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Comment by skywhopper | Hacker News Reader

There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs.

The Uber app was the original innovation, but it's not particularly innovative anymore. Besides Lyft, traditional taxi companies have similar apps in some markets.

Skirting regulation and good labor practices were also supposed to help, but that can't last once you become competitive with the establishment.

Self-driving cars were supposed to lower labor costs, but that's not going to be a thing for decades if it ever works. But even if it does, it won't be an exclusive technology. They won't be able to make any more profit from it. If their costs go down, so will everyone else's and they won't be able to undercut the competition without continuing to lose money.

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But in a way, that's the beauty of disruptive use of technology. Without the innovation of the Uber app, the traditional taxi cartels would have no incentive to improve their services and the fact that they have been forced to do so in order to compete benefits the consumer. They're not quite there yet, and are still catching up. The next logical step is a lift aggregation service that creates a marketplace.

I want a lift from x to y to z. Bid on me.

As it stands the price you pay for a ride in an uber is unfairly low. Driving it even lower would be irresponsible.

Call me a snob, but Uber's criteria for what qualifies as an acceptable car has dramatically declined to the point where even Taxis are sometimes "nicer". Combine that with the fact that the drivers often don't know the neighborhood and rely exclusively on GPS (so tend to be worse drivers than a taxi).

I'm left feeling like the fare - strictly from the perspective of a consumer - is actually too high.

That's when Uber Black is an option. Which is around what traditional taxis used to cost.

What are your thoughts on Uber Select / Uber Black / Lyft Lux / Lyft Lux Black?

Definitely a fan of the Select and Black options. In fact, I've been using them more and more.

The price - while higher - feels more aligned with what I would consider to be "good value".

Ranked in order of importance for me are: - A competent + safe driver, preferably someone who knows the area. - A nice, clean, comfortable ride. - A driver who doesn't talk to me.

All 3 of these are markedly improved in both the Select and Black options. Given I don't take Uber that often, I can justify the expense. If it was something I relied upon on a more regular basis I just don't think I could justify using Select/Black.

> A driver who doesn't talk to me

I wish "Quiet Ride, Please" was an option in the app.

I wish drivers that pick me up from the airport (or who are taking me to the airport at an early hour) would have some sense of situational awareness and realize that someone who just got off a plane (or is waking up early to catch a flight) might not be feeling all that chatty, and just wants to sit back, close their eyes, and enjoy some peace and quiet.

I wonder if this is a uniquely American problem. Over here (Australia) it's always a couple of short sentences ('how'zit goin'?', 'yeah good') then awkward silence the rest of the trip.

Unless the cricket is on the radio, then all bets are off.

I figure probably 80% of my rides are as you describe. But I don't know what it is about airport pickups. I guess it's easy to start a conversation with "where are you flying from?" maybe, and then they don't want to stop after I give a terse answer.

You could always ask....

I always thought this should be a "swipe left / swipe right" thing for both driver & passenger. If they both indicate they want to chat, talk away.

Or you can use the voice activated option with the driver. You just need to say “I’m feeling pretty tired right now and don’t feel like chatting”

“I’m sorry, I didn’t get that. Here are some things you can ask me.”

Immune that case, the passenger has to worry about the rating they will get from the driver.

Uber Black, at least for me, is not a good option because it usually (seemingly every time in LA) results in getting a giant SUV. These are not comfortable, and are not discreet, by comparison to good sedans.

> Uber Black, at least for me, is not a good option because it usually (seemingly every time in LA) results in getting a giant SUV. These ... are not discreet, by comparison to good sedans.

I am dubious. You live in LA and want to be discreet?

Yeah an uber that smells of farts, vomit and piss, and the seats are sticky... that has become more commonplace for standard uber.

Uberx is much nicer for an extra dollar or two (for standard trips), no more farty taxis.

But using my power of recollection - taxis were a crapshoot before uber came along too. Some were okay, some were disgusting.

I have not had (after a night out at a comedy lounge with my wife) an uber driver chase me into another uber, try and yank open the door yelling "I was first in line! You fuck! You Fuck! Get out!" while my taxi driver speeds away tires squealing.

Since uber came along, the quality of standard taxis here in Perth has increased dramatically. The result is a net positive.

Totally agree that in the past Taxis were MUCH more of a crapshoot, but lately they've really stepped their game up, which I think is attributable to Uber/Lyft.

So all in all, I think it's been a net positive for the consumer.

> drivers often don't know the neighborhood and rely exclusively on GPS

I drove for Uber about 3 years ago for a couple of months when getting my consultancy off the ground, which led to my current gig.

If I had a way to tell Uber "Don't give me rides that require me to leave a given geofence--we'll all have a bad time." Then I'd have been much, much happier. Everyone wanted a ride from my suburban town to the metro area that I know nothing about. Every now and then I'd get one where start point and endpoint were both my own town.

I'd have happily taken less fares in order to drive more familiar streets, and the people who rode with me would have enjoyed it more.

The problem there is twofold:

1) Many drivers from your town would likely geofence themselves to your town, reducing the supply of drivers that will drive to the metro area, increasing wait times and driving up prices, making riders unhappy.

2) Drivers would use this feature to avoid driving to "bad" parts of town, making transportation discriminatory. (In ways that are illegal for traditional taxi companies, so Uber would eventually run afoul of the same regulations.)

It's a shame because there are reasonable use cases for a geofencing feature (you seem to certainly be one of them), but it can be easily abused and can hurt the rider experience depending on locale. (Not saying the rider experience is inherently more important, but certainly Uber/Lyft would see it that way.)

For #1, it seems the market would adjust. We already see complaints about drivers not knowing the area they're driving in. Would it reassure riders to know that their driver spends 99% of driving time in an area they're riding?

For #2, sincere problem for which I am not aware of a good solution.

Not if there aren't enough drivers there, period. I'd much rather a driver unfamiliar with my city who needs Google Maps to get me to my destination if the alternative is I have to wait 20 minutes for a car.

You could also allow for auto-handshakes, drivers who prefer to drive only within a radius handing over there passenger to another driver in transit.

Solution is to repeal the laws that make driving non-discriminatory. It'd be painful in the short run but ultimately a place being so bad cabbies won't drive there is a signal there is a serious need for other forms of intervention, probably by policing changes. Wallpapering over the symptoms may relieve short term pressure but is no long term solution.

Yes, this is how supply and demand works in a healthy market. Riders should pay higher prices for tasks that drivers are less willing to do, and concomitantly drivers should get paid more for those tasks.

That's a "healthy" market in the sense of a liquid market with high levels of information communication. That's not necessarily the same thing as a "healthy" market in the sense of good public policy. For instance, very few people would say that a "healthy" labor market has no minimum wage or discrimination protections, trusting supply and demand to solve those adequately. Similarly, letting the market price trips to "bad" neighborhoods higher is probably undesirable, even if that's what a free market would do.

It also may not be the same thing as a market customers understand and feel comfortable participating in. It's true that there's more demand for unblemished produce priced the same as misshapen ones, but I'd be very unlikely to patronize a grocery store that ran an auction for each individual vegetable. So it might be in Uber's interest to not expose a variable-pricing mechanism. (Indeed, customers already seem not thrilled with surge pricing, even though it arguably gets them the service they want more efficiently.)

