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Comment by Night_Thastus | Hacker News Reader

It's only a matter of time before Uber and Lyft cease to exist. Lyft lost what, $1.5 billion last year? The trend isn't towards profitability, and they have had plenty of years to work out the kinks and figure out structural issues.

I've said it before, and I'll say it again - if you were to pay for real cost of overhead and to pay the driver, you'd end up with a price that no customer is willing to pay.

Uber has briefly entered profitability, but only by absolutely shredding any pay to their drivers, who will jump ship eventually.

The reality is that once investors wake up and close their pockets, these companies vanish into dust. It's either that or their drivers will abandon them.

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My guess is that they’re profitable in some regions and losers in others. They don’t need to disappear everywhere if they run out of capital to work with.

They probably run real-life experiments to see “what happens if we increase prices 25% in a region” and have a model for how that can be applied everywhere and where they would just have to close up shop if they needed to go into profit-mode instead of maintenance or growth mode.

I suspect you're right, but there lies the bitter disappointment with these companies.

I'm sure Uber in NYC makes money, and DoorDash in NYC makes money... but those are also the places where those services have existed for many decades profitably.

The whole promise was that with [insert handwaviness] technology the business model can be made to work in places where it was never sustainable before (i.e., the suburbs and much smaller cities). This... overwhelmingly hasn't panned out.

I'm generally skeptical of the oversimplistic "you've invented [thing]" complaints that are often leveled at new tech, but in this case... the shoe does seem to fit.

The only places this business model seems to work are places where the business model has always worked!

my question is: why do we need taxi companies that make money? why can we not have non-profit or publicly-owned taxi apps? I'm not saying make taxis free, just provide the infrastructure without the need to extract any money from workers, or gouge prices for consumers. why do we just accept feudalism with extra steps? why are the bbc and npr the only publicly-owned entities on the web with any presence at all?

I do think you're onto something - though I don't think we actually need non-profit or publicly-owned taxi apps.

The chief conceit of Uber is that the technology is what provided value. This justified exorbitant margins for Uber the company while squeezing drivers brutally. This conceit turned out to be ludicrously wrong - the vast majority of the value being provided by drivers, not the app itself.

And the market is starting to grok that. For example in NYC you can now hail a cab using the Curb app, which adds the two main user experience improvements Uber pioneered: hailing by phone and paying by phone. The app itself isn't non-profit nor publicly-owned but it does take radically less of a cut of a ride than Uber, reserving the bulk of earnings for the actual driver - as it should be, because it turns out the app is not the primary value creator here.

So in a way, "nature is healing" - the market is correcting and starting to (correctly) attribute value back to drivers rather than a parasitic central office.

FWIW I think this reckoning is coming for all gig economy companies - the vast majority act like (and charge $$ like) they are the main value creators in the chain when they are not. The entire past decade of the gig economy has been a massive wealth transfer from working-class gig workers to investors and office tech workers who have 100% failed to justify their exorbitant cuts.

what happens in 5 years time when Curb has loss-led to the top? the exact problem again, only possibly worse. maybe this time Curb learns the lesson of Uber and finds a way to anti-compete away the possibility of another "Curb"

this idea that we can't have products within a competitive sphere that are publicly-owned is completely stupid. if they're bad, people won't use them, and if they're good, it will force private competition to get better. there's a (Murdoch-pushed) idea that that's unfair competition. but who is it unfair on? it's unfair on the capital holders. it's not unfair on the workers. it's not unfair on the consumers. it's just unfair on the people in society who extract their wealth from the people who do all the actual work

because public transport is a better investment of public money than taxis, generally?

Publicly funded taxis would be public transport. But, I get your point.

the two things are not mutually exclusive

> if you were to pay for real cost of overhead and to pay the driver

How come taxis existed then? I find it hard to believe that taxis could turn a profit despite being very low-tech and inefficient compared to Uber.

I wonder if the real reason Uber isn't profitable is more due to "growth & engagement". How much money is wasted on US-salary engineers playing with microservices in their engineering playground or burned on ads?

A old-school taxi service doesn't need a data center to operate. They need some cars and drivers, a phone, a dispatcher, and a radio.

Uber isn't profitable because their overhead is higher than a taxi service and they charge less than a taxi service.

> they charge less than a taxi service

Depends where. In NYC, taxis are usually cheaper than Ubers.

Their success is largely due to the fact that American cities are built so poorly. Emphasizing suburban sprawl and associated highway, parking, and street infrastructure over safe and walkable/bikable cities.

