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The Uber Bubble

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Re: The Uber Bubble

#501

Post by golergka »

throw-nocoiner wrote: post #439
golergka wrote: post #413

Earlier quoted context omitted.

I have been living in Istanbul for the last month, and it's worse. With any app (Uber or local) actually ordering a cab takes several attempts. Taxi drivers are constantly rude and unhelpful, cancel rides after taking them, and refuse to take you all the way and just drop you off far from your destination if it's uncomfortable to them. And they often try to get you to pay in cash instead of using Uber's payment, and…

That's surely nice, but ultimately inconsequential What matters in the end is whether Uber can sell the service for more than it costs to provide it. Traditional taxi could do it, Uber cannot

> That's surely nice, but ultimately inconsequential

This is a great quote to describe engineer-minded approach to user experience and convenience.

Re: The Uber Bubble

#502

Post by lisper »

About the same time that Uber launched I tried to launch a similar startup except that it was purely a dispatch service. Our plan was not to have any cars, but rather to just provide centralized dispatch for cab companies. The economics were win-win for everyone but we couldn't get a single cab company to sign on with us because each one was happy with its little fiefdom that was blissfully free of competition. The result was universally terrible UX. So regardless of whether or not Uber is actually better than what it displaced IMHO it's a net win simply for having displaced the old ossified cab companies. Maybe Uber will be swept away and replaced with something better, maybe it won't, but at least now we have a shot.

Re: The Uber Bubble

#503

Post by DennisP »

parineum wrote: post #343
kanbara wrote: post #321

Earlier quoted context omitted.

in europe there are many taxi companies that have started to do uber app features and prepayment and all the jazz that make uber so great. the main issues i have with uber are that it's now almost more expensive than taxis, there's almost no regulation, the drivers are taken advantage of / not making profit and also not getting proper benefits. just because taxis suck doesn't mean uber should replace them. government…

> drivers are taken advantage of / not making profit and also not getting proper benefits. I hear people say this all the time. None of those people are Uber drivers. I can't speak to Europe but that's been my experience in California. This kind of "we know what's good for you" elitism is that turns people off from the left and why I don't want to be associated with the democratic party despite my voting history.

I was getting half-convinced that gig workers were getting shafted, until I talked with a doordash/ubereats driver for twenty minutes. She said she was making significantly more money than she had as a waitress, and was finally getting ahead. At the same time it was more pleasant work and she didn't have to fight about what shifts she could work.

Re: The Uber Bubble

#504

Post by chrischen »

micromacrofoot wrote: post #472
chrischen wrote: post #302

Earlier quoted context omitted.

Uber’s model is basically the same as the cab/taxi model, but likely much more efficient due to software. That business model (hiring private drivers for point to point public transit) has been profitably working for over a century now. Also keep in mind Taxis, unlike buses and trains, are usually not even subsidized, which lends even more credence to the business model.

"basically the same" yet uber did have a transformative effect, in some countries taxi systems were very hostile and disorganized, and uber has raised the standard significantly... they've created a certain expectation

My point is that if Taxi’s were profitable essentially being a worse Uber, then it makes the argument that Uber is in a bubble industry seem ludicrous, which it is.

Re: The Uber Bubble

#505

Post by chrischen »

Marazan wrote: post #352
chrischen wrote: post #299

Earlier quoted context omitted.

If Uber can’t turn a profit then how did cab companies (essentially Uber but with a worse product, no software efficiencies, and bad UX) turn a profit for over a century?

They charged more than the service cost to produce. A shocking idea I know but there we got.

Yes and Uber cannot do that?

Re: The Uber Bubble

#506

Post by Closi »

MBCook wrote: post #30
Closi wrote: post #5

Easy answer - They are still experiencing rapid revenue growth, they have a clear path to profitability with a simple monetization strategy, and have dominated the market in many territories.

> 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’…

> Zero switching cost

In principle then it should also be a cakewalk to replace platforms like Facebook.

The real advantage the first established player has is the network effect - without that you have a catch 22 of needing drivers before passengers can use your service, and needing passengers/customers to encourage drivers to sign up and use the app. Similarly a new Facebook has to get everyone on it before anyone wants to be on it.

Lyft has a fraction of Ubers revenue, and in a lot of territories Uber doesn’t have any competition (eg here in the UK it is just Uber and traditional firms).

Re: The Uber Bubble

#507

Post by Marazan »

chrischen wrote: post #505
Marazan wrote: post #352

Earlier quoted context omitted.

They charged more than the service cost to produce. A shocking idea I know but there we got.

Yes and Uber cannot do that?

Then they would be more expensive than the other taxi firms that aren't pretending to be a tech company.

Re: The Uber Bubble

#508

Post by chrischen »

ketanip wrote: post #475
mbesto wrote: post #469

Earlier quoted context omitted.

> A lot of movie productions infamously do not have positive cash flow. This is a nuance of an accounting trick used specifically in Hollywood and isn't relevant to this discussion whatsoever. > It’s usually pointless to look at reported profits from growth oriented startups Uber isn't a startup anymore. It's a publicly traded company. > It’s much better to look at unit economics. It's not. Unit economics are commonl…

> Uber isn't a startup anymore. It's a publicly traded company. THIS

I don’t get it. Even publicly traded companies try to zero out end of year profits via reinvestment and salary bonuses. If you did not then you accumulate unused cash which if you decide to pay out to employees later gets double taxed.

But in any case Uber’s industries are still highly competitive (ride sharing and food delivery), so there are plenty of ways for them to reinvest profits rather than accumulate a war chest like a company like Apple (which also was able to do partly because of a tax haven country).

Plus if Uber didn’t reinvest profits their hundreds of competitors would do that and get an edge, many of which are smaller private startups

Re: The Uber Bubble

#509

Post by chrischen »

projektfu wrote: post #415
Ekaros wrote: post #367

Earlier quoted context omitted.

So how did these work? How did the driver tell where they were coming from and where they were going? And was it worth their time? I can't think sharing your own ride is easy to solve. And no if you add more people when you are professionally driving it is still not ride sharing, it's just bus service at that time.

I think GP is talking about services like Lyft Line where the driver would pick up a second passenger on the way, the route calculated for efficiency.

Yes Lyft Line and Uber Pool. I know Uber pool achieved break even just before the pandemic. It was remarkably cheap and popular in high use areas like major cities. Even if it wasn’t a super profitable product it was a great service that reduced car dependency in America.

Re: The Uber Bubble

#510

Post by chrischen »

rvense wrote: post #344
chrischen wrote: post #289

Earlier quoted context omitted.

You’ve clearly never called a cab pre-Uber, or you worked as a dispatcher. Worse of all not only does the cab company often decide to not show up, if you cancel (such as calling another cab company that does show up or take a bus instead) you get yelled at and cursed to hell for letting them know you are canceling . Everyone in the system is just an average joe, probably being paid less than they deserve. But the sys…

> You’ve clearly never called a cab pre-Uber There might be some variation with things like geography, here.

Yes agreed. Some countries and cities had better taxi service than others. But one of beauties of early day Uber was that I was able to use the same app globally (in the US, Taiwan, and even Chiba) and it used my prexisting saved credit cards even! No fumbling for the local currency, registering a local payment method, or worrying if I am going to be scammed by the driver—just a consistent note global taxi hailing experience.
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