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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

#61

Post by bruce511 »

mixmastamyk wrote: post #30
bruce511 wrote: post #20

I get that people don't like it when the price of things go up. But surely people can see that the Uber pricing was unsustainable? The VC money was subsidising our transport (yay) but clearly that couldn't last. So, as prictable to everyone , prices go up, drivers get less, and Uber are hoping riders will have grown so used to the convenience so as not to care. Expect a flood of stories along these lines in the comin…

Prices go up; drivers should get more.

Of course they -should- get more. But the economics of uber aren't working for either uber or the drivers.

Uber is super convenient. And also (used to be) super cheap. Cheaper than taxis, because a) they used VC money to cover costs and b) because they moved vehicle costs to the driver.

Driving is fundamentally underpaid (it's basically unskilled labor) but if you ignore vehicle costs (which most drivers do) it looks OK. Factor In vehicle costs and it gets bad. Remove all job security and work-place benefits and it's, well, not good.

So uber loses money, the drivers lose money, (or, more charitably, are just badly paid) - the real winners were riders.

But the free money is over. So the prices are jacked - the first time to make Uber profitable, and likely the second time to keep drivers from abandoning the system.

Customers will bleat, but the -economics- don't lie. It costs a lot for the convenience of anywhere-to-anywhere-anytime-by-yourself transport. If it's not costing the rider a lot then someone us getting screwed.

Sure, removing labor will change thd equation (self driving cars), but I fear even then the ancillary effects of "riders with no adult supervision" will add a lot of overhead.

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

#62

Post by habosa »

The share to the driver is so small I can’t believe they get away with it (Lyft too). In SF I often see drivers accepting their next fare while I’m in the backseat. A ride that will cost me $15 might get them $6.

I know Uber’s part here is not trivial (it’s good software and they do support, etc) but surely the driver should be getting more like 80% or even 90% given that it’s their time, their equipment, etc. Most other marketplaces take smaller cuts.

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

#63

Post by twelve40 »

pdntspa wrote: post #45
bruce511 wrote: post #20

I get that people don't like it when the price of things go up. But surely people can see that the Uber pricing was unsustainable? The VC money was subsidising our transport (yay) but clearly that couldn't last. So, as prictable to everyone , prices go up, drivers get less, and Uber are hoping riders will have grown so used to the convenience so as not to care. Expect a flood of stories along these lines in the comin…

How the fuck was uber's pricing unsustainable? They aren't manufacturing anything physical. The core business doesn't need tons of employees. They're aren't paying extra for drivers' gas or mileage. The app is conceptually simple. Where is all the money going? Why is it WhatsApp can serve most of the fucking world with something like 100 people but Uber needs a huge staff?

well when they started, the whole concept of ridesharing was unproven. They didn't just set out to replace taxis, the idea was to offer a service initially so cheap that people who otherwise wouldn't even think about getting a car, would start doing it on a regular basis (same with Eats). So yes, i'm pretty sure they have been subsidizing rides, and in certain markets probably still are. So now the question is: can this market - where some people even grew accustomed to commuting to work on Uber - sustain itself, or is it too expensive and people will just revert to the old mode where (outside of NY) getting a cab was a rare event.

tldr - i don't think it's the staff that's the expensive part. Also, they do a bunch of non-trivial things with maps, etc, so not quite a simple crud app.

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

#64

Post by mrwh »

bruce511 wrote: post #20

I get that people don't like it when the price of things go up. But surely people can see that the Uber pricing was unsustainable? The VC money was subsidising our transport (yay) but clearly that couldn't last. So, as prictable to everyone , prices go up, drivers get less, and Uber are hoping riders will have grown so used to the convenience so as not to care. Expect a flood of stories along these lines in the comin…

It was, in retrospect, a weird time. Because absolutely yes, everyone knew it was unsustainable and could not logically last forever, yet I think it lasted long enough that we forgot that part, and got used to it, and here we are. Very similar (intimately connected in fact) to the low interest rate world we also started to think was normal.

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

#65

Post by wahnfrieden »

twelve40 wrote: post #51
sheepscreek wrote: post #39

Earlier quoted context omitted.

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.

Society doesn’t need to accept their profit motive

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

#66

Post by pdntspa »

twelve40 wrote: post #63
pdntspa wrote: post #45

Earlier quoted context omitted.

