The Economics of UberX in NYC • Hacker News Board

Re: The Economics of UberX in NYC

#31

Post by harryh » Tue, Nov 04, 2014, 5:14 AM UTC

albertwang wrote: post #17

untog wrote: post #10

Earlier quoted context omitted.

Why would people be more inclined to take an UberX to the airport than a taxi? The taxi has a flat fare. And from the map view I've seen using Uber, UberX's absolutely do hang around in dense Manhattan areas.

I live in Manhattan and I now prefer to take Uber/Lyft to the airport whenever there's no surge pricing. Taxis are _supposed_ to have flat pricing but I've never found that to be the case: given all the bridge/tunnel tolls, baggage fees, and airport taxes, I'm consistently charged anywhere from $80-$120 one-way from Midtown Manhattan to LGA (+tip). In comparison, Uber uses GPS tracking to automatically figure out whi…

NYC Taxis have a flat fare to JFK. This does not apply to LGA.

That being said I have no fucking clue how you're spending $80 or more on that fare. Even if you're coming from the far west wide and sitting in traffic forever you shouldn't be cracking $50.

Re: The Economics of UberX in NYC

#32

Post by harryh » Tue, Nov 04, 2014, 5:17 AM UTC

travisp wrote: post #13

untog wrote: post #10

Earlier quoted context omitted.

Why would people be more inclined to take an UberX to the airport than a taxi? The taxi has a flat fare. And from the map view I've seen using Uber, UberX's absolutely do hang around in dense Manhattan areas.

The flat fare is only from JFK to Manhattan(source: http://www.nyc.gov/html/tlc/html/passenger/taxicab_rate.shtm... ), not to JFK, or to/from LGA, and not to the other boroughs. UberX also comes to my apartment, while a taxi rarely does, and the drivers are typically more patient with me strapping my son's car seat in (or providing one in the case of Uber Family) and even helpful. As someone who does not live in Manh…

"For trips between (to and from) Manhattan and JFK International Airport, the flat fare is $52.00"

TO AND FROM

I know reading is hard.

Re: The Economics of UberX in NYC

#33

Post by harryh » Tue, Nov 04, 2014, 5:18 AM UTC

jhferris3 wrote: post #5

Not taking surge pricing into account probably plays a large role in explaining this article's findings. Another thing to note in his section with self driving cars: the pool of cars would be fixed in that case, but the amount of uber drivers fluctuates throughout the day. Now, uber doesn't really care if drivers are 70% utilized or 50% utilized, as their revenue doesn't depend on that, but they do have an interest i…

"it turns out that surge pricing amounts to no more than a 12.5% fare premium. Not nothing, but not explanatory either."

Re: The Economics of UberX in NYC

#34

Post by harryh » Tue, Nov 04, 2014, 5:23 AM UTC

wdewind wrote: post #4

haddr wrote: post #3

The most important giveaway of this post is this: "But at the end of the day, their business model boils down to taking a 20% rake of a large commodity services business while pushing assets, costs, and liabilities off the corporate financial statements and onto the shoulders of their not-quite-employee-partners."

And yet people still choose to drive for Uber. Are they all being taken advantage of?

On one hand, no, of course not. It's a voluntary transaction between adults. There's no taking advantage of someone who comes willingly. I used to think this.

But on the other hand, if some people are getting really really rich off the labor of some really poor people than it's gotta make you wonder a bit. And the risk distribution has really got to make you wonder.

Uber, being big and diversified could easily take on that risk and insure against it (or really just self insure with their scale). A single driver on the other hand could be completely wiped out by bad luck. Uber isn't doing this though. Why is that?

It's certainly worth thinking about more deeply than simply shrugging and saying that you can't take advantage of someone in a voluntary transaction.

Re: The Economics of UberX in NYC

#35

Post by harryh » Tue, Nov 04, 2014, 5:35 AM UTC

badusername wrote: post #27

whiddershins wrote: post #23

Earlier quoted context omitted.

The author does discuss surge pricing.

Nope, he does not. If he'd studied the blog post he's linked to, it is clear that surge rates can go a few multiples at busy periods, which would make an outsized contribution to total fares even at 10-15% occurrence. If you look at the service area on the ubernyc page, it goes way beyond the city limits (even a fixed price to the hamptons). Again, even if the percentage of these rides are low, it isn't hard to see h…

Did you look at the spreadsheet he linked to in the footnote where he calculates the cumulative effect of surge pricing? Where would you like to quibble with the math?

https://docs.google.com/spreadsheets/d/1N4NiwuPLo78w9PaoqXRa...

