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The Uber Bubble

braveneweurope.com

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Re: The Uber Bubble

#51

Post by anyfoo »

JumpCrisscross wrote: post #27
Barrin92 wrote: post #22

The piece is exactly right. Uber is effectively an instrument to shift economic gains from labour to capital by atomizing the workforce. From a macroeconomic perspective this is terrible because turning taxi firms into countless of one man businesses provides no efficiency gains, it's basically reverse economic development. There is a version of Uber that actually makes sense. As a lean SaaS company that sells its so…

> a lean SaaS company that sells Uber's software as a service to ordinary taxi companies, takes a cut and makes a profit This destroys a lot of value. Most taxi companies suck for reasons independent of their tech stack. (The fact that they’re better post-Uber shouldn’t obscure the effect of that competitive pressure.) Moreover, having a transport app that works in most countries is a value add for such a service’s m…

They really, really don't suck in Germany. Taxis there are mostly clean, comfortable Mercedes (E-Class usually, Mercedes has a long history and special contracts for that), and Taxi drivers are massively trained. Up until recently, part of the extensive examination was being quizzed about how to get to obscure streets (and remember that Germany does not have a grid system like in the US). That has been abolished, because with ubiquitous GPS it's not necessary anymore, but the other strict requirements stayed.

Uber has nothing on that.

Re: The Uber Bubble

#52

Post by colinmorelli »

BobbyJo wrote: post #37
JumpCrisscross wrote: post #27

Earlier quoted context omitted.

> a lean SaaS company that sells Uber's software as a service to ordinary taxi companies, takes a cut and makes a profit This destroys a lot of value. Most taxi companies suck for reasons independent of their tech stack. (The fact that they’re better post-Uber shouldn’t obscure the effect of that competitive pressure.) Moreover, having a transport app that works in most countries is a value add for such a service’s m…

> This destroys most of the value. Most taxi companies suck for reasons independent of their tech stack. None of which Uber fixes? Uber is a tech company. Arguing that it's better than taxis for non-technical reasons is a bit absurd.

Uber shifts the relationship from rider taxi company, to rider Uber. This places a significant responsibility on Uber to create a high quality rider experience. If you book a car and the driver doesn't show up repeatedly, Uber will remove that driver.

Uber also fields customer service, meaning you're not trying to call into a one man shop to argue for a refund with whoever happened to pick up your ride that day. You're talking with Uber.

Some cities, such as NYC, have created their own structure around taxis, but in many cities it's a complete guess as to the quality of service you'll get when you call a local cab company.

This is the exact same playbook as Doordash, Seamless, Taskrabbit, Airbnb, or any of the other gig economy platforms. They're vastly more than just software. They're certainly different from software provided to independent operators, though individual people can come to their own determination of whether or not that is "better."

Re: The Uber Bubble

#53

Post by Animats »

acchow wrote: post #19
Havoc wrote: post #13

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…

> Can you VC fund something loss making long enough so that it corners the market somehow / gains some other crushing advantage. 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…

Google was a money-loser for quite some time

No. Google was incorporated in 1998, profitable in 2001, and the IPO was in 2004. Total investment pre-IPO was about $25 million.

Re: The Uber Bubble

#54

Post by JumpCrisscross »

sbarre wrote: post #46
thr0wawayf00 wrote: post #34

Earlier quoted context omitted.

> Uber is effectively an instrument to shift economic gains from labour to capital by atomizing the workforce. This is the entire gig economy/sharing economy in a nutshell. The platform puts most of the financial risk on the labor side (drivers owning the cars if you're driving Uber, owning the house if you're Airbnb'ing it, etc.) and simply taking a cut of each transaction. The platform owns nothing, the workers hav…

> The next financial crisis is gonna show us just how fragile this system is, whenever that is. For now, a lot of the gig economy (but not all of it) is focused on non-essential services (food or other delivery, vacation rentals, private car rentals, etc), so in a time of crisis people can just stop using those services. It will suck for the workers but even in a non-gig model that same problem would occur, although…

> but "private citizens operating unregulated hotels/taxis" seemed impossible/illegal just a decade ago

Every city has had gypsy cabs and Craigslist hotels since forever.

Re: The Uber Bubble

#55

Post by BobbyJo »

JumpCrisscross wrote: post #40
BobbyJo wrote: post #37

Earlier quoted context omitted.

> This destroys most of the value. Most taxi companies suck for reasons independent of their tech stack. None of which Uber fixes? Uber is a tech company. Arguing that it's better than taxis for non-technical reasons is a bit absurd.

> None of which Uber fixes? Did you hail or call taxis before Uber? The simple ability to see where your car is while en route was game changing. Add to that ratings, embedded payment (“credit card reader broken”) and dynamic pricing and you have a dramatically better experience.

