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Didn't Uber disrupt an industry that was already very well protected by government regulation, and seems much more exploitative?

It costs around $100,000[1] to be allowed (by the city) to drive a taxi in New York ($1.3MM in 2014), for a job that pays on average $43,000[2] per year - which involves driving an average of 70,000 miles per year - which at an average speed of 4.7mph[3] works out to $3/hr (not counting waiting time).

It's still not a living wage, but making $9/hr[4] just by owning a decent car seems like progress.

[1] https://citylimits.org/2019/11/30/need-to-know-taxi-medallio...

[2] https://www.salary.com/research/salary/benchmark/taxi-driver...

[3] https://www.latimes.com/nation/la-na-new-york-traffic-manhat...

[4] https://www.thestreet.com/personal-finance/education/how-muc...

Uber didn't comply with the regulation though. They just ignored it.

Labor laws are much harder to ignore than taxi boards.

I don't think Uber disrupted anything. Private car services or gypsy cabs already existed, they just had a brand name and an app. The result of which is that the same problems remain for workers. Unless that's how disruption in an industry is defined these days.

Update for clarity:

I guess my bigger question is: what really changed? Customers became more comfortable and the business side became more reasonable, but competition and workers still get the shaft.

My experience in London was that Uber radically disrupted things. Yes, private hire cars existed, but the experience was pretty bad. You'd phone a number or go to an office, they'd say "20 minutes" and then, hopefully, a car would turn up. It involved a lot of waiting on streets (especially at night) and sometimes no car would turn up. There was no recourse or way to contact the driver.

Maybe app based hire cars were an inevitable product of smart phones. If not Uber, then someone else. But certainly Uber's business model was incredibly disruptive of that industry. From my perspective it had a really strong effect on how my generation lived in the city.

I happily use an app to hail taxis in London before Uber existed. The biggest change they caused that the trips got cheaper occasionally after Uber.

I'd say that the biggest change is that you now can use that same app to effortlessly hail a car in New York, Hong Kong and Sao Paulo.

The fact that I don't have to stress and figure out a new taxi system every new city I visit is a big plus. On the flip-side, the taxi system quirks of new cities could also be charming in a way. Double edged sword I guess.

I've never taken an uber from a place with hailable cabs. I would never have left a night haunt in Tottenham or a friends house in Denmark Hill and expect to find a taxi. Like, ever.

Sure, some cabs would be finishing jobs taking people home from Shoreditch and soho, but you'd just have to walk to a main road and hope you bumped in to one. Along with anyone else doing the same thing...

I’ll argue on the side of their disruption, Uber and Lyft’s.

Prior to their arrival on the scene, getting a taxicab in SF was nigh on impossible for there were far too few drivers, the cabs were often unsanitary, often took up to an hour to arrive when called, the drivers often tried to argue against taking card, often falsely claiming the machine was broken. The complaints stacked up on the SFMTA’s website and the SFMTA did basically nothing.

Uber and Lyft were disruptive, they were disruptive to the benefit of their customers. I have my complaints about Uber the company, but I would take this band of psychopaths over what we had prior to their arrival on the scene.

Before Uber New York City was the same way except for availability. You could get a cab but it stank, the machine was always "broken", the driver didn't speak English (until it was time to tell you the machine was broken), and if they suspected you were from out of town they would drive you around in circles just to increase the fare. I learned to always start my ride by immediately making it clear to the driver that I expected him to take a particular route and if any monkey business happened I would report him to the TLC. Acting confrontational is way outside my comfort zone but it was the only way not to get fleeced.

All that garbage is gone with Uber and Lyft.

I never understood why Uber existed, until I tried to get a cab in San Francisco.

One day we'll get to the point where MUNI is replaced with private bus lines. Although the regulatory environment here might prevent that.

Can't agree; Uber and Lyft caused a massive change in the culture of cities in America. Maybe not the biggest ones -- NYC already had a taxi culture. But they exploded the use of hired cars in all of the medium-sized cities.

