You keep saying this and yet have not provided anything to demonstrate it. Meanwhile we can look at pricing and it seems like, no actually, price is their main selling point and they are losing a shit ton of money all the time keeping their prices down. Uber and the like have continually demonstrated via their actions that the most important thing they have is a low price point.
If the story you want to tell in the first paragraph about insufficient supply was the big deal, then you wouldn't need to lower prices to get marketshare. The unserved customers would have been out there to grab. Shit, you wouldn't even really need to provide better service technically.
I'll reiterate that I cannot personally compare Uber prices to taxi prices, because pre-Uber I never lived in a location where taxis were a viable way to get anywhere but to/from an airport. The price was irrelevant. But, I can google around a bit and see articles like this:
But there are many times when a taxi is a better alternative. For quick trips when the fares are below $35, for instance, a taxi could be the cheaper option. Such trips account for about 94 percent of taxi fares, Noulas says.
...
A taxi is likely to also be the better option when demand is high. That’s because during such times, Uber and rival services such as Lyft rely on surge pricing to boost fares by up to four times the price. The theory is that by allowing drivers to charge a premium, more drivers will get behind the wheel, which will help meet demand from passengers.
Surge pricing can happen more often than you’d expect in some high-traffic neighborhoods, such as New York City’s Times Square. Noulas says the practice affects about 25 percent of UberX cars—the budget option for riders—in New York City. The result is that the median price for a yellow cab ride in New York, says Noulas, is $19.50 versus $23.50 for an UberX ride.
Even without surge pricing, UberX can be more expensive than taking a taxi, especially for shorter trips. Uber charges a minimum fare of $8 for simply getting into the car, compared with $2.50 for New York’s yellow cabs. UberX is still often more expensive even after you take into account tipping taxi drivers, Noulas found. Uber drivers typically don’t accept tips.
So looking at NYC specifically, the median cab ride (apparently?) costs less than the median UberX. For the bulk of rides...which is to say short point-to-point rides within a city, rather than long airport hauls...taxis appear to be cheaper or at least very price-competitive. In peak periods, they're definitely price-competitive due to surge pricing. Which is to say Uber/Lyft riders are often paying roughly the same amount for a ride in non-peak periods for shorter hauls, then paying a substantial premium to get a ride during peak.
Looking at Seattle, it appears the base fare for a taxi is $2.60 drop fee, and $2.70 per mile (plus $0.50 per minute in traffic). Meanwhile UberX runs $3.50 base fare (with a minimum $5.80 total fare), $1.60 per mile, and $0.27 per minute. This makes Uber look cheaper for any ride over a mile or so, though the fact that Uber's per-minute charges run for all minutes of the ride (versus taxis only being allowed to charge while stopped or moving extremely slowly) does close the gap. But the real kicker is the fact that this is a base fare, and there's little to no guarantee you'll ever actually pay that base fare on Uber rather than a surge rate. Whereas that taxi rate is it. That's as high as it goes, ever.
Point being that it's not just NYC where taxis are very price-competitive...or even outright cheaper on average...than an Uber for intra-city trips. It's a thing. People don't care, and call Uber anyway, for all the reasons that aren't price.
Price sensitivity between app-based services has definitely been an issue, and driven fares down and driver compensation into the toilet. Also, the fact that these companies have inserted themselves in as an inappropriately-well-paid but largely-unnecessary middleman in the transaction has done as much or more to erode driver pay. But outside of airport trips and such, I'm not seeing that Uber destroyed taxis on price or due to price sensitivity between app-based livery and regulated taxi cabs. Indeed, it appears that riders often wound up paying a premium and did so happily because these services worked where taxis in many markets simply did not. "Worked" meaning "would actually show up and pick you up and get you to a destination in some semblance of a reasonable timeframe."
I suppose I have a weird POV on this though, because my partner is also so rabidly anti-taxi that I've argued with her that we were waiting longer and paying more to get a Lyft rather than just use the taxi stand right there and she still pretty much refuses. That's the brand taxis built, apparently. The thing that you pay a premium and wait longer to avoid; the thing you do only as a last, desperate resort. The view of taxis in many or even most American markets was "maybe drunk driving isn't that risky."
The pricing wars going on between Uber and Lyft and the like suggests price is the biggest factor though.
For choosing between Uber and Lyft, yes. However, if I'm choosing between a taxi and rideshare, the biggest benefit to me is not being stolen from someone who shows up late with a smelly car.
And yet none of them have ever priced themselves that way. Even though they are losing money.
Initially, they priced themselves low in order to entice customers to download and use their app. Remember that 10 years or so ago, getting into a random stranger's car summoned by an app you've never heard of was a gamble in of itself.
Except they still price themselves that way. And any data I've seen on the issue continues to show that riders are extremely price sensitive.
