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Uber CEO Stunned When He Heard Cost of 3-Mile Uber Ride

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Re: Uber CEO Stunned When He Heard Cost of 3-Mile Uber Ride

#51

Post by twelve40 »

sheepscreek wrote: post #39
marcus_holmes wrote: post #23

But this was always the plan, wasn't it? Uber has been losing money since it started, subsiding our travel with VC money, I thought clearly always with the plan of "once we get market dominance we can jack up the prices and make all that money back". I don't think they were ever shy about this plan. So now we're at that point. Either we put up with the new prices, or move on to another app, or find another transport…

That part is understandable. What doesn’t make sense is the ratio. Driver pays for the car, gas and their time. And Uber pockets 50% of the fare? I’ve heard this from at least a few vocal drivers. Apple App Store’s 30% cut as a software service provider seems like a bargain.

but what are they supposed to do? there is no more evil tech-bro to blame even, they are now under public pressure to make money and if the current CEO fails to maximize the profits, he will get booted and replaced by the one who will.

Re: Uber CEO Stunned When He Heard Cost of 3-Mile Uber Ride

#52

Post by arcticbull »

sheepscreek wrote: post #39
marcus_holmes wrote: post #23

But this was always the plan, wasn't it? Uber has been losing money since it started, subsiding our travel with VC money, I thought clearly always with the plan of "once we get market dominance we can jack up the prices and make all that money back". I don't think they were ever shy about this plan. So now we're at that point. Either we put up with the new prices, or move on to another app, or find another transport…

That part is understandable. What doesn’t make sense is the ratio. Driver pays for the car, gas and their time. And Uber pockets 50% of the fare? I’ve heard this from at least a few vocal drivers. Apple App Store’s 30% cut as a software service provider seems like a bargain.

> Driver pays for the car, gas and their time. And Uber pockets 50% of the fare? I’ve heard this from at least a few vocal drivers.

It is in Uber's interest to keep exactly as much of the fare as they can to the extent they still have riders and drivers. This was always the endgame.

Re: Uber CEO Stunned When He Heard Cost of 3-Mile Uber Ride

#53

Post by ecshafer »

SV_BubbleTime wrote: post #24
ecshafer wrote: post #14

Earlier quoted context omitted.

Greyhound nyc to dc is like $20 and has a dozen buses a day. Plus you have Amtrak. Why take an Uber?

Is that really the cost or figurative? Because I would take the bus from NYC into PA and it was like $70 twenty years ago.

$20-30 is the code nyc to dc. Philly to nyc was $11 before the pandemic, might be more more now.$70 sounds more like state college or Pittsburgh. Greyhound is you’re only hitting major cities in the north east is super cheap and fast

Re: Uber CEO Stunned When He Heard Cost of 3-Mile Uber Ride

#55

Post by arcticbull »

rabuse wrote: post #40
marcus_holmes wrote: post #23

But this was always the plan, wasn't it? Uber has been losing money since it started, subsiding our travel with VC money, I thought clearly always with the plan of "once we get market dominance we can jack up the prices and make all that money back". I don't think they were ever shy about this plan. So now we're at that point. Either we put up with the new prices, or move on to another app, or find another transport…

They were betting on self-driving cars originally, but it became too long of a waiting game for that.

Nah, they weren't. Their own leaked study (many years ago, I'll try and dig up a link) I recall showed at most a 5% improvement in their margins over time. This makes sense, as soon as one company has self-driving so will others. Any period where they are the exclusive self-driving ride hailing is fleeting at best. In time, it reverts to exactly the same as it's always been.

Re: Uber CEO Stunned When He Heard Cost of 3-Mile Uber Ride

#56

Post by dang »

metadat wrote: post #8

Discussed 3 days ago: Uber CEO stunned by $52 fare for 3-mile ride - https://news.ycombinator.com/item?id=37000811 (101 comments)

Also

Uber CEO surprised after Wired reporter pays $51 for a 2.9-mile Uber ride - https://news.ycombinator.com/item?id=36964028 - Aug 2023 (32 comments)

Re: Uber CEO Stunned When He Heard Cost of 3-Mile Uber Ride

#57

Post by twelve40 »

bragr wrote: post #50
woodruffw wrote: post #16

Earlier quoted context omitted.

I would also like to know this. Even a flight would have been cheaper!

Or even renting a car one way!

speed would be my guess. Especially at night. Everything else from renting to even trains is slower and harder to coordinate.

Re: Uber CEO Stunned When He Heard Cost of 3-Mile Uber Ride

#58

Post by arcticbull »

metadat wrote: post #8

Discussed 3 days ago: Uber CEO stunned by $52 fare for 3-mile ride - https://news.ycombinator.com/item?id=37000811 (101 comments)

I mean what was he going to say? "Nice, eh?"

At most he was surprised at just how well the revenue management team was doing.

The reporter paid it didn't they?

Re: Uber CEO Stunned When He Heard Cost of 3-Mile Uber Ride

#60

Post by sheepscreek »

iepathos wrote: post #31
npace12 wrote: post #2

Last year, I traveled from DC to NY overnight, and it was 2.5x surge pricing. When i got to my destination, I stuck around in the car to see what the driver app was saying. I paid close to $900, driver took ~$250, the entire surge pricing difference went to Uber. I was thinking, that's an crazy markup over their AWS bill but really it's just a robbery.

Yeah, it is a crazy markup and it's why they were able to increase their ARR by 58% this last year. I think the more frustrating thing is lack of serious competition in the space to keep them from jacking up the prices down so much. Lyft should be drastically undercutting Uber in order to force them to lower prices or out of the market but they aren't, instead they are on average charging more. Need better startups i…

I’m sure it’s the software development cost that’s eating Lyft’s profit margins. Would love for someone on the inside to share insights on that.
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