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The overwhelming vast majority of reasons I've heard people give for preferring Uber/Lyft over regular taxis are (1) regular taxis could not be summoned via an app or web page, instead requiring a phone call or curbside hailing, and (2) their credit card terminals were often broken so that you had to pay cash.

Both of those specific problem are solvable for most rides without going anywhere near the level of complexity described in that post you linked to that details why the Uber app is so complicated.

Most of the Uber app complexity that post gives is because they want one app that works nearly everywhere and does a lot more than just let you summon a ride from A to B and pay via credit card.

For most US cities you could cover the payment needs of most riders with something from Square installed in the car. That gets rid of a huge amount of complexity (or rather, pushes it to someone else).

That should be good enough to make them a viable alternative to Uber/Lyft for probably 95% or more of the rides in a US city.

>For most US cities you could cover the payment needs of most riders with something from Square installed in the car.

That's a good example of driver-centric thinking instead of holistic thinking that considers the paying passengers. Consider: what if the customers/passengers actually prefer the convenience of not having to mess with an extra payment transaction step before exiting the car?!? With service like Uber, passengers can just get out of the car immediately when they arrive at their destination. No whipping out the credit-card to swipe. No exchanging of QR codes.

Always think of game theory and consumer behavior preferences.

Adding "Square payments" as a driver-platform "solution to avoid complexity for the programmers" is adding another reason for customers to avoid using it because you added complexity to the customers -- and therefore you have less revenue. There are always tradeoffs.

Whenever anyone thinks "Problem <X> is trivial, and the solution is just to do <Y>," ... you have to think a few chess moves ahead as to what the actual paying customers will do that may negate your "solution".

I mean, I take your point, but I'd choose a higher friction payment every single time I thought it favored the driver vs Uber or Lyft or whatever. It's the driver providing the valuable part of the the service, not the wholistic user experience in the app.

I think you are overestimating the inconvenience of paying at or near the destination. Most passengers will have smart phones with them, most of which support NFC payments. Double tap the side button on your iPhone (or whatever is equivalent on non-Apple phones), hold it near the reader for two seconds, and you are done.

Heck, a large fraction of the passengers won't even have to reach into their pocket to get their phone because they'll have been doing stuff on it during the ride.

Even for those who have to use an actual physical credit card I don't think it would be enough of a barrier to make a noticeable difference because they are also using that card for nearly everything else. It's so routine that they don't think about it or notice it. I don't think I've ever heard anyone complain about the complexity of paying by credit card at a non-waited restaurant, a grocery store, a hardware store, or any other retail place.

Also, note that with this approach the co-op would not have to make riders create accounts and associate payment information with them. That removes some complexity for the user, and is one less thing to deal with when the user gets a new credit card.

>I think you are overestimating the inconvenience of paying at or near the destination. Most passengers will have smart phones with them, most of which support NFC payments.

And I think you're falling into the same trap of believing other economic actors will happily agree to your proposed "solutions".

Disadvantages of NFC payments:

1) economic friction which lowers supply of drivers: drivers have to buy $50 NFC terminal from Square. $50 is not a lot of but it's extra financial friction which deters potential drivers

2) trust issues which lowers supply of paying customers: NFC payments puts the payment amount in control of the driver which makes potential customers fear getting scammed. In the Uber/Lyft model, this doesn't happen which is a significant psychological advantage because drivers are notorious for playing games with payment (especially with foreigners and travelers). By letting the "service in the cloud" pay the drivers on behalf of the passengers, it adds accountability.

I'm not claiming it's impossible to create a car-on-demand service that uses NFC and/or credit-card swipes. I'm saying it would be a disadvantage to other platforms that work more conveniently. This means less paying customers which leads to less capital to continuously improve the software -- which could then lead to more customers abandoning the co-op rideshare app for the more polished Uber/Lyft apps.

Again, see the failed non-profit RideAustin losing riders as somewhat analogous case study. And see the other comment about the apparent low quality of this thread's app (Drivers.coop): https://news.ycombinator.com/item?id=26592354

The co-op needs capital to improve the app software and you need a virtuous cycle of paying customers that don't avoid (or abandon) the platform to provide that ongoing capital.

>co-op would not have to make riders create accounts and associate payment information with them. That removes some complexity for the user,

This wouldn't be an advantage for commuters that use Uber/Lyft daily.

