The Uber Model, It Turns Out, Doesn’t Translate | Hacker News Reader

The Uber Model, It Turns Out, Doesn’t Translate

nytimes.com

66 pointsblatherard86 comments

Uber only worked because they found a market that was heavily regulated at the local level.

Most industries with this sort of regulation are extremely difficult to disrupt thanks to regulatory capture. But the taxi industry was almost exclusively regulated at the local level. By starting the service in a city with a real taxi problem (and SF has always had a "unique" black car system in that black cars can answer hails off the street) they were able to prove their system worked and build capital. After they did this in a few friendly cities that just needed a taxi solution, they had enough funding and momentum to simply ignore local taxi regulations, pay off any fines, and let public opinion of the new (and super cheap because it's subsidized by Uber for a while in new markets) taxi service do the work for them.

That model works great if your regulators are far-flung and small. Most of these taxi regulatory agencies have pretty limited budgets and simply aren't equipped to deal with a company like Uber that has an army of corporate lawyers. The worst they ever thought they would have to deal with is a couple of local taxi companies with limited resources themselves, so they weren't prepared. Because Uber could drown their agency in paperwork for years, many regulatory agencies have adopted a "wait and see" approach with Uber.

Try this "ignore the regulators" approach in an industry with centralized national regulation and you're in for a big surprise. Turns out, the federal government has basically infinite money and is not scared by lawyers the way municipal government agencies are. This is exactly how Theranos and 23andme got in trouble -- you ignore the feds at your own peril.

I never thought of how important the distinction between local and federal regulation could be when establishing a market. I think you hit the nail on the head. Regulations made the price high to begin with so there's plenty of profit, even if uber wasn't so expensive.

A startup in my town recently launched an app that basically acts as uber for established taxi companies. Interesting to see how that plays out.

> A startup in my town recently launched an app that basically acts as uber for established taxi companies. Interesting to see how that plays out.

If it's like any other city, the taxi drivers will cancel the ride as soon as you get in the cab and ask you to pay them in cash (often because it's not really their cab; they're just borrowing their cousin's license/car for the night). Uber works because it's the only option for the cab driver to get paid, and in many cities they fine drivers for canceling fares.

It's a college town. Small enough for word to get around quick. The companies that work here are pretty good since the majority of their work is taking drunk college students home from the bars.

I don't think it's fair to attribute all of Uber's success to regulatory flouting. They provided legit enhancements that a) benefit both parties, b) are legal, c) are things taxi companies hadn't bothered with, and d) are things people will pay more than production cost for.

For passengers: tracking the car as it approaches, frictionless CC payment, responsive support, reliable rides, accountability and when something goes wrong.

For drivers: a steady stream of business, filtering of bad customers, protection against customers that can't pay, less time lost to payment and finding destination address.

They solved a very old coordination problem (assign rides from a veil of ignorance) that had historically led taxis to discriminate on passenger and destination.

They started pooling similar rides together, thus saving trips, which taxis never even attempted unless you arrange it yourself.

And didn't they have a workable enough model just using licensed, insured black car drivers?

To be sure, they benefit from flouting some reasonable regulations, but it doesn't account for their entire success.

This has all been pretty obvious for awhile.

Take Instacart: I pay $100/year for unlimited grocery delivery? Which I'm doing once per week, so that's < $2 per delivery. To deliver this service takes the Instacart shopper/driver at least 30 minutes, probably closer to 60. Assuming a $15/hour wage to the driver, that's $13 of loss per order. Which, again, I'm doing 50+ times per year.

And, at the store I order from, prices are exactly the same as in-store so there's not much (if any?) profit they could be extracting on that side.

Let's all just enjoy the VC money subsidizing our lives for this (second) brief moment. Just like Kozmo.com back in the day.

> And, at the store I order from, prices are exactly the same as in-store so there's not much (if any?) profit they could be extracting on that side.

They could easily be taking a cut from the shop's profits - margins at some grocery shops are pretty good, and at least in theory Instacart are bringing in custom that they wouldn't otherwise have.

Yes - if they're reducing the costs (real estate, cashiers, etc) of the store, they can get money from that side of the transaction. The same is true for food delivery: restaurants save a lot of money if they're not providing space, servers, dishwashers, etc.

