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Comment by senectus1 | Hacker News Reader

Uber is a doomed business.

The real problem is what it will leave behind will be worse than what taxi's were like before uber.

I dislike Uber but worse than taxis? I don't know which area you've had experience with but taxis have been consistently terrible in my experience. It's the perfect scam: price is mostly determined at the end, no repeat customers, the majority of customers lack the ability to tell if they were scammed (this has gotten a bit better since gps/maps).

> I dislike Uber but worse than taxis?

I don't think that's what the parent said.

Taxis in my areas are a municipally regulated monopoly on fare-for-(uncontracted)-hire services.

There are a lot of reasons why they devolved to the level of service that we associated with them:

1) lack of competition

2) internally there is no reward for excellent service

3) as a regulated industry, the internal players will try to stretch the margins to make it more profitable to address either a) greed, b) actual operational needs--cash only, "my terminal is offline", fake terminals, tourist routes

Most of this points to failings with how the models are implemented:

- diffuse reward system that doesn't account for fare-taker's feedback

- slow, high-effort negotiation modification to a) fares, b) license / medallion holder needs, c) driver's needs, d) fare-taker's needs and feedback

Consider the differences between Uber and Taxi:

1) feedback is tied directly to driver and passengers

2) feedback is instant

3) Uber dictates pricing and can do so based on a regional, time, legal games, and overall load basis on a low latency regional authority's direction (one person could make that decision based on their local knowledge of upcoming concerts and NFL games, or the status of their application for licensing with the city)

4) individual drivers are now the liability / cost holding party

One thing that I think should be in your mind is "who is losing in either model and why?"

its not the service that i fear will get worse, its the government backing and taxpayer funded side that will get worse.

It seems we need to have this discussion whenever an uber story is posted so here we go again.

You must take into account that uber is global, you are not aware of markets that were very much improved by Uber and subsequently the competitors that were created in its wake. In Romania for example it was popular culture that Taxi drivers were universally shady and if that you were not careful there was a higher chance than not to get scammed. Uber, and now its competitor Bolt which I believe has become more popular than Uber have introduced a massive amount of competition in the market that it is now universally a good experience to order a ride.

Even taxi drivers have gotten nice because of the market pressure

I can’t say that matches my experience in Timișoara, at least.

Before Uber, taxis were ok. I don’t think I ever got scammed.

Now, several taxi companies have gone out of business and it’s harder to find both a regular taxi and an Uber.

The you can't see out of your own country is a rhetorical trick to make people question themselves and feel bad. People say the same things about US cabs before Uber, but somehow when taking hundreds of them I never noticed I was supposed to be in hell. Instead I met a lot of nice cab drivers from places I've only read about. My worst experiences were when annoying ones were too talkative when I was tired because they heard somewhere that it would raise their tips (and it probably does.) That didn't go away with Uber.

I am not convinced they are doomed. They seem to operate just fine here in Sweden as a normal taxi company. Yes, they cannot have their insanely low prices that they have in other countries but running a regular taxi company is a real sustainable business.

The issue with Uber is that they spend too much money when they enter new markets and that they are too inefficient in general. They need to slim down.

> Uber is a doomed business.

why?

The original plan was to start out with human drivers while developing the technology for self-driving vehicles. This was a solid plan because owning self-driving tech is a good moat.

However it’s clear by now that Uber won’t be anywhere near the first to bring self-driving tech to market.

Ridesharing itself has only weak network effects because drivers are interchangeable and can easily switch apps. All Uber have in this case is their brand, which is more toxic than a Machineel tree.

If self-driving does eventually pan out then they are also in a bad way because whoever develops that tech will likely directly compete with Uber, at lower margins.

Because the taxi business is a commodity. The returns are ~2%.

Uber doesn't have any geographic or other advantages. "Self driving" is a nonsense claim that doesn't stack up because it's not going to be available for at least another 5+ years. Even when it does happen, Uber doesn't have the capital to establish the necessary fleets of vehicles and is currently "outsourcing" that to the owner/drivers.

There have been any number of articles about Uber's lack of a sustainable business model.

https://www.forbes.com/sites/greatspeculations/2020/09/09/th...

https://marker.medium.com/end-of-the-line-for-uber-901e3077b...

And the original guy that showed that the emperor has no clothes:

https://www.nakedcapitalism.com/2021/08/hubert-horan-can-ube...

Uber does have the advantage of operating globally and having a single app that will get you a taxi almost anywhere in the world. Given that traditional taxi companies often only operate in a single town or city that's quite an advantage. They would easily have a sustainable business if they dramatically cut their costs. Whether they can do that having taken the amount of VC money they have is another question.

What percentage of taxi users are globetrotters?

I'm not sure, but you don't even need to a globetrotter. Even the town an hour away probably has different taxi companies to where you live.

I'd assume a decent chunk. I don't generally use a taxi in my home country, but used Uber a few times when traveling. That being said, I have 0 issue downloading a local taxi app and deleting it afterwards.

They're bleeding money and have no path to profitability. They have no competitive advantage over the various local competitors, so the moment they increase prices ( their only chance of increasing revenues enough) consumers will shift and use Bolt/Lyft/Freenow/Deliveroo/Glovo/whatever.

This can be seen in markets like Ireland, Germany, where Uber are prohibited from using their ride sharing model so are only fielding out to taxis. Free Now is already dominant in those markets as they got established while Uber was still fighting it out with legislators to go for their unlicensed model and Uber has nothing compelling to offer when it can't undercut by pushing the costs to their staff.

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