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The Drivers Cooperative

drivers.coop

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Re: The Drivers Cooperative

#161

Post by pjmorris »

nabla9 wrote: post #92
jwr wrote: post #79

This is doubly ironic and amusing if you think about how Uber/Lyft were "disrupting" the existing markets. Well, market forces are at work: if Uber/Lyft provide no additional value over drivers' work (and treat drivers as disposable assets), they themselves will get "disrupted" and the drivers will get rid of them :-) Happy to see this happening, and I wonder how this will develop.

App provides value, global brand has some value. There is absolutely no reason for ride hailing app to get 10-20% markup per ride. I suspect that after the competition really kicks in, Uber/Lyft must settle for 1-3% per ride or less.

I've read that grocery stores operate on a ~2% profit margin.

Is a high-margin business a sign of market inefficiency that will eventually be stamped out?

Re: The Drivers Cooperative

#162

Post by andrepd »

jasode wrote: post #78
zxexz wrote: post #15

I hope this takes off. Ride-hailing apps always seemed like a model that was extremely conducive to a cooperative, worker-owned model. I would gladly (and will try to next time I'm in NYC) use this service over Uber or Lyft. Power to the drivers!

>Ride-hailing apps always seemed like a model that was extremely conducive to a cooperative, worker-owned model. It's only the surface-level of an ride-hailing app that seems easy for worker-owned cooperatives to create. In reality, the extra expensive programming dollars required to tame the hidden complexity so that the app can present a seamless experience to the customers/passengers is a huge factor that works ag…

Your comment is a perfect illustration of problems with the capitalist model of private ownership of capital. Notice what you're saying: one person starting a for-profit enterprise can get access to the capital they need to start their business, but a group of thousands of people starting a co-operative enterprise are unable to get a similar credit even in a collective name! This highlights the deep injustices people face in access to capital which hamper their ability, among other things, to start competing businesses.

Re: The Drivers Cooperative

#163

Post by asdfasgasdgasdg »

jwr wrote: post #79

This is doubly ironic and amusing if you think about how Uber/Lyft were "disrupting" the existing markets. Well, market forces are at work: if Uber/Lyft provide no additional value over drivers' work (and treat drivers as disposable assets), they themselves will get "disrupted" and the drivers will get rid of them :-) Happy to see this happening, and I wonder how this will develop.

> Well, market forces are at work: if Uber/Lyft provide no additional value over drivers' work (and treat drivers as disposable assets), they themselves will get "disrupted" and the drivers will get rid of them

We shall see if that ends up being the case. It's an open question to me. I could see this being as effective as Uber. But I could also see an industry association implementing some anti-consumer policies that make it less appealing than Uber.

I'm also interested to see how the compensation model works out. It will be interesting to see if the cooperative pays out for idle/waiting for passenger time. It will also be interesting to see if they offer health coverage, PTO, etc. Or is the idea simply that they will give the drivers a larger slice of the earnings? A pure labor-price play?

I have often wondered what you'd build in the ride-sharing space if you didn't have a profit incentive. One could imagine going full auction nerd and building an app where drivers and passengers are able to bid (automatically?) in an auction to see who gets whose time. Of course you'd lose price predictability. And that might cost you customers, and that might cost you volume, which you absolutely need to have a modicum of success in this space. An app that has only drivers or only passengers is not a useful app.

How sick would it be if we had interoperability laws where the app could fall back to Uber if it couldn't find a better price in-app? I'm sure this would be against Uber's TOS today, but it would be a great pro-consumer feature.

Re: The Drivers Cooperative

#164

Post by gruez »

jrochkind1 wrote: post #131
jasode wrote: post #78

Earlier quoted context omitted.

>Ride-hailing apps always seemed like a model that was extremely conducive to a cooperative, worker-owned model. It's only the surface-level of an ride-hailing app that seems easy for worker-owned cooperatives to create. In reality, the extra expensive programming dollars required to tame the hidden complexity so that the app can present a seamless experience to the customers/passengers is a huge factor that works ag…

These are real challenges, nice outline of the capital issue. Coops generally have to get money by borrowing rather than equity investment. I'm for increasing federal programs for offering and subsidiziing loans to worker-owned coops -- like we do student loans -- not that that's a model, I realize, student loans don't work well, but just a demonstration that the federal government can subsidize loans in the public i…

>There are also hybrid models possible where workers own some % of the company -- over 50% if you want to consider it worker-controlled -- but investors also own a portion.

but why would investors invest in a company that gives them half as much stake (because the other half goes to the workers)?

Re: The Drivers Cooperative

#165

Post by jasode »

clarkevans wrote: post #135
jasode wrote: post #78

Earlier quoted context omitted.

