Uber vs. Car Ownership • Hacker News Board

Re: Uber vs. Car Ownership

#31

Post by alooPotato » Tue, Jul 29, 2014, 1:18 AM UTC

7Figures2Commas wrote: post #5

> This calculation is why I think Uber is still undervalued. The people who say Uber is only worth $4 billion or whatever don't think enough about people like me who will go from spending ~$500 a year on taxis and car service to ~$12,000 now that the experience and cost have reached a tipping point. This is a lazy analysis. Are there folks who will trade car ownership or public transportation for Uber and services li…

"Are there folks who will trade car ownership or public transportation for Uber and services like it? Absolutely. But what is the size of that market?

Literally everyone. Everyone needs to move around their city. The size of the market is the size of the total city scale transportation market which includes car ownership, taxis, public transportation, good walking shoes, pedi cabs......etc.

How much of that market has Uber already tapped?

An insanely small percentage outside of SF and even in SF its small.

One question you didn't ask: Can Uber get even cheaper than it is now? My guess over a 10-15 year time horizon is absolutely yes when you remove the cost of the driver. I think the state of the world that Sam is referring to is when ubers (or services like it) are the predominant way people move about cities. In that world, who is best positioned to win? Uber.

Re: Uber vs. Car Ownership

#32

Post by sah88 » Tue, Jul 29, 2014, 1:19 AM UTC

I agree with most of the posters here that the market for Uber totally replacing household vehicles is pretty slim. However I think there could be a larger market for Uber replacing 2nd/3rd vehicles.

That said, there are already taxis and car share programs. Uber may be able to take customers from them but I'm not sure that Uber really provides something compelling enough that it would push a large number of people who are at the margin over the edge. Disclaimer: I've never actually used Uber

Re: Uber vs. Car Ownership

#33

Post by vasilipupkin » Tue, Jul 29, 2014, 1:21 AM UTC

7Figures2Commas wrote: post #26

gautambay wrote: post #15

Earlier quoted context omitted.

Two thoughts: 1. People will move back to cities as cities become more attractive (thanks in part to things like the shared economy). There's already some evidence of this trend among millennials. Reverse white-flight if you will. 2. Uber will eventually work just as well in suburban areas. The fundamental economics don't change (higher resource utilization => lower costs). It will take longer to get to penetration l…

> Uber will eventually work just as well in suburban areas. No, it won't. > The fundamental economics don't change... They don't change for Uber, but they do for drivers. > It will take longer to get to penetration levels that result in sufficiently high utilization. You seem to be under the belief that supply drives demand here. That's not the case. The economics of utilizing a taxi service can be markedly different…

I live in the suburbs of Chicago and Uber is plentiful and I use quite often

Re: Uber vs. Car Ownership

#34

Post by dsil » Tue, Jul 29, 2014, 1:23 AM UTC

mastermojo wrote: post #25

I actually have some personal numbers after owning a second hand 2000 Mustang for 1 year from 112k to 121k miles exactly since yesterday. I got the car for 6000. Uber 9000 miles x $2 = 18000 Personal Car: 7000 Maintenance 2500 - new bumper (old one taken off while street parked) 1000 - replaced foggy headlamps 400. purely cosmetic reasons - side window smashed 800. never park in oakland =( - oil changes etc? (200 at…

Hold on, what you're missing is the last part of the essay, the difference in value of time spent driving vs time spent riding an Uber.

Say you averaged going 45mph. Then your 9000 miles took 200 hours. And you'd spend $4000 extra to use Uber, so not having to drive would cost $20/hour.

Depends how you'd use that time, but for many it would be well worth $20/hour to be able to do other things, like bill hours.

Re: Uber vs. Car Ownership

#35

Post by tdicola » Tue, Jul 29, 2014, 1:23 AM UTC

recalibrator wrote: post #19

Sam. You own a Tesla Roadster, a car for people who don't have to niggle over money. Most people a) don't live in SF b) have your money c) have access to Uber and d) have a Tesla Roadster. You're essentially talking to yourself and a few choice friends who live in the same bubble as you.

Not to mention since the car is paid off/owned outright the calculation doesn't take into account the price of the car. I would wager a majority of car owners are financing or leasing their cars and pay a monthly cost to do so. I guess depreciation kind of counts in his calculation, but it also applies to financing a car. Adding this cost would actually help his argument.

