The Uber Bubble • Hacker News Board

Re: The Uber Bubble

#461

Post by mbesto » Mon, Apr 18, 2022, 1:38 PM UTC

qeternity wrote: post #373

samastur wrote: post #357

Earlier quoted context omitted.

That's not what kanbara said. Most people are bad at calculating financial implications of decisions before them. There are lots of reasons for this (limited finance/math knowledge, impenetrable language in which conditions are layed out...) or actually don't have better options so they can literally be taken advantage of. Some may be even stupid, but there's no need or reason to reach for that as an explanation.

> Most people are bad at calculating financial implications of decisions before them. This is such a horrible take and reeks of nanny state oversight. Millions of small business owners make these decisions all the time. Markets have a way of quickly rooting out those who aren’t making good decisions. Government has proven itself to be far less financially competent.

The implication is partially two fold:

(1) Most business owners ("millions of small business owners"), especially those that are independent LLC owners, do not fully understand the cost implications of their business's financial health. By their very nature, they do not have dedicated financial expertise, typically lack strong accounting principles, etc. My sister, a personal trainer, is a great example of this. I had to explain to her what "writing off" expenses actually meant.

more importantly:

(2) Uber knows this and exploits it.

Re: The Uber Bubble

#462

Post by AlchemistCamp » Mon, Apr 18, 2022, 1:39 PM UTC

Semaphor wrote: post #402

kanbara wrote: post #321

Earlier quoted context omitted.

in europe there are many taxi companies that have started to do uber app features and prepayment and all the jazz that make uber so great. the main issues i have with uber are that it's now almost more expensive than taxis, there's almost no regulation, the drivers are taken advantage of / not making profit and also not getting proper benefits. just because taxis suck doesn't mean uber should replace them. government…

> in europe there are many taxi companies that have started to do uber app features and prepayment and all the jazz that make uber so great. Yeah, Uber never got a foothold in Germany, but they brought us apps and card payment. Before that, it was cash only. That said, cabs (both, actual taxis and rentable cars with drivers [0]) also seem to be far better here. The cab companies own the cars, not drivers, they are mo…

> Yeah, Uber never got a foothold in Germany, but they brought us apps and card payment.

Germany also worked hard to cripple Uber. Even its per-existing rules are hostile towards much of the innovation Uber brought to market.

One particularly egregious example is forcing each Uber to "return to garage" between each trip, even if another customer is on its path and requesting a ride. This makes the service considerably more expensive, increases wait times and needlessly burns gas to send cars with no passengers back to their "garage".

To my point of view, it's insane protectionism. In recent weeks, the policy can even be seen as indirectly subsidizing an invasion.

(see: https://www.wired.co.uk/article/uber-ride-hailing-future)

Re: The Uber Bubble

#463

Post by faller » Mon, Apr 18, 2022, 1:43 PM UTC

projektfu wrote: post #423

faller wrote: post #347

Earlier quoted context omitted.

> 1. Uber is actually a higher cost/less efficient producer of urban car services than the taxi companies it has driven out of business This doesn't seem to be true, given that in some countries you have taxi companies providing services through Uber, as well as their own ride hailing platforms. > 2. Individual Uber drivers with limited capital cannot acquire, finance, maintain and insure vehicles more economically t…

It's a one time charge and also can be resold if needed.

> It's a one time charge and also can be resold if needed.

It's a hefty one-time charge that is not required to operate a Uber and thus can baloon the initial investment between 2x and 3x, and at best is capex that you have to tie down. Therefore, how is that an advantage?

Re: The Uber Bubble

#464

Post by gruez » Mon, Apr 18, 2022, 1:45 PM UTC

amelius wrote: post #354

gruez wrote: post #189

Earlier quoted context omitted.