>Ride-hailing apps always seemed like a model that was extremely conducive to a cooperative, worker-owned model. It's only the surface-level of an ride-hailing app that seems easy for worker-owned cooperatives to create. In reality, the extra expensive programming dollars required to tame the hidden complexity so that the app can present a seamless experience to the customers/passengers is a huge factor that works ag…

> That's the financial constraint that causes co-ops to more easily organize in lower complexity businesses such as local grocery co-op or a farming coop. But a high-tech complexity business that's expensive to build is inherently too costly for a pool of drivers' savings to fund. Farming cooperatives can be very capital intensive. In contrast, technology platforms are relatively inexpensive to build these days. The…

>Farming cooperatives can be very capital intensive.

The farms are capital intensive but the separate entity that forms the cooperative is less capital intensive. E.g. building the local co-op grain storage bin that farmers contribute to will cost less than the millions it takes to build a polished app like Uber/Lyft.

Or did you have something else in mind when you meant farm co-ops are capital intensive?

>There's nothing saying the cooperative cannot have revenue bonds, notes payable as a percentage of revenue.

True but bonds don't exist in a vacuum and must compete with other alternative investments including other bonds by other businesses/governments.

Certain financial aspects of the co-op bond (regional business is lower revenue than national Uber, higher risk premium than Apple/Microsoft bonds, lower Moody's credit rating, etc) ... are less appealing to bond buyers which then lowers the amount of capital to the co-op. Just because a company has a "bond offering" doesn't automatically mean investors will line up to buy them.

E.g. and using the failed RideAustin example above... if they hypothetically offered bonds in 2017, your coupon payment would be $0 right now.

Whatever financial "solution" one comes up with for co-ops, one still has to account for behaviors of all the other economic actors in the system.

Re: The Drivers Cooperative

#166

Post by sandworm101 »

jwr wrote: post #79

This is doubly ironic and amusing if you think about how Uber/Lyft were "disrupting" the existing markets. Well, market forces are at work: if Uber/Lyft provide no additional value over drivers' work (and treat drivers as disposable assets), they themselves will get "disrupted" and the drivers will get rid of them :-) Happy to see this happening, and I wonder how this will develop.

I applaud the effort, but the problem with a collective is that they are, legally speaking, a soft target. Uber can afford to break laws, run at a local loss, and generally throw its weight around a new market. Cooperatives don't have such deep pockets. They will leave town as soon as a some local interest resists. They aren't going to survive multi-year fights with cities or organizations like the London cabs.

Re: The Drivers Cooperative

#167

Post by gmadsen »

pjmorris wrote: post #161
nabla9 wrote: post #92

Earlier quoted context omitted.

App provides value, global brand has some value. There is absolutely no reason for ride hailing app to get 10-20% markup per ride. I suspect that after the competition really kicks in, Uber/Lyft must settle for 1-3% per ride or less.

I've read that grocery stores operate on a ~2% profit margin. Is a high-margin business a sign of market inefficiency that will eventually be stamped out?

Not necessarily. An extremely low profit margin is a sign of a commodities market, where there isn't really a space for innovation. For example a grocery store, so you are competing on very fine details and logistics.

High margin, COULD be inefficiency, but it could just be a technological or innovation advantage.

It seems ride hailing is transitioning into a commodity since innovation has dried up. The one obvious disruption would be self driving cars

Re: The Drivers Cooperative

#169

Post by praveen9920 »

While it is great to see drivers disrupting the space, one particular aspect is might be missing. Uber/Lyft or any ride hailing company kind of acts as an mediator between driver and rider. If there is any issue between driver and rider, ride hailing apps provide certain "guarantees" for both in terms of experience and financials which might be more biased towards drivers in this initiative.

Re: The Drivers Cooperative

#170

Post by 0xbadcafebee »

drrotmos wrote: post #130
nabla9 wrote: post #92

Earlier quoted context omitted.

App provides value, global brand has some value. There is absolutely no reason for ride hailing app to get 10-20% markup per ride. I suspect that after the competition really kicks in, Uber/Lyft must settle for 1-3% per ride or less.

Global brand definitely provides value. Whenever I'm traveling (or rather, back when travel was possible) I always use Uber because I know that I can pay buy credit card (rather than cash) and if the driver takes a huge detour or some other common taxi scam, I can just contact Uber's customer service, and they'll refund me.

I have often found local alternatives to Uber/Lyft, whether it be in Austin or Ireland, and their main value proposition remains: get me a car, quickly, and take my payment digitally. If I have a problem there's always credit card charge backs.

I think competition is the other thing that makes them work. The local options know if they fuck customers over that they'll just jump ship to Uber/Lyft. And same is probably true for Uber/Lyft!

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