Uber's dirty tricks quantified: Rival counts 5,560 canceled rides
money.cnn.com
money.cnn.com
I think that Uber, as someone else noted, is a company run by assholes. Rideshare services like UberX and Lyft are going to get more-or-less shut down, and deservedly so. Remember that period in like 1999 before Napster got shut down? Yeah, that's rideshare right now. While many consumers cry "choice!" and "innovation!", the reality is that these services operate in a loophole which any objective observer will point out is complete bullshit. We have a system, which is probably unfair to begin with, but an existing and functional system nonetheless that rideshares effectively hacked. One group plays by the rules and is taxed and regulated and fee'd, the other magically escapes it.
If you have a complaint it should be with cities that require medallions - they are the ones to blame for the current situation. Maybe we should get rid of medallions completely, I dunno. But be careful what you wish for.
Uber has made the market more efficient. If anything, it's making the industry more sustainable.
It's even worse when the target of those regulations don't want things fixed either. Taxi companies pay crazy medallion fees, but expect exclusivity (perhaps rightly so) for that fee. Government doesn't want the fee income to go away, taxi companies enjoy their monopoly.
Sometimes it takes someone breaking the rules - and more importantly, with the general full support of the public - to really cause any change in the old, entrenched ways.
- They probably have more experience behind the wheel, but they also have different incentives.
- Time behind the wheel doesn't automatically mean more skilled/safe.
There's plenty of reasons I could be safer in a cab, but also plenty of reasons I wouldn't assume that.
But my comment was really responding to SamReidHughes dismissal of the notion that there could possibly be any question of safety involved in these matters.
Sounds most likely to me. Someone who drives 100k miles/year will on average by a safer driver than someone who drives 10k, both due to a wider experience base and by being far less likely to do something to jeopardise their license/insurance and hence their livelihood.
When the hell did Hacker News get filled with bean counters who tut-tut about municipal regulations?
Here's what I know. If I paid (heavily) into a system of regulation that worked, only to have someone hack it and basically blow up my asset/income stream, you'd better believe I would push back hard. Aereo, anyone?
For example, it used to be a major hassle trying to get a car to pick me up in Park Slope, Brooklyn. I would call the local car service, who would always say "5 minutes". Except it often wasn't 5 minutes and sometimes they didn't come at all.
Other car services were OK but took a long time to show up. Now with Uber I can hail an NYC green taxi.
Sorry to sound like an Uber ad but it's been working really well for me.
> If I paid (heavily) into a system of regulation that worked, only to have someone hack it and basically blow up my asset/income stream, you'd better believe I would push back hard. Aereo, anyone?
I get into cabs where: - The driver can't speak English - Doesn't know where they're going - The cab smells - Drives dangerously - Is drunk (literally had an open bottle of wine under the handbrake) - Doesn't turn up when I book it
The list goes on, the moment I started taking uber cabs all of this stopped, I review every cab I take after a trip and the moment they drop too far they're removed from the service.
Sure, maybe within the existing system I could write an email to the cab company (who will probably ignore me on account of trying to avoid a fine), the medallion issuer (who MIGHT fine the driver if this happens often). But the reality is that this is hard, and giving someone a rating between 1-5 stars at the end of the trip is easy.
This is my most frequent complaint (Boston and Pittsburgh). My success rate is about 30% when I have to call for a cab.
Get out of the cab. Pay or don't pay, it doesn't matter. Note the cab number and call the taxi company or whatever organization polices the drivers internally (in Chicago, I think 3-1-1 is sufficient). YOU saw the infraction, who else do you expect will fix it? Sometimes the taxi driver will not see anyone else from the company, only the other driver who shares the car.
Aside from that, cash transactions are not recorded, which in turn results in less of that Driver's income being taxed, taking money away from local municipalities. This is actually a great argument in favor of uber, as they send 1099s out to all of their drivers.
That's not a problem, because they are required to accept credit cards (read the "Passenger Rights & Responsibilities" that they are also required to display). I've never been refused with this response: "I can pay the full fare with my credit card, or I can give you the $1-5 in my wallet."
OTOH, a lot of taxi drivers will break their machines and ask to use Square instead. I hear that Square's fee is about half of the company-provided machine's fee. I don't object to that, because the convenience is the same on my part.
This, and more so. I hate to admit it, but it really is true. I currently live in a city where the cab situation is just awful. And a lot of it is due to awful regulation. Biggest case in point: The city caps the number of permits at only about 400. But you need a separate permit to pick people up at the airport, and the number of those is capped at 50. So getting a ride to the airport is nigh impossible - dispatchers will just refuse to send you a cab - because the vast majority of drivers are not allowed to get a return fare.
Uber and Lyft have done a great service by calling public attention to the situation, and so the city council is finally paying attention to it, too. But that's where their contribution stops - they've been actively lobbying against any proposed legislation that would allow metered cab service to improve, for example, and also actively fighting proposed rules that their drivers should be able to pass a basic background check and have a (vaguely) clean driving record. In that sense they're no better than the owners of the cab companies, who also have a vested interest in not seeing the situation for consumers improve.
I almost wish there were a Nobel Prize in aphorisms, so that we could award it to them for showing that two wrongs really can make a right.