...those are all technical problems, no?

Re: The Uber Bubble

#56

Post by vgel »

sbarre wrote: post #46
thr0wawayf00 wrote: post #34

Earlier quoted context omitted.

> Uber is effectively an instrument to shift economic gains from labour to capital by atomizing the workforce. This is the entire gig economy/sharing economy in a nutshell. The platform puts most of the financial risk on the labor side (drivers owning the cars if you're driving Uber, owning the house if you're Airbnb'ing it, etc.) and simply taking a cut of each transaction. The platform owns nothing, the workers hav…

> The next financial crisis is gonna show us just how fragile this system is, whenever that is. For now, a lot of the gig economy (but not all of it) is focused on non-essential services (food or other delivery, vacation rentals, private car rentals, etc), so in a time of crisis people can just stop using those services. It will suck for the workers but even in a non-gig model that same problem would occur, although…

It's easy to think of Uber as a non-essential service, but it's not really -- it's started to get its tendrils into a lot of places. E.g. https://qz.com/1971558/uber-plans-to-play-a-bigger-role-in-p... -- Uber is being baked into public transit plans as a viable last-mile option.

Re: The Uber Bubble

#57

Post by JumpCrisscross »

anyfoo wrote: post #51
JumpCrisscross wrote: post #27

Earlier quoted context omitted.

> a lean SaaS company that sells Uber's software as a service to ordinary taxi companies, takes a cut and makes a profit This destroys a lot of value. Most taxi companies suck for reasons independent of their tech stack. (The fact that they’re better post-Uber shouldn’t obscure the effect of that competitive pressure.) Moreover, having a transport app that works in most countries is a value add for such a service’s m…

They really, really don't suck in Germany. Taxis there are mostly clean, comfortable Mercedes (E-Class usually, Mercedes has a long history and special contracts for that), and Taxi drivers are massively trained. Up until recently, part of the extensive examination was being quizzed about how to get to obscure streets (and remember that Germany does not have a grid system like in the US). That has been abolished, bec…

> Uber has nothing on that

Travel extensively in Germany. I can hail Uber from an app that works in Frankfurt, Paris and New York. Uber is often cheaper. And it is far more ubiquitous, particularly outside the major metropolitan areas.

I still take taxis e.g. from the airport, but pretending there is convenience parity in all situations is false. (Agree that Frankfurt and London cabbies are good.)

Re: The Uber Bubble

#58

Post by ttcbj »

westcort wrote: post #35

My key takeaways: 1. Uber is actually a higher cost/less efficient producer of urban car services than the taxi companies it has driven out of business 2. Individual Uber drivers with limited capital cannot acquire, finance, maintain and insure vehicles more economically than Yellow Cab 3. Expenses other than drivers, vehicles, and fuel account for 15 percent of traditional taxi costs but Uber charges drivers 25-30 p…

These are all interesting points. However, I recently used Uber Premier twice in Miami, after not using any car service for two years, and the experience was excellent. It was fast, friendly, the car was nice, and I was happy with the price. For my use case, I am happy to pay more to get a better service, but it didn’t really seem that expensive. Both drivers had been doing Uber for a long time, which would be surprising if they were getting ripped off. So, as much as these points are interesting, I’m not sure they fully capture the situation.

Re: The Uber Bubble

#59

Post by AmericanChopper »

cyanydeez wrote: post #20
Havoc wrote: post #13

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…

It's more likely they get a monopoly and use that to leverage a "natural" market. For Uber, that's the taxi industry and they're only got an edge by ignoring all manner of regulation.

How could Uber possibly be described as a monopoly when they have multiple competitions in every market they operate in?

Re: The Uber Bubble

#60

Post by Sebguer »

sbarre wrote: post #46
thr0wawayf00 wrote: post #34

Earlier quoted context omitted.

> Uber is effectively an instrument to shift economic gains from labour to capital by atomizing the workforce. This is the entire gig economy/sharing economy in a nutshell. The platform puts most of the financial risk on the labor side (drivers owning the cars if you're driving Uber, owning the house if you're Airbnb'ing it, etc.) and simply taking a cut of each transaction. The platform owns nothing, the workers hav…

> The next financial crisis is gonna show us just how fragile this system is, whenever that is. For now, a lot of the gig economy (but not all of it) is focused on non-essential services (food or other delivery, vacation rentals, private car rentals, etc), so in a time of crisis people can just stop using those services. It will suck for the workers but even in a non-gig model that same problem would occur, although…

Essential services are already effectively being 'gigged out'. Travel nurses and EMTs being employed by staffing agencies rather than the hospitals, Amazon's entire delivery end is almost entirely driven by third party contractors, and in general a lot of employment relationships that would have once been owned by a company are now abstracted to vendors solely as a way to reduce margin.
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