This isn't to say that many won't go out of business. Many will, and the market will consolidate.

Gross margins are probably pretty good for some items at grocery stores, but in general their income percentages are razor thin.

Margins at most grocery stores are abysmal. Not even Whole Foods, which has the highest margins in the industry, could subsidize that delivery model.

> They could easily be taking a cut from the shop's profits

If its easy, why are they not doing so? Because there's only so much pain you'll tolerate as a supplier before setting up shop yourself to provide that service directly.

Unless they can "batch" up deliveries enough. I.e. that 30 minutes actually involves 8+ deliveries to people near you. Hard to do obviously.

Yes. In many ways this seems like a (admittedly less severe) version of dot-com happening again. There was also a piece a week or so ago about how a number of these companies are trying to branch into offering these services for businesses.

One of the problems both then and now is that there are a lot of convenience services that people would, in general, like. However, in many cases, there aren't (enough) people willing to pay the cost of delivering those services to make them work as businesses.

Grocery delivery can work. Some Whole Foods were offering delivery pre-Instacart and Peapod (Stop & Shop) has been around for over a decade. But you pay about $10 per delivery, which I assume is priced to be roughly breakeven given that the grocery chain is still making money on the food. I think it's fair to say that the market has shown the average person (especially one with a car) isn't willing to pay that--especially given the other real or perceived issues associated with ordering groceries online.

Grocery delivery only really works as a business if you're shipping the orders from a distribution center. I believe Peapod (and others like FreshDirect) use this method: they have a giant warehouse full of food, and they load trucks up for deliveries every morning with the day's deliveries.

Instacart is honestly a wholly inferior product. I find myself using it whenever I have a craving for something specific and I'm willing to drastically overpay for it. The few times I have used it for grocery delivery, it was way overpriced and the shopper couldn't find half of the things on my list (so I wasn't able to make either meal I had purchased the ingredients for). The only benefit I see from Instacart is 1-hour delivery (most grocery delivery services require you to order at least the day before).

"Grocery delivery only really works as a business if you're shipping the orders from a distribution center"

In Montreal a lot of grocery stores offer delivery for a couple of dollars as a norm, although the orders would usually be placed over the phone, you also had the option of shopping at the store and having your groceries delivered in a few hours. It was only after I left that I realised grocery delivery was not the norm in most places.

Example: http://www.supermarchepa.com/eng/services/delivery.html

Sorry; I should have said grocery delivery only scales past a single neighborhood without a distribution center.

You're certainly right; grocery delivery was more or less a regular service before the advent of the massive suburban supermarket.

I didn't love Peapod either when I used it admittedly a long time ago because they regularly didn't deliver some items--even some I thought would have been very common--and made weird substitutions. I only used them while I had a broken foot and was on crutches because, although I could drive around and even go to the store easily enough, doing a full grocery shopping would have been a pain.

I do know people in SF without a car who do use Instacart regularly but, for me, it's easy enough to hop in the car and go to the store. I also buy mostly unprepared food so I'd just as soon look at it anyway. I don't actually have Instacart available in my area anyway.

Your spot on that some stores are offering grocery services. Our local Hyvee is doing this and has been a life saver [1]. For this to work you already need a distribution imo.

Orders over $50 are free for pickup, just drive there and they load it into your car. To house deliveries are free over $100.

I don't know if they are making anything on the delivery or just taking it out of the per item markup. Just makes one realize how much markup are on the items. I spoke with the delivery guy and he said they are doing past 300 delivers a week.

[1] - https://www.hy-vee.com/grocery/

>Orders over $50 are free for pickup, just drive there and they load it into your car.

Yeah, there's a local chain around me that just started doing this as well. I'm not really the market for it, but I could absolutely see it for parents with small children or people with mobility issues.

I imagine there's a fair diversity in how these deliveries are paid for between explicit delivery charges, probably at least some markups, and simply not including in-store specials.

I agree that the Instacart economics don't quite work out.

However, to be fair to them, it is also expected that you'll tip.

& I do ... but the tip goes to the driver, not Instacart.

