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Can Uber ever make money?

economist.com

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Re: Can Uber ever make money?

#351

Post by speedplane »

shafyy wrote: post #350
skywhopper wrote: post #15

There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs. The Uber app was the original innovation, but it's not particularly innovative anymore. Besides Lyft, traditional taxi companies have similar apps in some markets. Skirting regulation and good labor…

> Self-driving cars were supposed to lower labor costs, but that's not going to be a thing for decades if it ever works. Decades? Maybe half a decade until it starts rolling out in major markets. > But even if it does, it won't be an exclusive technology. Of course it will be exclusive if the developing company decides not to make it publicly available. And why should they? > If their costs go down, so will everyone…

>> Self-driving cars were supposed to lower labor costs, but that's not going to be a thing for decades if it ever works.

> Decades? Maybe half a decade until it starts rolling out in major markets.

What is the evidence for this? Five years ago the same claim was made, and it hasn't happened. It's not at all clear to me that mass market self driving cars will appear in 5 years, 20 years, or 100 years.

Re: Can Uber ever make money?

#352

Post by tyopiuy »

URSpider94 wrote: post #345
lugg wrote: post #312

Earlier quoted context omitted.

The beauty of the uber model is that drivers don't even need to break even. Very few I speak to are doing it full time to make money. Most are doing it as a side hustle for a little extra cash before or after work. Or they're using the money to justify spending more on their dream car. They don't need to break even, they needed the car anyway, it would depreciate roughly the same amount anyway. Or at least the extra…

A lot of drivers are acting irrationally (in the economic sense). The number of miles you put on driving for a car service will almost certainly be consequential to your car’s service life, if you are making any money at it. But, new drivers see cash in their bank account every week, and it’s hard to link that to having to splash out $25k for a new car down the road. I expect a lot of these drivers will bow out when…

Not exactly. This theory applies steady state analysis to a transient problem. Those drivers need money now. And are willing to trade off miles for money, in some sense. They are able to leverage their time and mileage to get income, which they might not otherwise have. They may already have invested in buying the car so that is a sunk cost. In some sense they are just extracting the value of the car combined with their time and some minor profit which is their opportunity cost. The theory also fails to account for the extra utility they drive from earning the cash, which may offset any costs incurred by spiraling downwards mood from financial stress, unemployment, or even the regret of buying a car which they are having trouble paying off. Also they get to still use the car in the meantime, offsetting transportation costs and most importantly, saving them time and extending their ability to acquire other jobs or new opportunity such as education, driving to visit friends and family, etc.

Re: Can Uber ever make money?

#354

Post by thkim »

Uber can't make money from taxi service. It's trying to mimic Amazon model where profit comes from subsidiary service. Uber is yet to find such thing. Without valid profit source I don't understand how SEC approves an IPO for a license to suck away average joe investment. Uber is walking a very thin line between being a hoax and a business.

Re: Can Uber ever make money?

#355

Post by usrusr »

zip1234 wrote: post #320
kevin_thibedeau wrote: post #214

Earlier quoted context omitted.

No. What happens is that roads keep becoming saturated until they are clogged with ride shares and the riders bail out when they realize they can walk faster. The equilibrium point creates complete havoc for everyone else and little productive work is actually done.

The roads are already clogged with cars. Does it matter if they are ride shares or not?

A saturated Uber-model ride share market is one where an empty car is seconds away whenever you need one. Idle ride shares matter a lot.

Re: Can Uber ever make money?

#356

Post by mike00632 »

__jal wrote: post #267
remote_phone wrote: post #237

Earlier quoted context omitted.

>As I understand it, Uber is playing a sort of TicketMaster-ish game, demanding exclusivity (no having your own drivers, no using competitors) and funny terms about hosting your menu designed to make you dependent on them. This is false.

I'm really curious about this. I've known one of the people I talked to a long time, and while I don't audit his business, I believe him when he says the contract says he can't hire his own drivers. What, exactly, is false?

In my neighborhood I know of multiple restaurants that are on UberEats, Postmates and Amazon Restaurants. For example, Pick Up Stix has their own delivery service and they're on UberEats.

Re: Can Uber ever make money?

#358

Post by namdnay »

Bayart wrote: post #258
astrodust wrote: post #220

Earlier quoted context omitted.

A taxi in Europe is akin to an "airport limo" in North America. The differences are astounding.

Here in France taxi driving is pretty hard to get into. You not only need to pass an exam, but you also need a licence that can be bought or rented from its owner, which is really expensive. New licences are basically non-existent. In comparison the cost of the car itself isn't as important, so drivers put some effort into it. And they're more professional. I've never once in my life talked to a taxi driver in France…

You’ve identified one of the reasons for having nice cars, which is the relative low cost of the car as compared to buying the licence. The others are that they are only paying about 50% of the cost of their cars (as the installments are deductible from gross income), they get subsidised diesel (hence the ludicrously overpowered v6 German engines when the rest of the world is running on Japanese hybrids), and most importantly they get to use the vehicle as their personal car when not working...

Re: Can Uber ever make money?

#359

Post by PhantomGremlin »

lpcam33 wrote: post #342

If I was a car manufacturer I would invest heavily on Uber. The fact that people need to have a new car to work for Uber is one of the main factors that keep the auto industry out of recession.

people need to have a new car to work for Uber

Quite the opposite. There have been complaints in this thread about how the cars are getting shittier and shittier.

For Lyft for Oregon the car needs to be 2004 or newer for most of the smaller cities, 2009 or newer for Portland. https://www.lyft.com/driver-application-requirements/oregon

Uber is much the same. 15 years old in rural areas, 10 years old in Portland. https://www.uber.com/drive/eastern-oregon/vehicle-requiremen... https://www.uber.com/drive/portland/vehicle-requirements/

Realistically, a 10 year old car is closer to "junkyard" than "new".

Re: Can Uber ever make money?

#360

Post by navs »

IanCal wrote: post #175
parksy wrote: post #58

Earlier quoted context omitted.

But in a way, that's the beauty of disruptive use of technology. Without the innovation of the Uber app, the traditional taxi cartels would have no incentive to improve their services and the fact that they have been forced to do so in order to compete benefits the consumer. They're not quite there yet, and are still catching up. The next logical step is a lift aggregation service that creates a marketplace. I want a…

> Without the innovation of the Uber app, I had local services with an app before Uber, I'm sure. It's really not much of a shift from a phone call either. But then, all Uber cars are the same as private hire cans anyway here. It seems like the real innovation was being big enough to ignore the local rules. That and being able to say it's "ride sharing" with a straight face.

So I used to call the local cab company a lot when taking work trips. Problems Uber solved for me:

- Knowing my location automatically via GPS. I don't always know where I am. I'm on a street near some bar. - Knowing how long it'll take for my cab to get to me. I don't have to assume it's on its way and wait or call the operator to confirm ETA. - Paying when I don't have cash. In NZ, not all taxi cabs take cards.

It's a major shift from a phone call. Not a fan of the company but it's certainly changed things with taxi companies now investing in their own apps and Uber alternatives sprouting up.

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