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The Uber Bubble

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Re: The Uber Bubble

#151

Post by dylan604 »

yywwbbn wrote: post #64
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…

And with all this power these companies still somehow never manage to become profitable. It seem to that the consumer is benefiting the most in this situation because both the VC and labor keep having to subsidize him

How much of this "never manage to become profitable" is tricks in accounting? Would investors continue to give money after due diligence looking into the books show this constant loss and say "yes, take my money!"?

Re: The Uber Bubble

#152

Post by bogomipz »

>"Uber is actually a higher cost/less efficient producer of urban car services than the taxi companies it has driven out of business; individual Uber drivers with limited capital cannot acquire, finance, maintain and insure vehicles more economically than Yellow Cab"

Ironically enough Uber recently announced a partnership with yellow cabs in NYC whereby you can order taxis via the Uber app[1].

[1] https://www.nytimes.com/2022/03/24/business/uber-new-york-ta...

Re: The Uber Bubble

#153

Post by MBCook »

JumpCrisscross wrote: post #32
MBCook wrote: post #30

Earlier quoted context omitted.

> they have a clear path to profitability What is it? The problem I see is that there’s zero switching cost. It’s like buying salt at the supermarket. It’s all the same. They have nothing to differentiate them except their brand. Sure they can charge a little more because of that. National brands charge a bit more than generic. But you can’t raise prices 50+% and hope people will just stick with you so that you aren’…

> there’s zero switching cost Finding an app, installing it, entering your card details and then hailing are switching costs. When I travel, I sometimes try the local app. I usually just use Uber. (In America I default to Lyft, in New York Revel.) Keep in mind that Uber is profitable in some markets, e.g. New York.

OK. It’s a four minute process.

It’s not like switching from Xbox to PlayStation or Windows to Mac or something. You don’t have to throw away something of value that you purchased and buy something else expensive.

You can go back-and-forth between the apps.

Re: The Uber Bubble

#154

Post by maxerickson »

inamberclad wrote: post #67

Uber as a business is a massive loss, but consumers still _chose_ Uber over taxis because the process of getting and riding in a car is a million times more transparent than a taxi ever was. You can see what car and what driver are picking you up, what route they're going to take, and how much it will cost. Taxis failed because they failed to modernize.

Uber losing money on a ride should be expected to make it a more attractive option than close equivalents that do not lose money.

Re: The Uber Bubble

#155

Post by bombcar »

mupuff1234 wrote: post #23

Why are there so many competitors in the delivery/taxi type services, but in the short term rental industry Airbnb seems to be mostly unchallenged? I would've expected to see a lot of VC money being thrown there as well, but I'm only seeing Airbnb raising their fees and actually making a profit.

Because if a food delivery company messes up I’m out dinner. An Uber competitor messes up in our a ride or have an uncomfortable half hour.

But an Airbnb competitor messes up and maybe I have lice or worse. So the brand is worth more in that case.

And they’re constrained on both ends by hotels also.

Re: The Uber Bubble

#156

Post by ceeplusplus »

acchow wrote: post #48
thematrixturtle wrote: post #9

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…

You are 100% correct. This is the magic There are people who want to make a positive return on their time + vehicle depreciation. But they are on the open market competing against people who are in a cash crunch and happy to have a net negative return on the same, as long as it temporarily allows them to convert depreciation into cash. This is why drivers will always lose in the long term. They are racing against eac…

That's because depreciation is a paper loss. If you're an average person you're not selling your car for a new one for at least 7-8 years after you buy it. By that time it's worth very little of its original cost anyways. The only actual cost incurred by the driver is repairs and maintenance, which is nowhere near the cost of depreciation on the car. In effect, the depreciation schedule changes, but on the time scales of your average person the net result after 7-8 years of ownership is the same total depreciation. For corporate owners who have to report depreciation as a loss this schedule is not great, but for individuals it's not a real loss.

Re: The Uber Bubble

#157

Post by api »

rzz3 wrote: post #43
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…

Despite all of the negatives, many of which I agree with, the legacy taxi industry really sucked for riders. Riding in a taxi feels dirty to me, to be honest. Old, ugly cars that never seem well maintained, having to actually call someone on a phone and tell them where to pick you up, often not accepting Apple Pay, Android Pay, credit cards. Rude drivers with no rating system to disincentivize it… It’s sad that Uber…

Taxis at least were so terrible that a complete disaster of a business could disrupt them by just being marginally less awful. I don’t know if they have improved.

Re: The Uber Bubble

#158

Post by MBCook »

lhorie wrote: post #93
MBCook wrote: post #30

Earlier quoted context omitted.

> they have a clear path to profitability What is it? The problem I see is that there’s zero switching cost. It’s like buying salt at the supermarket. It’s all the same. They have nothing to differentiate them except their brand. Sure they can charge a little more because of that. National brands charge a bit more than generic. But you can’t raise prices 50+% and hope people will just stick with you so that you aren’…

> It’s like buying salt at the supermarket. It’s all the same You can say the same about Coca-cola or McDonalds though. They have a ton of competition and are most certainly not dead. I don't really buy the argument that competition is all that problematic for Uber. Worst comes to worst, taxis made money, so IMHO there's no reason to believe Uber couldn't settle at doing what taxis did in terms of profitability, at a…

Coke vs Pepsi are different. Same basic category (cola soft drink) but they taste different. Same with McDonalds vs Burger King. There are differences, you’re buying different products in the same category.

But if I take Lyft, Uber, or use a taxi app it’s all the sane in the end. Start at point A, get out at point B.

It may be a different car. One driver may be better. The only REAL difference is the price. In fact we know a lot of drivers drive for multiple services, so your experience may literally be identical!

Re: The Uber Bubble

#159

Post by slfnflctd »

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…

> Uber charges drivers 25-30 percent

You might be a little low there. In my direct experience as a driver pre-covid, it was close to 50%, and many drivers in the relevant subreddits have reported it frequently being more than that since. Imagine hearing a passenger complain about their $15 fare when you only see $6 of it (out of which you still have to cover your gas usage). 25-30 percent seems reasonable in comparison.

Re: The Uber Bubble

#160

Post by alexpotato »

RicoElectrico wrote: post #102
1over137 wrote: post #81

Earlier quoted context omitted.

>having to actually call someone on a phone The horror!

You'd think it's a joke but it's like a 2nd or 3rd time that my brother ordered a pizza by phone and got a wrong one. Sure the girl who takes order is absent-minded or hard of hearing. And similarly sounding pizza names don't help. We like their pizzas and try to cut out the middle-man, but our colleagues who order from there suggested we just use Pyszne.pl (i.e. Takeaway.com). Also, many times we tried to order food…

I ordered from a local bagel shop and also got missing items multiple times.

I finally went in and spoke to a manager who said: "Yeah, you order via Seamless/Grubhub, it shows up on a screen and then someone hand writes down your order."

This conversation happened a few weeks ago. It blew my mind that they didn't have a printer etc for this kind of thing.

Goes to show that the "future is here, just not evenly distributed" is 100% true.

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