> very few people would say that a "healthy" labor market has no minimum wage or discrimination protections ...

Unfortunately, you're talking to one of those few people. I'm against government mandating minimum wages or mandatory maternity/paternity leave. If you want those things, you can try to negotiate for it.

> customers already seem not thrilled with surge pricing

This is a true statement, but I wonder about these people. I don't share their view.

Government mandate minimum wages and mandatory parental leave are the result of people having negotiated for them.

It's a strange negotiation that prevents me from entering into another contract with a third party ...

You can - move to a country that doesn't provide those.

You can move to a country that does.

Negotiating for everything is not the most efficient way of conducting business for society as a whole. Negotiating offers the benefit of price discovery, but it also consumes resources in the form of opportunity cost with other things that could have been done with that time and effort.

Yes, we can expose the reality that most people aren't economically worth enough right now to demand parental leave or living conditions, but what is the benefit of exposing that?

It's not like figuring out the true price of a product is low because it's low quality, so if people stop buying it then the producer will stop making it. The people that aren't worth enough, whether it be because they are lazy, stupid, came across an illness, born into a poor family and never had the opportunity and mentors to teach them, should we just let them rot away?

> Yes, we can expose the reality that most people aren't economically worth enough right now to demand parental leave or living conditions, but what is the benefit of exposing that?

The benefit would be discouraging people from having kids they can't afford and not forcing employers to pay employees who aren't working.

If you want to get paid for work you're not doing, you should at least have a conversation with your employer about it.

You bring up an interesting point about efficiency, and regarding most other things, I would agree with you, but your employment is one of the most important things in your life, so it's worthwhile to do the work to understand your contract.

The benefit would be discouraging people from having kids they can't afford

Perhaps you haven't noticed, but all the evidence would suggest that that isn't working. You can't just not pay people and they magically stop fucking.

Rather, the framework is broken. When we hyper-individualise everything, we end up with a world people can come to frame thoughts like the one you've expressed.

A world where everyone must own one of everything, and a spare, in order to survive. Where betterment is defined as having more and better things to throw in the garbage heap.

So that future archeologists may dig up our society and find the last of the great cetaceans, beached, with their bellies full of custom gift cards with your face printed on it.

And that is a sad state of affairs.

The more educated people are the fewer children they have. And we continue to price more and more people out of education because they lost the birth lottery.

If biological entities whose entire purpose is to have kids can't afford to have kids, that's an indictment of the system that charges so much to have kids, not of the organisms fulfilling their biological imperative.

Here are a couple of replies: 1. As a society, we don’t allow people to discriminate against protected classes in commerce. Most of those “bad” neighborhoods are actually not bad, they are just populated by people of different race or social status. 2. Unregulated auctions work well when there is symmetry of information and negotiating power. That is not the case when I’m standing on a street corner trying to get home.

It's way too much to ask a driver to risk driving in some gang land area or pick up riders that in way too many cases are violent criminals.

If you pick up random strangers in "bad" neighborhoods as a private person you are insane. Somehow taxi drivers are bad persons when they don't.

Do these things full time you will sooner or later get in trouble.

Going after drivers is going for the symptoms rather than the cause and quite selfish. If I wouldn't do it myself I don't want anyone else being forced because they have lower income than me.

I think you are a bit sheltered about what "bad" neighborhoods can be like

Having to do fares in the bad part of town is the reason my brother carries a loaded gun under his seat while driving for Uber.

Bringing a loaded gun with you is a good way to end up dead.

What how does that work logically or in reality ? Good guy has no gun, bad guy does, 100% good guy gets robbed, raped, kidnapped, or killed. Good guy has gun, bad guy runs away most of time or sometimes gets killed or captured or otherwise stopped some of time, or sometimes robs, rapes, or kills good guy despite good guy gun some of time. 100% of time I like the second scenario.

"Studies that directly assessed the effect of actual defensive uses of guns (i.e., incidents in which a gun was 'used' by the crime victim in the sense of attacking or threatening an offender) have found consistently lower injury rates among gun-using crime victims compared with victims who used other self-protective strategies. ... Almost all national survey estimates indicate that defensive gun uses by victims are at least as common as offensive uses by criminals, with estimates of annual uses ranging from about 500,000 to more than 3 million per year, in the context of about 300,000 violent crimes involving firearms in 2008."cdc see https://www.investors.com/politics/columnists/how-many-lives...

Well it's not very useful without the bullets.

Yes, but the criminal always has first draw, first action. Unless the criminal is a bad shot or otherwise unlucky, you just escalate a situation in which you are already on the losing end of a stick.

Just explain to me the game theory plus of a main-street battle, where the bad guy already holds you at gun point- and you have the chance to accelerate towards the bitter end?

And if the criminal doesn't have a gun, crime averted. Pretty useful, I'd say.

It all depends on what the situation is. Some people get mugged by people without weapons or who only have a knife or are bluffing about having a gun. But yeah I wouldnt have it somewhere I couldnt reach for the gun immediately.

I'm going to guess that if someone in a bad part of town is pulling a gun or even a knife on your brother, they're not going to just lazily stand there staring at him as he fumbles to find a gun under his seat to defend himself.

It's odd that this still isn't available. If you just want to drive for Uber for a couple hours you don't want to be taken to the other side of town

How profitable is "just driving Uber for a couple of hours"?

Not speaking from experience, but the earnings seem relatively linear. Two hours a week would tend towards the thirty hrs/wk hourly rate, I'd think.

> Combine that with the fact that the drivers often don't know the neighborhood

I used to travel to Houston quite a lot. Not sure if this is representative of taxis in general in the US, but the taxi drivers never knew the neighbourhood. I couldn't say "I want to go to Acme Stuff in X district", I had to give a "Cross road" (a very US thing, that) and the driver would use satnav based on that. It did seem that a lot of taxi drivers were recent immigrants (invariably chatty), so that accounts for some, but not all.

At first, this was a surprise, as in my native UK I can literally give a street name within 50 miles of where I am, and the driver cocks their head for a second, gears whir, and yes! They know it!

That's probably because becoming a taxi driver in places like London is extremely hard (https://www.theknowledgetaxi.co.uk), while becoming a taxi driver in Houston is probably as simple as "do you have a license?"

Yes, London is the whole UK.

EDIT: If it sets a standard then why has that standard not been adopted nationwide? Your argument is dead in the water and I can only assume you’re speaking as a person who has never visited the UK.

It sets a standard.

The US has no such equivalent.

I lived in a small New Jersey town where getting a taxi medallion involved little more than paying $100 and promising to charge every customer no more than $5 (for in-town trips).

I'm not in London, or even England. AFAIK, it's relatively straightforward to get a taxi license anywhere in the UK but London.

It's a mix in the US. "Career" taxi drivers that have been in an area for a long while will generally be able to get you where you want to go based on landmarks and place names. Many will ask for a cross-street and will take you there from memory. Newer drivers or drivers who cover a larger area will rely heavily on satnav.