How the fuck was uber's pricing unsustainable? They aren't manufacturing anything physical. The core business doesn't need tons of employees. They're aren't paying extra for drivers' gas or mileage. The app is conceptually simple. Where is all the money going? Why is it WhatsApp can serve most of the fucking world with something like 100 people but Uber needs a huge staff?

well when they started, the whole concept of ridesharing was unproven. They didn't just set out to replace taxis, the idea was to offer a service initially so cheap that people who otherwise wouldn't even think about getting a car, would start doing it on a regular basis (same with Eats). So yes, i'm pretty sure they have been subsidizing rides, and in certain markets probably still are. So now the question is: can t…

Of course... the specifics of routing so many rides at scale is certainly non-trivial. But in 2019 they had 26k employees, 32k in 2022 according to https://www.macrotrends.net/stocks/charts/UBER/uber-technolo...

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

#67

Post by bruce511 »

pdntspa wrote: post #45
bruce511 wrote: post #20

I get that people don't like it when the price of things go up. But surely people can see that the Uber pricing was unsustainable? The VC money was subsidising our transport (yay) but clearly that couldn't last. So, as prictable to everyone , prices go up, drivers get less, and Uber are hoping riders will have grown so used to the convenience so as not to care. Expect a flood of stories along these lines in the comin…

How the fuck was uber's pricing unsustainable? They aren't manufacturing anything physical. The core business doesn't need tons of employees. They're aren't paying extra for drivers' gas or mileage. The app is conceptually simple. Where is all the money going? Why is it WhatsApp can serve most of the fucking world with something like 100 people but Uber needs a huge staff?

It's a good question. There are enough local clones to suggest it's not the software that eats all the money.

Bandwidth plays a role. Updating driver positions constantly, at scale, chews bandwidth. As does broad-casting trips, acceptances, and so on.

I'm guessing Lawyers take a huge chunk. Uber is forever being sued especially in years past and they must have a pretty terrible legal bill. It was always part of the model to operate outside the law, so legal issues were inevitable.

Plus lobbying - at every level. Changing the model (which they have done) takes a lot of lobbying. More lawyers, at lawyer rates.

Marketing of course takes a chunk. That's to be expected, especially as competitors enter the market (riding on the back of their legal coat-tails).

By comparison WhatsApp has no legal bill, no marketing bill, no lobbying bill, and so on.

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

#68

Post by wahnfrieden »

bawolff wrote: post #41
jonathankoren wrote: post #37

Earlier quoted context omitted.

Hotter take: Pocketing the excess value of someone else's labor and capital is theft.

Hottest take: As a worker, only you can free yourself from your chains. It ain't the corporations' job to start the revolution on your behalf.

Don’t wait around for revolution either

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

#69

Post by kedean »

flagrant_taco wrote: post #48
iepathos wrote: post #31

Earlier quoted context omitted.

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…

Wouldn't that effectively be asking Lyft to jump on a grenade for the greater good? Drastically undercutting the competition means you leave money on the table. Let's just assume a 5% discount isn't enough to win riders but 15% is, should the cut fares but anything over 15% just to screw Uber? And does this risk setting a low enough market cap on Lyft that they could be compelled to take an acquisition offer simply b…

> Startups' job isn't to fix a broken market

An aside...why are we still referring to Uber and Lyft as startups? They are 14 and 11 year old, extremely well established, multinational companies. They are no longer the little guys disrupting an entrenched market.

When do they stop getting the excuse of being startups?

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

#70

Post by twelve40 »

pdntspa wrote: post #66
twelve40 wrote: post #63

Earlier quoted context omitted.

well when they started, the whole concept of ridesharing was unproven. They didn't just set out to replace taxis, the idea was to offer a service initially so cheap that people who otherwise wouldn't even think about getting a car, would start doing it on a regular basis (same with Eats). So yes, i'm pretty sure they have been subsidizing rides, and in certain markets probably still are. So now the question is: can t…

Of course... the specifics of routing so many rides at scale is certainly non-trivial. But in 2019 they had 26k employees, 32k in 2022 according to https://www.macrotrends.net/stocks/charts/UBER/uber-technolo...

dunno... that's probably a lot, but unlike say twitter, they do a lot more stuff. With Eats, you have to coordinate with restaurants locally, etc etc. So while it sounds a bit bloated, i think there are worse examples elsewhere in tech.

But I don't think it matters very much at all. If people are the problem, they can be quickly cut. But if their market fundamentally shrinks or is unable to pay for itself, you can't really fix that.

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