Hacker News Reader

Comment by maxaf | Hacker News Reader

I’ve been conducting a thought experiment. Imagine an Uber competitor that keeps drivers as full time employees and charges customers a price that allows it to pay the drivers a fair wage while slicing a modest profit margin off the top. Let’s discuss if something like this can work.

View on HN

> Let’s discuss if something like this can work

In New York, London and San Francisco? Sure. Anywhere else, there isn't enough density of destinations and density or wealth to make on-demand service competitive with hired cars.

That said, the full-time requirement would also wipe out taxis in most cities. That turns a broken-down car for anyone but the wealthy into a potentially life-destroying experience. Weighed against the benefits around drinking and driving, et cetera, something between full-time employment and the current situation seems apt.

I'm not sure if someplace like Lancaster, PA (totally random example; it's a city I enjoy visiting) even needs a service like Uber. There is nothing in the value prop that demands that it be scaled up, down & out to fit everywhere in the world.

> I'm not sure if someplace like Lancaster, PA (totally random example; it's a city I enjoy visiting) even needs a service like Uber

I dive in Dutch Springs (near Bethlehem, Pennsylvania) from time to time. Bus out of New York and Uber for the last mile. Without Uber, those are hotel, restaurant, equipment, facilities and bus expenses I would not be spending there.

You don't need an app for 50% of that use case. You need taxi drivers hanging out at the train station/bus depot.

People that want to stop drunk driving would disagree. Taxis are way to unreliable in the vast majority of US cities to be used as transport to/from a dinner with drinks.

Yep. The primary way I get to/from drinking events is Uber/Lyft. The other use case is when going somewhere without parking. Taxis were always very unreliable for trips like this; they'd show up late or not at all, especially for leaving events late at night.

This is what I don't understand. When I lived in the Boston area, I used Uber instead of taxis, because of this neat little feature Uber (and Lyft) had called "showing up". Sometimes when I called a cab company, I wasn't even able to reach the dispatcher (maybe 20% of the time, because I was often calling in the very early morning). When I spoke to the dispatcher, I could never be certain that he actually understood what I was saying. If those hurdles were overcome, there was about a 75% chance that taxi would show up, but the time of arrival was always uncertain.

I could not have cared less about the cost of Uber. I'd have paid ten times the cost of a cab, in order to have a service I could rely on. I've never once been stood-up by an Uber or Lyft driver. Reliability is what's important - little things like the car not being filthy and the driver not screaming at me about the Yom Kippur War are just extras.

Why don't taxi companies just clone (as closely as they can) the Uber dispatch and driver tracking technologies?

As I understand it, taxi companies have done just that - they now have apps as well.

The Amish. No joke.

My dad's from there. The guy who lives next door to my grandparents drives a truck for the Amish since they can't.

Scenario: It's raining. Twice as many people are requesting rides as normal. You have, as you described, only full-time employees. Go!

Half of people get rides, the other half don’t, as happens with taxis today. It’s unreasonable to assume the physical world has the elasticity of technology resources.

That's a pretty terrible solution. Leaving good, willing-to-pay customers out in the rain? Not really customer-service oriented, are we?

Customer obsession is worker abuse veiled as clever business practices.

Workers > Customers > Shareholders (this is Costco’s stated priority by the way; they do very well and treat their employees well)

Try to get Costco to show up at your house 7 minutes from now.

That’s the point

That’s a competitive advantage over taxis, then. It’s one of several reasons I choose uber over yellow cabs when in NYC (9 times out of 10, anyway).

Up until Uber exhausts cash on hand. And then you’ll be back to using taxis or public transit, no?

A competitive advantage has no value without a path to profitability.

So are you going to start this business now or wait until Uber folds?

Start what business? Have taxis gone out of business? Or did they adopt their own ridehailing apps and continue to exist? I still see cabs everywhere in NYC, Chicago, and SF.

If you can’t kill taxis with tens of billions of dollars of VC investment, how does the last bit of cash Uber has help?

> Up until Uber exhausts cash on hand.

Uber's rideshare business appears to be almost revenue-neutral. So if you're waiting for Uber to run out of cash, you'll be waiting a while. Worst case scenario, they stop pouring money into their money-losing ventures and focus on rideshare.

Perhaps human mobility solutions should be run as non-profit.

> A competitive advantage has no value without a path to profitability.

It's a real pity that there is no 'HN Quotes' section, I'd definitely nominate this one.

This seems based on the assertion that people are only using Uber because it's cheaper which, as far as I can tell, is completely unfounded.

There could still be “surge” pricing though, as long as the company paid the employee-drivers overtime. So perhaps drivers who are “off” could be incentivized to drive during the additional demand.