I'm confused. Who benefits from using a physical credit card terminal instead of an app in the first place? If you don't want to implement all the payment methods Uber does, and you're willing to settle with only credit cards... why not just have in-app payment that only supports credit cards?

The obvious answer would be "so that the user doesn't have to have the app", but if the user doesn't have an app, how is that different from an old fashioned taxi service?

Beyond the fact that the credit card terminal isn't broken... but it's not like the rider would know that ahead of time.

> (1) regular taxis could not be summoned via an app or web page, instead requiring a phone call or curbside hailing

This is partially true. It wasn't just that taxis couldn't be summoned through an app. It was that when you tried to summon one, there was at best even odds of one showing up within 30 minutes. Drivers could and did take curbside hails as they saw fit, and a dispatch often seemed to amount to no more than a polite request.

I've used taxis apps in the years since Uber's debut. Replacing a phonecall that gets ignored with an app's request that gets ignored is not an improvement.

> (2) their credit card terminals were often broken so that you had to pay cash.

They essentially never were. Cabbies just prefer cash. The real issue here is that cabbies had no compunction about lying through their teeth and there were no consequences for this. The whole system was set up so that there was in-theory accountability but no in-reality accountability. Uber took this away entirely by forcing payment to be handled entirely via the app.

> That should be good enough to make them a viable alternative to Uber/Lyft for probably 95% or more of the rides in a US city.

With the above points in mind, things take on a slightly different character. Using Square accomplishes nothing except giving cabbies a slightly different thing to lie about. Without the assurance that your driver won't make random other stops or otherwise not show in a reasonable timeframe, the request app isn't that useful.

There was one more reason: Uber debuted in NYC. NYC has a limited number of taxi medallions and therefore a limited number of taxis which is a problem because demand outpaced supply. Uber provided additional drivers/vehicles. Also initially it paid better while taxi medallions were no longer owned by the drivers but rather by what amounted to wage-slave owners. As a result some people felt it was better to support this nee gig economy as it put more money into the pockets of drivers. Oh and did I mention it was slightly cheaper than equivalent yellow cab rides because it was VC subsidized? Turns out when you sell dollar bills for 90 cents you can get loads of customers.

Uber debuted in SF.

That Uber eng comment reads like list of features and approaches that are necessitated by an overstaffed engineering department than stuff that necessitates it.

Yeah if you have 40-50 (!!) “product teams” fiddling with the Rider app, it’ll get complex and sure it’s impressive it works. But uh... why are there 40-50 product teams working on the Rider app?

Did we read the same comment? They all look like useful features which deal with the complexity of things external to Uber (like regional payment regulations).

>present a seamless experience to the customers/passengers

There does exist a segment of users who are willing to navigate a less-than-seamless experience if that lets them avoid dealing with a less-than-ethical business. (And probably there's at least some PR effort involved in making their voices not count.)

Besides, the Uber/Lyft experience is far from "seamless", and developing a ride-sharing app that does _not_ aim to work on a global scale has different challenges from those outlined in that post.

>But a high-tech complexity business that's expensive to build is inherently too costly for a pool of drivers' savings to fund.

>Whenever you see "worker-owned", mentally substitute "capital-constrained" -- and it starts to make sense why many businesses domains don't have any coops rising up to compete with VC-fueled startups.

My favorite conspiracy theory is that VC is poured into software not to produce meaningful innovation, but chiefly to hypercomplicate the field in a sort of Cambrian explosion, so that the "capital-constrained" can't get anything done with the baroque frameworks and out-of-touch developers that the ecosystem produces.

Thankfully, people who understand how a computer works (and what it's good for) do exist outside of SV. Sometimes (shhh!) they're even motivated by other things besides short-term capital accumulation!

And better ethics can mean better efficiency - fewer politically driven kludges in software, less staff turnover, even the fact that people can and do accept to get paid a more average salary in exchange for working at a place that isn't screwing people over at industrial fucking scale.

That's how a cooperative can compete with a megacorpo, although realistically a more reasonable first goal would be to coexist in the same markets, or operate in markets that have demand but are deemed insufficiently profitable for the corp.

> less-than-seamless experience if that lets them avoid dealing with a less-than-ethical business.