I still disagree, I think their explosion is the result of other factors. Medium-sized cities still had taxi cab services but they were more expensive and less used. Uber and Lyft had massive capital backing to essentially invade these cities with lower cost rides. Once that honey-moon is over (it's over in NY for sure) customers will be in the exact same place. Another factor is that there is more leisure money moving around in the middle class as opposed to before. To attribute Uber/Lyft to the cause of the culture change is just way off base.

I dunno, it shifted overnight in my life. People I knew in Seattle went from not using cabs ever to taking Uber and Lyft constantly in the course of a couple of months. Cabs were such a miserable experience that it just wasn't part of going out. They were reserved for emergencies or for getting to the airport.

As soon as apps existed, "calling an uber" became a thing within a few months -- for getting to and from restaurants and bars; for getting to work when you're late, etc.

That's the problem with 'disruption' as the MO for tech startups - they end up creating new business models that may not be any more efficient or better overall for society, and escapes scrutiny during the time that society adjusts.

By the time everybody catches on, the damage is done.

We need a better way to internalise social and environmental costs. Just because human society has been able to adapt to past technological and social upheavals is not an indication that it will be able to continue to do so.

Taxi companies have always been crap places to work. The job is (relatively) dangerous, pay is bad, flexibility is bad, and probably no benefits. Didn't help that most cities had a medallion system that enabled a group of rent seekers. And outside of NYC, Chicago, and maybe a couple other cities taxis sucked.

I think Uber is much more efficient and better overall for society than what it is replacing. Not a great job by any means, but far better than a taxi company. And when I look back 10 years ago Uber/Lyft are probably top 3 things that have made the world better. It opened up an enormous amount of flexibility when going out at night and eliminated concerns around drunk driving.

Uber doesn't just compete with taxis. It also competes with public transport.

Also, there is a chance that sole riders would actually be increasing their carbon footprint compared to driving, as the Uber driver is also involved in your trip. Unless Uber is proven to cut car ownership and vehicular use, it is very possible that it is worse for society and the environment than the previous status quo.

In NYC Ubers have contributed to increased car traffic, so definitely a net negative for congested urban life and global warming at the same time.

"contributed to increased car traffic" = "lots of people use it"

Yeah that was part of it, but the same study found a lot of it was due to circling blocks around already high traffic areas without passengers waiting for fares. In that case, that added traffic would be from people not using the service, but the service requiring a physical footprint in the city in the name of an empty uber vehicle anyway for it to function, if people were to use it.

You can argue buses and trains also need space, but you can fit way more people into a bus or a train before you need to make square footage available for a second bus or a train.

The per-mile cost of rail or bus is much, much lower than a car or SUV.

If they are so mismanaged that they can't offer drastically lower prices, then driving them out of business and replacing them with better management seems like a great idea.

that competition is fairly small. in the US, there is very few cities with good public transport

Yes, I can accept that it's region specific. It's the case in London, for example. Uber has made central London traffic worse. And that would be the case for many places outside of NA.

> when I look back 10 years ago Uber/Lyft are probably top 3 things that have made the world better

Really? A car service in your opinion is in the top 3 of what made the world measurably better in the last 10 years?

What are your top 3?

In no particular order:

- polio cases worldwide have dropped to well below 100 per year since 2010 (except last year, 175)

- same sex marriage if you want to focus on the us

- Sharp drop in air travel with the corresponding benefits on global warming. Recent, but analysts seem to agree that business travel will permanently drop to between 1/2 and 1/3 of what it was before now that the world has discovered video conferencing is a thing.

There hasn't been a reported Polio case in the west for over 40 years. Likewise, according to Wikpedia, LGBT individuals represent 5% of the population.