Even then, many experienced drivers will still use satnav due to changing traffic conditions. Since there are usually several routes that can be taken, using Google Maps or the like will tell the driver what the fastest route is during that particular moment, which might change every 15 minutes.

I remember when Uber was new (black cars only), and the app didn't yet give the ability to enter your destination, the drivers were all very knowledgeable (in SF) and would be able to take me where I wanted to go based on pretty minimal information. Especially in SF, UberX and Lyft Line are full of drivers who don't live in the city, and must rely on satnav to get around. Very occasionally (1 in 100 rides) I'll end up with a driver who has lived in the city for decades and could drive me somewhere in their sleep.

That's because in the UK they have to know the area before they can get a taxi license. No such requirement exists in the US.

That is only true if you want to drive a black cab in central London. My northern taxis are just as OP described.

Didn't know that. Thanks.

Up here in Newcastle I'm yet to meet an Uber driver who knows their way around, and it's a tiny city. My favourite was the guy who had no idea how to get to the airport despite it being literally 15 minute drive from the city centre. One of the roads was closed(and Google maps of course had no idea about it, it's completely useless), so the driver started asking me for directions to get to the airport - and my only reaction was "dude, seriously? You drive a taxi for a living and have no idea how to get to the only airport for a mid-size city??". Literally every Uber I've taken so far was both useless at navigating and borderline criminal with their driving ability(driving too fast, too aggressively, not paying enough attention).

Speaking from my own experience though, for the few times I was in London, the driver would need the zip code to drive from airport to the home stay.

"At first, this was a surprise, as in my native UK I can literally give a street name within 50 miles of where I am, and the driver cocks their head for a second, gears whir, and yes! They know it!"

I'm not sure where in the UK you are, but if you pick a street at random (i.e. give all streets within 50 miles equal weight, and pick a name out of the hat), it's far from guaranteed that a taxi driver would know where it is, and how to get there.

- <30 square miles: The area within 6 miles of Charing Cross, within which London taxi drivers must know every single street.

- ~606 square miles: The area of Greater London, within which London taxi drivers must know the main roads.

- ~7800 square miles: The area "within 50 miles of where I am"

> Uber's criteria for what qualifies as an acceptable car has dramatically declined to the point where even Taxis are sometimes "nicer"

In my travels to the US, which almost exclusively meant Houston, the taxis were always very basic, "boxy" cars; not sure about make/model, but they always felt "cheap".

Meanwhile in Europe, a lot of taxis are Mercedes E class saloons, or high-spec saloons from other makers.

A taxi in Europe is akin to an "airport limo" in North America. The differences are astounding.

Here in France taxi driving is pretty hard to get into. You not only need to pass an exam, but you also need a licence that can be bought or rented from its owner, which is really expensive. New licences are basically non-existent.

In comparison the cost of the car itself isn't as important, so drivers put some effort into it. And they're more professional. I've never once in my life talked to a taxi driver in France besides entering and leaving the car.

You’ve identified one of the reasons for having nice cars, which is the relative low cost of the car as compared to buying the licence. The others are that they are only paying about 50% of the cost of their cars (as the installments are deductible from gross income), they get subsidised diesel (hence the ludicrously overpowered v6 German engines when the rest of the world is running on Japanese hybrids), and most importantly they get to use the vehicle as their personal car when not working...

Depends on where you are in Europe.

Here in Romania, taxis are consistently horrible. The cars are usually old and not well maintained. It's not uncommon to see duck taped airbags. The drivers are far from friendly.

But! They are consistently horrible in my experience. Not once has one ripped me off and they always use the meter. They know every address you throw at them and get you there safely. No matter the hour. They're also dirt cheap. 2.25 RON/km. So that's about $0.55/km.

For the Romanians reading this; Bucharest is an exception and I've had nothing but bad experiences with cabs there. My experiences are based on using cabs weekly in major Transylvanian cities.

A while back in Chicago I was picked up for Uber, in a Taxi... that also drove for the other services and was tied to a local taxi company.

Not a bad ride that one, but that guy had all his bases covered...

I'm with you right until the line break. The thing is: even for the quality-declined cars, we are not paying enough to cover the costs. Those are simply the economics of using a phone app to hire a person to come and pick you up in their car and then drive you somewhere.

The truth is that if you want to pay less for transport then you need to not be taking human-driven taxis.

Yep. Uber is subsidising the fares and even then the drivers are barely making minimum wage, after accounting for their expenses.

>Call me a snob

You're a snob.

I wish they'd relax their policy on vehicles. I would have no problem riding in 90s shitboxes. I would find it novel. As long as it's been vacuumed that week I don't care what condition it's in.

I'd rather pass on 90s-era safety tech

Such as?

Well, in the 90s pretty much the entire car was the crumple zone. (That may be a slight exaggeration.) ABS wasn’t as common.

https://www.wired.com/2017/02/watch-terrifyingly-bad-car-saf...

They should add a tier of service so that you can choose as a rider.

> I'm left feeling like the fare - strictly from the perspective of a consumer - is actually too high.

Not to mention personal risk if you consider how dangerous some Uber drivers are.

However if you consider the cost of car maintenance, annual depreciation on a taxi-like vehicle, and petrol the fares are actually very low. I would be willing to bet that a lot of Uber drivers are wavering around breaking even on the long run. Maybe that's why a lot of drivers' cars aren't as well-groomed as they used to be.

Now, I get that "from a consumer perspective" this is irrelevant, but it does mean that a cheaper service is simply not possible without sacrificing something.

The beauty of the uber model is that drivers don't even need to break even. Very few I speak to are doing it full time to make money.

Most are doing it as a side hustle for a little extra cash before or after work. Or they're using the money to justify spending more on their dream car.

They don't need to break even, they needed the car anyway, it would depreciate roughly the same amount anyway. Or at least the extra uber usage is going to be negligible compared to the time based depreciation.

> Very few I speak to are doing it full time to make money.

Interesting. Anecdotally, in Sydney it seems almost all Uber drivers I meet are doing it full-time now. A few years ago, it was just a side-gig for most but I think the demographics have shifted quite a lot.

> They don't need to break even, they needed the car anyway, it would depreciate roughly the same amount anyway.

Not if you're driving it 10x more than you normally would. Mileage affects the resale value and increases the likelihood of additional maintenance work (especially if you're doing city driving which is substantially more stressful on cars).

In LA, Uber drivers seem to be more like former shitty taxi drivers. Lyft drivers are for more likely to be part-time hoi polloi.

> Very few I speak to are doing it full time to make money.

Most of the guys make it to pick up girls. I know some girls that use to go by Uber and many guys would ask for their number.

For example they can't drive a Tesla for this cheap, makes no economic sense, except if it's another tinder for them.

A lot of drivers are acting irrationally (in the economic sense). The number of miles you put on driving for a car service will almost certainly be consequential to your car’s service life, if you are making any money at it. But, new drivers see cash in their bank account every week, and it’s hard to link that to having to splash out $25k for a new car down the road. I expect a lot of these drivers will bow out when their current cars become too old or damaged to keep driving for hire, since they won’t actually have saved enough money for a replacement.

