Uber Bonds Term Sheet Reveals $470M in Operating Losses

That means that, at no extra cost to the network, the customer will end up waiting 2 minutes for a cab instead of 40, and the driver will end up waiting 2 minutes for a fare instead of 40.

Would you pay extra for those 38 minutes as a customer? I would. Would you accept a lower commission as a driver if you spend less time waiting for fares? I would.

As soon as the competitor tries to muscle in, the dominant player can maintain that advantage while dropping their costs and still remain profitable. They can undercut the new player until they go out of business.

Realistically speaking, the new players will recognize this built in advantage and will not challenge the monopoly at all unless their pockets are very, very, very deep and they are prepared for a protracted period of heavy losses.

Uber is still fighting to gain that monopoly advantage, but it looks like their investors are willing to sustain heavy losses for a long time to get there. Once they do have it, it will become self-sustaining. The more powerful their monopoly power is, the less likely it will be challenged, so the more powerful it will become. At that point they can start milking their customers and drivers and then earn some truly ridiculous profits.

Part of the monopoly advantage means that they can covertly punish drivers who choose to use competitors' apps by sending them fewer rides. If it's not already here, this tactic is probably coming very soon.

My point is that you don't have to run the cars to run a marketplace, though the money is being thrown at doing both at once in an effort to lock the running of the cars into the monopoly.

Running the marketplace is the only real natural monopoly here, though; If you can decouple the marketplace from the running of the cars, you could potentially become a lot more efficient, by allowing smaller players to run the cars.

So, of the people I know working for Uber... it seems that compared to other unskiled labor jobs open to them? By all accounts, Uber is worlds better than foodservice, unless you count both the lack of disability insurance (workers comp functions as a sort of disability insurance for most people) and massively increased danger (driving a car is one of the more dangerous jobs available) - but certainly for the right now? the people I know who work for uber? they are so happy to not have to work foodservice. And the schedule control? the schedule control is unheard of for unskilled labor jobs. If you don't know anyone who works retail, it's not like being an engineer, where so long as I show up between 8:00 and 11:30AM, the boss is cool. No, not only do they have to stick to a schedule, but that schedule changes from week to week and even day to day. Uber lets these people have, if not full schedule flexibility, at least more schedule flexibility than I get.

I... don't think I could handle an unskilled job for more than a month. I'd get fired for showing up late, or quit after one too many customers laid in to me because they were having a bad day.

So... yeah, even without the disability insurance, I think I'd choose an uber driving job over a fast food job. And if uber loses the appeal? (what happened with that, anyhow?) and is forced to pay on a W2 basis and cover worker's comp? That problem will be solved, too.

(oh yeah, as an aside, if I ran uber? I'd tell my lawyer to take a fall; to make damn sure we "lost" that case. Uber is far better placed to absorb the extra costs associated with paying drivers as employees than any of the other ride-sharing companies.)

>On top of all of that, I believe they're a great example of the shift back to a new gilded age, where the main function of the poor is to directly serve the wealthy. But instead of a Victorian model where employees are part of the household, in the Uber model we'll get paid only during the instants we are directly useful to somebody with money.

Now, I'm not defending uber on any of the other counts; or this one, really; you aren't wrong. Especially on the bit about wanting the convenience of having servants without wanting to deal with the relationship -

You could make the argument that the new arrangement is more respectful to the workers; when the uber driver is off shift, she is my social equal, and that wasn't true of the Victorian model. It's certainly a hell of a lot less paternalistic.

Of course, you certainly have a point that the new model is less stable. (I return again to the worker's comp issue)

But the truth of the matter is that it sucks to be poor. It always has, really, and it probably always will.

I'm just saying, when you compare working for Uber to the other choices an "unskilled" person has, it doesn't look so bad. Being poor sucks, sure. but I think being poor and driving for Uber is probably better than being poor and working at McDonalds or target or what have you. (minus, of course, that disability insurance thing, which, I guess, could actually be a pretty big deal, considering the increased chance of disability that comes from driving all day)

I think that if the disability insurance problem was solved (say, by Uber losing that court case) then if Uber or similar services increases the demand for professional drivers, that might be a win-win for both the poor, who get slightly better jobs, and the upper middle, who don't have to drive as much.

(I need a better word than "unskilled" - I highly doubt I could maintain a minimum uber driver rating. I'm a below-average driver, and while I could maintain that level of social function for eight hours, I'd find it pretty draining; just that level of social interaction, for me? I'd be able to pull it off two, maybe three days a week.)