True; this is why I started using Uber: to avoid the “oh the credit card machine is broken, you need to pay cash” only to find out it did work AND I’d paid cash.

Yeah, it works both ways. Otherwise we wouldn't have competing alternatives to discuss (Uber, cooperatives, taxi companies, solo cabbies... I hear that in Russia it's customary to hail any car on the street and pay for a ride, with obvious safety drawbacks of course)

What you're describing can happen anywhere there is a PoS terminal. I guess a sketchy cabbie has the benefit of being able to drive away before you realize what happened (and it could be harder to see the card machine when sitting in a car as opposed to e.g. paying at a desk in a shop?)

Nevertheless, "we let users order and pay for rides with an app" is a part of the business model which is totally distinct from "we'll make sure users never get screwed by fucking with the workers". Which does have an obvious advantage in terms of customer retention though - especially if your customers are petty bourgeois knowledge workers who want to benefit from an "on-demand" lifestyle and to distance themselves from the people doing the actual gig.

Not to mention, Uber probably has more data on your ass than what a single fraudulent transaction entails (for which you can at least issue request chargeback). It's up to them to handle it responsibly, and they have failed to do so at least once (the 2017 hack). Just like every SV company that keeps screwing up but people still love them because all those beautiful apps make their expensive smartphones a little less pointless.

> That's how a cooperative can compete with a megacorpo

Hum... I guess you forgot about the main competitive force of cooperatives. On service based industries, they let the service providers capture most of the value, what should attract better service. (But some times it doesn't, those things are complex.)

It's not about the IT people at all.

Parent post explicitly referenced "a high-tech complexity business". Agreed that "high-tech complexity" is not essential to providing a service, indeed it's often antithetical to that goal. Does help with market capture though.

These are real challenges, nice outline of the capital issue.

Coops generally have to get money by borrowing rather than equity investment.

I'm for increasing federal programs for offering and subsidiziing loans to worker-owned coops -- like we do student loans -- not that that's a model, I realize, student loans don't work well, but just a demonstration that the federal government can subsidize loans in the public interest if it chooses to.

There are also hybrid models possible where workers own some % of the company -- over 50% if you want to consider it worker-controlled -- but investors also own a portion. Investors invest in companies where the founders have a controlling stake, it's not unheard of. there could be federal tax or other subsidy incentives too.

>There are also hybrid models possible where workers own some % of the company -- over 50% if you want to consider it worker-controlled -- but investors also own a portion.

but why would investors invest in a company that gives them half as much stake (because the other half goes to the workers)?

Why do investors invest in a founder-controlled company, where the founders have more than 50% stake? To make money, I would assume, is why they do it?

I'm sure it's a barrier, but it apparently isn't one that rules out all investment, since investors do it with founder-controlled companies, right? There is even entirely non-voting stock, which people invest in.

If it were decided through political processes that worker-owned cooperatives were a public good to be encouraged, there could be additional incentive/subsidy through the tax code or other means for investing in minority stakes in them. (As the government subsidizes/incentivizes homeownership or higher ed tuition. Or for that matter, ESOP's for another route to minority employee ownership).

>To make money, I would assume, is why they do it?

If the only option were a drivers cooperative, then yes they might go for it (although they're still going to be competing against other forms of investment, eg. other stocks). However that's rarely the case, because there's going to be non-cooperatives which don't have workers taking up 50% of the stake.

>since investors do it with founder-controlled companies, right? There is even entirely non-voting stock, which people invest in.

They only do that because they think the founders are valuable. I don't see how the same dynamic exists with mostly replaceable drivers.

They can still believe in the leadership of the project. After all, many investors invest without themselves having a majority stake. If you own 3% of a company, the other 97% might be other investors, or might be some other investors and some worker-owners, you still only own 3%. Not everyone thinks worker-owners are any less capable of making good decisions towards the success of the endeavor than investors, although I gather you do.

Sometimes worker-owned businesses do well in fact because the worker-owners are willing to put in more energy and sacrifice for their business than typical employees, worker-ownership can be a plus. (Obviously plenty fail too, not saying it's some kind of magic invulnerability).

But also investors sometimes invest in worker coops because they want to support a worker-owned business in addition to make money, some kind of values-based investing: https://nextcity.org/daily/entry/worker-cooperatives-are-fin...