Having people who don’t understand how to calculate their costs in the market drives down wages for everyone.

Not exactly. This theory applies steady state analysis to a transient problem. Those drivers need money now. And are willing to trade off miles for money, in some sense. They are able to leverage their time and mileage to get income, which they might not otherwise have. They may already have invested in buying the car so that is a sunk cost. In some sense they are just extracting the value of the car combined with their time and some minor profit which is their opportunity cost. The theory also fails to account for the extra utility they drive from earning the cash, which may offset any costs incurred by spiraling downwards mood from financial stress, unemployment, or even the regret of buying a car which they are having trouble paying off. Also they get to still use the car in the meantime, offsetting transportation costs and most importantly, saving them time and extending their ability to acquire other jobs or new opportunity such as education, driving to visit friends and family, etc.

What exactly are you disagreeing with? The comment you're replying to basically says: "it is unsustainable in the long term" and your response is basically: "it is sustainable in the short term" which is effectively equivalent.

I think my comment explains that. Think about it a little more

> Having people who don’t understand how to calculate their costs in the market drives down wages for everyone.

Yup, this was my point! :)

I feel like it depends on the city. In Phoenix I typically get a relatively nice car with a fairly normal guy or girl that drives a relatively newer car as a side gig, or to keep busy during retirement.

Conversely in Columbus Ohio all the drivers I’ve had recently are clearly former taxi drivers that migrated to Uber. The cars are old and beat up, the insides are dirty, and the drivers disregard the app’s directions usually taking us to the wrong spot.

Where are you finding these magical cabbies that know the city better than GPS? My p99 experience is the opposite (Except in London where they have The Knowledge

I agree that when it comes to finding the most efficient routes across town, cab drivers are better (especially during rush hour), but once they get to the right street the experience is so much better with Uber/Lyft/GPS.

"It's the red building in the middle of the next block. No, the next block. No, a bit further. The...it's fine, I'll just get out here."

vs.

"Perfect, thanks!"

The way to change it is affordable EV cars ===> less fuel costs

Fuel costs aren’t a huge factor for most cars. It’s the time and vehicle depreciation and maintenance that add up.

I don't know the numbers, or if there's even enough long term data to provide the numbers yet, but supposedly the lack of a combustion engine should eliminate much of the maintenance. How much is offset by other problems EVs have compared to combustion engines, I don't know.

Says you. That sounds awesome to me!

How about we let consumers decide what the right "price" is? If you don't like it, then you should feel free to use the higher priced/quality alternatives!

Is it OK that there is slave labor in the coffee supply chain? If consumer price is the only metric, then I guess that is OK?

I totally agree.

It's kind of hard to predict which way the fare would go for such a service... It might actually end up being higher than what Uber is currently charging. Which wouldn't be a bad thing necessarily.

The drivers don’t have to bid. Do you find eBay auctions “irresponsible”? You can’t hide from the market.

Do you not support minimum wage laws?

But it's really not. At one time it was, but at least in my city, it's sanely priced. When I travel for work for example, an Uber takes my wife and child to school and back. The roundtrip time is about 15 minutes, and the cost is usually 12 to 14 dollars. That's at minimum 48 dollars per hour, which is the upper end of middle class here.

My most recent trip to SF, my ride from Berkley to Downtown each day was about 30 dollars for about a 30 minute trip. 60/hour doesn't sound absurd for that region.

A few issues with your calculation: 1. Drivers are not productive 100% of the time, 50% utilization is more common, so knock that hourly rate in half. 2. That’s revenue, not profit: you have to pay for gas, maintenance, depreciation, and probably higher insurance premiums for driving commercial and/or high mileage. The IRS deduction for business mileage for 2019 is 58 cents per mile, this is meant to be a median all-in cost, so subtract that from your fare, and subtract half again for the miles spent driving between fares or getting home after the last ride of the day.

For many drivers, you also need to factor in the car payment. Lots of Uber drivers bought their car specifically for Uber (and sometimes from Uber).

> Without the innovation of the Uber app,

I had local services with an app before Uber, I'm sure. It's really not much of a shift from a phone call either.

But then, all Uber cars are the same as private hire cans anyway here.

It seems like the real innovation was being big enough to ignore the local rules. That and being able to say it's "ride sharing" with a straight face.

Hacker News about Dropbox (2007):

"For a Linux user, you can already build such a system yourself quite trivially by getting an FTP account, mounting it locally with curlftpfs, and then using SVN or CVS on the mounted filesystem"

Hacker News about Uber (2019):

"It's really not much of a shift from a phone call either"

Hasn't Dropbox lost market value every quarter since they went public while growth has been flat and operating at a loss?

I'm not saying the HN crowd didn't miss a $10B opportunity, but they also weren't exactly wrong.

10 years is the definition of wrong.

Uber's S1 is available. They are, for sure, losing shit tons of money. And they have no reliable view into what happens to demand if you broadly raise prices. Maybe that works, maybe not. Nobody knows.

Dropbox's weakening position isn't necessarily an indictment of the idea, just that they're in a tough market when you consider both Google and Apple offer (comparatively cheap) cloud storage that is well-integrated into their smartphone platforms. Also consider that the success of Google's and Apple's offerings has proved out the value of the idea many times over.

Also, Dropbox was an early mover. That worked well for them in their early days, but the consumer space is saturated by better options. Dropbox (and Box) are often better suited to enterprise use, where some of the more advanced features (that regular consumers mostly don't care about) are important.

Judging by your parent's comment, HN would've been wrong to assume that the reason for Dropbox's decline is a mass movement of users towards rolling their own linux hosting stack.

You have conveniently missed that there was already an app for ordering taxis before Uber for me.

Also, yes, it's not much of a shift. I'm not arguing people rebuild it or have something together but the shift from:

Call cab firm and say where you are

App calls cab firm and says where you are

is not massively innovative. (edit - particularly when it has been done before)

I know it's fun and cool to be snarky, but you have clearly missed what I've said and equated it to something wildly different. Please put a little more effort in to your comments to make them more useful.

The Dropbox comment is amusing because that's a complex thing users would have to do and doesn't support what Dropbox supports. Switching from one app to another is really quite different.

To me, the innovation isn't using an app instead of a phone call, it's the accountability and reliability. Before Uber, I'd have to call a taxi company at least a half hour before I want to leave. If they even answer the call, the response is always "20 minutes", regardless of how long you have to wait. At least a quarter of the time, the taxi will never show up. As a result, I'd barely ever take taxis anywhere. Instead I'd drive my own car, which meant finding/paying for parking and ensuring continued sobriety, else planning to leave the car and likely get a parking ticket the next day. I guess one benefit of the old way is that I'd plan ahead a bit better, so if driving myself wasn't practical I'd leave extra time to take transit or walk.

If I order an Uber/Lyft, I'm nearly guaranteed a ride within a reasonable amount of time once my request is accepted. Yes, occasionally the driver will cancel and the app will find a new driver, which adds to the time. Sure, the time estimate itself is usually off by 10% or so. It's not perfect, but this experience is orders of magnitude better than it used to be. For the most part I only drive my car when I'm leaving the city or need to carry a bunch of things with me.