I don't mean to downplay these accomplishments, but I think the impact of Uber/Lyft is greater than these on a simple per capita basis. Maybe that's a American-centric view but it's far more realistic for many Americans than "no polio cases"

It's a privileged american centric view on top of an american centric view. Lots of people use uber and lyft here on HN, and in other corners of the internet occupied by people satiated with a tech worker's salary. But for most working people, rideshare remains a frivolous cost that can quickly add up to the price of whatever you were doing at that destination, and it is not this world changing thing that some imagine, but just another service for the wealthy.

Indeed. 'Disruption' often translates to inserting an expensive middleman into an existing relationship. E.g. passengers used to order taxis directly and takeaways would deliver food themselves. There are certainly improvements for some of the parties involved (Uber is a lot easier to use than local taxi companies used to be), but that doesn't mean there's magically a lot more money available to pay both the existing and new members of the model.

That's usually referred to as "building a regulatory moat".

Or pulling up the ladder.

Either way, it’s a very common tactic, and undoubtedly part of the motivation.

It’s also a defensive play. If Trump loses, companies like Uber will be facing a regulatory reckoning for things like unemployment insurance. (Some states are paying gig workers UI or pandemic relief)

Better to control the narrative than just wait.

> If Trump loses, companies like Uber will be facing a regulatory reckoning for things like unemployment insurance.

That's... wishful thinking. Such a reckoning will certainly not come under Trump, I agree; but it's not a given that it will happen under Biden. In fact, I'd be willing to bet that it will not, at least for the first 4 years.

Right, because there was no Democrat president before.

Inform yourself before engaging in snark. It's not a democratic/republican issue. It's a current POTUS vs. responsible leader issue. The problem that we're facing are novel.

To my knowledge, the US has never used unemployment to provide benefits to non-employees. UI is an insurance based program and always has been -- the business model is to loan money to the state programs during an uptick, which then gets recovered through UI premiums.

Chances are, changes are coming that will erode the free ride that "employers" of Uber have been enjoying. The states are broke and facing big increases of UI premiums. Once the door opens, it's hard to close. People will start looking at things and asking awkward questions about things like Medicaid and SNAP expenses associated with gig workers, etc.

This is commonly done by huge telecoms/ISPs (Comcast, Charter, Centurylink sized) against competition in specific geographic areas. And at the federal/FCC level.

It is among the many issues that are the contributing causes of why residential broadband sucks in many parts of the USA, and why consumers are dissatisfied.

So what's the solution to a regulatory moat? Would gov't regulations made to be only applicable to big businesses, and give smaller businesses a pass so they can compete?

Generally, you make the rules as simple as possible instead of a complex ouroboros of legislation that requires a full team of lawyers to understand. The other rule would tend towards “no need for government approval.” You shouldn’t have to ask the gov for permission to start working in the space, you should just have rules you need to follow while you do. Approval processes that inevitably take years are by far the most dangerous regulatory moat, if a startup can’t enter the space and start making money quickly that startup is many times less likely to exist.

The moat is still gonna be there. Austin TX went through this when they banned lyft and uber and had some "in house" startups launch rideshare apps. They didn't fare that well after uber/lyft came back in.

You can make it difficult for everyone at the "national" level of operation, but then how does a smaller company ever get there from a "local" start?

What even constitutes a "small business" when it comes to gig economy? Most of the workers don't even count as employees.

There's going to have to be a -lot- of legal changes to constitute something worth while. And legal stuff moves slow on purpose (so that it doesn't bork things before they're understood... and also, it's just slow).

Don't let lobbyists for these companies craft their own regulations, and actually listen to academics without a conflict of interest from our world class, publicly funded schools of economics for once.

> They have made their bucketloads of money

I agree with your broader point, but Uber lost some 8.5 billion USD last year. They're not (yet, at least) making bucketloads of money, despite paying their workers badly.

To be clear, they have made bucketloads of revenue, they lost profit. The OPs point was that now that they have practical market dominance, regulations will most likely favor them compared to small start-ups.

Focusing on revenue and revenue growth makes sense for some companies, especially ones where you can expect economies of scale to eventually become a major factor.