Also investor subsidies due to low interest loans or cheap money from banks. Although that is quickly going away.

If it weren’t for these two items, Lyft/Uber would just be another mediocre taxi service.

Their success is due to the taxi medallion system.

I almost never use Uber or Lyft rideshare (sometimes on business travel if no reasonable public transport, but since I'm not paying I'm less cost sensitive there), but Lyft runs the bikesharing system in my city, so hopefully that can be salvaged, since I use that lot...

Terrible take. Rideshare apps aren’t going anywhere, because they are strictly better than regular taxis, and demand for taxis isn’t going anywhere.

Maybe some individual companies might go bust, and probably rideshare prices will continue to increase towards typical taxi prices, but there’s no reason at all to think the apps are going anywhere.

> Rideshare apps aren’t going anywhere, because they are strictly better than regular taxis, and demand for taxis isn’t going anywhere.

I've had poor experiences with Uber/Lyft at airports. Taxis are way better. Sometimes there's not enough luggage space in the car for my luggage, and I won't know that until after I've called them and waited a long time. If I cancel, I end up paying.

(And it's not about me picking a small car - they've got a lot of their personal stuff in the trunk so the capacity is smaller).

Also, plenty of rude Uber/Lyft drivers ("Hey! You were on the wrong side of the road! I could get in trouble for picking you up on the other side of the road!").

We're talking about a single lane each way road, and I went to the other side because I knew he was coming from that direction.

Still, being able to call one via an app is convenient compared to taxis.

Well some airports prohibit rideshare all together (just like some cities or countries do), so trying to use it in places where the local authorities have intentionally made it difficult will probably always suck.

But rideshare apps are incredibly valuable at airports, especially in less developed countries where getting into the wrong cab at the airport gives you about a 90% chance of getting scammed or robbed, but getting an Uber or Grab from the airport brings that down to almost 0%.

> Uber/Lyft at airports

That's only because their software lacks the necessary feature (select driver based on imminent arrival at the curb, from a queue of arriving drivers).

Since that feature doesn't seem hard to implement, presumably the underlying reason is regulations to do with airport pickup.

> Since that feature doesn't seem hard to implement, presumably the underlying reason is regulations to do with airport pickup.

That's a giant leap.

Yes, the wait times aspect is due to airport regulations. Not having enough luggage space is not. It's on Uber/Lyft to allow users to define things like how many suitcases they have so it shows only cars where drivers can commit to that amount of space.

It's just a basic thing if you're a driver and want to serve airport arrivals (or train or bus for that matter).

The demand for rideshare apps is enormous. It's the only thing keeping investors interested.

But there's no way to make them profitable as it stands.

Depends on the market. I have heard from someone who I trust deeply and knows the financials well (worked there) that Uber is profitable in certain markets.

It’s very possible that they have to pull out of a lot of places, but I think the model can work in the right places

Of course there is, once the investor subsidies go away they won’t have to compete on price so much, and prices will go up.

All of the services that rideshare apps offer were highly demanded before the apps existed, and they were all delivered at more expensive prices with perfectly decent profit margins.

If VC money stops funding these products, then the prices have to go up to something similar to “traditional” prices for those services, but consumers will still choose to use the apps, because the service they provide will still be substantially better than the traditional service.

Traditional services have gotten way better — in that, they got an app. Teo went from an obscure local taxi service to a great local taxi service, and now undercuts uber because they don’t have an insane advertising burn to subsidize.

Part of the value prop of the big rideshare apps is that you can use them basically anywhere in the world (you probably need to have 3 or 4 of them to get most of the world covered). Nobody wants to land at the airport in Toronto, figure out what the local taxi app is, download it and get yourself onboarded, and then order a cab. People just want to step out of the airport and order an Uber.

Uber Rides are profitable and subsidizing Uber Eats growth. Any take that "Uber will cease to exist" is farcical.

With all the fees that Uber tacks onto Uber Eats, I'm absolutely baffled that they could possibly be losing money on that service. That's just... insane.

Would also add that the average e-bike-based delivery person is likely happy to accept much less per mile and time-pay.

(They’re all over in Toronto)

> subsidizing Uber Eats growth

Ah, growth, of course. Sure, they lose money on each delivery, but they’ll make it up in volume!

This is the exact same thing people, probably you included, said about Uber Rides, and they’re still saying it. It was incorrect

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