So the innovation for you is something that has existed elsewhere before? Why is that innovative?

...the innovation is a consistent more reliable and timely experience, consistent across geographies, where it did not exist before.

McDonalds didn’t have the first burger franchise, the innovation is very much in the reliability of an experience that is a better fit for the needs of the consumer than the alternatives.

I too avoided booking taxis due to bad dispatchers, even though I’m sure some good dispatchers existed in some areas. That doesn’t really do you any good when the use case for a taxi is generally that you need a car in a place that is not your home, and so you are unfamiliar with the area.

Uber not only gave you a reliable dispatcher, they show you with GPS that the taxi on the way, which greatly improves consumer confidence that yes, the ride really is on its way. If that existed pre-Uber for some areas, it hardly matters if you never visit the area and so don’t know about it’s existence.

> McDonalds didn’t have the first burger franchise,

So saying "the innovation is in the franchise" wouldn't make sense, right?

> That doesn’t really do you any good when the use case for a taxi is generally that you need a car in a place that is not your home, and so you are unfamiliar with the area.

The use case for a taxi is surely dominated by when you need a car but can't or don't want to drive? I've definitely taken more taxis near my home than away from it, purely because I'm here more often.

> Uber not only gave you a reliable dispatcher, they show you with GPS that the taxi on the way, which greatly improves consumer confidence that yes, the ride really is on its way. If that existed pre-Uber for some areas, it hardly matters if you never visit the area and so don’t know about it’s existence.

This seems like an odd description of innovation to me. "I didn't know about it so it's innovative"?

Remember, innovation is not the same as value. I'm not saying it doesn't add value to have these services elsewhere, but that the app is not innovative simply because it was not new.

Innovate means to make changes in a thing that is established. The innovation here is that the thing is the same everywhere, you don’t need to know the local errata to rely on it.

I say this as someone who was downright flabbergasted that the iPhone was described as “innovative.” After all, I had been using a handheld PC with full Windows installed for years when the original iPhone came out, and it could make VoIP calls just fine! It took me awhile to accept that the incremental “new” people are talking about when they talk about innovation is distinctly NOT novelty. It’s a shuffling of the already existing puzzle-pieces in a way that, in the cases it is successful, we call innovative, and when it fails, it was simply “ahead of its time.”

>The use case for a taxi is surely dominated by when you need a car but can't or don't want to drive? I've definitely taken more taxis near my home than away from it, purely because I'm here more often.

I'm sure it depends. I've never taken an Uber near my house. (I do get driven to and from the airport but I use a private car service for that.) I don't actually use Uber/Lyft (or taxis) all that much when I travel either although I've started to do so a bit more often when I found I mostly rented a car to get to/from the airport to some destination and then just have it sit.

Regarding McDonalds, correct, the innovation was not in the franchise. The innovation was in creating the corporate and logistic structures necessary that every single McDonalds, everywhere, even though owned by franchisees, would deliver pretty much the same experience.

This

> ...the innovation is a consistent more reliable and timely experience, consistent across geographies, where it did not exist before.

Call a cab and wait and pray. Get a call 30 minutes later asking if you still want a cab. Wait 20 more minutes for a cab to actually show up.

This is in a major metro. Calling for a cab sucked if you weren't in a busy area, in which case you could just walk to a major street and hail one.

They said the app was innovative, it was not to me because I already had something similar, and what you're describing has nothing to do with the app. You're just describing a not terrible taxi company, which has existed in many places far before Uber.

It seems the main thing they did was be big enough to ignore the rules that kept taxis in some parts of the US so terrible.

Not at all, their main innovation was combining pricing theory in a way that worked. They got drivers on the streets during major storms to keep wait time down. Fascinating

Wait until they hear about Amazon vs. the Sears-Roebuck catalog

Wow, there's a lot to process here. E.g., suddenly I remember how much HN doesn't go into the nitty-gritty anymore.

Wtf?

It is completely different. Before Uber, you had to call dispatch, give them your location or your closest estimate of it: dispatch would then manually try to find a car that was available and send them to you. This usually took at least 30-40m, if they arrived at all.

With Uber, I open the app, it looks at all available cars, finds the closest one available, and sends that car to my GPS location. Oh, and if that car gets stuck in traffic, it automatically picks another car and sends that over

Uber completely revolutionized taxi services and is absolutely nothing like calling dispatch on a phone.

Agreed. In SF whenever I called cabs they often wouldn't show up at all. I suppose they found a fare before they got to me. So features like ratings and assigned cars and ability to check the status added by Uber are all huge improvements for my usage.

I've not anywhere argued that it hasn't been beneficial for people, but simply that it is not innovative.

Here, Uber is just another private hire taxi. They cannot pick up random people from the street (and be insured, anyway), so they would not be picking up random other fares on the way unless the dispatcher told them to. This is what has existed for a long time before Uber appeared, so replicating that elsewhere is not innovative surely?

>I've not anywhere argued that it hasn't been beneficial for people, but simply that it is not innovative.

And that’s what’s making you look like a dolt. Taxis in most of the world were (and mostly still are) unreliable gambles that vary from city to city. Calling on the phone and waiting for 40 minutes without live tracking and automatic rerouting for when the driver decides to stop for groceries is a completely different level of usefulness.

You just compared a flip phone to a smartphone (in more ways than one).

Before Uber there was an app I could use to book a taxi. That's one of the main reasons I don't think their app was innovative.

> This usually took at least 30-40m, if they arrived at all.

Not for me, I would and still do get cars faster using other firms. Uber says they're two minutes away and they come ten minutes later.

The only reason I use Uber is I get receipts I can push to my expenses.

That's fair, but understand that your city's taxi experience isn't necessarily typical, and also that Uber has the ability to make the experience nearly identical in all markets where they operate (that alone has value). For most markets, that turns out to be higher quality than the local option, but every now and then (like in your case), the reverse is true.

I've not said they don't have value, what I've said was the app wasn't innovative. To me it cannot be because something almost identical existed before, and it isn't a huge shift from telling someone where I am.

If the innovation is being a non-terrible taxi firm, then I think I stand by my point that it's because they were big enough to ignore the local rules

do you think big hits in tech are merely the first one to code the idea? proper execution and business maneuvering are arguably more important than being the first "app to book a taxi".

> do you think big hits in tech are merely the first one to code the idea?

No. Nor have I suggested anything like that.

If they're not the first to have an app like they started with, why would you describe it as innovative?

I think their important business decisions were ignoring local rules (as I've said) and building a brand.

Totally! The one and only time that I tried to get a taxi at my house, which is in a suburb of a major metro area in the US, I was told it would be a 45 minutes wait. I waited the 45 and nobody showed and I called again. 30 more minutes. No show. Now, I can have an Uber at my door in 10 minutes and I know what it will cost.

I'm critical of U/L, but it's ignorant to say there hasn't been any innovation.

Back then, you had to know the phone number to call - I'd try to be diligent about keeping a taxi number in my contact list but it's invalid when I really need it when traveling in a different city.