Like, we can talk about this or that other thing they do but as far as I'm aware the data we have shows that none of that shit matters as much as the simple question of how much it costs.
Because the market has changed, explicitly because of Uber's entry. Before, local taxi markets almost universally had competition limiting systems like limited medallions, licenses, etc that significantly limited how many taxis could be on the roads. The exchange for that was that priced were also fixed. The problem was that if your prices are fixed and there isn't a major threat of new entrants coming in, then taxis were not particularly pressured to provide good service (or even able to provide it, in the case of peak demand times). In fact, taxis were often incentivized to rip you off by the system. What were you going to do about it? Go to a competitor? Pshaw. That was the major downfall of pre-Uber taxis that we're bringing up here. Taxi service sucked.
Yes, prices are important, but there's a giant reason why Uber was able to crack the taxi market as hard as it was able to. And it was because taxi services sucked. Hardcore. Uber got in and provided competition on service quality that was sorely lacking. Now that the taxi market is actually competitive, prices are now the way for rideshare services to compete. But the very fact that they're even -able- to compete on price is due to Uber. Yes, they may be a shit company run by gremlins but the foot they put up the ass of the taxi system was absolutely needed.
If prices are fixed then service is basically all you can compete on. Conversely, if services are basically interchangeable then price is the only way you can differentiate yourself. Livery isn't quite either extreme but the typical taxi regime is a combination of the government limiting supply (for various reasons we've discussed before) and setting prices (for more obvious reasons).
Uber and the like come into the market and what do they do? Lower prices. And they lost a shit ton of money while doing it. And it's not like they can't raise them. Surge pricing has been around since like day 1. But those prices go right back down after the surge is over. These are not the actions of a company competing on service.
Whether they are competing with traditional cab companies or with other competitors in the same space, they are burning piles and piles of VC money and fucking over drivers and all sorts of other shit to keep their prices from going up. This seems like very strong evidence they believe they cannot afford to raise prices and compete on service unless supply becomes constrained.
Yes, but the combination of prices being fixed -AND- new entrants being restricted means you don't have to compete at all. One of the reasons taxis take hours to show is not because they're all snoozing in a backroom instead of working but because there was a fixed supply of taxis that was insufficient to meet peak demand. So, no, they didn't really compete on service. They didn't have to and, even if they wanted to do so by putting more cabs on the road, they couldn't by law.
And, yes, Uber is also attempting to compete on market share too and other gremlin like business activities. That's not in doubt. There's more going on than just service. But, service was what exploded Uber onto the scene. What they were offering was just night-and-day better than taxis. Like, you couldn't even reliably get a taxi, at any price, for hours on a typical Friday night when the bars closed around here in the winter. That's why Uber, despite using surge pricing, could still fucking compete. It isn't just about the price (which, frankly, isn't all that discounted either).
You keep saying this and yet have not provided anything to demonstrate it. Meanwhile we can look at pricing and it seems like, no actually, price is their main selling point and they are losing a shit ton of money all the time keeping their prices down. Uber and the like have continually demonstrated via their actions that the most important thing they have is a low price point.
If the story you want to tell in the first paragraph about insufficient supply was the big deal, then you wouldn't need to lower prices to get marketshare. The unserved customers would have been out there to grab. Shit, you wouldn't even really need to provide better service technically.
From a random article I found with Google in under a minute:
Uber officially got its start in March, 2009 in San Francisco California. Uber wasn’t always called Uber, though. The beta was launched as UberCab in 2011. The price was higher than a cab ride, but the cars were originally black luxury cars. The company shortened its name to just Uber shortly after launching in 2011 because cab drivers kept complaining about the confusion. In 2012, Uber expanded to Chicago and allowed people to hail regular cars instead of the black luxury cars of San Francisco.
I have no idea if anyone has actually done any peer reviewed studies on why people chose to use ride sharing up but there are definitely a lot of anecdotes from people about how the fundamental difference in service was key, myself included.
Ooh, I think I know why Uber started with black luxury cars! Basically, as long as you use expensive cars, and dispatch them instead of allowing hails, you can bypass the medallion system altogether, because you're running a limo service, not a cab service. (Ubercab's pitch deck, indeed, notes that they don't need a medallion.) The initial pitch was actually legal. Wow.
The pricing wars going on between Uber and Lyft and the like suggests price is the biggest factor though.
For choosing between Uber and Lyft, yes. However, if I'm choosing between a taxi and rideshare, the biggest benefit to me is not being stolen from someone who shows up late with a smelly car.
And yet none of them have ever priced themselves that way. Even though they are losing money.
Initially, they priced themselves low in order to entice customers to download and use their app. Remember that 10 years or so ago, getting into a random stranger's car summoned by an app you've never heard of was a gamble in of itself.