And that you can have your cake and eat it, too!
Breaking the rules that artificially restrict the market for rides? Sure.
Breaking the rules that say you don't lie, cheat, or steal? Hmm, not so sure about that.
So we have multiple competitors to Uber, on multiple occasions over a prolonged period of time saying Uber employees called in rides they had no intention of taking.
So right there we have a lie -- they lied to a competitor.
The lie was told to steal time from their competitors employees -- so there's your stealing.
And the lie was told because they couldn't compete on level ground with their competitors, and felt the need to cheat (by making their competitors seem like they received a lot of bogus rides-- where Uber does not).
You have multiple people, multiple competitors, on multiple occasions making the same allegations against Uber.. and you have Uber outright acknowledging it on (at least) one of those occasions.
So there's no question that Uber lies, cheats and steals.
Let's stipulate your one assertion of fact, that Uber acknowledged that on one occasion an employee called in rides they had no intention of taking. From that one fact you jump to a Hasty Generalization [1].
We cannot admit your other evidence that "multiple competitors" made the same or similar claim because it's plain Argumentum Ad Populum [2].
Everything else is supposition and innuendo.
Please note, I'm not saying it ain't so, just that you did not support it.
[1] http://en.wikipedia.org/wiki/Hasty_generalization [2] http://en.wikipedia.org/wiki/Argumentum_ad_populum
And "Argumentum Ad Populum"... I'm not talking about what people believe. I'm talking about a behavior that was admitted by Uber. That isn't a belief. It is a fact that Uber engages in this behavior.
Just to clarify my own comment: I was responding to the parent's statement that "sometimes it takes someone breaking the rules", and saying that it's OK to break the rules by trying to dislodge artificial scarcity, but it's not OK to break the rules by lying, cheating, and stealing; so if Uber has been doing the latter (and it looks like they have), they're not breaking the rules in the right way.
Really, I'd say €10 for 10 minutes is a pretty fair deal. They get to use the bus lane as well, which adds to the value of the service.
Also I'm weird but I like that cabs use small cars. The city has too many cars on the road as it is, and large vehicles are much harder to walk/cycle/drive/see around (and tend to be worse for the planet), so smaller vehicles are more considerate of others. I've never been in a late 90's (implied by your 15 y.o comment) car, at least yet.
In Ireland there is a premium rate between 8pm and 8am, all day Sundays and Public Holidays. But it's only a ~20% increase.
Often the public has full support for causes that will bite it back in the long term.
> If services like Uber and Lyft simply decided to be a cab company with excellent technological underpinnings, people would have been quite happy with them and they would have been quite profitable. And they could have blown most cab companies out of the water. Buying up inefficient operators, consolidating them, and bringing them into the modern world of technology is a really good business plan.
> Uber and Lyft are in trouble because they wanted to be exit strategy profitable rather than simply profitable. And they decided to do this by ignoring all of that icky stuff like liability insurance, commercial licensing, and following the law. In addition, Uber and Lyft tend to want to ply their trade in areas which are already profitable to cab companies rather than taking over areas that are underserved. If they were brokering rides in areas that can't get cabs easily, they would have lots of defenders.
You can request actual licensed taxis and licenced black hire cars through Uber.
But they are heavily regulated though. For example, at least in Australia, a taxi has to be a particular make/model/style of car, and a hire cars can only be cars more expensive than $60k AUD [1]. There's no room in the middle for a nice, normal car that's not too expensive that it jacks up fares.
I think Uber's biggest problem is not actually knowing or understanding what Uber is - I have friends say to be all the time 'Uber, isnt that illegal?', where it's only a very recent product of Uber (UberX) that's in a weird legal gray area. Ubers original, best and most popular (I presume) product, Uber Black - is just standard hire car service with a fancy app and payment system.
Citation needed. I can't find anything that specifies that, but the Wikipedia article[1] lists a large number of cars in use just in NSW.
and a hire cars can only be cars more expensive than $60k AUD[1]
Again, citation needed (and I'm not sure why you are linking to the Luxury Car Tax - that applies to all cars).
The NT legislation[1] doesn't say that, and the Victorian Government's taxi website[3] says the opposite:
>Hire cars can only operate after being previously booked. They can be luxury sedans, stretched limousines, hybrids and non-luxury vehicles.
(Emphasis mine)
[1] http://en.wikipedia.org/wiki/Taxicabs_of_Australia#New_South...
[2] http://www.austlii.edu.au/au/legis/nt/consol_reg/lr238/
[3] http://www.taxi.vic.gov.au/owners-and-operators/hire-cars
NSW[3] has a number of different criteria. Put basically, needs to be either 1) wheelbase of 2800mm (which is almost always luxury cars), 2) a hybrid car seeting 5 to 9 people, or, most commonly, a car that luxury goods tax was sold on.
[1]: http://www.transport.nsw.gov.au/taxi-operators
[2]: http://www.transport.nsw.gov.au/sites/default/files/b2b/hire...
[3]: http://www.transport.nsw.gov.au/sites/default/files/b2b/taxi...
I agree that is an outdated rule.