Trying to hail a cab during a busy holiday? Good luck with that - cab splitting existed but nowhere near as frictionless as through apps + route-planning software. Plus phone calls usually didn't make it to the dispatcher during extremely busy times (walking out of a bar on new years).

Waiting for the cab? Better stay put where you are since they can't see your live location.

> I'm critical of U/L, but it's ignorant to say there hasn't been any innovation.

I won't say there's none, but there was a taxi app for me before Uber that knew where I was and let me book a taxi, that wasn't innovative.

> Back then, you had to know the phone number to call -

A benefit sure, but "being big" is not an innovation.

> Trying to hail a cab during a busy holiday? Good luck with that

Here when it's busy I can't get an Uber but I can book my local service. Uber is way less reliable here.

> route-planning software.

Every uber here uses Waze.

> Waiting for the cab? Better stay put where you are since they can't see your live location.

Hah! I've repeatedly had issues where Uber cars didn't seem to know where I was, their app put me in the middle of a lake once and I kept moving about trying to figure out where the hell I could meet the taxi because their position made no sense either. They cancelled on me and I had to chase them down a street and rebook, hoping it would connect to them.

>Every uber here uses Waze.

Swing and a miss. Op is talking about Uber’s scheduling system for assigning drivers to riders.

So I used to call the local cab company a lot when taking work trips. Problems Uber solved for me:

- Knowing my location automatically via GPS. I don't always know where I am. I'm on a street near some bar. - Knowing how long it'll take for my cab to get to me. I don't have to assume it's on its way and wait or call the operator to confirm ETA. - Paying when I don't have cash. In NZ, not all taxi cabs take cards.

It's a major shift from a phone call. Not a fan of the company but it's certainly changed things with taxi companies now investing in their own apps and Uber alternatives sprouting up.

Sure, but I wonder if this was the best way for it to happen.

Couldn't we have gotten to taxi-hailing apps without allocating a bunch of capital to companies that might never turn a profit?

I'm just curious. I don't personally care because my money isn't invested and my rides are subsidized by the people who did invest.

It doesn't seem like it. In my experience, a lot of taxi companies don't have fully-featured apps even today, and the ones that do were probably motivated by the spectre of Uber. They weren't motivated to do it because they already had the market captive.

You don't even have a pension? A lot of money finds its way to companies like Uber from sources almost everyone has. Even with no pension, your bank is speculatively investing the money in your account to try and earn interest.

Uber is a private company. If I own any equity indirectly it would be news to me.

> Without the innovation of the Uber app, the traditional taxi cartels would have no incentive to improve their services and the fact that they have been forced to do so in order to compete benefits the consumer.

The taxi “cartels” can’t “compete” with Uber or “improve their services” to match Uber. Some of the key things that make Uber attractive to customers is low rates and the ease of booking through an app. Taxi companies are *legally prohibited” from competing on rates. Rates are set by the government, and surge pricing (which allows Uber to offer cheaper rates to more cost sensitive customers by charging more to less cost sensitive customers) is illegal for taxis. Likewise, the government usually regulates metering and payment processing for cabs. It’d be illegal for most cab companies to do GPS based metering and smart phone billing like Uber.

That may well be the case, so I voted you up as I'm not sure why you were greyed out for pointing this out. But taxis are heavily regulated partly because the taxi lobby itself demanded these sorts of barriers and taxi lobbys have been notoriously effective at shutting Uber down. They appear to have a lot of political power, and convincing politicians to let taxi firms use new technology should be the easiest lobbying gig in the world.

Reality is, even in parts of the world where taxis are not heavily regulated, no taxi firms got even close to Uber's competence and sophistication. They simply don't have access to the right people or technical knowledge to produce the same experience (evidence: my local taxi apps that are trying to compete with Uber are all buggy incompetent messes).

>> There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs.

I dont understand this comment. Traditional taxis made money for generations, why cant Uber? If anything, Uber has more advantages.

EVEN: Traditional taxis had the "rent" of medallions. Uber has the rent of Corporate HQ costs.

DRAWBACK: Uber gets raw deals in some cities because the local Taxi commission has sweetheart deals with the city (Case in point: NYC, NYC TLC, and Mayor DeBlasio: https://www.nytimes.com/2012/07/18/nyregion/de-blasio-reaps-...)

BENEFIT: More efficiency, less wasted miles w/o riders.

BENEFIT: Group rides are highly efficient.

BENEFIT: National/international scale

BENEFIT: National/international scale to get better loan rates, prices, and even self-loan to drivers.

This isnt to say they dont have to raise prices, but I dont see how they can never make money.

Taxis made money because the medallion situation limited competition, and because fare prices were fixed by the city at levels that ensured a profit.

I see your point, in theory, but the increasing medallion investment/rent just lowered profit further and further until the profit to drivers was some very low wage. The driver is not usually the medallion owner, and hence the rent for the medallion goes elsewhere. The driver just ends up with the metered fare net of medallion costs.

Similarly, Uber leads to a sort of perfect competition equilibrium (https://en.wikipedia.org/wiki/Perfect_competition) where drivers keep entering the marketplace until wages drop to some low wage, but not below that (because below that, drivers start to leave the marketplace, thus decreasing supply and increasing the equilibrium price point.)

Economically, it does lead to a competition equilibrium, but it does not take into account the cost of externalities such as additional traffic and pollution generated by having more drivers.

At appropriate saturation the number of cars being displaced by riders is significant, though I wonder what that is and how it trends over time.

If I was in college today, I might never consider buying a vehicle.

No. What happens is that roads keep becoming saturated until they are clogged with ride shares and the riders bail out when they realize they can walk faster. The equilibrium point creates complete havoc for everyone else and little productive work is actually done.

The roads are already clogged with cars. Does it matter if they are ride shares or not?

A saturated Uber-model ride share market is one where an empty car is seconds away whenever you need one. Idle ride shares matter a lot.

Or it could be a model where there is always a car with a ride share available.

I mean could it be the Uber Go model is the best win-win for the customers, Uber and the drivers?

Actually it's more like a monopsony where a single buyer (uber) can dictate the price to the sellers (drivers). Uber varies the prices it charges consumers (and therefore pays drivers) based on what maximises its profit rather than general economic welfare.

Taxis (drivers) don't make money, or rather, they are subjected to the same degree of commoditization either way.

Medallion owners make money. All of the profits are extracted into the medallions.

It's actually a bad system, really.

'Driving a taxi' is a total commodity, there's a limitless supply of people willing to do it for sub minimum wage, so the money just goes to the owners.

Rent extraction is usually a bad way to manage things; it's kind of like real-estate speculation, but there's no need for it.

It'd be nice to see the cities embrace Uber-like systems, capture the profits from it, enforce basic laws, and somehow make it fair. I'm not holding my breath.

I feel like Uber can always make money as a marketplace - but competitive pressures from other marketplaces will drive profits down. However, is there any further growth in the model? Seemingly no unless they gain monopoly.

You are making me smack my forehead to the point of giving myself a concussion. If your comment were true, market economies as a concept would be unviable. The global economy would not exist if your comment were true. Ride-sharing is a market. People compete in the market. That’s how literally every solvent business in the world operates.

