Uber is losing billions and their drivers are making peanuts. That sounds sustainable.
The only reason Uber and Lyft work is that there are a ton of people with limited job skills, who have time on their hands, are short on cash, and need to spend their extra time trying to make money. Sure, there may be "bored people" who do this because they're retired or whatever, but that's a tiny minority. Most people do not become part-time cab drivers because it's more fun than what they would normally do with their free time.
A significant amount of our economy is dependent on people having two or three or four jobs, and a lot of those people live in or very near to cities, and have cars. If wages improve across the board, or people move farther away from cities, or people get rid of their cars, ride-sharing is screwed. Much of the "gig economy" is dependent on similar conditions. If we had better access to jobs and a living wage, a lot fewer people would be "gigging" to get by.
Another reason (there's probably dozens) why the gig economy is incentivised today are things like rising health care costs, rising cost of housing, rising cost of education, and lack of availability to retirement or pensions. We all know we're supposed to save, but it's harder and harder to save. So people have to pick up gigs.
My partner is a teacher and gets paid well for her position, but she still has to Airbnb out a room in her home because the insurance, taxes, and mortgage are absolutely insane. If she makes it to 25 years or whatever it is without killing herself from stress, maybe she can finally retire. Except, oh wait, the state isn't funding the teachers' pensions and will run out of money in eight years! Fun.
Point is, the gig economy is here because almost every strata of people below "upper-middle-class" have been getting slowly screwed for decades. It's not designed to give people a working income. It's designed to fit into the cracks in the system - and the cracks keep getting bigger.
I used to drive a taxi - I fell into it when I needed a job but was overqualified for just about everything. I learned a lot from my passengers.
The taxi company I used to drive for has adapted. I think they'll survive until uber runs out of money, simply because fleets of similar vehicles are cheaper to maintain. A Prius will last 400,000 miles, with rebuilt batteries and cheap parts from a boneyard (retired/wrecked vehicles).
The taxi company now leases unbranded cars that can be used by drivers for any of the app-based services. The company's contracts pay better than non-surge uber fares, which motivates the drivers to take care of the company's contracts too.
> Point is, the gig economy is here because almost every strata of people below "upper-middle-class" have been getting slowly screwed for decades.
I call the phenomenon "economic cancer".
Let's assume, for the sake of argument, that the concept is viable in urban areas within 5 years and Uber puts a massive fleet of self driving vehicles on the road.
While it's certainly true that they wouldn't have to pay drivers it would be a massive shift in capital investment.
The "genius" of Uber is shifting the necessary capital investment for hundreds of thousands of vehicles onto the drivers.
Assuming one car costs 30K (which I think is on the very low side) it costs 3Billion to put 100'000 cars (which also seems very low with Uber's global ambition) on the road.
That's an upfront investment currently incurred by the drivers.
The second point is that there are two keys to making money out of this: Have self-driving cars, find customers to rent the self-driving cars. Uber is already established in the second part. So it might be true that another company buys the cars and tries to run the business, but uber has the established customer base.
In my opinion the future of self-driving cars inevitably ends up with one of the big players buying uber to allow them to monetize their fleet.
Also, I never understood what kind of problem companies are trying to solve with self driving cars to be honest. Traffic in cities will be the same, if not worse. And I consider driving as one of the things I really enjoy doing. Why take that away?
So it has to buy parking.
What happens when they break down?
Servicing.
How often do they have to replace their fleet?
$3 billion every 5 years.
> So it has to buy parking.
Rent parking spaces in people's driveways! :-)
So, at best, they become a 40-billion dollar driver/rider match-making algorithm and a pretty CRUD app. Unless Uber itself is working on autonomous driving technology. It's so easy for drivers and riders to switch between ridesharing apps (e.g., ever see an Uber driver that also has a Lyft sticker on their car? I have, many times), I don't see how any of them can solidify a competitive advantage of sorts long-term.
But looks like I was wrong. They do have a self driving car service running for a group of testers, but apparently it is currently free so I don't think it counts. On the other hand they've got permission to start charging and have said they plan to this year, so I'd still expect them to beat Tesla.
Source: https://www.digitaltrends.com/cars/waymo-now-a-full-ride-hai...
I think the optimists are thinking "oh, the high-level problem of image recognition and building a 3D model of the area around the car is pretty much a solved problem, great, done!" But in fact, it's all the edge cases that will kill you. What happens when it is dark and rainy and the car in front of you is black, with no license plate? What happens when the car in front of you hits something in front of them unexpectedly? What happens when the car gets a flat tire? What happens when someone doesn't look in their mirrors before changing lanes? What happens when your "there's a problem" solution (like, say, stopping or slowing down) is actually not a good solution?