I think this gets at one of the key problems with the current psychology of startups. Everything is build around creating an illusion of rapid, exponential growth, even if that growth is unsustainable. In the long run the exit focused strategies of startups and VCs mean we are going to be left with a few monolithic tech companies striding among the burnt out corpses of energetic, innovative startups, left to die because they couldn't reasonably target a high value exit strategy.
I've been in SF regularly for business for half a dozen years now, I've never had a cab stop for me when I tried to hail it like in NYC. When I've called cab companies, the cab has only shown up 50% of the time and only after 20 or 30 minutes. With Uber the car has always come, and come much faster, and I can watch on the screen what is happening and text the driver if needed.
The cab system is just plain broken and SF is very underserved. I imagine it is just as badly managed as the housing where they are refusing to let people build upward.
Totally false, as thirty seconds of Googling will tell you:
In SF, this is absolutely not the case. Uber and Lyft simply would not be able to "decide to be a cab company" at all. Total non-starter.
Taxi drivers require a medallion to pick up passengers, and those are strictly limited by law. They are also already all taken by existing cab companies, either directly or through renting them from the actual medallion holders, and there's a 10+ year waiting list for a medallion unless you have $250K to purchase one from an existing holder (who wants to sell).
Medallions in SF are owned only by taxi drivers, not by cab companies. You must drive a cab 800 hours per year in order to own a medallion. You can't own multiple medallions.
Taxi fleets, in SF, provide vehicles, dispatch services, insurance, and maintenance, as well as basically being intermediaries for medallions. Driver-owners with medallions rent their medallions to the fleet, who then hand them out to their drivers who are not owners, to give them the legal right to act as a taxi for that shift. The fleets get revenue (typically) through gate fees, which is basically a fee each driver pays when they take the vehicle off the lot.
You do not have to sign up to get a medallion in order to be a fleet -- nor can you own a medallion. You'd need to either attract several medallioned drivers to your fleet (hardly impossible: make them a better offer than their current fleet -- they aren't owners or otherwise locked into their existing fleet), or, perhaps better if you want to make a big entrance into the market quickly, buy out one of the existing fleets and continue its arrangement with its medallioned drivers.
I take no position on whether it would have been a good idea for Uber or Lyft to do something like this -- I'm just saying that there is not a mandatory 10 year waiting period or anything.
This is 16 weeks of 5-day 10-hour shifts, and about one-third of the existing medallions are pre-Proposition K medallions that do not have a driving requirement. However, the medallions are in valid 24 hours a day.
I didn't say there was a mandatory 10 year requirement for driving a cab, that would be silly. However, there is a 10+ year waiting list for a person to get their own medallion, which promotes them out of the gate-and-gas rat race.
There may very well be artificial supply with respect to medallions, except there's one major indefensible problem with that position - I don't know any cab drivers living the high life. Do you?
I'm pretty sure the cab drivers themselves do not own the medallions.
Not every driver in SF owns a medallion. Drivers who are owners can and do rent out the medallions to other drivers for when the owner is not himself out driving. In this way, medallions can theoretically be utilized 100% of the time. The way it works in SF is that most drivers are affiliated with a fleet (they are not employees of the fleet). The fleets typically (though not always) own the vehicles. The fleets rent the medallions and then hand them out along with the vehicles to the drivers, and the fleets also handle insurance and other infrastructure stuff, plus dispatch. The drivers pay a "gate fee" at the start of their shift to the fleet, and then keep their earnings that they make during the shift (so they start out in the hole and earn out their gate fee (hopefully!) and then anything on top of that is profit to them).
It may be completely different in other cities. My understanding is that in NYC, drivers are typically not medallion owners, and there aren't really fleets in the SF sense -- instead there are taxi yards that offer some of the same functions, but have a less exclusive relationship with taxis and some kind of different business model. But I don't know much about NYC. In cities with less expensive medallions, I'm sure it works differently again.
Source: I am an employee of Flywheel -- we work closely with SF cabs.
EDIT: By the way, again in SF at least, where medallions recently cost $250k (they've gone down since), you might ask "How does a cab driver pay $250k"? The answer was simple: they get loans. There are or were bank loans available to get a medallion, on the basis that medallions gave you the earning power necessary to pay back the loans. So, given that banks are not charitable organizations, if you're wondering who got the excess value created by the legal monopoly of the medallion, part of the answer is "banks."
The cab driver have to pay the medallion holders.
That position is quite easy to defend if you understand the industry. The reason that you don't know any cab drivers living the high life is in fact because of medallions. Medallion owners don't need to drive taxis. If you control the medallion, you're made. No pun intended.
As recently as July 2014, medallions in NYC were being sold privately for over a million dollars (http://www.nyc.gov/html/tlc/downloads/pdf/july_2014_medallio...).
Some interesting economics on the industry and how we got where we are: http://blog.priceonomics.com/post/47636506327/the-tyranny-of...
From the moment you get into any Uber product (e.g. uberX, UberBLACK) to the moment you’re dropped off, your ride is covered by commercial liability insurance
> pass annual maintenance checks
Not just any car can be an Uber. It’s a title reserved for safe, high-quality vehicles that are in exceptional condition. In the U.S., the average model year for vehicles on our platform is 2008, and none are from before 2004+.
