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Comment by sjg007 | Hacker News Reader

I’d be long on Uber. Taxis are still a bad experience. A recession is coming too.

Why would a recession be good for Uber though? A lot of Uber rides are discretionary spending; even if they could get away with paying drivers less their ridership would go down, no?

Lots of people will drive for Uber during a recession to make an extra buck perhaps the extra supply allows them to reduce subsidies and turn a profit on a per ride basis (in more cities).

So fewer riders, more driver supply. Sounds like it would make the recession hit a service like Uber harder.

I was talking to a taxi driver who noted that leading up to the end of financial year, taxi rides drop significantly, as discretionary spending dries up from the public sector. I wonder if you could gauge the same effect for Uber in public sector heavy cities to get a glimpse at what a financial crisis might look like to such a platform.

As I said, they might be able to pay drivers less during a recession but if total ridership is down they are still going to be in trouble during a recession. If they have problems reaching profitability now I don't understand how a recession will do anything but harm them.

And drivers are probably already somewhere around minimum wage a lot of the time. Recession or not, there's some price floor under which even the relatively desperate are not going to drive for willingly.

If travel is down, young urbanites aren't taking Ubers to dinner, etc., it's hard not to see the business decreasing. Uber may not be a luxury for everyone who uses it, but it is for many.

Uber isn't very sticky.

It would be very easy for both riders and drivers to switch to a new app.

Agreed, now that they've created a constant supply of drivers and riders, it's much easier to solve the chicken and egg problem by piggybacking on that supply. For a while now, I've been thinking that someone should create a simple smartphone dispatch service that operates as a service to drivers, just takes a very small fixed cut, and allows them to put out ask prices, while riders put out bids. Then, this thing matchmakes and hands the rider off. The experience would likely be more variable/less controlled, but it also seems more likely to be economically sustainable, and give some freedom back to the drivers.

I asked that HN few months ago and was told its a bad idea. I was explained that people want to find a ride quickly and riders only care about stable inflow of riders. I still believe an app that both parties can agree on price (uber for ebay) would be a great third competitor in taxi-riding world.

I think a lot of that assumes that people only use yours, and that price isn’t a significant factor for riders. But I think in a lot of areas they’re still subsidizing riders, and once they jack it up to the true cost everywhere, people will start caring a lot more about the price. In SF I’ve noticed that they’ve bumped the price of express pools up by ~50% since IPO, and it’s gone from a no brainer to not such a no-brainer. If there was a significantly cheaper but less reliably fast option, I’d check it before falling back to the others, similar to how I currently check both Uber and Lyft for pricing.

This app exists, it's called indrive

Didn't we have something very similar with sidecar, and nobody knew about them? They couldn't compete with Uber and Lyft and went under. That's from vague memory...

https://en.m.wikipedia.org/wiki/Sidecar_(company)

Maybe, but I’d say the market is significantly different now.

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