People are willing to pay to get driven around for relatively short distances on-demand so I'm not sure why that's an inherently unprofitable business. I assume many taxi companies and black car companies make money.

What's probably true is that they probably have to raise prices and deal with decreased volumes in at least many markets to do so--and probably grow more organically. And it won't be the kind of profitability that's expected from VC-funded companies.

I can imagine that running a taxi company might be a lot like running an airline (a notoriously money losing business). Four out of five of Porter's five forces are working against you:

  - relatively easy for new entrants to enter the market
  - lots of consumer substitutes
  - lots of customer buying power
  - lots of competition

This is the conundrum of creating a better marketplace. An optimal market has 0 profit opportunities. In order to make money the market must be flawed in some way. Luckily in the real world perfect markets don't exist, but in certain sectors technology has made life difficult for people who had previously had a solid reliable income with the old inefficient system.

"An optimal market has 0 profit opportunities"

That doesn't quite right to me. A market with the smallest profit opportunity of a selection (say worse that government bonds) wouldn't see investment to correct that inefficiency. Zero may be 'best' case, practically speaking though no one's going to arbitrage an opportunity, that's less than the opportunity cost.

So it seems to me the optimal market would a profit opportunity somewhere between being the 2nd best profit opportunity and zero profit opportunity, depending what you set the opportunity cost at.

In a perfect market the profit opportunity asymptotically approaches 0.

But a perfect market is a mathematical model, not something that you would see in real life. As you note some entrant is not going to jump into a market and undercut the competition by 1 cent (from 2 cents) and immediately capture all of the market share.

But this does illustrate the dangers of making a more efficient marketplace if your goal is to make profit.

That's rediculous. If a market with 0 profit opportunities exists them time is frozen and all future innovation is impossible. It means that every possible inefficiency of every single person working has been removed. Humans are never perfect beings, and usually far from it, so there is always opportunity for more efficiency. Also the goalpoint is constantly moving as more technology is created to replace older ideas.

If we ever reach a so called "optimal market" as you describe it then GDP growth will also stop, as will personal income growth and all manner of things..

Historically things like medallions were pretty strong barriers to new entrants in some markets. But, yeah, today not nearly the same degree.

I imagine cab companies are in roughly the same position as people who own a bunch of fast food franchises. The owners can earn a reasonable living but it's mostly not the sort of income stream that people in Silicon Valley dream about.

Historically, the market was regulated to prevent new entrants from entering the market and preventing competition. In NYC, this was a hard limit on the number of taxis with every taxi requiring a medallion. In suburban towns, taxi companies typically need to be licensed by the town and some towns have limited the number of companies or total taxis.

Uber really disrupted that as it rolled out across the US and other countries by basically rolling out illegally and then getting customer support to change laws.

Is it easy for new entrants though? And is there competition?

I'm not sure about the future profitability of this space, but I think you're disregarding a few key points.

1. The innovation was less the app and more solving supply problems. No app will be able to change that for the taxi business.

2. Competitive advantage in this space is having more drivers and less wait time. That drives folks to use one provider over another. The lock in isn't the tech, but the availability of rides.

You're right that the lock in or network effect in the ride sharing space is very different than other big tech cos (FB, Netflix, AMZN etc) in that they're localized, and should result in more competition.

The bet investors are making is that the market will shake out with one category leader, a runner up and virtually no competition beyond that. Should be interesting to watch.

1. The regulations that Uber skirted around and then loosened up to provide more drivers can also be used by other companies. The gates are open, but not only to Uber.

2. Drivers and customers are fickle. My market used to be mostly Uber and is now mostly Lyft because all the drivers hate Uber. When Uber and Lyft run out of cash to blow on subsidies, they don't really have much of a selling point.

The problem with Uber's business model is that the main cost is the driver, who is not going to go anywhere anytime soon. It's no Amazon, where they have efficiencies of scale in logistics, datacenters, etc.; you don't get economies of scale by being bigger in the taxi business. It seems more like Moviepass.

All great points. I guess we'll see where the chips land.

Are you sure there are no economies of scale?

Everyone I know uses Uber exclusively for taxis now and it's partly because whenever they travel Uber works great, but using local taxis is a pain. The "taxis are local" argument is right some of the time but many people use taxis primarily when travelling, and that's a market that really only Uber and Lyft can automate with any degree of success. I don't want 50 half-baked taxi apps on my phone.

That‘s not what an economy of scale is, that‘s branding. An economy of scale would be Uber saving a portion pf costs as it gets bigger, but that‘s not really possible because the per unit cost of a ride is tied to a driver, and they‘re not pushing drivers into driving buses or other vehicles that can carry more shared trips.

You could achieve the same thing Uber achieved with branding with a franchise; McDonalds maintains quality across franchises despite not being involved in the day to day operation. And McDonald‘s certainly doesn‘t lose money on every patty sold.

> The Uber app was the original innovation

No it wasn't. There were a ton of taxi related apps and startups before Uber and nothing about Uber's app was particularly impressive IP-wise - it's basically just distance search.

What Uber did that was unusual for a tech startup was to invest in lobbying - https://www.theverge.com/2014/12/14/7390395/uber-lobbying-st... - it allowed them to play across regulated markets where no one else had before.

There were a ton of taxi related apps but none of them did what Uber did; at least in London. There were apps where you could book a taxi, telling them when and where to pick you up, but if you expected anyone to show up in the next 5 minutes you were crazy. And they were twice as expensive as uber, of course.

My impression was the the previous tax-related apps just connected riders with the existing establishment taxi companies. They didn't have much in the realm of enforcing accountability or reliability. It was nearly the same as calling the taxi dispatcher yourself and hoping a taxi would show up, except an app would do it for you.

In San Francisco there was nothing before Uber and similar companies started operating. You called a phone number (I used to have it memorized) and some surly individual would bark at you and then maybe a taxi would come in 40 minutes or maybe not.

Later, the driver would explain the credit card machine was broken and you'd need to pay in cash.

If self-driving technology is mature enough to be used and there are several implementations to choose from, what stops care manufacturers to go after that market directly and undercutting everyone else?

* They have industrial facilities to build cars

* They have dealership networks to repair cars

* They have capital or can borrow easily to do it

I can even argue that all that stops car manufacturers from operating this are government regulations -- taxi medallions as well as anti-monopoly laws. Once Uber, lyft and the like undercut those regulations, someone else can undercut them.

The same thing that largely keeps them from operating dealers (yes, now there are laws and contracts, but it was the manufacturers who wanted dealers in the first place) and rental car companies. Although there are legal impediments, companies often want to focus on a specific part of the value chain rather than having to own the whole thing.

Car2Go is a subsidiary of Daimler, though. And I suppose that being able to produce a large number of cars (all identical models and setups, all the same colour etc.) is something that an automotive company can easily leverage.

Silvercar was recently acquired by Audi, so that's an example of a auto manufacturer running an car rental business.

That's why I said largely. I think one or more of the US manufacturers may have investments in rental car companies as well. But I'll still argue the basic point; companies often don't want to own the whole chain. (Auto manufacturers also use a lot of upstream suppliers as well rather than designing and building many of their components.)