This is really wrong thinking and a good example of misunderstanding unit economics. You're calculating the unit economics of a delivery assuming there's only one "unit". You have to look at the aggregate. That driver isn't just delivering to you. Not every customer is ordering 1x week.

as a reply to his post, this reads like a magic wand wave

While the post you're responding to doesn't explicitly state all the detail you were looking for, I do think you're being a bit too dismissive.

Not sure on the accuracy of the claims, but the "hand waving" is saying that the estimated time spent per delivery may be a large overestimate if that driver is delivering multiple orders per trip, thus reducing the amount of time that a single customer pays the driver to drive out to a specific area. Point number two was to imply that, yes, if they priced a delivery at $2 per delivery, they probably are operating at a loss, but not everybody gets 50+ deliveries in a year, thus bringing the average cost of delivery up. Heavy users have existed in other systems and they didn't become suddenly untenable (Amazon prime seems to handle it just fine).

It needs a bit more detail. Is the assumption of groceries once a week really weak? (literally everybody I know gets groceries once a week)

Is the density of drivers and customers such that drivers deliver at a rate <<15 min?

"Not everybody gets 50+ deliveries a year" can sound as sensible as "Not everybody brushes their teeth every day" or as pedantic as "Not everybody sleeps every day" depending on the underlying statistics.

It's a reasonable response: that driver isn't delivering groceries to you, they're delivering to your whole neighborhood. As the density of delivery orders goes up, there's more and more opportunity to batch nearby orders like this.

In addition: if you pre-order a bunch of deliveries, you're giving the delivery service more cash upfront. That usually allows for greater efficiencies in how the cash is spent and/or invested in the business.

Of course, if they never reach the break-even density, the whole thing is doomed to slow failure.

The point of VC-subsidization is only to last until the company can build up both a brand and a more efficient system.

For example, shopping at Whole Foods is inefficient. However, once Instacart has their own (automated) warehouses and can cut out the middleman supermarket, as well as real estate/cashiers/etc, it can potentially shift to being profitable. Add in self-driving cars, and they're set.

(Also, don't forget that for many stores, Instacart marks things up 10-20%. So they're making +$20 on a $150 order.)

Instacart are absolutely not subsidizing until creating their own automated warehouses. Pick and pack for groceries is really hard due to the high variety and expensive and the margins are really small.

Instacart are trying to capture the top-of-the-funnel via marketing efforts and branding, which is capital intensive, but from a variable cost instead of fixed cost perspective.

So basically a business that isn't going to be feasible for the next 5-10 years.

That's not a business model then

> once Instacart has their own (automated) warehouses and can cut out the middleman supermarket

So now they're running a delivery-only grocery chain that has to compete with the well-established brand and distribution network that is popular among their not very price-sensitive customer base.

>Add in self-driving cars, and they're set

Don't hold your breath for door to door that also somehow has to drop off bulky and potentially fragile packages.

Uh no. At that point you're like a UPS delivery man, pack the truck vlby delivery order. Then the car drives to each location, you get the package inside and the car moves on

"Take Instacart: I pay $100/year for unlimited grocery delivery? Which I'm doing once per week, so that's < $2 per delivery. To deliver this service takes the Instacart shopper/driver at least 30 minutes, probably closer to 60. Assuming a $15/hour wage to the driver, that's $13 of loss per order. Which, again, I'm doing 50+ times per year."

Except Instacart marks up most items on their website, so it's not really $2 per order (http://www.nytimes.com/2014/05/22/technology/personaltech/on...)

Most items on Instacart cost the same as they do in the stores. They tell you whether prices are the same as in-store prices on a store by store basis. In NYC, only Costco items are marked up, while items from everywhere else (Fairway, Whole Foods, PetcoNow, and Breads Bakery) aren't market up.

Except they don't for the store in question, as stated in the very next sentence of my post:

"And, at the store I order from, prices are exactly the same as in-store so there's not much (if any?) profit they could be extracting on that side."

citation: http://www.centralcoop.coop/page.php?PID=1042

Doesn't Instacart also charge a thick margin on top of each grocery good you're buying?

I don't think it's only costing you $100 a year, in fact it's probably much more than that.

