-…

For many drivers, you also need to factor in the car payment. Lots of Uber drivers bought their car specifically for Uber (and sometimes from Uber).

Re: Can Uber ever make money?

#397

Post by bobthepanda »

repolfx wrote: post #395
bobthepanda wrote: post #88

Earlier quoted context omitted.

1. The regulations that Uber skirted around and then loosened up to provide more drivers can also be used by other companies. The gates are open, but not only to Uber. 2. Drivers and customers are fickle. My market used to be mostly Uber and is now mostly Lyft because all the drivers hate Uber. When Uber and Lyft run out of cash to blow on subsidies, they don't really have much of a selling point. The problem with Ub…

Are you sure there are no economies of scale? Everyone I know uses Uber exclusively for taxis now and it's partly because whenever they travel Uber works great, but using local taxis is a pain. The "taxis are local" argument is right some of the time but many people use taxis primarily when travelling, and that's a market that really only Uber and Lyft can automate with any degree of success. I don't want 50 half-bak…

That‘s not what an economy of scale is, that‘s branding. An economy of scale would be Uber saving a portion pf costs as it gets bigger, but that‘s not really possible because the per unit cost of a ride is tied to a driver, and they‘re not pushing drivers into driving buses or other vehicles that can carry more shared trips.

You could achieve the same thing Uber achieved with branding with a franchise; McDonalds maintains quality across franchises despite not being involved in the day to day operation. And McDonald‘s certainly doesn‘t lose money on every patty sold.

Re: Can Uber ever make money?

#398

Post by Skunkleton »

kortilla wrote: post #301
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 drivers don’t have to bid. Do you find eBay auctions “irresponsible”? You can’t hide from the market.

Do you not support minimum wage laws?

Re: Can Uber ever make money?

#399

Post by ghaff »

IanCal wrote: post #278
FiddlyPack wrote: post #277

Earlier quoted context omitted.

...the innovation is a consistent more reliable and timely experience, consistent across geographies, where it did not exist before. McDonalds didn’t have the first burger franchise, the innovation is very much in the reliability of an experience that is a better fit for the needs of the consumer than the alternatives. I too avoided booking taxis due to bad dispatchers, even though I’m sure some good dispatchers exis…

> McDonalds didn’t have the first burger franchise, So saying "the innovation is in the franchise" wouldn't make sense, right? > That doesn’t really do you any good when the use case for a taxi is generally that you need a car in a place that is not your home, and so you are unfamiliar with the area. The use case for a taxi is surely dominated by when you need a car but can't or don't want to drive? I've definitely t…

>The use case for a taxi is surely dominated by when you need a car but can't or don't want to drive? I've definitely taken more taxis near my home than away from it, purely because I'm here more often.

I'm sure it depends. I've never taken an Uber near my house. (I do get driven to and from the airport but I use a private car service for that.) I don't actually use Uber/Lyft (or taxis) all that much when I travel either although I've started to do so a bit more often when I found I mostly rented a car to get to/from the airport to some destination and then just have it sit.

Re: Can Uber ever make money?

#400

Post by greenyoda »

ancientworldnow wrote: post #167
an_account_name wrote: post #146

Earlier quoted context omitted.

Can you elaborate? I don't have any context on this other than taking a Lyft in NYC once.

NYC introduced fees for ride sharing with destinations or pickups in Manhattan to reduce congestion. They also added fees to guarantee a reasonable minimum wage for the drivers of the ride sharing app. The difference in price between a cab and a uber/lyft is relatively small. Convenience seems to be the primary driver for which people use (cabs in Manhattan frequently because of ubiquity, apps in other boroughs).

NYC also imposed a cap on the number of ride sharing vehicles that could be operated. Uber is suing to try to overturn it:

https://www.consumeraffairs.com/news/uber-suing-new-york-cit...

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