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Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

economist.com

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Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#11

Post by goodpoint »

metalliqaz wrote: post #3

Massive wealth consolidation leads to huge piles of capital that are itching to invest in ventures, which leads to entrepreneurs sprouting up to pitch ideas for a piece of the pie. To get the most enthusiastic investments, they don't bother building a productive company but instead pitch dazzling tech startups that operate at a massive loss in order to disrupt and grow to critical user mass, in order to replace a leg…

Capitalism should be defined by free markets, among other things.

What we are seeing is an unprecedented combination of quasi-monopolies, rent-seeking, and an economy disconnected from real production of goods and services.

It has been called neofeudalism.

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#12

Post by m_ke »

moolcool wrote: post #8

This may be a hot take, but I think the gig economy is one thing which could be a pretty solid use of the blockchain. Uber/DoorDash/Lyft are all pretty simple CRUD apps at their core, and the companies themselves do very little actual work. Unfortunately, due to the Silicon Valley cult of growth, they are still either unprofitable or barely profitable while also taking a pretty massive cut away from actual workers on…

Or a normal database. There are a few worker coops trying to do just this without the waste of everything that comes with the blockchain. Co-op Ride is an example of a driver's coop that's competing with Uber in NYC.

https://drivers.coop/

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#13

Post by JulianMorrison »

If you are dumping to own the market as a monopoly, and so is your competitor, and both of you are buoyed up by seemingly limitless investor finance, then all that happens is that investors' money moves into the customers' pockets.

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#14

Post by [deleted] »

metalliqaz wrote: post #3

Massive wealth consolidation leads to huge piles of capital that are itching to invest in ventures, which leads to entrepreneurs sprouting up to pitch ideas for a piece of the pie. To get the most enthusiastic investments, they don't bother building a productive company but instead pitch dazzling tech startups that operate at a massive loss in order to disrupt and grow to critical user mass, in order to replace a leg…

[deleted]

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#15

Post by jjulius »

paxys wrote: post #10

I was expecting a data driven argument but the bits of data shared actually contradict the author. These companies mentioned are collectively worth $500B, after taking $100B in venture capital. They are starting to get profitable. Demand for their services is increasing. This article is thousands of words of the exact same talking points we have been hearing for a decade. What's the "after all" part?

>They are starting to get profitable.

No. They posted an adjusted Q3 profit of $8M, with an actual Q3 loss of $2.4B.

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#16

Post by brianwawok »

moolcool wrote: post #8

This may be a hot take, but I think the gig economy is one thing which could be a pretty solid use of the blockchain. Uber/DoorDash/Lyft are all pretty simple CRUD apps at their core, and the companies themselves do very little actual work. Unfortunately, due to the Silicon Valley cult of growth, they are still either unprofitable or barely profitable while also taking a pretty massive cut away from actual workers on…

Sorry blockchain literally does nothing to this problem except maybe get some naive VCs to up the valuation. Which perhaps is the goal anyway so hey..

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#17

Post by ashtonkem »

paxys wrote: post #10

I was expecting a data driven argument but the bits of data shared actually contradict the author. These companies mentioned are collectively worth $500B, after taking $100B in venture capital. They are starting to get profitable. Demand for their services is increasing. This article is thousands of words of the exact same talking points we have been hearing for a decade. What's the "after all" part?

"We're worth 5X what the investors put in despite losing all that money so far" strikes me as an argument for it being a bubble, not against.

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#18

Post by mstipetic »

JulianMorrison wrote: post #13

If you are dumping to own the market as a monopoly, and so is your competitor, and both of you are buoyed up by seemingly limitless investor finance, then all that happens is that investors' money moves into the customers' pockets.

And previous well functioning economies get destroyed in the process

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#19

Post by xoa »

A core aspect seems to come at the end as a tossed in aside but gets disappointingly little consideration:

>Real business flywheels do exist. Software makers have managed to lock users in and thus generate gross margins typically above 70%.

No, it's not just "lock in" it's the magic of minimal to zero marginal cost, near zero "stocking" cost, instantaneous reaction to demand, etc. Software and digital services firms face dramatically different scaling curves than traditional physical products/services. That they also in turn have been able to continuously add in ways not limited by IRL physical constraints and experience real network effects certainly helps, but I suspect one of the big foundational issues for a lot of these valuations is people naively applying software business lessons to businesses based around hardware and real world physical human interactions. It doesn't cleanly translate though, they aren't the same thing.

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#20

Post by WitCanStain »

goodpoint wrote: post #11
metalliqaz wrote: post #3

Massive wealth consolidation leads to huge piles of capital that are itching to invest in ventures, which leads to entrepreneurs sprouting up to pitch ideas for a piece of the pie. To get the most enthusiastic investments, they don't bother building a productive company but instead pitch dazzling tech startups that operate at a massive loss in order to disrupt and grow to critical user mass, in order to replace a leg…

Capitalism should be defined by free markets, among other things. What we are seeing is an unprecedented combination of quasi-monopolies, rent-seeking, and an economy disconnected from real production of goods and services. It has been called neofeudalism.

But all that is the natural and inevitable consequence of capitalism. It's baked into the structure of the system.
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