Not in my case, as I stated above:

"Except they don't for the store in question, as stated in the very next sentence of my post:

"And, at the store I order from, prices are exactly the same as in-store so there's not much (if any?) profit they could be extracting on that side."

citation: http://www.centralcoop.coop/page.php?PID=1042

When I looked into Instacart last year, there seemed to be considerable uncertainty about whether their customers paid higher prices than in-store grocery customers. While they claimed at times that the pricing was the same, some of their customers claimed this was not the case. I don't know what the company's current claims are, but I'd be curious to know. This could give them a much easier path to sustainable revenue.

Also, if Instacart customers cannot take advantage of certain sales or club card pricing, Instacart could split this difference with grocer. At some stores, the difference is huge—my Safeway receipts boast that I've "saved" 25 or 30 percent. I haven't—I just avoided overpaying by that much, by purchasing items that are currently on promotion. Hopefully some current Instacart customers can weigh in on how the pricing lines up.

I enjoy the subsidy, but VC money is rarely "VC money" it's mostly LP money from pension funds, endowments etc., and when they fail there is usually a bail out from a large publicly traded corporation which again is spending everybody else's money. Certainly, wealth is extracted along the way by the VC's, bankers, stock traders, laywers, etc; however, I think at the end of it the joke and the bill are coming at the expense of the average person.

I think Manjoo's a bit off the mark here. We're not "witnessing the death of the on-demand dream". The dream was never alive in the first place. It was a zombie that was animated by cheap VC dollars.

Is the fact that most of these services are more expensive and less performant than they were two years ago a function of the challenges of maintaining quality while rapidly scaling (Luxe's excuse in the article)? Is it because the cost of expanding into new market segments has exceeded corresponding revenues in the short-term (Instacart's excuse)? Or is it because there are fewer venture capital dollars with which one can buy users?

When I hear the paper of record name "not losing money on the bulk of its orders" as an attribute of a startup that is doing well, I start wondering when the music is going to stop.

Loss leaders are a very common strategy for successful business. https://en.wikipedia.org/wiki/Loss_leader

IMO, the problem is the web makes customers far less sticky and people still have not caught on.

Most successful businesses that use loss leaders to gain revenue / market share do so for several specific products among a much larger offering. For example, the supermarket's 50% off charcoal sale ahead of the 4th of July that gets you into the store where you'll buy hot dogs and beer.

It's not a loss leader when your entire company is losing money. It's just a loss.

I was a buyer for a major grocery chain for a while - If you ever feel like really sticking it to the man, the biggest losses I used to stare at were always the rotisserie chickens, the expectation being customers buy other sides that had insane margins. So buy those without anything else in the cart and slowly run your local grocery store out of business!

My assumption for "not losing money on the bulk of its orders" meant that most transactions where not loss leaders.

Zappos is a good example where uniform business models may include unprofitable transactions. Having a liberal return policy is fine as long as only a small percentage of orders are a small net loss. AKA, if 0 or 1 return is profitable, they break even on 2 returns, and most orders never hit 3 returns it's a very good sign.

But, if even 2 returns is unprofitable and people regularly go past that then the business model may be at issue.

I think the model itself is valid, it just doesn't work for certain markets right now.

Companies like Amazon and Uber expand their market through convenience and ease-of-use. I make more impulse buys on Amazon with Prime 2-day shipping and take more taxi rides with the convenience of the Uber app.

The problem is it's hard to extract a lot of value without volume and efficiency/integration. Amazon ekes out as much efficiency as possible, being a large online retailer, and Uber was able to 'disrupt' the taxi industry.

It turns out delivery is expensive and even with good process, you can only get so far with a luxury service.

I suspect the on-demand service will slowly die out until it's revived by more efficient transportation (autonomous cars, drone last mile delivery).

If Luxe was cheaper than parking close to work because they were enabling users to have their cars parked at far-flung, cheaper lots, they drove up the value of those far-flung lots as demand increased.

Sometimes these kinds of hacks just don't scale.