> Or you've got 50,000 gas guzzlers on the road
Uberpool: http://blog.uber.com/uberpool
> Or they get into fights with customers. Or there is some other worse criminal activity.
Uber/Lyft are far better in this respect since there is a record of both the driver and passenger (and a log of their GPS coordinates).
Also: Every ridesharing and livery driver is thoroughly screened through a rigorous process we’ve developed using industry-leading standards. This includes a three-step criminal background screening for the U.S. — with county, federal and multi-state checks that go back as far as the law allows — and ongoing reviews of drivers’ motor vehicle records throughout their time on Uber.
> Not just any car can be an Uber. It’s a title reserved for safe, high-quality vehicles that are in exceptional condition. In the U.S., the average model year for vehicles on our platform is 2008, and none are from before 2004+.
That does not answer "pass annual maintenance checks". This literally says that it has 10 year old cars on the road that don't have to pass annual maintenance checks. Ouch.
Lyft does too: https://www.lyft.com/safety
I don't understand your definition of "fair." You say "for better or worse," but I would only consider it unfair if government regulations are for better, which I highly doubt.
Construction companies are the same, there's only one big company that does roadwork where I live. I got a driveway in, the job was given to a bunch of different contractors to do the sidewalk as they had to be city approved. It took 3 contractors 4 visits to do the prep for the sidewalk: they marked it twice, cut and removed it but did it to the wrong marks, framed it. We complained and complained and nothing happened. Finally the concrete company that does all the roadworks was the final contractor, I run out and explain it to them and the guys like "yeah no problem, happens all the time. We just bill the city for the extras." That was the day I stopped questioning why there was one big contractor, its because the little guys just can't coordinate it.
Uber will get squashed for the very reason it is disruptive. Until mileage and fees are all recorded and payment is through the app, there will be no possibility of this app surviving. No taxes and drivers with no liability insurance, no quality regulation, its a recipie for massive lawsuits, tax agencies alleging tax fraud and worse Uber will be targeted for aiding tax evasion.
This happens already? Here's my trip from last night http://i.imgur.com/JzseAq8.png
> No taxes and drivers with no liability insurance
Taxes have nothing to do with this - everyone still needs to report their regular income - Uber doesnt change this.
Also, the majority of fares on Uber are actually through Uber taxi, black or SUV. They are all licensed and already carry commercial insurance (as some of them accept fares outside of Uber). For the drivers that don't have their own commercial insurance (e.g. UberX), Uber covers them with their own insurance (which you can actually read yourself as it was leaked not too long ago).
That ride would be $9.00 (US) in San Francisco. [0]
Perhaps Uber is, like Apple, quite simply providing a higher class of service and getting compensated proportionally for it. Maybe they won't ever eliminate traditional taxis b/c not enough people can afford a 266% markup.
Even so, had he got an UberX it would have cost him $12.40, or $11.50, so it's really quite comparable.
I spent $15 last week going from Union Square SF to the Caltrain station (accidentally picked Uber Black not UberX) - about a mile. It's really quite a lot nicer than a taxi. So it's really quite close, dollar for dollar
But here's the thing - SF taxis have (presumably because of past abuses) very rigidly pegged milage to total cost in order to properly compensate drivers. The problem is that this works terribly for further distances. So SFO to Palo Alto will set you back at an absolute minimum about $100, but Millbrae (2 miles fewer) to Palo Alto cost me $30 on UberX. Where I live in the UK, I'll spend £20 ($45) on travelling 6 miles after a night out (no traffic) - because the taxis go off meter outside the city limits. Travelling 3 miles to catch a bus to London in a minicab, prebooked costs £8.
Not fare to compare this to a $9 taxi fare in SF. In taxi, that would have cost me maybe $15 or $20?
Check out the fares for your city. They offer taxi cabs as well https://www.uber.com/cities/san-francisco
Uber has not accepted $1 in cash which means its hundreds of millions of dollars of revenue is all reported. It's a boon for tax revenue.
Also, mileage/fees/payment have always been part of the app. Have you used Uber before?
At least in Germany, it is - at least for the companies. There are some drivers willing to game the books, but the companies have an obvious interest in eradicating these practices.
What is that interest? The way cabs most frequently work in the US is that the drivers are effectively independent contractors who rent the car (and ever valuable medallion) from the taxi company. The companies themselves may or may not accurately report their income, but it doesn't have anything to do with the fares. Some companies charge a percentage of fares, so in that instance I'd assume there are more stringent controls.
It's similar to restaurants in the US, cash tips are drastically underreported and this is fully known by management.
But just like with bartenders, it's pretty easy for a company to identify a driver who is skimming the fares -- their $/mile or $/hour will be lower if he steals more than his peers.
The cab company has an interest in accurate numbers because their payment is based on honest reporting of the fares.
It's all recorded. Payment has been done through the app since they've started. Their app also shows the driver the fastest route to the customer's destination, acting as a GPS navigator, and eliminating the possibility of unnecessary routes in order to boost the mileage.
> No taxes and drivers with no liability insurance,
Uber drivers must pass background checks and carry commercial-grade liability insurance, which is typically more than consumer liability insurance, since it covers more edge cases.