Look, all I can say is this is an actual thing that happens, there are hybrid ownership worker coops taht also have investors, it literally exists in reality.

Here's more info, including targetted at potential investors: https://project-equity.org/about-us/publications/coop-invest...

As I keep saying, I agree there are reasons some investors rae reluctant to invest, and the government could provide subsidy or incentives to change that calculus somewhat, the same way the government does for all sorts of economic activity that is considered socially desirable. It's true that worker coops have barriers to raising capital, but this really is one way some have done it, despite the challenges, it literally happens in reality, so if you're trying to argue that it doesn't, that's a weird argument.

>After all, many investors invest without themselves having a majority stake. If you own 3% of a company, the other 97% might be other investors, or might be some other investors and some worker-owners, you still only own 3%.

That's not exactly the same. If you invest in a regular company, the other 97% of investors contributed capital, making the company worth more. On the other hand, in a owner coop the 50% (or whatever % share allocated to the workers) is essentially dead weight. There might be some value that the workers add (increased loyalty?), but I doubt whether that has actual value in the context of a ridesharing platform where turnover is high and the workers are more-or-less replaceable.

>But also investors sometimes invest in worker coops because they want to support a worker-owned business in addition to make money, some kind of values-based investing: https://nextcity.org/daily/entry/worker-cooperatives-are-fin...

>Look, all I can say is this is an actual thing that happens, there are hybrid ownership worker coops taht also have investors, it literally exists in reality.

It's hard to infer motivations here, because what they're doing is blending rational investing (eg. maximizing risk adjusted returns) with philanthropy. While it's technically true that worker coops can find "investors", having to rely on the generosity of others isn't exactly a sound business strategy.

Buddy, I don't know what you are trying to argue for.

Worker-owned coops exist, thousands of them. Some of them have investors. Some of them fail, some of them have been in business for decades. Yes, raising capital can be challenging for worker-owned coops, my first post on the topic literally said that. But there are ways it can be done, that have actually been done.

I gather you think worker-owned coops are a terrible idea, that's fine you're entitled to your opinion.

No that model is a worker coop - its how Poptel in the UK was structured.

You're making some assumptions. Why can't programmers be workers in the coop and be part of the equation? Why can't forms of capital available to other startups be available to coops?

> Why can't forms of capital available to other startups be available to coops?

... because then it wouldn't be a co-op. The whole point of a co-op is that it is owned by the workers/producers/consumers instead of equity investors.

As long as the members co-operators own 50%+1 you can take external funding - doesn't always workout as Poptel found

Hmm, they probably could be. But it may be difficult to recruit and retain good ones. Coops tend to have a compressed salary spectrum, which is good for lower wage workers like taco drivers, and bad for higher wage workers like programmers.

Actually, there are a lot of high wage workers like programmers who opt to work in co-ops because the ownership model aligns with their values and they find the work both financially and also intellectually and emotionally fulfilling. You need look no further than Ampled.com, which has a robust team of "contributors" who are all working to build and improve the platform on a volunteer basis. Ampled has built a system to track everyone's contributions which will be honored down the road once the co-op has more $ in the bank. And these are top notch folks who have come from Kickstarter and other related platforms (and who also clearly have a lot of economic privilege to be able to work in this arrangement for the time-being).

Agreed, people who believe it ideologically will be attracted. It just seems like that would still make it hard to recruit if the money is much worse, though -- there are only so many people willing to take a huge pay cut.

I would personally give up half of my income to work at a cooperative. Weirdly enough, I don't see many cooperatives hiring software engineers specifically.

You're in luck! Driver's Seat Co-op is currently hiring for a software engineer and UX/UI designer. The founders are smart and committed and also just really thoughtful and kind guys. https://www.driversseat.co/careers

Thank you! Seems like a great opportunity. Applied :)

Does depend on coop - a fully flat worker coop is very rare

Not fully flat, no; just compressed.

Why would a VC invest in a co-op? What would be the exit strategy that would allow them to be paid off at the multiple needed to compensate for the risk? In a worker-owned co-op, there is none, so they won’t have access to venture capital as Uber could raise.

They can get different types of financing perhaps.

