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The Uber Bubble

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Re: The Uber Bubble

#191

Post by lhorie »

MBCook wrote: post #158
lhorie wrote: post #93

Earlier quoted context omitted.

> 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 w…

> Coke vs Pepsi are different. Same basic category (cola soft drink) but they taste different

There was a study that actually concluded most people can't tell the difference between Coke and Pepsi. And there are similar examples across many product lines: Sprite vs 7up, Dasani vs Aquafina, etc. All of these beverage companies are similar, and cost of switching between brands for colas or bottled water is zero. So why aren't we talking about how COKE is oh so bad of a stock to own? IMHO, it's because switching cost isn't zero, and things like market dominance and brand play a non-zero role.

My point is mostly that COKE doesn't need to monopolize the market to be profitable, and neither does Jarritos, and that similarly, there's no reason to think Uber requires global scale to be profitable when taxis were doing just fine before.

Re: The Uber Bubble

#192

Post by nonrandomstring »

gruez wrote: post #176
nonrandomstring wrote: post #169

I feel this entire thread has quite missed the point of the question the way a neutrino passes through a solid object and interacts with nothing but empty space. People have talked about microeconomics, gig economies, labour shifting, bad old days, safety, subsidies, licenses.... but we've gotten no closer to understanding; "Why Is a Company That Lost Billions Claimed to Be Successful?" To answer this one must ask "W…

>Under financialised logic it is absolutely immaterial whether Twitter, Uber or whatever make a penny. Ever. Or whether any of the stakeholders are served. The rules of traditional business go out the window. What makes you think that shareholders in Twitter or Uber don't care that they'll never make a penny? They're not turning a profit now, but it seems at least somewhat plausible that they'll make money in the fut…

> What makes you think that shareholders in Twitter or Uber don't care that they'll never make a penny?

Who are "they"? Be specific. The shareholders can make a pretty penny while the companies never do. Because they're shareholders, not workers, or customers, or execs, or owners.

> what someone is willing to pay for it", not its actual utility

Pay for what? Please be specific. The service of the company or the value of its share?

You've really answered your own question. The "actual utility" of a share is nothing but it's propensity to go up. Financial markets don't care about anything else. Just don't be the shareholder left holding anything when the music stops.

Re: The Uber Bubble

#193

Post by subroutine »

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…

Nice summary. A thought on point #2: (from a total costs perspective) is this still true considering yellow cab drivers still need to acquire, maintain, and insure their personal use vehicle?

Re: The Uber Bubble

#194

Post by theonlybutlet »

It depends, in South Africa Uber basically created the personal taxi market all by itself, prior to Uber very very few people utilised personal taxi's. The big selling point being safety with car and driver being vetted.

Edit: Without a doubt many of my friends and family would have never have stepped foot in a personal taxi in their lives prior to the advent of Uber.

Re: The Uber Bubble

#195

Post by DoughnutHole »

willio58 wrote: post #166
amelius wrote: post #144

Why isn't it illegal to disrupt a market by undercutting the competition in a long-term structural way? What makes it worse is that money is pumped into it like a ponzi scheme (first investors cash, last investors are left with the bubble), which should be illegal in itself.

How would you go about enforcing the alternative? Force companies to charge the same as the their competitors? And how would you evaluate if the undercut is sustainable or not?

This legislation already exists. Predatory underpricing has been a known problem for century, and is already built into antitrust laws.

The thing is that it's not generally illegal in its own right - it just forms a component of a potential antitrust case case which could result in the breakup of a company in conjunction with other anti-competitive or monopolistic behaviour.

But the precedent is there. A company destroying its competition by operating at a loss and surviving entirely by virtue of external capital injection surely falls at the very least under the spirit if not the letter of antitrust laws.

Re: The Uber Bubble

#196

Post by gruez »

mistrial9 wrote: post #11
Supermancho wrote: post #3

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

If you call working for uber "slavery", what do you call what african-americans were subjected to in southern US up to the 19th century? "super-slavery"?

Re: The Uber Bubble

#197

Post by PolygonSheep »

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…

> Easy to say that would never happen, but "private citizens operating unregulated hotels/taxis" seemed impossible/illegal just a decade ago...

I think a lot of it was making it "cool". These things definitely existed in the past and you could avail yourself of them if you knew where to look but these were seen as seedy and lesser than calling a real taxi/car service and staying in a "real hotel. Somehow making it an "app" from a "tech company" really changes customer perceptions.

> if essential services start getting "gigged out" in a similar manner, that would be problematic..

Just have Uber drivers carry a gun, handcuffs, a fire extinguisher and a first aid kit in the trunk. Now they can shift from taxi driver to cop to firefighter to paramedic at a moment's notice. Maybe an LED light bar/siren combo they can quickly attach to the roof of the car with magnets when they switch to emergency responder mode. It'll be a hell of a lot cheaper too, they won't have all those silly pensions and unions and stuff.

Re: The Uber Bubble

#199

Post by SilasX »

danamit wrote: post #90

All the complains in this thread seem like they can be solved by Uber easily, mainly by allowing drivers to set their price by themselves. Taxies in my country are so bad, it feels like you are asking them for a favor by using their service, not to mention they pick and choose if they wanna take you or no based on how profitable for them it is.

We had that, in the form of Sidecar, whose model lost to Uber et al in 2014.

Re: The Uber Bubble

#200

Post by encoderer »

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…

It’s more than converting depreciation to cash, it’s borrowing against deferred maintenance. It’s the $800 tires and the $500 tie rod that they will need in a year that they aren’t even thinking about today. I guess they will just have to drive a lot that month to cover it.
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