All auto manufacturers have stakes to ride hailing apps if not outright owning one or more of them.

That's Tesla's plan and the reason why they want to forbid to use their full self-driving system for providing rides to third party taxi services.

As a sibling comment noted, that is Telsa's plan. I believe GM is wanting to do something similar with Cruise.

However, I feel that both of those companies are still way behind Waymo in terms of R&D. Personally, I think that Waymo is the one to watch. If they get their first, they already have the ride hailing infrastructure/user network in place (Google Maps) and may even license the tech out to auto manufacturers.

Regardless of who is standing in a few years, as a customer I will choose to ride in a Tesla whenever possible for a few reasons. 1) safety 2) fun 3) support the transition to sustainable transport 4) if FSD is part of the equation by then I think Tesla is going to have the best implementation, based on their overwhelmingly massive lead in real data.

Vertical integration like this is generally considered bad in business. Sure it is possible, but it is better for car companies to work on making a better car than split their attention and risk not paying enough attention to either...

Are you saying in any city with an un-regulated taxi market means all taxi companies operate at a loss? That doesn’t sound right (Stockholm, Sweden for example would be a counterexample).

Perhaps I misunderstood “mass market”?

You are just fundamentally wrong. There is a cost associated with operating the “dispatch,” operating the car and paying the employees/contractors. Take that cost, distribute it over the number of rides you expect to give to your customers and then add a little on top. The question is whether or not the customers will engage in that transaction or is the cost too high? Uber has plenty of fat to cut. If it were running efficiently, there is no possible way it would go out of business. You think Uber will raise their prices 10 percent and then everyone will decide to give up ride-sharing? Uber is the most efficient method of doing taxis. It succeeds by default. I don’t understand how you can possibly think that Uber can’t make money.

There's making money, and there's making enough money to justify an $84B valuation.

> to justify an $84B valuation

He wasn't arguing that the investor were going to make money out of it. He was arguing that as a dispatcher, they can be more efficient than the current dispatcher, thus can make money.

The disruption of taxi/rental business is going to come way before from self driving cars becomes perfect. most people know how to and prefer to drive especially if its not long distance inside dense urban areas. the real use case will be the fact that self driving car will drive itself at its own pace to nearest suitable pick up point, where u can get behind the wheel and drive it where u need to go, then leave it there for it to figure out how to drive itself to next customer who needs it. half of the population prefers to drive the car themselves or their partner rather than share that tiny space with a stranger and be driven around. this completely solves the liability issue and pr nightmares that will come from 'killed by/because of self driving car' news.

Uber had $940 million in Contribution Profit in 2018. It prints money on non-pool rides in mature markets.

What does that mean?

Uber revenues minus cost to operate Uber car service = $940 million in 2018.

If I make a widget for $100 (50/50 fixed, variable) and sell it for $90, I've covered the variable costs. But If I only have one line, all those fixed costs are attributable to that one line, so its still not making a profit.

If you had multiple lines and one line that wasn't making a profit, but was making a contribution to fixed costs, it maybe better overall to keep that line in place. That isn't what we seem to be talking about here, but it depends how 'fixed' the fixed costs are.

I find local taxi companies have started making their own 'Uber' apps that accept card and it's fantastic.

And you don't have to deal with the awful rating system Uber have. Whoever thought it was a good idea to have drivers rate their customers really doesn't understand customer service. If you're out with some friends on a night out for example, of course you're going to get a bad rating (because your friends are drunk and probably a bit rowdy) which affects you during the working day or just solo.

Local taxi services are usually cheaper too as they don't do the surge pricing like Uber do. Uber have really driven me away as a customer to the local services.

Also local taxis don't cancel so they can abuse the surge system.

Your last point is the most salient. Solving autonomy is a much harder problem than making an app. Anyone who solves autonomy can easily make their own app, or can partner with any upstart in the ride-hailing world, who would be desperate to get that autonomy software. Hard to see how Uber or Lyft truly profits unless they're the ones who own the autonomy code.

A monopoly is exactly how they'll do it. If a competitor pops up they will undercut them.

They've run over local governments to get their cars into the highly regulated taxi industry and basically operate under their own rules so I have no doubt they can operate anti-competitively too.

UBER won't be a monopoly. But UBER and Lyft could offer lower costs than taxis, because of cheap labor, no medalions, and less empty rides they could offer their drivers.

So it's basically a UBER/Lyft duopoly, after the growing phase. And Duopolies are good businesses to be in.

> because of cheap labor, no medalions, and less empty rides they could offer their drivers.

You forget that dispatcher already take a pretty big cut already and I don't know where you live, but here in Montreal, we have a bunch of them that are all profitable. Sure dispatcher started to makes apps, but they only cover a tiny market (thus the apps is more expensive to develop per ride than Uber) and plenty of their clients prefer calling, thus an human operator (which Uber doesn't has to pay for).

Our government also decided a few years ago to force them to accept credit/debit card. One of my friend worked for one of the operator that rented terminal to taxis. They were profitable too.

If Uber can't make money by being much more efficient in MULTIPLE already profitable business and that's WORLDWIDE, there's something pretty wrong.

> Self-driving cars were supposed to lower labor costs, but that's not going to be a thing for decades if it ever works.

Decades? Maybe half a decade until it starts rolling out in major markets.

> But even if it does, it won't be an exclusive technology.

Of course it will be exclusive if the developing company decides not to make it publicly available. And why should they?

> If their costs go down, so will everyone else's and they won't be able to undercut the competition without continuing to lose money.

This is econ 101. There will be an equilibirium price. Or do you think just because it's easy to make pizza since hundreds of years and there are probably a million pizza suppliers in the world, the price of pizza went to 0?

>> Self-driving cars were supposed to lower labor costs, but that's not going to be a thing for decades if it ever works.

> Decades? Maybe half a decade until it starts rolling out in major markets.

What is the evidence for this? Five years ago the same claim was made, and it hasn't happened. It's not at all clear to me that mass market self driving cars will appear in 5 years, 20 years, or 100 years.

Yes, there is literally a way to make money.

Assuming you can get everyone to adhere to regulations etc..

Then Uber could be seen as a marketplace connecting drivers and riders - and there is material value in that.

And it doesn't have to be a lot for Uber to make money.

Not $100B valuation money, but money.

And there are de-facto network effects, brand etc. that play into that.

Lyft and Uber might not be worth their valuation, but there's value add there.

Do people actually use the taxi uber like apps? I ask everyone I make rideshare smalltalk with and no one has ever even said they'd installed it (small, poor sample size, I know.)

What about UberEats?

Pooling is a nice cost saving innovation.

You made quite a big claim in the first sentence but the rest of your comment doesn't explain it.

> There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs.

Confident brash nonsensical statement with no factual argument to back it up.

The fact that it is voted top comment on HN says some unflattering things about this place.

Autonomous driving is "decades" away? How do you figure?

Self-driving cars are already here (Phoenix, Arizona). That and falling electric car prices will be the key advantage.

Uber won’t be the one to benefit though, as the other companies at the cutting edge are too savvy to let them (Waymo, Tesla). It is very hard to get right and I think will give those companies an advantage for years.

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