I've personally never felt that Uber was a particularly innovative business. The ability to temporarily commandeer a vehicle/driver has been a thing since vehicles were invented. The only interesting thing Uber ever did was the replacement of inefficient centralized dispatch of resources with their tech stack that directly connects consumers with suppliers.

It does not surprise me in the slightest that it doesn't translate well to other industries. If it did, I would expect to see a greater variety of preexisting businesses utilizing centralized dispatch in a manner similar to how the taxi/black car industry operated pre-Uber. Given that these are few and far between, I can only assume that either nobody thought of doing this before (unlikely) or that it's simply a losing business proposition.

I think the surge pricing is something that hasn't been seen before.

I still think that Uber's biggest innovation was charging 30% less than cab companies. Given a smart phone, I have 0 problem looking up a cab company and calling them (in most cases). And New York City cabs have had apps for years.

The Uber app has a lot of details that are nice, but not essential. The minute they no longer have the cheapest fares, I'll use any other solution.

Uber started with town cars in SF that cost more than taxis. They caught on because they actually show up when you call one, unlike taxis who might find a street hail halfway there and abandon you without notice.

You're forgetting the quality control that Uber imposes on drivers through multiple mechanisms.

Maybe it isn't too bad in your particular corner of NYC, but in most other places, taxis are just horrible. They're dirty, nasty vehicles that are falling apart; the drivers won't take credit/debit cards and demand cash; the drivers drive you around in circles to get a bigger fare; the drivers are rude, don't speak English, etc. There's a reason so Uber has become so popular, and it's not just price.

With the reputation system, Uber lets you rate drivers, and if a driver gets too many complaints or low ratings, Uber kicks them out. Regular cab companies don't do this. Uber integrates GPS navigation, so your driver doesn't drive you in circles. Cab companies don't do this; they insist their drivers have "valuable local knowledge" (yeah, of the best ways of fleecing you). Uber doesn't let you pay in cash, all payment goes through their app; cab companies have broken (or "broken") card readers in their cars.

You should take a flight to San Francisco and take some cabs there. I hear that's a particularly interesting experience.

Let's not forget Uber somehow magically bypassed the old taxi licence/disc system. IMHO if existing taxi services could get rid of all the fees and regulations they would be only slightly less effective as Uber.

I had a discussion on here about this a while back. The model translates, as it turns out, super super well. The failure is understanding the Uber model.

I see uber differently as a company long term. However, this is my attempt at what their current conventional model is:

- they are a market maker

- the market(service) ois highly variable. E.g All rides are non-standard each ride has a different origin and destination, as well as timeframe. A rake is a standard tool, lot easier to rent that to me than a dynamic ride from downtown boston to southie. Ect.

- transparency in cost calculations

- convenience

- ect.

So while Luxe is to some extent trying to replicate this, that isn't totally possible. On top of sort of competing with Uber (i just park in a cheap area and uber to destination) the service is highly limited by inability to calculate randomness of peoples schedules.

AirBnB works because tgere is friction, domain specific knowledge, experience, and pricing.

Uber for groceries competes with me just getting groceries. A premium payment for a standard service. I am paying for a luxury here.

Uber is a market maker in a highly dynamic market. Many "uber for x" are just premium service providers

This makes sense. Almost everyone needs transportation at least once a week. If you don't have a car and use uber to fill the gaps then it's a great service. But if you do have a car and some free time then it doesn't often make sense to spend extra for convenience services like Instacart.

Yes there are people to whom every minute is a lot of money, but they are a very small market of all humans. Uber (with its scale and cash reserves) could make spin offs that can handle those needs more than a dedicated startup could.

Another issue is that it's pretty common to have an uber drive you to and from work, and if you like your driver, you two can negotiate on the side, saving money for both. I imagine this kind of thing would happen for personal services like housekeeping. If I'm giving someone keys to my house, I want them to be someone I know and trust. Turning gig economy work into an under-the-table job can be absorbed by uber, but it's harder for unprofitable niche competitors.

I agree with Uber being able to take over a lot of these spin offs much more efficiently. And it already has a customer base, so one fewer app I have to download and manage.

As I type this, I'm eating my lunch provided by UberEats, actually.

How many more years of losing $2B a year until we find out the Uber model doesn't work for Uber either?