Except they still price themselves that way. And any data I've seen on the issue continues to show that riders are extremely price sensitive.
Like, we can talk about this or that other thing they do but as far as I'm aware the data we have shows that none of that shit matters as much as the simple question of how much it costs.
Because the market has changed, explicitly because of Uber's entry. Before, local taxi markets almost universally had competition limiting systems like limited medallions, licenses, etc that significantly limited how many taxis could be on the roads. The exchange for that was that priced were also fixed. The problem was that if your prices are fixed and there isn't a major threat of new entrants coming in, then taxis were not particularly pressured to provide good service (or even able to provide it, in the case of peak demand times). In fact, taxis were often incentivized to rip you off by the system. What were you going to do about it? Go to a competitor? Pshaw. That was the major downfall of pre-Uber taxis that we're bringing up here. Taxi service sucked.
Yes, prices are important, but there's a giant reason why Uber was able to crack the taxi market as hard as it was able to. And it was because taxi services sucked. Hardcore. Uber got in and provided competition on service quality that was sorely lacking. Now that the taxi market is actually competitive, prices are now the way for rideshare services to compete. But the very fact that they're even -able- to compete on price is due to Uber. Yes, they may be a shit company run by gremlins but the foot they put up the ass of the taxi system was absolutely needed.
If prices are fixed then service is basically all you can compete on. Conversely, if services are basically interchangeable then price is the only way you can differentiate yourself. Livery isn't quite either extreme but the typical taxi regime is a combination of the government limiting supply (for various reasons we've discussed before) and setting prices (for more obvious reasons).
Uber and the like come into the market and what do they do? Lower prices. And they lost a shit ton of money while doing it. And it's not like they can't raise them. Surge pricing has been around since like day 1. But those prices go right back down after the surge is over. These are not the actions of a company competing on service.
Whether they are competing with traditional cab companies or with other competitors in the same space, they are burning piles and piles of VC money and fucking over drivers and all sorts of other shit to keep their prices from going up. This seems like very strong evidence they believe they cannot afford to raise prices and compete on service unless supply becomes constrained.
Yes, but the combination of prices being fixed -AND- new entrants being restricted means you don't have to compete at all. One of the reasons taxis take hours to show is not because they're all snoozing in a backroom instead of working but because there was a fixed supply of taxis that was insufficient to meet peak demand. So, no, they didn't really compete on service. They didn't have to and, even if they wanted to do so by putting more cabs on the road, they couldn't by law.
And, yes, Uber is also attempting to compete on market share too and other gremlin like business activities. That's not in doubt. There's more going on than just service. But, service was what exploded Uber onto the scene. What they were offering was just night-and-day better than taxis. Like, you couldn't even reliably get a taxi, at any price, for hours on a typical Friday night when the bars closed around here in the winter. That's why Uber, despite using surge pricing, could still fucking compete. It isn't just about the price (which, frankly, isn't all that discounted either).
You keep saying this and yet have not provided anything to demonstrate it. Meanwhile we can look at pricing and it seems like, no actually, price is their main selling point and they are losing a shit ton of money all the time keeping their prices down. Uber and the like have continually demonstrated via their actions that the most important thing they have is a low price point.
If the story you want to tell in the first paragraph about insufficient supply was the big deal, then you wouldn't need to lower prices to get marketshare. The unserved customers would have been out there to grab. Shit, you wouldn't even really need to provide better service technically.
They're losing a shit ton of money because they want market share more than profits. What the company is doing strategically through its business operations (attempting a monopoly, etc) is not 1:1 to why customers come to them. Sure, price can be a factor, but its not how Uber cracked the market. Discount gypsy cabs have always been a thing. Uber offered much more than that: No hold times on the phone. GPS tracking. Upfront costs. No physical cash required. A ratings system that actually matters. A way to actually handle peak demand periods. And more. It was night and day on service. Literally.
I'm not sure if you've ever used a taxi before they had competition, because asking me to prove that taxis provided bad service and that's a big reason why people were willing to give Uber a chance is pretty basic cultural zeitgeist.
Right. If they are losing money trying to get marketshare by keeping fares low, that means they are having to keep fares low in order to continue to attract customers. Which is exactly my points. If service was the issue here, Uber would raise it's prices to lose less money. But they don't. Because the price is the big factor at work. They are competing on pricing, not on service. And are (or were until very recently if that's changed) losing money doing that.
And the point of all this re: the gig economy is the way in which this paradigm effects their business model and it's workers. Uber and the like function by using the gig economy to off-load hard to track costs onto their drivers and keeping their prices lower then is profitable to attract customers. Judging by how their businesses work they functionally cannot treat their workers better or not be a gig economy setup with all it's inherent issues (which would cost more) because even while doing that they are still losing money.
