Comment by opendais | Hacker News Reader

Comment by opendais | Hacker News Reader

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They are expanding on regulation arbitrage. Being able to bend and/or break the rules by using contractors.

http://bits.blogs.nytimes.com/2014/04/17/uber-faces-rebukes-...

"Oh lets operate in Paris and not pay the licensing fee for a taxi service." Etc.

They've been completely and/or partially banned by more markets, larger markets than the entire country of Colombia at this point.

It is the same thing as AirBNB. You build the software service and then hire out contractors who don't comply with local laws and rake in the money.

I don't see that as a good, sustainable service at an evaluation larger than the entire US taxi market in the US. http://www.ibisworld.com/industry/default.aspx?indid=1951

They are going to hit like AirBNB was and have to play by the same rules as everyone else which will squeeze their margins. :/

Maybe this speaks to my bias against people who bend reasonable rules for profit.

Also, many of the people who were looking into investing agreed with that: "The bidding for Uber was so heated that some venture capital and private equity investors bailed out after the valuation soared beyond $10 billion, according to people familiar with the situation, who asked not to be identified because the talks weren’t public."

Ironically if they go further into South America and end up in the crazy deregulated market of Peru, where it seems like most car owners operate as taxi drivers, Uber will find their value proposition being that of the regulated taxi industry (pay more and wait longer to get registered drivers who are less likely to take you to a dark alleyway full of robbers and more likely to fix the dents in their car)

> Maybe this speaks to my bias against people who bend reasonable rules for profit.

I share the same "bias" (I would actually refer to it as "normal thinking", but hey…) and think it's a shame people in Silicon Valley have collectively decided it's fine to break the law as long as you can get away with it and get a high valuation out of it.

To take one example, AirBnB has clearly had a negative impact on many local rental markets via units being taken off the normal market and instead being turned into unlicensed hotel rooms, but their response has been basically complete and utter defiance to anyone to stop them, and this attitude gets applauded here on HN and elsewhere.

It's a fantastic business model (low liability, high scalability), and if they can pull it off, it will be worth way more than $17B. That's the bet that these investors are making. Same thing with AirBnB (and many many other tech companies).

Yes but the market isn't that large and if they can pull it off, so can other people.

Even if Uber manages to capture 25% of the market, it isn't going to hit $170B market cap.

Exactly. And those other people can do it a lot cheaper than Uber because they'll be taking advantage of the costs/time Uber is spending on lobbying.

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