> tax agencies alleging tax fraud
If anything, lack of cash transactions makes Uber a very welcomed development (from tax authorities' point of view) in the industry that's been known for chronic under-reporting.
I fail to see how you need a government-sanctioned monopoly to get a taxi service. I've been on small islands in the Mediterranean with taxi service (it's one grandpa in his car who you call on his mobile phone and he'll come pick you up). Sweden has an almost completely unregulated taxi market and I've never heard of a place without taxis.
-- drivers that jack tourists around -- drivers that don't know where they're going -- drivers that don't make enough to live on -- excessive numbers of empty taxis idling/cruising the streets, creating unnecessary congestion and pollution -- drivers that red-line particular areas of the city -- drivers that red-line particular ethnicities of passenger -- taxis as a public service: making sure everyone has access
If your only analysis is the typical Hacker News mouth-breathing of "government BAD huh-huh", then I can't help you. But if you're actually trying to understand the problem, you should maybe consider why every city in the world has some sort of taxi regulation system.
I'm from Sweden where the taxi market is mostly deregulated, with the only remaining regulations being in the interest of consumer protection - extended driver's license, approved taximeters and clearly displayed standardized pricing information. There are a few problems with tourists who don't understand the pricing information getting on taxis with rip-off rates, but aside from that it works well. There's a number of full time taxi drivers, and during busy periods (evenings weekends) there's a contingent of part timers who get in a car to skim off the lucrative periods and add capacity. From the discussions I've seen in "hey anyone tried becoming a taxi driver" threads in Swedish forums, it's a career you can make a living in.
I've been in places with high levels of regulation (:cough: san francisco :cough:) where I've experienced half the points you take up, whereas I haven't experienced any of those in Sweden. As usual, it's more a case of "good regulation vs bad regulation" instead of the more typical political dichotomy of "no regulation vs lots of regulation".
If true that is still a giant improvement over your average taxi company. Uber might be run by assholes, but it's not run by the mob or by cronyism.
"Giant improvement" Uber is not. It's wannabe robber baron vs. incumbent robber baron. They'll be a net benefit to consumers as long as they're the underdog - God help us if they ever get into the top spot.
I'm a fan of disrupting the old medallion cabs, they've been sitting idle getting by on substandard product for eons. But I'm adamantly opposed to letting Uber write the new rulebook - from everything we've seen from them they're less interested in evening the playing field than locking everyone else out of the market except themselves. They will abuse transport regulation - just like the old cab companies - to monopolize the market if we let them.
The cancelled rides here are part of the giant recruitment drive both companies are in as they rapidly try and scale up--they're trying to hire away each other's drivers.
Uber is no different than any other wannabe monopolist - they'll fight hard to monopolize the market - whether by regulatory capture or sketchy fraudulent activity like what we're looking at today (based on what we've seen from Uber, it's a mix of both). Once they do it's game over for consumers.
How do you think the medallion racket got here? This is how we got here in the first place - lots of shitty unregulated cars engaging in awful abuses, prompting public outcry. Cab companies upped their game, consolidated, fought for regulation, and successfully drove that element of their industry out. And then promptly started feeding at the trough. Once upon a time, the evil cab companies were the good guys.
There's no reason to believe Uber is any different. They've already demonstrated all the willingness to skirt basic business ethics.
Uber is a necessary evil to shake up the entrenched awfulness of the cab industry. It also needs to be kept on a very short leash lest we end up with the new boss, same as the old boss.
No, once they do it, it's game over for them, and game beginning for new competitors.
The entire taxi industry in the US has revenues of about $11 billion (source: http://skift.com/2013/08/06/are-uber-hailo-and-other-taxi-ap...), and that's split across literally at least thousands and maybe tens of thousands of companies.
In SF, Uber claims to do more rides itself than all the taxi fleets put together.
It long ago ceased to be the underdog in this fight.
Are you saying that they will partner up with government to create a protectionist racket as the incumbents did so effectively some decades back?
Maybe some day they will. History testifies that as incumbents grow they are drawn toward regulatory capture and licensing schemes. They find willing partners in government who can sell it under the banner of consumer protection.
Yes, one day Uber might try that, but right now they're tearing down those rackets. The "lock in" they are creating now is based on customer service, innovation, brand marketing and partnerships. I'm not denying there are any dirty tricks, but that's a sideshow played up by populist press.
How about price, convenience, reliability, and rider experience?
Re: your other reply: yeah, eventually someone will come along and knock hypothetical-monopolist Uber off their perch, just like Uber is kicking cab companies' asses right now. But in the mean time we're looking at decades of the Dark Ages where the monopolist pillage the market for all it's worth.
This is the crux of why this abuse by Uber shouldn't be given a pass. In order for the transport market to function there must exist competition, and any anticompetitive behavior - whether it's coming from Uber or cab companies or elsewhere - needs to be shut down, hard.
Why decades? Uber started in 2009, and UberX launched in 2012, and that was them (and their competitors) starting "from scratch" in the sense that consumers and drivers weren't familiar with the concept. It wouldn't take long at all for competitors to pop up. Remember that the profit incentive for new firms to enter the market is strongly correlated to the "badness" (as judged by the potential customers) of the current firms.