Re: The Economics of UberX in NYC

#36

Post by randyrand » Tue, Nov 04, 2014, 5:58 AM UTC

harryh wrote: post #34

wdewind wrote: post #4

Earlier quoted context omitted.

And yet people still choose to drive for Uber. Are they all being taken advantage of?

On one hand, no, of course not. It's a voluntary transaction between adults. There's no taking advantage of someone who comes willingly. I used to think this. But on the other hand, if some people are getting really really rich off the labor of some really poor people than it's gotta make you wonder a bit. And the risk distribution has really got to make you wonder. Uber, being big and diversified could easily take o…

> some people are getting really really rich off the labor of some really poor people

The answer to this is more competition between companies. Uber is enjoying temporary market dominance.

Re: The Economics of UberX in NYC

#37

Post by badusername » Tue, Nov 04, 2014, 6:12 AM UTC

harryh wrote: post #35

badusername wrote: post #27

Earlier quoted context omitted.

Nope, he does not. If he'd studied the blog post he's linked to, it is clear that surge rates can go a few multiples at busy periods, which would make an outsized contribution to total fares even at 10-15% occurrence. If you look at the service area on the ubernyc page, it goes way beyond the city limits (even a fixed price to the hamptons). Again, even if the percentage of these rides are low, it isn't hard to see h…

Did you look at the spreadsheet he linked to in the footnote where he calculates the cumulative effect of surge pricing? Where would you like to quibble with the math? https://docs.google.com/spreadsheets/d/1N4NiwuPLo78w9PaoqXRa...

Daily weighting is made up without any real insight into operations. Furthermore, whatsthefare says that it bases its own approximations on relatively sparse data from user's use of their systems, not realtime monitoring on a service that's probably prone to constant change.

I think I mostly find it incorrect to essentially take a pin-hole view at the data through 5-6 averages, and extrapolate it towards a somewhat biased result.

Re: The Economics of UberX in NYC

#38

Post by mbesto » Tue, Nov 04, 2014, 6:16 AM UTC

morgante wrote: post #20

While fascinating, this analysis seems to fall apart on two major fronts. 1. It seems to completely discount surge pricing, which would likely change these numbers significantly. 2. It assumes that taxi and Uber behavior is very similar, but this seems pretty dubious for 2 major reasons: a. In dense areas it's far more convenient to use a taxi than an Uber (you can hail one in a minute or two), while in less populate…

a. The analysis is clearly conclusive for NYC, which is densely populated. What am I missing?

b. Where's the data that concludes any of these points?

Re: The Economics of UberX in NYC

#39

Post by zevyoura » Tue, Nov 04, 2014, 6:44 AM UTC

mbesto wrote: post #38

morgante wrote: post #20

While fascinating, this analysis seems to fall apart on two major fronts. 1. It seems to completely discount surge pricing, which would likely change these numbers significantly. 2. It assumes that taxi and Uber behavior is very similar, but this seems pretty dubious for 2 major reasons: a. In dense areas it's far more convenient to use a taxi than an Uber (you can hail one in a minute or two), while in less populate…

a. The analysis is clearly conclusive for NYC, which is densely populated. What am I missing? b. Where's the data that concludes any of these points?

Not all of NYC is so densely populated that you can hail a cab faster than an Uber.

Re: The Economics of UberX in NYC

#40

Post by wdewind » Tue, Nov 04, 2014, 1:22 PM UTC

harryh wrote: post #34

wdewind wrote: post #4

Earlier quoted context omitted.

And yet people still choose to drive for Uber. Are they all being taken advantage of?

On one hand, no, of course not. It's a voluntary transaction between adults. There's no taking advantage of someone who comes willingly. I used to think this. But on the other hand, if some people are getting really really rich off the labor of some really poor people than it's gotta make you wonder a bit. And the risk distribution has really got to make you wonder. Uber, being big and diversified could easily take o…

I don't understand. Why do you have to wonder? No offense but there is a lot of hand waving going on in your post, like this:

> Uber, being big and diversified could easily take on that risk and insure against it (or really just self insure with their scale)

Uber is a marketing channel. Why would they want to take on this risk? Why is it "right" for them to take on this risk? Exactly how easy for them would it be? How much would it cut into their profits?

> It's certainly worth thinking about more deeply than simply shrugging and saying that you can't take advantage of someone in a voluntary transaction.

I don't agree with this. It's a free choice, as free as you can get. Yes, some people have better choices than others in life. But just because I can't spend my life making exactly the choices I want doesn't mean someone is taking advantage of me.