Every time I ride with an exuberant Uber driver I warn them that wages will erode. Uber's (and competitors') intentions are to monopolize as much marketshare as fast as possible then increase margins. Today's drivers are overqualified for their position and these (already reduced) wages will continue dropping until they are slightly above fast-food wages.

These kinds of articles continue to pop on hacker news. At the end of the day won't most delivery companies go under when Google (fill in: whoever) brings the self driving car to a mass market and develops their own delivery service?

What will differentiate Postmates from Doordash from Eat24? Google might just sell these cars to these services but I feel like it is too lucrative for them not to develop their own service

Self-driving cars are inevitable, but concerning that day and hour no one knows. Not only will the tech have to be foolproof, but the product consumer ready, and the legislation in place as well. Even if it's moving fast now, it'll take at least a decade or half to be ready.

I don't know about that. Tesla, Mercedes, etc all have some sort of self driving capability already on the market and are expanding the capabilities pretty rapidly. I agree that completely self driving cars won't be ready for over a decade most likely. But plunking a person down to sit in a car that can drive itself for 95% of the time will greatly reduce the amount of money you will have to pay said driver.

>But plunking a person down to sit in a car that can drive itself for 95% of the time will greatly reduce the amount of money you will have to pay said driver.

Really? It's not like you're replacing a high skill/high wage person with a seat warmer. You're replacing a roughly minimum wage driver with... a driver who doesn't need to drive as much (but, for the time being at least, doesn't need to drive as much in a more expensive car). Why on earth would that reduce the amount of money you have to pay?

Sounds like these services initially under-charge to get popular, and then have to ramp up prices (and lower wages) to stay out of the red.

I've been using Washio for two years and have loved it - 24 hour turn around for fresh clean laundry that is folded for me. It's been a great timesaver and luxury for me. Over the past few months though they've slowly raised the price. I didn't mind, I loved the service. But then they stopped doing morning pickup, and the 24 hour turnaround has now gone to 60 hours and I can't even pay extra to get the same level of service I used to have. I guess the VC money is running out.

I'm glad somebody finally wrote something on this. I would love to see the incomes for all the delivery workers (drivers / packers etc) broken down revenue and net income minus taxes, gas, vehicle maintenance, benefits, referral fees, and incentives etc. I can't imagine people are really making a solid hourly rate.

It depends on the kind of worker. For someone that relies on Uber or the like as a main source of income, it's not pretty. But if you're a stay-at-home spouse and you spend a fair portion of the day running errands, doing a little Uber work on the side can help offset your costs, especially if you're one of those strange people that actually enjoy driving.

I had an Uber driver on the SF Peninsula who works a day job just a few hundred feet from where I live (which is, I suppose, why he got the dispatch). He drove us to SFO.

Turns out, he lives in BFE (Tracy) and works 7-4. His commute in to work is fast (okay, as fast as a, what, 70 mile drive can be) because it's off-hours. Then he drives for Uber for a few hours after work, getting PAID to sit in traffic.

Then he drives home when there's no traffic! And as a bonus, sometimes he gets paid to drive someone to the East Bay or somewhere that gets him a bit closer to home, 'on the clock' so to speak.

I have read that delivery drivers have to make 16 deliveries an hour to make minimum wage in the UK.

Uber worked because it disrupted and undercut taxi monopolies, and a minicab industry with various usability/availability/safety issues.

Uber is not only more convenient, but cheaper than the established players.

Few other industries are ripe for such disruption.

So doesn't this extend to "services" like Magic, which are just another layer of abstraction from the core product/service?

I've personally never understood Magic. Looking at their homepage, none of those use cases work for me. Flights, flowers, pizzas, whatever...each require enough specific information from me that passing it along to a third party - and paying more to do it - seems pointless.

I wrote about this recently: https://danielcompton.net/2016/01/27/a-context-free-grammar. The gist is that you can't copy a business model, tweak a few features and expect it to work in your market. The whole context of the business model matters.

Relevant article from almost a year ago makes almost exactly the same point: https://pando.com/2015/07/28/homejoy-only-uber-is-uber/

Doordash just got a valuation of 700m. May not be billions but it's certainly not a fail.