That comparison might be the most positive thing anyone has said about Uber in this whole thread. (For the record, I was nodding my head when you lead with "they're a bunch of assholes."
Yeah, and made it 100x better. Why should I be mad about this?
The sad part of the story is that it had to move it's HQ to Washington DC because its business was essentially lobbying and lawsuits for half a century, and that AT&T reacquired most of its regional components after its breakup.
More at Tim Wu's excellent "The Master Switch," naturally.
http://www.cpuc.ca.gov/PUC/Enforcement/TNC/TNC_Licenses_Issu...
I don't get it. Your faint praise for the government's system is that it is "existing and functional." And yet, the new system, with ride sharing services, is equally existing, and I would argue much more functional.
This is a common theme, that there are a lot of arseholes running growing companies, from which I conclude that being an arsehole brings something to the business. Certainly arseholes tend to be determined in the pursuit of their goals which is useful when those goals overlap with a company's needs, particularly as a newer business grows.
Of course it might not bring something to the customers, the workers, or the general public, hence we think they are arseholes but the board of the company see them as useful go-getters.
http://www.ribbonfarm.com/2009/10/07/the-gervais-principle-o...
People love Uber, Lyft, and Airbnb. They won't be going anywhere.
http://www.sfgate.com/bayarea/article/Uber-Lyft-Sidecar-put-...
> "I was driving for Lyft in November when I picked up two attractive women," said the driver, who declined to give his name because he fears repercussions from the apps. "Like anybody, we started chatting, but they were sort of awkward. I knew something was up when they didn't tell me clearly where they wanted to go."
And this:
http://www.forbes.com/sites/ellenhuet/2014/05/30/how-uber-an...
> Another part of the game is knowing the enemy. Uber employees and loyal Lyft drivers regularly try to infiltrate opposing driver ranks for inside information, and often call up a rival car for a ride so they can pitch the driver on switching.
The cancellations are probably after they see that they got a driver they had already tried to pitch. A huge portion of them came from just a few recruiters... Seems like an easy fix if Uber wants to fix it, though they may not considering Lyft isn't exactly free from devious ploys:
> On Tuesday, the rivals descended upon the humble intersection, where Uber usually hosts car inspections. Lyft started recruiting drivers by hosting daily luncheons in the parking lot (with a free taco truck, pink mustaches ziptied to the chain-link fences and two bouncers in black at the gate).
Why is there no rating system for passengers? How can a single phone number be tied to 21 accounts and cancel over 1500 rides without Lyft ignoring orders from that phone number? Why weren't the accounts deactivated long before this level of abuse? It doesn't seem like they're taking good care of their drivers' time or expenses.
But that's how it feels. Is Lyft just better at PR?
At a certain point you just have to apply Occam's Razor and realise that Uber is run by a collection of assholes.
http://money.cnn.com/2014/01/24/technology/social/uber-gett/
At this point Uber can't reasonably claim that these were rogue employees. It's pretty obvious to everyone that this is officially sanctioned.
[edit] Side note: this is not the first time a YC company has been caught engaging in highly unethical business behavior (see: AirBnb marketing). What is YC, and other investors, doing to curb this kind of behavior? Or is this level of abuse tolerated because money?
[edit2] Bah, brain farted, Uber is indeed not a YC company.
Although, many companies that use baity "growth hacking" strategies are indeed YC, but that's a seperate issue.
There's always been a bit of ambiguity about the sort of rule-breaking ("hacking") that is and isn't encouraged in these sort of start-ups. One person's hack is another person's unethical behavior. I know a couple folks who founded a YC company and self-reviewed their awesome iPhone app, acquiring some imaginary children in the process...
And to answer your question, it's completely tolerated. Just look at the iOS store and the massive botnets that used to plague it. Every major company hired botnets to game the charts.
Welcome to the Valley.
Edit: sorry, they called this "growth hacking".
Though, YC staff (including Sam Altman) do tend to speak highly of it: https://news.ycombinator.com/item?id=8100101. pg also used to effusively praise Uber: "Uber is so obviously a good thing that you can measure how corrupt cities are by how hard they try to suppress it" -- https://twitter.com/paulg/status/222462460978937856
I know and have met with a few times the Uber team in my local city and they're quite nice and normal people - definitely not assholes.
There is however, a strong culture of 'hustle' (I've heard that exact word a couple times) within the company that I guess could encourage people looking the other way at this behaviour.
I've used both services quite heavily, and talked to tons of drivers. Drivers seem happy with both the services. I wonder if Uber is just getting big enough that some media names love to take sides. Knowing many people at these companies, I'm not sure if we are objectively assessing this situation.
http://techcrunch.com/2014/01/24/black-car-competitor-accuse...
Can't wait to see how Uber rephrase "It was likely too aggressive a sales tactic" this time around!!
I check both apps, if the pick up time and price is similar I'll take Uber.
The only pushback I've seen from Lyft is mobilizing drivers to hand out free ride cards at slammed venues, like music festivals, when Lyft is at maximum Prime Time of 300% and Uber is at 800-1300%. Not a bad strategy, but basically, Uber is giving Lyft a hyper wedgie by cutting right into their supply.
