Disrupting Uber

Also it isn't really true that Uber lowers prices for riders when they lower prices for drivers. Uber practices active price discrimination to discover the highest price a rider will pay. If you get ten people together on the same street corner and everyone calls for an UberX, you'll get ten different prices.

1) Owning a car

2) Having insurance and good driving/criminal history records.

3) Willingness to do the work.

Even assuming Uber also has minimum age requirement, that's a very large supply of potential drivers, which is going to prevent wages from rising very high, unless there is artifical pressure such as regulation.

In some big cities, Google Maps can provide this, sort of, Uber vs bus fare, for instance.

The corporation isn't some money-sucking black box. It's dispute resolution, software development to match rides efficiently (Uber Pool is tricky), and advertising.

Yes, it also skims money off the top to pay for things like driverless car R&D, but is a small, likely disorganized co-op going to be efficient enough at all the above to take advantage of that margin?

The issue is though how does one get drivers to switch from a reliable (though possibly imperfect, inefficient) source of regular income with a well-known brand to an upstart at a large enough scale to pose a direct threat to Uber, thereby forcing them to change their model or go out of business?

I'm living in LA right now and I typically wait 4 min for a car (longest has been 10 min). My last ride cost $4.44. That's less than a Big Mac! ($5.04 average price in the US). I can't imagine a new service being able to beat that from it's inception.

The other issue is that if drivers are allowed drive for Uber and Swift there could be a free rider dynamic: drivers get the benefit of belonging to Swifts' co-op but still get to be part of Uber's network. Sure Uber's service would suffer, but it would be a huge drain on Swift's resources and undercut their model (and reason of existing) from the driver's perspective.

It seems like a few lines later, it says:

By turning to co-op apps, drivers can retain the flexibility of working under a model like Uber’s while also having a say in their own wages and conditions.

If the workers have a "say" in their own wages that means increasing prices, unconditionally. And who is going to provide the assurances that drivers won't lose money if they drop prices. When Uber drops prices, they guarantee wages as per:

https://newsroom.uber.com/beating-the-winter-slump-price-cut...

How will this happen in a co-op? Spoiler alert: it won't.

How?

What is the "bloat" of Uber that this taxi co-op would avoid. Uber's primary spending is on marketing and developer salaries. Without marketing, how do you expect anyone to use the co-op app?

Ultimately, I think it comes down to drivers (and leftists) not valuing developers. You're not going to build and maintain an app which competes with Uber if you're not paying for the "bloat" of developers.

Those are the two ingredients of capitalism: competition and the profit motive. Once you take away one of them, things start breaking down. And that's why not-for-profits are notorious for being wastefully run and being taken advantage of by their senior management.

Taxi service was often discriminatory in NYC and other cities: taxi drivers often refuse to pick up black passengers assuming they won't pay once they reach their destination and I've had gay friends openly complain about how SF cab drivers used to throw them out on Pride or after a PDA with their significant other. This was the status quo for decades because of the barriers to entry of municipal taxi services' monopoly. They never had to anything about it since their was no competition and if you didn't like it, you probably shouldn't take a cab.

Besides Uber's barriers to entry are it's scale (low prices and reliable service) and brand than de facto monopoly status (which I assume is what you're talking about since you mostly talk about competition beside summing up your link). The fact that a co-op could potentially "disrupt Uber" is evidence of that.

[0] https://www.uber.com/p/carousel-vs-2/?exp=xcl_t1

That's only a relevant question if the policy being proposed is actually likely to achieve a transfer from highly-paid professionals to the unemployed. Which is certainly not obvious, let alone consensual.

I don't know how many people that is. It would be interesting to find out.

2) The high liquidity of drivers would imply a functioning market (not to say that it's perfect). The most obvious solution for drivers who are unhappy with the pay would be to get a different driving job, right?