According to https://en.wikipedia.org/wiki/Dumping_(pricing_policy) , it only seems to be banned if you're doing it as a country. >What makes it worse is that money is pumped into it like a ponzi scheme (first investors cash, last investors are left with the bubble), which should be illegal in itself. IANAL, but part of what makes a ponzi scheme illegal is that there's deception involved (ie. you're taking money for…

> IANAL, but part of what makes a ponzi scheme illegal is that there's deception involved (ie. you're taking money for investors and saying that you'll use it to invest in the business, but really you're paying out yourself/other investors). You're taking investor money, and inflate the bubble. And you prevent the bubble from popping by using the investor money to subsidize rides. Part of the deception is that the tr…

>You're taking investor money, and inflate the bubble.

What counts as "inflating the bubble"? Are you just referring to share prices going up? Taking investor money and spending it on advertising arguably counts as "inflating the bubble" as well. Should that be banned as well?

>And you prevent the bubble from popping by using the investor money to subsidize rides. Part of the deception is that the true price of a ride is higher in reality.

It seems plausible that consumers were deceived about "the truce price of a ride", but it seems hard to believe that uber investors didn't know.

Re: The Uber Bubble

#465

Post by aeyes » Mon, Apr 18, 2022, 1:49 PM UTC

kwhitefoot wrote: post #409

meowtimemania wrote: post #323

Earlier quoted context omitted.

I used to live in Latin America and I would avoid hiring shoe-shiner kids in spite of them following me each day. I thought it was sad to see these kids working at such an early age and thought hiring them would be me exploiting them. In hindsight I should’ve just hired them, they need the money. it’s horrible people live in poverty and have to work such jobs, but IMO hiring them helps them more than not hiring them.

No, hiring them to shine your shoes would not have helped, it only perpetuates the system. What is needed is a social change that eliminates the need. Sadly this sometimes only happens when the oppressed party suffers enough to elicit real sympathetic action or in extreme cases an uprising. As you didn't hire them, presumably your shoes didn't need shining so they were not really performing a necessary function anywa…

If they weren't shining shoes for money, they'd be straight begging or stealing. So what should we do with the homeless who only beg for money? Tell them to get a real job? It doesn't work like this, at least not in countries which are less developed. Here we can't create millions of entry-level jobs for people who mostly don't have any type of formal education overnight.

Seeing kids work is not right by our standards but people have to eat. Luckily I hardly ever see that here. But I see a lot of people that are willing to work, even if the job is unnecessary by your definition: Cleaning windscreens, carrying bags, singing or other artistic presentations, selling candy or water...

I give them money, they are part of this society and most of the time they did not choose this route. I would like to do more but unfortunately my time is very limited.

Re: The Uber Bubble

#466

Post by throwaway73838 » Mon, Apr 18, 2022, 1:51 PM UTC

Having existed pre and post Uber, in my country (Australia), here are my thoughts:

Ordering an Uber is far, far quicker and easier than getting a taxi.

Getting an Uber is still far cheaper. In the old days, if you were traveling after 10pm, you’d very often be charged up to $10 from before you’d even closed the door.

That lead to taxis feeling like luxury vehicles. Catching an Uber seems so mundane by comparison.

Re: The Uber Bubble

#467

Post by akoster » Mon, Apr 18, 2022, 1:52 PM UTC

rajman187 wrote: post #389

inamberclad wrote: post #67

Uber as a business is a massive loss, but consumers still _chose_ Uber over taxis because the process of getting and riding in a car is a million times more transparent than a taxi ever was. You can see what car and what driver are picking you up, what route they're going to take, and how much it will cost. Taxis failed because they failed to modernize.

In the UK the black cabs and other taxi services have rolled out similar apps. Uber prices have gone up to the point that a cab is often enough the same price if not cheaper. Never mind that black cab drivers know optimal routes by heart while Uber drivers are often just following phone navigation and getting lost.

Im glad to hear Uber/Lyft/Ride Sharing App pricing has matched that of cabs in London. In New York it was close (at least pre-COVID). I took would always opt for a yellow cab at those crazy prices (making sure that the meter was on, unless I negotiated a price). I'm not sure what cabbies in New York must pass but Definitely in places like London where cabbies must pass but hearing a little about "the knowledge" [1] for London cab licensing, and experiencing their true professionalism, I only wish that a similar test could be administered to anyone professionally driving any vehicle in the city must take.