This is handled the same way 24/7 availability is handled. The company employs some multiple of the employees it needs to handle regular demand during the day. Some of these employees happen to like working at night. Others like working during the day. All are required to put in some number of hours per week in order to qualify for the perks that come with full time employment.

When a spike in demand occurs, a page goes out to all employees who currently aren’t on the road requesting that all those who can do so safely proceed immediately to an area that has unfilled demand.

These hypothetical employees are expected to be 24/7 on-call? If they're required to have their "pager" on and respond to pages, this is unreasonable. Nobody would put up with such absurdity. If they aren't, it's also unreasonable, after all, nobody would put up with such absurdity.

Put in work preferences. Would like to work hours X; is willing to be notified of opportunities for overtime hours Y. When it's a big deal time, call up everyone who seems to be legal for DOT workrules, regardless of their preferences.

Awesome. I've put in a full day of work and I'm finally chilling out with my kids playing Xbox, can't wait to "immediately" get my ass back on the road. Not exploitative at all.

So long as the pay is good enough without answering any overtime calls (ie at least minimum wage plus operating costs for 40h per week) then I don’t see the issue with some limited voluntary overtime.

The q is: can the driver play Xbox with his kid and get him a higher education, with the pager off? Then it’s an ok solution. Otherwise not.

Assume all drivers (taxi or Uber alike) have the same rights as other employees (min/max working hours, minimum pay, benefits).

If the idea of “independent contractors” is punctured so that Uber has to ensure drivers make minimum wage in 40h after their own operating expenses, then Uber won’t have a huge competitive advantage anymore.

Same deal as it is now no? Its not like you recruit more drivers during a rainstorm in the current model. You dangle hazard pay to make your employees grab their keys and drive after hours, same as any job with full time employees and sudden after hours demand.

As a public company with shareholders? Never.

Once you go public, the shareholders by and large drive your you revenue decisions. Don’t hit your revenue goals? Stock tanks and you lose money.

If Uber remained a private company, it’s possible. However if the goal is growth a massive IPO and cash grab, then your idea is antithetical to their goals.

If they stayed private and did what you said and the goal was a modest profit and staying under the radar? Totally possible, but that has to be the goal at the outset and keeping employees will be hard if you have to keep up with cost of living adjustments, bonuses, etc to stay competitive with other industries competing for the same talent

The operative word in my blurb was "modest". Screw the shareholders; or rather, screw the public shareholders. I don't want their money because it comes with strings attached: demands that the business operate in an unethical and inefficient manner. Those types of shareholders are crazy can take their money to the casino for all I care.

However, I'm sure there are other shareholders who might appreciate a "modest" dividend instead of a meteoric rise and trading potential. Where are those people? Aren't they the true smart money?

Isn't that called a "car service"?

Perhaps, and there are plenty of those around. You're a fellow New Yorker, so you can readily conjure up the image: crummy Lincoln Town Car, leather seats that reek of stale tobacco, driver who talks on the phone while operating the vehicle, payment in cash (plus the tolls!), ordering process that involves speaking on the telephone... You know, the typical Brooklyn-based car service that dispatches cars via the radio from a storefront office.

Uber's greatest contribution to the industry is the discovery that customers want a nice and smooth experience. Order using a smart phone, ride in a nice car (or perhaps a luxury one, or a larger one, or one with a child seat - you have options), and don't worry about payment and how much you owe in tolls.

So, my pitch is that this convenience can probably be made to work as a business that doesn't abuse its employees and doesn't flood the roads with idle drivers. And also doesn't burn investor cash in order to conduct a price war. That's just bananas.

It isn't 1982 anymore, taxi businesses and regions have apps now. Uber's value add is their pool of drivers' reach.

I called out “Brooklyn car services” specifically because I still see such operations around town. I’m assuming they survive because there’s a group of users who are beyond the reach of new technology.

I’m sure there are taxi services that offer conveniences similar to Uber, but none have enough name recognition for me to name even a single one off the top of my head. It’s possible that they need marketing help. It’s also possible that they aren’t looking to grow beyond whatever niche they serve now.

> I’m assuming they survive because there’s a group of users who are beyond the reach of new technology.

This thought experiment is fun, but based on a lot of assumptions like these.

I believe that's what taxis are.

Uber zero hour drivers are footing all the startup investment to provide their end of the service. They paid for the car and are paying for insurance, petrol and upkeep. On top of that Uber is saving on holiday/sick pay, employee contributions...but more importantly they can afford to hire any driver without worrying about firing them, and that could be the deal breaker on zero hours vs full time.

Reply on news.ycombinator.com