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Uber’s margin gains have not come from efficiency improvements but from its ability to unilaterally cut driver compensation by 40 percent since 2016. So much more cost-effective than slavery.
Slavery is not a trade you choose to practice. Not sure how this is constructive.
The entire SV model is basically Uber. i.e. Can you VC fund something loss making long enough so that it corners the market somehow / gains some other crushing advantage.
Unfortunately everyone and their dog is focused on the first part on that strategy. 9 times out of 10 no natural crushing advantage shows up so the SaaS gets under pressure and raises prices and then proceeds to circle the drain.
Crucially thought that isn't an indictement of the model. For good ideas lose money then win big is a valid strategy. Just needs a crystal ball
The real magic of Uber is that it allows drivers to convert the depreciation of their car into cash at a time and schedule of their own choosing. For the reasons discussed in the story, this may still technically be a net negative in the long term compared to driving a regular cab fulltime, but a) drivers find it far preferable to/cheaper than alternatives like payday loans, and b) many Uber drivers have multiple job…
I would be curious to see independent citations of these claims.
And WSJ's survey (above) indicates that many Uber drivers are not actually aware that this is where the money is effectively coming from.
Uber’s margin gains have not come from efficiency improvements but from its ability to unilaterally cut driver compensation by 40 percent since 2016. So much more cost-effective than slavery.
Earlier quoted context omitted.
Slavery is not a trade you choose to practice. Not sure how this is constructive.
"slavery" is a relationship with gravitational pull for the ages; less a literal, particular configuration IMHO
It isn't about Uber at all though is it? The entire SV model is basically Uber. i.e. Can you VC fund something loss making long enough so that it corners the market somehow / gains some other crushing advantage. Unfortunately everyone and their dog is focused on the first part on that strategy. 9 times out of 10 no natural crushing advantage shows up so the SaaS gets under pressure and raises prices and then proceeds…
This is Uber's model. This is not every VC-funded company's model.
Google was a money-loser for quite some time, but each additional search gave positive returns. There's just so much other fixed-cost overhead that you really need to expand the business massively so that you can "make it up in volume". This is the most common "tech startup" model - very high startup and fixed cost which takes years to build a large enough customer base to overcome.
As far as I understand it, Uber for many years lost more money with each additional trip. This is the "selling $10 bills for $5" model. Which certainly lets you grow your market and hope for a future where you have pricing power and can raise prices. This is your "crushing advantage" model.
It isn't about Uber at all though is it? The entire SV model is basically Uber. i.e. Can you VC fund something loss making long enough so that it corners the market somehow / gains some other crushing advantage. Unfortunately everyone and their dog is focused on the first part on that strategy. 9 times out of 10 no natural crushing advantage shows up so the SaaS gets under pressure and raises prices and then proceeds…
For Uber, that's the taxi industry and they're only got an edge by ignoring all manner of regulation.