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$2.25 Lyft line rides in SF

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Re: $2.25 Lyft line rides in SF

#61

Post by baddox »

evv wrote: post #16
enahs-sf wrote: post #14

This price war between uber and lyft seems foolish and unsustainable, but as a consumer, I'm down.

I agree, until Lyft runs out of money, Uber wins, and the price skyrockets. Plus there's Sidecar, which will surely die soon because nobody even knows it exists.

I don't see why that would necessarily happen, because the barrier to entry for new competitors in the smartphone-app-ride-sharing industry is relatively low. Of course, it could happen if Uber ironically manages to get regulatory favors that increase barriers to entry to would-be competitors.

Re: $2.25 Lyft line rides in SF

#62

Post by baddox »

stolio wrote: post #48
enahs-sf wrote: post #14

This price war between uber and lyft seems foolish and unsustainable, but as a consumer, I'm down.

There's a logic to unsustainable price wars - your competitors might not sustain them as well as you can. Price wars can be horrible for consumers, that's why some forms of them are illegal[0]. If Lyft and Uber talk to each other about gutting prices to put cabs out of business it's illegal. If they read the same econ books and independently come to the conclusion that it's the best thing to do, it's legal. We regula…

I'm not sure how tin-foil or revisionist this belief considered, but I've suspected for a while that predatory pricing simply isn't a thing that is remotely common or effective. There is far too little historical evidence of it happening, and even less of it being effective.

Re: $2.25 Lyft line rides in SF

#63

Post by prawn »

dougabug wrote: post #59
gojomo wrote: post #55

Earlier quoted context omitted.

Whoever wants to be in the business owns the cars, like every other rental/service offering. Whatever the liability challenges, they are likely less than current cars-with-drivers, after removing human error, emotions, and criminality. You aren't likely to want to own your own self-driving car in a major city, unless you're an eccentric rich person, or a car hobbyist, or a old fogie. Urban garage/parking space is exp…

Do you spend most of your life sleeping on public beds, lounging on public sofas, and public furniture? Eat most of your meals in restaurants? Rent your clothes? I'll spend some time in a hotel if I have to (i.e. far from home, no friends or family where I'm going), but I don't pay to sleep in a hotel or couch surf in my own neighborhood, nor do I rent cars unless I'm out of town. I own my own home, means of transpor…

This attitude will change over the next decade or two. As @gojomo said, the vast majority of people already use common cabs, buses, trains and planes. Convenience and price will win out. Street parking or off-street parking will become rarer and more expensive in cities.

First it will be the occasional users or those with a second car or on a budget, but eventually most of us will either pay per use or have an account for regular use rather than outright buying a car like we do now.

For commuting, many will be taking shared vans (possibly pod-based) that pick an efficient route rather than plying a typical bus route.

And we'll get the vehicle we need when we need it. You won't take a ute to dinner with your partner. You won't have a three-door hatch when you need to choose and bring home large items, or transport the family on a road trip.

The future Uber won't even be people you know or don't know. It will be a driverless car.

Re: $2.25 Lyft line rides in SF

#64

Post by prawn »

geuis wrote: post #56

I use Lyft all the time, multiple times a week. This is ridiculous. How in the hell are their drivers supposed to make money?

It's likely that Lyft are loss-leading to keep marketshare and still paying their drivers the regular amount.

Re: $2.25 Lyft line rides in SF

#65

Post by stolio »

baddox wrote: post #62
stolio wrote: post #48

Earlier quoted context omitted.

There's a logic to unsustainable price wars - your competitors might not sustain them as well as you can. Price wars can be horrible for consumers, that's why some forms of them are illegal[0]. If Lyft and Uber talk to each other about gutting prices to put cabs out of business it's illegal. If they read the same econ books and independently come to the conclusion that it's the best thing to do, it's legal. We regula…

I'm not sure how tin-foil or revisionist this belief considered, but I've suspected for a while that predatory pricing simply isn't a thing that is remotely common or effective. There is far too little historical evidence of it happening, and even less of it being effective.

In some quick googling the Cato Institute are the only ones saying it's a myth. But I'd expect that from them. I'm sure the Austrians deny it, too.

It's fairly basic game theory and strategy. If it's not empirical enough for you then Economic theory in general might not make the cut either :)

Re: $2.25 Lyft line rides in SF

#67

Post by baddox »

stolio wrote: post #65
baddox wrote: post #62

Earlier quoted context omitted.