When the company's business model is this transparently an elaborate scheme to sell dollar bills for $0.75, though, focusing on revenue starts to seem like either committing or being taken in by a very elaborate version of lying by omission.

They have no dominance, they just proved to a bunch of other taxi companies up to which point their business model is viable.

And by relaxing the regulations they will be making that job for smaller startups only easier.

I am so confused by Uber's financials.

I do not understand what they spend well over 8.5 billion on.

Their software for riders and drivers is quite good and certainly tons of engineer-hours have been poured into the front and back ends.

Are they paying their drivers more than they're charging riders? Or have all the billions gone into their moonshot projects like self-driving cars? Both?

Because otherwise, to me it's almost like, how do you not turn a profit on rides? Once they've got their app and infrastructure going (again, no small expense) then any rides they arrange should be profit.

Clearly, I am misunderstanding something about their business to an astronomical degree but I don't think I'm alone.

Advertising is expensive and probably invested money in new ventures.

https://www.theguardian.com/technology/2020/jul/08/uber-to-l...

They probably spent well over $1bil on their autonomous driving research (which didn't pan out).

They're losing money every ride, or so I read somewhere, like $16 each time?

I think that's just the $8.5B loss restated as (total loss) / (number of rides), right?

Dara seems to be doing well for himself.

https://observer.com/2019/09/uber-ceo-dara-khosrowshahi-tech...

Doesn't that just mean that Uber's investors are doing badly? I'm assuming most of their (regular) employees are being handsomely compensated.

Hilariously, years of multibillion dollar losses with no path to sustainability have yet to translate to a lower stock price.

Indeed, the ultra-cynical view is that they are now desperate for government regulation to ossify the market because without a lock in (similar to what taxi companies used to enjoy pre-Uber) profits drop to 0 and stay there.

Raw capitalism should drive companies like Uber out of business as a billion-dollar company. They can always be undercut by a group of drivers in a locality starting a new app and stealing the local regulars (identical service, lower cost because no Uber premium) leaving Uber with only non-local traffic. Apps are not expensive.

Your deeper cynicism is justified. Regulations always benefit the well-entrenched in a marketplace. In many cases, they are the ones who actually write the regulations.

Politicians do victory laps, big business get their position in the marketplace protected by law, and everyone else loses.

What is the gain in making uber in a taxi company again with all the same corporate math? Uber is turning about to be american arbitrage, giving us the same service but with an app.

Uber has never made a profit in any quarter or year. In fact I believe the best they’ve ever done is lose a billion in a quarter. This past quarter they lost $2 billion.

To add. Uber has bled billions while paying people less than minimum wage. By now they may be established enough. But anyone attempting to compete will be screwed.

The solution is protections and to break up uber.

>bucketloads of money

Uber has yet to make a profit. Some shareholders have made profits by selling stock, but the business is losing money hand over fist.

i suspect the same. we saw the same exact behavior last year from amazon around minimum wages (https://techcrunch.com/2019/04/11/amazon-ceo-jeff-bezos-chal...)

That's 100% it. By Uber advocating for additional regulation, they get to (hope to) design the regulatory capture that entrenches them and makes it harder for upstarts.

It's the same reason Facebook advocates for data protection laws in the US - they're going to happen either way, Facebook wants them to suit them and makes it harder for competition.

I wasn't following recently, but has Uber finally become profitable?

Regulation helps the large incumbents, who have more capacity to bear the fixed costs.

The capitalist solution to the 2008 financial meltdown would be to let new banks bump the old banks. Despite all the Fintech innovation, the old banks are more entrenched than ever. With Dodd-Frank, Barney Frank gave them one more gift on the way out of office.

Ouch, right - basically, "dumping": https://en.wikipedia.org/wiki/Dumping_(pricing_policy)

When Uber started they predicted (falsely) that autonomous driving is going to be ready in few short years. For Uber drivers are a minor annoyance.