Unless they use revenue-based financing, a VC wouldn't invest in co-ops. As you point out, their need for an exit strategy that revolves around an increase in the price of equity doesn't align well with co-ops striving for building longer-term wealth for their community. That's why we see co-ops funded through loan funds, angel investment, and a new breed of equity funds trying to fill the gap, like The Equitable Economy Fund (https://www.equitablefund.net/)

> Real-life customers don't want to enter their credit-card details into City_X_driver_coop and then re-enter their financial details multiple times again into City_Y_driver_coop. Even if you imagine a hypothetical national co-op to consolidate multiple cities, customers would still then have inconvenience of Country_X_coop and Country-Y_coop.

I strongly suspect city level coops would consolidate easily and naturally once they would develop a strong base in their respective cities. Besides, consolidation isn't the only way this might go: a lot of the software work can easily be ported from one city to another - if for example the current NY coop catches on, I think it would be quite easy to spin off a Boston coop for example.

Regarding international travel you should ask how often does that need actually occur. Quite few people travel internationally so much that having a couple of different apps on their phone is a real inconvenience.

> That's the financial constraint that causes co-ops to more easily organize in lower complexity businesses such as local grocery co-op or a farming coop. But a high-tech complexity business that's expensive to build is inherently too costly for a pool of drivers' savings to fund.

Farming cooperatives can be very capital intensive.

In contrast, technology platforms are relatively inexpensive to build these days. The value of a platform is proportional to the number of users (drivers) it has: hence, this is a particularly good application of a cooperative structure.

> It takes a lot of capital to pay programmer salaries for desirable features that customers want and since co-ops are capital-constrained (by definition because they can't take millions in investors money), the app will always have less features compared to Uber/Lyft.

There's nothing saying the cooperative cannot have revenue bonds, notes payable as a percentage of revenue. Savvy.coop received funds from https://indie.vc under these terms. Moreover, technologists could contribute well below their market rates in exchange for revenue bonds. https://start.coop is working on these sorts of legal details.

>Farming cooperatives can be very capital intensive.

The farms are capital intensive but the separate entity that forms the cooperative is less capital intensive. E.g. building the local co-op grain storage bin that farmers contribute to will cost less than the millions it takes to build a polished app like Uber/Lyft.

Or did you have something else in mind when you meant farm co-ops are capital intensive?

>There's nothing saying the cooperative cannot have revenue bonds, notes payable as a percentage of revenue.

True but bonds don't exist in a vacuum and must compete with other alternative investments including other bonds by other businesses/governments.

Certain financial aspects of the co-op bond (regional business is lower revenue than national Uber, higher risk premium than Apple/Microsoft bonds, lower Moody's credit rating, etc) ... are less appealing to bond buyers which then lowers the amount of capital to the co-op. Just because a company has a "bond offering" doesn't automatically mean investors will line up to buy them.

E.g. and using the failed RideAustin example above... if they hypothetically offered bonds in 2017, your coupon payment would be $0 right now.

Whatever financial "solution" one comes up with for co-ops, one still has to account for behaviors of all the other economic actors in the system.

> Or did you have something else in mind when you meant farm co-ops are capital intensive?

I disagree with your characterization: it's the potential sharing of capital expenditures (for storage, processing, distribution and advertising) that drives cooperation. In many cases these costs are far more than software-based services. Cooperatives of this nature often have significant capital contributions required for membership.

> True but bonds don't exist in a vacuum and must compete with other alternative investments including other bonds by other businesses/governments.

Agreed. I would note our current legal environment makes it challenging for cooperatives to raise capital since most of their potential contributors, who see the community "main street" value, are effectively prevented from becoming investors, even if they are willing to do so. Retail investors have their arms twisted (401k) to put their savings into the stock market... rather than into main street. Moreover, since they are not often SEC qualified investors, they are prevented from investing even if they wish to do so. There are some limited exceptions for local organizations, but these rules are hard to navigate. These barriers to capital should be addressed.

Let’s not pretend back-end taxi/private hire vehicle dispatch is either a complex problem, or one that Uber solved themselves.

They added a glossy mobile app to the equation. Many others have since done the same.

Driver co-ops or smaller operators simply don’t need to worry about half the nonsense in the comment you linked (support for dozens of languages and payment methods, integration with other first or third party services, etc.)

The commenter is not saying literal taxi dispatch is complicated. But that's an extremely reductive view of what Uber is.