I have been in all of those situations except for the black car, and the humans involved all made spectacularly poor decisions.
People who claim that self-driving cars will have failure modes far underestimate the failure modes that humans have.
Now they have permits to run around 100% humanless apparently.
In the 2004 DARPA Grand Challenge, of 21 teams entered, 15 qualified to race on the course, and none finished the 240 km course. The best result was 12km. That was off road, with no requirement to obey traffic laws or other cars to hit.
Since 2009, Google/Waymo has 5 million driverless miles under their belt.
Is it 5 years away? I don't know, but this is not the same story forever. This is iterating and improving at a breakneck pace.
The problem with predicting these curves is there's usually a confluence of factors that lead to that tipping point. When the right algorithms, hardware, and software are combined it'll be obvious in retrospect, but right now we're still fumbling around with primitive solutions.
When will there be a TPU-type device suitable for in-car use? When will there be adaptive deep-learning algorithms available that can work in the demanding real-time environment of a vehicle? When will enough testing be done that we know such a solution can work without endangering people?
It will happen, but pinning down when is very hard. You'll only know when you're close, and by then you're already flipping from impossible to inevitable.
[1] https://googleblog.blogspot.com/2010/10/what-were-driving-at...
(But yeah, we are very far from cars navigating urban areas, or indeed anyplace where weather is inclement and so are people.)
If cars with safety drivers don't count, nearly a year ago if you move to Pheonix and get lucky [1]. They're apparently planning to launch in more cities "soon" (though I can't find a list or date) [2] and they've recently got permission to start charging passengers and intend to by the end of they year [3].
So I think "decades" is an exaggeration.
[0] https://www.theverge.com/2017/12/6/16742924/lyft-nutonomy-bo...
[1] https://www.theverge.com/2017/4/25/15415840/waymo-self-drivi...
[2] https://www.theatlantic.com/technology/archive/2018/01/waymo...
[3] https://www.digitaltrends.com/cars/waymo-now-a-full-ride-hai...
Even if you have a driverless solution today it'll take years to test it and get it certified.
If you read threads about biking[0], people seem to be motivated to bike more than they are motivated to drive. Although these same people are stymied by negative conditions. Self driving cars could improve biking conditions by opening up roadways, making them safer, providing better point to point transit.
I don't think that I necessarily agree that this means bike shares will succeed though, I think private bike ownership has a lot going for it.
And if they kill each other and the winner raises the price, I suspect Detroit wins.
Revenue
daily rides*365*$1
$250 per bike
+ $15 per month for maintenance
+ 20% chance of catastrophe amortized over the fleet
= ~$500
So maybe 2 rides per bike per day gets them in the green?
If in the future they get their coveted monopoly, won't it be sweet when someone flouts the rules and undercuts them?
This is similar to how the huge army of people stuffing DVDs into envelopes at Netflix is going away. It might be slow, but I don't think there will be tons of people watching DVDs from them in 2030... https://www.cnbc.com/2018/01/23/netflix-dvd-business-still-a...
We still have drivers on subway trains. When those drivers lose jobs to autonomy, maybe we can think about being on the cusp. Until then, I see it as a fantastic story that can be used to milk VCs for cash.
At <$4/hour, it's a better investment to automate a fast food restaurant like McDonald's or Burger King. They pay twice as much for labor. Pouring a coke and cooking burgers and fries should be a pretty straightforward challenge. They've already done Pizzas.
Also, subway systems are monopolies with strong drivers' unions. Subway managers have no strong financial incentive to reduce costs because the taxpayer foots the bill. In contrast, if Uber doesn't produce a driverless taxi service soon its management will be fired and will miss out on billions of dollars in bonuses.
I think we'll see driverless public taxis in Phoenix before we see driverless subway trains in New York. Self-driving trains are technically easier to develop, but self-driving cars will win thanks to the efficiencies of the free market.
In most cases the costs imposed by a wave of city-crippling strikes will far outstrip the minor cost gains from automating the rail line, so it only makes sense to actually automate and fire the drivers if the goal is actually political.
Subway drivers comprise a strong component of a country's labor power (because of their power to shut down critical infrastructure) and the alliances they typically hold with other unions and their political donations cement that. They don't just offset the power of the government they work under, they offset the power of executive/shareholder power in general.
Since labor and union power is largely what held income inequality in check until the 80s, the political goal behind crushing them is pretty clearly about increasing the wealth and income inequality chasm still further.
Would love to see actual evidence that this is true.