3) The core issue is that the barrier of entry to driving for Uber is very low, increasing labor competition. This also keeps the price of a ride low. The wage of the driver is the agreement between the rider and the driver for the service, Uber is acting as a mediator. There is nothing in this article that comes close to proving that Uber is not fulfilling it's role as a mediator.

4) It will be interesting to see if the app works, but the strategy seems flawed. The constrained variable are the riders; there are already plenty of options. Paying drivers more doesn't seem to be a very compelling reason for riders to choose a different service.

Just as in buying computers, buying food, education, airplane fares, consumers want lower prices which is a good thing. In the case of taxis, that means the elderly who often need them because they can no longer drive and are on a fixed income can more readily afford them (surely a leftist notion).

There is no disagreement that "economic rents" are harmful to the economy, giving people artificially high profits (see the Wikipedia entry).

Are you saying that a politically left magazine want to harm the economy through economic rents instead of helping it through wealth creation? Who would be for that?

In Jacobin's world, the only person providing value here is the driver. In the world the rest of us inhabit, things like the star-rating system and the dispatch system are valuable too.

Not really, they are paying a portion of their profits for access to the connections to drivers that Uber provides. They have every right to participate in the ride-share market outside of uber.

Even in medicine, it is much harder for foreign doctors to work in the US than in Israel, a country with lots of competent medicine.

It really applies to any group that uses politics, regulation, to give profits beyond those in a healthy, efficient market.

In the case of taxis, it is helpful to eliminate economic rents so that fares are more affordable.

Instead of using economic rents to ensure that drivers get undeserved income which works against wealth creation, the workers should focus on eliminating economic rents that creates higher living costs, chief among these are the use of zoning density restrictions to create artificial land scarcity which results in higher rents.

Since a significant portion of one's salary goes towards renting an apartment or house or paying for an overly expensive mortgage, then eliminating the onerous zoning laws will go much farther towards improving the economy.

It is because of zoning density restrictions that housing is so expensive in SF, NYC, Boston, LA, SD, and other coastal cities.

The beer money group could be significant: retirees, students, people who want extreme flexibility because they have another primary job or responsibility. Half of all drivers is a significant block.

On the other hand, careerists legitimately face an impossible situation, since so much of their life is in the hands of one company that's constantly tinkering with its economics.

The common policy response across similar situations seems to demand every single job must work as a 40 per week career with benefits, killing any pure beer money jobs.

I don't know whether that's a wise policy solution or not. Maybe the benefits do outweigh the costs. But it's certainly not pareto optimal. Restrictive policy responses hurt one group of people in an attempt to protect others.

I'd feel better about such policies if proponents showed awareness of who they were hurting. Like if proponents said, "ok, honestly, we're going to hurt retirees with this jobs protection measure, but we think that's ok, because we value single moms over retirees."

Though if you get that far, you could just reduce it to a wealth transfer. Let Uber do what it wants, then tax retirees and give the money to single moms. Similar effect. One group loses, one group benefits.

Though of course then you'd stop and ask why you're taxing people supplementing a fixed income. Maybe you'd rather tax some other group first.

And that line of analysis is how you end up supporting deregulation combined with aggressively progressive taxation where the benefits are targeted to vulnerable groups.

If at least rates increased as you logged more miles and 5-star reviews that would be something. But it's quite obvious that Uber drivers are fresh meat for the machine. Not only that, but Uber is investing heavily in ways to eliminate drivers altogether. Literally everything about this screams do it for fun, for pocket cash, this is not a career.

The difference is that I have 0 trust in a random person offering me a ride. I trust the Uber brand though.

BTW, other day I was talking to a black guy friend of mine. He was complaining that the taxis didn't even stopped for him. More than one he had to ask as policeman to stop a taxi for him. As a funny guy, he says that he asks the policeman: "Would you please stop a taxi for me. I'm not able to do it, maybe they are thinking I'm black!".

As I understand, they had an experimental phone application. They took down support for it, and are building a next version.