Their actual point is 1) that it's a complex problem to make it a programmatic market which functions nationally (even internationally) and 2) that such a product will naturally have a feature and convenience advantage over regional-specific, capital-constrained alternatives.

Arcade City (the other driver co-op from Austin) is still going strong though. They’re actively working on v5 of their app. https://arcade.city/

They are more of a free tool to allow drivers in each city to create co-ops though, rather than one specific co-op.

If the app was open source/free in some way, and coops forked some of the money into development, maintenance, infrastructure, etc, then maybe it could really undercut the big guys, have quality, innovate fast and etc and also distribute capital fairly. So instead of having a big guy owning everything and dealing all the cards, the development people would get paid for the service provided to the coops, who in turn provide service for consumers. I've actually had conversations with a friend on doing this exact kind of thing.

>It's only the surface-level of an ride-hailing app that seems easy for worker-owned cooperatives to create. In reality, the extra expensive programming dollars required to tame the hidden complexity so that the app can present a seamless experience to the customers/passengers is a huge factor that works against co-ops.

This "seamless" experience is actually not required by most people. While it's amazing that I can land it a random major city around the world, pull out my Uber and hitch a ride, it's not a requirement for most people. Most people travel a few times a year, and those who travel for work are used to the context switch anyway. Very rarely do they land in a brand new city every time. Usually its a rotation of the same set of cities, for which they can use the corollary set of apps. The friction is only in the beginning. Besides, in the post covid world, I'd imagine business travel is going to take a huge hit, so this is less of a concern. Also, Uber has retreated from a lot of countries over the past few years, so this benefit is not true anymore.

> Real-life customers don't want to enter their credit-card details into City_X_driver_coop and then re-enter their financial details multiple times again into City_Y_driver_coop. Even if you imagine a hypothetical national co-op to consolidate multiple cities, customers would still then have inconvenience of Country_X_coop and Country-Y_coop.

This such a minor inconvenience. It's like saying, "I wish Amazon was dominant all over the world. It's so annoying that when I go to America I need to use Amazon but in Brazil I need to use Mercado!" If there is a trusted an app in a country that everyone uses, I don't mind entering in my details. Signing up takes 2 mins.

> That's the financial constraint that causes co-ops to more easily organize in lower complexity businesses such as local grocery co-op or a farming coop. But a high-tech complexity business that's expensive to build is inherently too costly for a pool of drivers' savings to fund

Ride hailing is not technically complex. There are many open source repos that do it. What makes it very complex in Uber's case is because they need to handle every single scenario. If they had only one country, or even one state, the tech because so much more straight forward and even scaling becomes much easier. The complexity is entirely self inflicted because of their single app model. Amazon for example has it's own India app. I can't imagine the headache and complexity they'd have if they tried to do an India + US app.

> Sure, the driver co-ops can choose to not spend capital on "useless" features but this leaves out the fact that customers can also choose not to use the co-ops because of the lower quality app experience. Keep in mind the behavior of customers who prioritize conveniences.

I agree poor user experience could be the downfall of such apps. I think it's only a matter of time before someone creates the model of a rider cooperative. Technically it's possible and contrary to what you say doesn't require as much capital. It does require amazing execution which is where I think most of these upstarts are failing. As a customer I am happy to support the local upstarts even if it means a minor app switch.

Riders will just use pay-by-qr-code.

Your comment is a perfect illustration of problems with the capitalist model of private ownership of capital. Notice what you're saying: one person starting a for-profit enterprise can get access to the capital they need to start their business, but a group of thousands of people starting a co-operative enterprise are unable to get a similar credit even in a collective name! This highlights the deep injustices people face in access to capital which hamper their ability, among other things, to start competing businesses.

I'd say it's not the capitalist model per se but particular preferences of the investors. The same way as investors preferred young white male founders (maybe until recently) to all the other combinations of the three parameters. Similarly they prefer entrepreneur-owned companies to collectively owned ones for whatever reasons they have in mind.

In fact it's perfectly possible to raise money for a coop, or a steward company [1], i.e. not owned by anyone, or owned by the employees but via non-economical shares. You issue special class of shares for the investors - could be redeemable for example - and make a commitment as an elected executive of the company.

[1] https://medium.com/bettersharing/steward-ownership-is-capita...