Re: Uber vs. Car Ownership

#36

Post by ewindisch » Tue, Jul 29, 2014, 1:24 AM UTC

7Figures2Commas wrote: post #26

gautambay wrote: post #15

Earlier quoted context omitted.

Two thoughts: 1. People will move back to cities as cities become more attractive (thanks in part to things like the shared economy). There's already some evidence of this trend among millennials. Reverse white-flight if you will. 2. Uber will eventually work just as well in suburban areas. The fundamental economics don't change (higher resource utilization => lower costs). It will take longer to get to penetration l…

> Uber will eventually work just as well in suburban areas. No, it won't. > The fundamental economics don't change... They don't change for Uber, but they do for drivers. > It will take longer to get to penetration levels that result in sufficiently high utilization. You seem to be under the belief that supply drives demand here. That's not the case. The economics of utilizing a taxi service can be markedly different…

> > Uber will eventually work just as well in suburban areas. > No, it won't.

Perhaps it doesn't work "as well", but I live in a very-much suburban area that borders on rural. I know several farms from which where one can consistently get an UberX with a 5-10 minute wait.

Re: Uber vs. Car Ownership

#37

Post by vacri » Tue, Jul 29, 2014, 1:27 AM UTC

gamblor956 wrote: post #30

matthewaustin wrote: post #2

Imagine what will happen when we combine decentralized car use with autonomous driving. Uber is already cheaper than driving yourself around, but think how affordable it would be if no Uber driver was needed at all.

Uber is only cheaper than driving yourself around if you points of comparison involve low-mileage use cases, a high-density area, an expensive car, and expensive gas. In other words, a wealthy individual who lives in San Francisco, New York, Chicago, or LA. For everyone else, Uber is far more expensive than owning their own car.

LA isn't a high-density area - it's very spread out, with lots of low-medium density housing.

How is Uber doing in LA, I wonder? Just watching it here on HN, you could be forgiven for thinking it was SF-only (due to the demographics of the site)

Re: Uber vs. Car Ownership

#38

Post by daveymcgav » Tue, Jul 29, 2014, 1:32 AM UTC

crabasa wrote: post #13

I'm a huge fan of Sam's blog posts and he is President of YCombinator for a reason, but I'm struggling to understand what Sam think that his personal data point (as a wealthy owner of a Tesla Roadster no less) says about the viability of Uber replacing a family vehicle for normal people. Does he not realize that plenty of people love to drive?

Based on anecdotal evidence, I've found that almost none of my non-wealthy family and friends like driving. They all drive fairly average cars (Honda Civic, old minivan, etc) on fairly average commutes between home/work/school/etc.

For them, driving is just a means to an end. If there was something better that was cheaper and fulfilled their needs, I think they'd sell their cars in a heartbeat.

That being said, I do love driving, and you're gonna have to pry my car from my cold dead hands :).

Re: Uber vs. Car Ownership

#39

Post by wise_young_man » Tue, Jul 29, 2014, 1:32 AM UTC

dsil wrote: post #34

mastermojo wrote: post #25

I actually have some personal numbers after owning a second hand 2000 Mustang for 1 year from 112k to 121k miles exactly since yesterday. I got the car for 6000. Uber 9000 miles x $2 = 18000 Personal Car: 7000 Maintenance 2500 - new bumper (old one taken off while street parked) 1000 - replaced foggy headlamps 400. purely cosmetic reasons - side window smashed 800. never park in oakland =( - oil changes etc? (200 at…

Hold on, what you're missing is the last part of the essay, the difference in value of time spent driving vs time spent riding an Uber. Say you averaged going 45mph. Then your 9000 miles took 200 hours. And you'd spend $4000 extra to use Uber, so not having to drive would cost $20/hour. Depends how you'd use that time, but for many it would be well worth $20/hour to be able to do other things, like bill hours.

Do you take hour long Uber rides? Because if most are 10-20 minute rides the distractions are not going to be helpful for productivity, so it may be hard to bill anything.

Re: Uber vs. Car Ownership

#40

Post by tptacek » Tue, Jul 29, 2014, 1:33 AM UTC

I'm a little confused about the valuation point. People have been doing the math on taxicabs versus car ownership since... forever. Whole cities, like NYC, are organized around that tradeoff. How is this not already priced into Uber?