To put the cancellations into context, I met a Lyft driver who was recruited by Uber. He told me the same lady was recruiting in his area on an ongoing basis, just catching rides to make the pitch (which is a TOS violation on either platform). He said the recruiter would request a ride, sometimes 4 or 5 times, and keep getting him, then she would cancel shortly afterward when she recognized his name. So yeah, I'm sure some Lyft drivers spent gas, time and miles, but I also believe for the most part, the cancellations occurred in a minute or less.
As far as which company are the biggest assholes, I think you need to look at it with some historical context. Uber started out as a company that created a better dispatch system for Black Cars, and got Livery companies and independent Limo drivers to sign on. That was good, because riders and drivers could be paired based on proximity. Combine that with Uber's marketing to increase ridership, and it is an all-around win. The savings/increased business for your average Livery operator more than made up for the Uber commission.
Then Lyft comes along and says "Hey, let's open this up to your average joe with his car and car payment". Ok, so what they are doing actually is sucking the equity out of people's cars, because by the time you amortize all the expenses, you're making $10-$15 an hour (on Lyft, Uber you can make more), you might as well work for In-N-Out and get benefits too. Not to mention the insurance issues if you get into a wreck and its your fault (cancellation and no payout on your collision policy). Sure, the network will cover your liability, but only because they have been forced to by regulators. I classify this type of business (and AirBNB too) as "Slumlord 2.0". Slumlords buy an asset and drain the equity out of it for profit. Slumlord 2.0s drain the equity out of someone else's asset for profit. Uber had to counter Lyft with UberX, and get into the Slumlord 2.0 game themselves.
Bottom line for me, I drive for them both, and I hate them both. I tolerate them because they enable me to continue to work on my startup, or I guess I should say, reboot of the family business. I can't wait to be done driving for them and become a rider.
Airbnb hosts impose significant negative externalities on their neighbours, and bear none of those costs. Noise, traffic, etc. That's what the regulation is designed to prevent.
Offloading risk is bang on though, and is the more troubling part, again in my opinion. A risk free slice of return on capital. It just sounds like a disaster in the making.
Doesn't the depreciation of automobiles slow down considerably after a few years? The Lyft drivers I have talked to in SF say they make $30 an hour at a minimum, which I assume is after subtracting fuel costs but not factoring in automobile depreciation and maintenance costs. However, I'm very skeptical that depreciation cuts their true earnings in half.
Also I think the parent post's history is incorrect; Lyft was a pivot of zimride. And Travis kalanick had a famous speech where he 'declared war' on Lyft... There's also some history about how part of the motivation for Lyft was that cabs treated lgbt clients really poorly, but I am unclear about the specifics on that.
In rental car context, depreciation is anything from $15-30/day, depending on the type of car. With livery vehicles, it may be higher because when you're done with the car, it has 200k miles and is beat from urban driving. Rental fleets ditch cars at 40,000 miles
Standard personal vehicle reimbursement is $0.55/mile. Not sure about a livery scenario, but I think in an urban environment you're easily looking at a $1.00/mile or more. Livery vehicles burn brakes, tires and other parts. They spend alot of time idling or in traffic, so gas mileage sucks as well.
30/hr 40 hrs/week = $1200 baddox assumed that accounted for gas, but not depreciation/maintenance.
Depreciation 30/week (the high end from Spooky24) 1200-30 = 1170.
Now, there may be some maintenance. A full set of break pad for a 2010 Ford Escape (Random vehicle, yours may vary) cost 100 dollars at Autozone- these are the expensive ones that appear to have a lifetime warranty- cheaper ones are half that much. I checked, and the lifetime warranty on the expensive ones does appear to cover commercial use (the warranty on the cheap ones explicitly does not, but the expensive ones do not exclude commercial use.)
I don't know how often your breaks wear out, but lets say you put the expensive ones on every month- and that you don't get free pads because of the warranty (Thought it appears that you should). A break job should only take an hour or two once you have done it a few times. Pretty simple stuff. Change the oil while your at it- another $20. (EDIT: I just realized that some new vehicles use more expensive synthetic oil- so you may have to double or triple this number, but you also may not have to change your oil as often, so it may work out about the same) $120 plus 2 hours of your time each month. 120/4 = 30.
1170 - 30 = 1140.
Your going to need new tires. Lets say you replace them every other month. Walmart lists them at around $100 a piece for a 60,000 mile tire. Your probably not going to get that many miles, but it should be at least 40,000. Again, I don't know how much driving your doing, so lets say you replace them every 3 months. It would probably be in your interest to do it yourself if doing it that often. But lets say you pay someone to do it so you don't have to buy and store the tools and deal with it. $20 per tire- (20 + 100) x 4 = 480, lets just say $500 every 3 months.
500/3/4 = $42. 1170-42= 1128.
Now, there will be other misc maintenance and repairs. Lets say $100 per week- I think that is high. Your vehicle isn't that old and you are keeping it well maintained, staying up on the simple things before they become major. We have already figured depreciation, so your replacing the vehicle when it is worn out.
1128-100 = $1028 per week after all expenses are accounted for.
1128/40 = $28 per hour. But you will have to pay self employment taxes. That will cost you a few extra bucks an hour. But you are still making significantly more than 15/hour.