[1] https://www.thesun.co.uk/news/3307245/the-knowledge-taxi-tes...

Re: The Uber Bubble

#468

Post by 3bproblem » Mon, Apr 18, 2022, 1:53 PM UTC

It's considered a huge success because it returned a ton of money to shareholders

Re: The Uber Bubble

#469

Post by mbesto » Mon, Apr 18, 2022, 2:03 PM UTC

chrischen wrote: post #295

femto113 wrote: post #260

Earlier quoted context omitted.

"Turning a profit" has almost no meaning, particularly with mark-to-market investments in the mix. More concretely Uber's business has never generated positive cash flow (i.e. taken in more money in a given period than they spent in that same period) and are projecting they will reach that milestone for the first time in Q4 of this year.

A lot of movie productions infamously do not have positive cash flow. They deduct profits by creating artificial expenses charged by other companies providing services. If they did have profits they’d get double taxed (once on the company’s profits and then again in payroll taxes if they decide to disburse profits to employees). They’d also have to pay out royalties on profits in some cases. It’s usually pointless to…

> A lot of movie productions infamously do not have positive cash flow.

This is a nuance of an accounting trick used specifically in Hollywood and isn't relevant to this discussion whatsoever.

> It’s usually pointless to look at reported profits from growth oriented startups

Uber isn't a startup anymore. It's a publicly traded company.

> It’s much better to look at unit economics.

It's not. Unit economics are commonly used to drive an overall cash flow / profitable capability of most startups because their profitability is usually highly irregular when they are subscale. Unit economics are usually a proxy / indicator of gross margin and gross margin is an indicator of operating cash flow and/or net income.

> Just because the product is labor driven and low margin doesn’t mean it cannot be profitable. Amazon is a fundamentally low margin business as well (retail). The margins don’t matter so long as it can scale well,

Generally true, but there's a few things here that are important to consider:

- In most recent years, Amazon has started driving overall profitability via AWS profits which far outsize their retail/ecomm profits.

- What you're referring to specifically is free cash flow. From Bezos: "“When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.” Jeff Bezos is very focused on this “absolute dollar free cash flow metric.” You will see many people talk about Amazon’s focus on “growth” vs. margins, but the right focus is instead absolute dollar fee cash flow."[0]

[0] - https://25iq.com/2014/04/26/a-dozen-things-i-have-learned-fr...

Re: The Uber Bubble

#470

Post by mtalantikite » Mon, Apr 18, 2022, 2:10 PM UTC

phil21 wrote: post #429

mikeryan wrote: post #270

Earlier quoted context omitted.

And maybe the driver would show up on time, or maybe they'd see a street hail en route to picking you up and decide to make you wait an extra 40 minutes. That’s not how it worked, or works (see Curb). You didn’t schedule a particular cab you call the cab service and the dispatcher sends a cab to you and makes sure they got there. If they didn’t show up you call dispatch back and they call the guy and find out what th…

> That’s not how it worked It's precisely how it worked everywhere I've lived. What you describe sounds like a low density suburb or smaller town. Yeah, social pressure in those situations still works. The only time I've seen things work as you describe were small/vacation towns when I was visiting for a wedding or whatnot. The type of places where there are a dozen total cabs for the entire county. Any major (call i…

> It's precisely how it worked everywhere I've lived.

Have you lived in NYC? It's not how it worked here prior to Uber. You could call one of the car services and schedule a pickup ahead of time and they'd show up. Of course it wasn't totally necessary, because you could call Northside or Arecibo at 4am and they'd come pick you up at your house within 5 minutes.

Outside of NYC, yeah it was a mess. I remember being at datacenters in New Jersey in the middle of the night to fix some server that went down when I was at the beginning of my career and you'd have to call a bunch of car services to find anyone working at 4am.