I'm not sure how tin-foil or revisionist this belief considered, but I've suspected for a while that predatory pricing simply isn't a thing that is remotely common or effective. There is far too little historical evidence of it happening, and even less of it being effective.

In some quick googling the Cato Institute are the only ones saying it's a myth. But I'd expect that from them. I'm sure the Austrians deny it, too. It's fairly basic game theory and strategy. If it's not empirical enough for you then Economic theory in general might not make the cut either :)

I don't know. The Wikipedia article is pretty short and sparse. There is a short list of "examples of alleged predatory pricing," but that doesn't seem to support the certainty with which the economic theory is generally presented.

Even in non-empirical economic theory, the idea doesn't sound particularly obvious or sound to me. Obviously predatory pricing by a large firm can drive small firms out of business, but the large firm doesn't actually make profit from that until they raise their prices again, which sends a signal to others to start competing. And yes, there are barriers to entry, but it doesn't seem like the resources a small firm spends to enter a market would be destroyed when that firm gets driven out of business by the large firm's predatory pricing. Assets will get liquidated, sold to someone else, and potentially used to start competing again when the large firm raises its prices.

Re: $2.25 Lyft line rides in SF

#68

Post by gojomo »

dougabug wrote: post #59
gojomo wrote: post #55

Earlier quoted context omitted.

Whoever wants to be in the business owns the cars, like every other rental/service offering. Whatever the liability challenges, they are likely less than current cars-with-drivers, after removing human error, emotions, and criminality. You aren't likely to want to own your own self-driving car in a major city, unless you're an eccentric rich person, or a car hobbyist, or a old fogie. Urban garage/parking space is exp…

Do you spend most of your life sleeping on public beds, lounging on public sofas, and public furniture? Eat most of your meals in restaurants? Rent your clothes? I'll spend some time in a hotel if I have to (i.e. far from home, no friends or family where I'm going), but I don't pay to sleep in a hotel or couch surf in my own neighborhood, nor do I rent cars unless I'm out of town. I own my own home, means of transpor…

Fair enough, I trust you on your own preferences, but car ownership is already trending down. More people each year are living in bigger cities. That's where ride-services are most convenient – and become even more efficient with a high density of cars and riders. And it's also where private car ownership can already be superfluous and expensive.

Self-driving cars-for-rent will get you places both faster and cheaper than possible in your own car. That could make private car ownership seem quaint or even ostentatious in most cities.

Re: $2.25 Lyft line rides in SF

#69

Post by stouset »

baddox wrote: post #60
rtpg wrote: post #26

Earlier quoted context omitted.

You shouldn't, the end result is that drivers will end up with shitty salaries (and no, most drivers aren't going to be retrained as computer programmers when they realise Uber can't help them pay for their SF rent). Not to mention that these people are contractors (illegal) so have more personal taxes to pay. In my eyes Uber and Lyft have lost all moral high ground. These companies are just not following regulations…

Drivers' salaries can only go as low as drivers are willing to be paid to drive. That's no different than literally any commercial interaction. You could always volunteer to pay more, and the other party would probably be appreciative. Of course, in this case I think it's pretty clear that Lyft and Uber are subsidizing the rides and paying drivers much more than the cost of the ride. If wealthy investors want to pay…

This only holds so long as you believe the drivers are rational actors, and account for all of their own costs. From talking to drivers I've ridden with, most have literally no idea how much their driving is depreciating the car, nor do they factor in things like an increased maintenance schedule into their calculations.

I suspect Uber and Lyft would continue to experience their current glut of drivers, even if the entire model boiled down to nothing more than drivers effectively trading the equity of their vehicles for cash at a terrible exchange rate.

Re: $2.25 Lyft line rides in SF

#70

Post by jlees »

Psyonic wrote: post #57
geofft wrote: post #39

Earlier quoted context omitted.

I'm a little sad that the entirety of SF is now considered "extremely expensive neighborhoods". What's your response going to be when Oakland also becomes "extremely expensive neighborhoods" (if it isn't already)?

Walnut Creek

Most of the Lyft drivers I've spoken to recently lived in Walnut Creek or further out. I only occasionally seem to get someone from Oakland, let alone SF.
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