Valuation is meaningless, as we've seen with Webvan, Theranos, Clinkle, and literally tens of thousands of other companies. Tell me it's "not a fail" when the company is cash-flow positive.

When investors wake up to the importance of profits over valuation, this bubble will begin to die.

Isn't that already happening? Wasn't DoorDash's latest round a down round?

They have woken up to this before. We've seen the bubble start to pop lately, as many unicorns have taken massive hits to their valuations.

Eventually, the bubble will rise again because this is a cycle. False sense of security -> bubble -> correction -> caution -> false sense of security ... etc. etc.

But when does the bubble actually burst, Dot Com style?

It really depends on your definition of "bubble" and "burst". What is the line between burst and not-burst? How much value has to be lost? How quickly does it have to happen?

I think we were/are in danger of a shock, but a large correction could very well happen slowly as well (and therefore not seem like a sudden burst).

To me, the important takeaway is to remember the lessons of previous bubbles/bursts and apply them to your own life and the way you vote. People will always forget about dangerous excesses over time (or just stop caring), but regulations don't.

The article isn't questioning their valuation but the unit costs and if working in highly affluent SF translates to mass market.

Are they profitable? Do their costs (and prices) go down as they scale?

Just because someone invested X for Y implying Z valuation doesn't mean it will turn out to be a wise investment.

"uber for x" is the new "facebook for dogs"

It's almost as if having on-demand people to handle the minutiae of everyday life for you instead of you doing it is something that only rich people can have.

Who would've thunk it.

Edit: To make my point more clear, some things aren't expensive because of an old system or organization that needs to be "disrupted" (I hate that word), some things are just expensive because they're expensive, it's not a conspiracy to keep the common man from having a secretary, it's the fact that said secretary will eventually want to get paid for dealing with all the bullshit you're offloading onto him/her.

"Rich people" is really an overstatement for services like these. But I'm not sure why someone would disagree with your basic point. Any of these services that involve human labor (because they can't be highly automated) have to be premium services and your median income person is probably not going to pay for their groceries to be delivered just like most won't pay to get their lawn cut or their house cleaned.

This guy nails it. "uber for everything" is a plague. I think he could have used some better examples though.

Uber got lucky - they banked on millenials being so self-centred, and so naive and myopic on the long-term costs of their actions, that they used them to basically use VC cash (like a billion a year in China alone) to basically buy the cabbie business.

Once uber are the only players in town for a cab, and the fares go north, the service drops even further, regulation ignored even more so, those same selfish millenials will be the first to moan (aren't they always...).

Uber has lots of non-millenial users. Millenials do make up a large percentage of the userbase, but I would argue that has more to do with the age breakdown of urban workforce populations. There are larger forces at play here: younger workforce is moving to urban areas, not suburbs, and this is impacting car ownership because cars are not needed in many urban environments.

For reference, here is a breakdown of Uber's customer base in the US: http://www.globalwebindex.net/blog/the-demographics-of-ubers...

I'm having a hard time justifying the effort spent to respond to this comment, it seems very low quality...

So self-centered and naive? What's wrong with paying $5 for an UberPool vs $2 for SF's subpar metro system? It's called paying a slight premium for convenience.

Not every millennial is running around massively in student debt, documenting their $30 brunch on Insta/Snap while complaining about boomers and the global economy.

I have to agree with the other responder: this is a low-quality comment.

The big thing you're missing with your idea about running the cabs out of business is that Uber is not a monopoly; they have a direct competitor in Lyft. Before those two came along, cabs were not cheap at all, and they had terrible quality (crappy, dirty vehicles; rude drivers; taking 60 minutes to show up when you call). Just ask anyone in SanFran about how cabs were before Uber showed up.

As long as there's competition, prices will naturally stay low.

As for "regulation", are you kidding? How did the "regulation" help anything? All it did was artificially restrict competition, while not providing any value for the customer. Cabs are nasty, drivers are rude, they drive in circles to increase the fares, etc. Regulation never helped with any of that. Uber's reputation system did.

Honestly, you sound like a disgruntled taxi driver, mad that you can't get paid to abuse customers any more. Too bad, so sad.

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