Unless I am missing something. Please feel free to contribute your own numbers to my napkin math.
There's no way that brake pads come with a warranty against normal use (it would only happen by regulatory requirement and then it should apply to the maker of the car). Autozone also explicitly disclaims commercial use in the warranty for here (but maybe that's different in California).
A $40,000 vehicle depreciating by 10,000 year day would mean the vehicle would be worthless in 4 years- not even scrap value. I have a hard time believing that. At an average speed of 30 mph for 40 hours a week, that is 249,600 miles over the 4 years. Which is a lot, especially in city traffic.
Still, that takes us down to 21.20 per hour. So if you are really depreciating that much over time, you are still doing better than $15 per hour. But maybe not too much more.
I would recommend not buying a $40,000 car for this purpose- get something that is a year or 3 old and that has already depreciated a good bit. That should massively reduce your depreciation over the 4 years or so that you own the vehicle. :) (I'm not sure how Uber and Lyft define "late model" so that may affect this strategy some. I think anything less than 10 years old is late model.)
A good mileage interval guide would show what you can expect (minor) to repair/replace every once in a while. I set up an example one on edmunds.com for a Toyota Avalon with 0 miles:
http://www.edmunds.com/car-maintenance/results.html?year=201...
There are other general things that you should watch out for [0], and plenty that aren't listed or may just happen.
[0] http://www.carsdirect.com/car-maintenance/a-routine-car-main...
So, by introducing short-term tenants into an area, you are adding risk and loss of stability to the other homeowners. Go to an area that has a lot of rooming houses. It's not as nice as a purely residential area. That will eventually be reflected in resale values. So, the slumlord is externalizing the downsides and draining equity from the neighbours.
I think it depends a lot on the clientele you're targeting. Rooming houses are generally for transient students or the down and out; they're looking for cheap lodging. Do they drive property values down? Or do they just tend to move to areas where property values are low? Probably some of both, but I don't think that's different than the rest of the dynamic of a neighborhood that's declining.
Does Uber have a similar process? I mean I'm all for deregulation of a broken/corrupt system, but protecting people's safety is paramount - perhaps Uber/Lyft do need to be regulated at least in part, just not with the currently over-regulated (?) system.
That seems wholly irresponsible and dangerous.
As a consumer it seems that there is basically no difference between the two services, I take whichever has less surge at the moment and/or whichever my friends want to take. It seems like this price war has served to totally commoditize ride sharing; I don't know anyone who has a serious preference between UberX and Lyft (black car and SUV are another story).
Do they really think they can squeeze the life out of each other like this? I feel like VCs will just keep pumping money into them and fueling the price war. It seems to me that instead one should focus on really differentiating the service in some way to reverse the commoditization of private, on-demand rides. They either need to make their service preferable in some way to consumers (like Dropbox has done for file sharing) or make it a no-brainer choice for drivers to exclusively drive with them.
Not that I'm complaining, this war basically just serves to make private transportation cheaper for consumers like me.
Two years ago I couldn't go go five miles in traffic without paying $50 and needing cash; and that was if I was somewhere where cabs hung around.
Regardless of them being "assholes", it's extremely useless in my life.
Imagine if you could request one with the click of a button and track its arrival? That would be so helpful.
Doing so probably violates their respective terms of service, but why can't drivers just "disrupt" the sharing economy themselves by being part of both?
Doesn't the "look" at ~2:04 in the video sound inserted, perhaps to make Kalanick sound abrasive? I may just be over analyzing it, after having watched a short documentary on shaping opinions with small manipulations of video interviews awhile back.
(I sincerely apologize that I can't find a link).
I digress. The fact is Uber has been playing fast and loose, and push is starting to come to shove with regulation. Whether Uber or regulators cave is now the question.
Sounds like Lyft is a shit show. For a service like this, that number should have been black listed within first 3 'rides'.
Not trying to blame the victim, just really curious about how to build a business that can't be DOS'd by competitors.
Often wondered how a Netflix or Redbox prevents competitors (once Blockbuster now Amazon?) from renting a bunch of DVDs only to return them with scratches.
Maybe track problem accounts then ban them is best you can do?
Correct me if I'm wrong, but I don't think they've claimed it is a "real" market, just that pricing programmatically adjusts to demand.
Can Uber drivers set their rates, to undercut other Uber drivers?
You lost me when you started name calling though, accusing everyone of being shills.
It's the internet, you don't need to pay people to have strong opinions, it's what they do here.
Is it obvious now that they should have caught it? Yeah, thanks to the brilliance of hindsight of course it is. Does that justify it? Hardly.
To add some perspective, this is 5,560 rides in the last 10 months or ~550 per month or less than 20 per day. There aren't any recent figures, but as of May 2013 they were doing 30,000 rides per week and growing very quickly.
A large amount of the cancellations were from a couple people and it also mentioned that when not canceling they took short rides and tried to poach the drivers. It's pretty obvious what a few of the recruiters are doing--asking for rides to be able and pitch the driver, but then canceling when it's a driver who already said no.
tl;dr a very small number of sleezy recruiters have gotten under the skin of Lyft.
That you don't care about the victim does not make them not a victim.