Here's another study (that actually cites the one you linked) covering the same time period and shows multiple other factors having greater impact. https://www.imf.org/external/pubs/ft/sdn/2015/sdn1513.pdf
"Technological progress and the resulting rise in the skill premium (positives for growth and productivity) and the decline of some labor market institutions have contributed to inequality in both advanced economies and EMDCs."
Emphasis mine.
That ^^^ was literally the first reason given in the article.
The second point it makes is about the role policy-making plays, which of course is probably as important, but is intimately connected to the presence or absence of union power because who the hell do you think lobbies for those policies?
Institutional support (donations, political support, control of voting blocs, policy research, etc.) behind those policies (e.g. raise minimum wage) comes from unions whereas the policies do the opposite (e.g. lower minimum wage) come from business lobbies and high net worth individuals - who have opposing interests.
> The second point it makes is about the role policy-making plays, which of course is probably as important, but is intimately connected to the presence or absence of union power because who the hell do you think lobbies for those policies?
Organized labor frequently advocate for policies that benefit their members at the expense of non-members (for example, licensing requirements) with ambiguous or detrimental affects on inequality. You use the example of minimum wage, but that's an ambiguous example too; we have some evidence that a high minimum wage actually decreases total low wage worker earnings[1], but a small increase (at least in the US) would probably be beneficial. To quote from the study I linked earlier
"Stronger labor market institutions could increase unemployment rates, reduce the wage differential between high skill and low-skill workers, and affect the labor share of income. The overall impact on income inequality, however, can be ambiguous: they increase unemployment, which tends to raise inequality, they can reduce wage dispersion, which tends to lower it, and they increase the wage share, which can have an ambiguous effect on inequality"
To be clear, it might be true that a decrease in labor power would be associated with policy that increases inequality but that's a non-obvious conclusion.
[1] https://evans.uw.edu/sites/default/files/NBER%20Working%20Pa...
The paper you linked was not studying that. It was not measuring the impact of union density on inequality whereas the study I linked to had a methodology for measuring the two, correlating them and teasing out a causal impact. Your paper was simply going over the various issues surrounding inequality and talking about them.
The other stuff you mentioned is a combination of wrong and not relevant to this topic.
Incidentally, that stuff about licensing requirements being "the bane of every worker's existence" that you read about can typically be traced back to lobby institutions that are linked to Charles and David Koch (e.g. CATO). They started publishing "research" and press releases about the onerousness of stuff like hairdresser regulation in the 90s and early 00s after some of the brothers' high profile fights with the EPA. Isn't it fun to learn where your propaganda comes from and why? :)
It has been in service since it was built for the 1986 World Expo.
Autonomous trains are not nearly as widespread as they could be, but this is not for technical reasons - it is for political reasons.
The new lines under construction (15, 16, 17 & 18, which will serve the greater Paris area) will also be fully automated.
The way it's configured it's basically an elevator.
You have to question the leadership of a company that's willing to throw untold billions and counting on a long-shot bet that they'll eventually have these magical cars and everything will be fine.
Once Uber can do it, soon afterwards everyone can, and what makes you think Uber will do it better when they've already had to give up so much to invent their own self-driving car solution?
Their business model is completely ridiculous.
It lowers the barrier for entry to pretty much anybody, with fleet manager taking care of car washes, interior clean-ups, refueling, parking at idle hours, ongoing maintenance and fixing occasional flat tires.
What part of Uber/Lyft business model makes them more sustainable when compared to Hertz, Avis, Budget, Alamo, Dollar, Fox Rent-a-car, ZipCar, Tesla Driving Network, any local car dealer with excess inventory, Ford- or Mercedes- or any other maker-branded service, or a small mom-and-pop operation with just a couple vehicles in their fleet?
So once either company successfully develops proprietary IP that enables fully autonomous cars they should have a clear road to profitably. They can use their existing relationships with fleet management companies to handle that part. And that is a mature industry, so the presence of a lot of capable competitors will keep costs down for Uber/Lyft. If they do need to do a bunch of hiring for new low-skill positions they can probably outsource it easily. I think the major winners will be tech companies and car makers. I don't think the fleet management industry will capture the majority of the profits, but they will probably get a minor portion.
Their venture into digital was ahead of the curb, allowing them to be even more successful and expand their business beyond distribution.
If the self-driving-taxi is right around the corner i guess that can save uber, but it's not like netflix was on a timer to like uber is to transition their business model.
And Uber...their whole point was being an annoying, even predatory middleman who shunt all their costs onto their "workforce"...you think they are going to thrive when they need to bear all the risk and expense themselves, as well as be unable to break laws?