Right. If they are losing money trying to get marketshare by keeping fares low, that means they are having to keep fares low in order to continue to attract customers. Which is exactly my points. If service was the issue here, Uber would raise it's prices to lose less money. But they don't. Because the price is the big factor at work. They are competing on pricing, not on service. And are (or were until very recently if that's changed) losing money doing that.
You still aren't demonstrating that they're losing money to get marketshare from regulated cabs. They could be losing money to get marketshare from other app-based livery services. They could be losing money to generate new marketshare altogether, from people who prior to Uber/Lyft as an option simply never utilized cabs at all. Basically losing money to gain marketshare from designated drivers and drunk driving. I'm unconvinced that most major US cities had a thriving cab system that was a viable, reliable option for intra-city rides to begin with. It was not my experience, including in Seattle (which was arguably not a small city).
As I noted above, Uber is barely cheaper than a cab in Seattle, if it's cheaper at all (during surges...when people are actually requesting rides...it is easily more expensive).
You're going to have to work to convince me that Uber/Lyft aren't simply competing on price with each other over the entirely new market of "actually being able to call a car, unlike before." At least in most U.S. markets, aside from like NYC, SF, and Chi. For most Americans in most cities, taxis were a thing that existed in movies and nowhere else.
I would believe that consumers are price sensitive when comparing ride-sharing services, but it’s pretty clear that consumers comparing ride-sharing to taxis take a much broader view.
Right. If they are losing money trying to get marketshare by keeping fares low, that means they are having to keep fares low in order to continue to attract customers. Which is exactly my points. If service was the issue here, Uber would raise it's prices to lose less money. But they don't. Because the price is the big factor at work. They are competing on pricing, not on service. And are (or were until very recently if that's changed) losing money doing that.
You still aren't demonstrating that they're losing money to get marketshare from regulated cabs. They could be losing money to get marketshare from other app-based livery services. They could be losing money to generate new marketshare altogether, from people who prior to Uber/Lyft as an option simply never utilized cabs at all. Basically losing money to gain marketshare from designated drivers and drunk driving. I'm unconvinced that most major US cities had a thriving cab system that was a viable, reliable option for intra-city rides to begin with. It was not my experience, including in Seattle (which was arguably not a small city).
As I noted above, Uber is barely cheaper than a cab in Seattle, if it's cheaper at all (during surges...when people are actually requesting rides...it is easily more expensive).
You're going to have to work to convince me that Uber/Lyft aren't simply competing on price with each other over the entirely new market of "actually being able to call a car, unlike before." At least in most U.S. markets, aside from like NYC, SF, and Chi. For most Americans in most cities, taxis were a thing that existed in movies and nowhere else.
I never said it mattered who they were competing with. I literally said up thread:
Whether they are competing with traditional cab companies or with other competitors in the same space, they are burning piles and piles of VC money and fucking over drivers and all sorts of other shit to keep their prices from going up. This seems like very strong evidence they believe they cannot afford to raise prices and compete on service unless supply becomes constrained.
ie - It doesn't fucking matter they are competing with, they are losing money. So why don't they raise prices?
Because they can't to compete. Because price is what they compete on. That's the problem all these arguments have yet to explain. You don't burn literally billions of dollars like you are giving it a viking funeral if you could just plug the hole with higher prices.
Uber et all have to keep prices low to compete -> the customers in livery are price sensitive enough it's worth losing billions of dollars over -> ergo they cannot not function as a gig economy company and keep compensation to their drivers down because the business model (which technically doesn't even function now) doesn't function even more so if they tried to up prices
The ridiculous business plan/model/pricing all probably made sense and was justifiable when everybody was under the same delusion that autonomous cars were 5 year out. "We'll just weather this shit out until auto cars come and we really rake in the money!" Now that the truth is out and it could very well be closer to 50 years, Uber and the like are starting to crumble.
"The sausage of Green Earth explodes with flavor like the cannon of culinary delight."
Right. If they are losing money trying to get marketshare by keeping fares low, that means they are having to keep fares low in order to continue to attract customers. Which is exactly my points. If service was the issue here, Uber would raise it's prices to lose less money. But they don't. Because the price is the big factor at work. They are competing on pricing, not on service. And are (or were until very recently if that's changed) losing money doing that.
You still aren't demonstrating that they're losing money to get marketshare from regulated cabs. They could be losing money to get marketshare from other app-based livery services. They could be losing money to generate new marketshare altogether, from people who prior to Uber/Lyft as an option simply never utilized cabs at all. Basically losing money to gain marketshare from designated drivers and drunk driving. I'm unconvinced that most major US cities had a thriving cab system that was a viable, reliable option for intra-city rides to begin with. It was not my experience, including in Seattle (which was arguably not a small city).
As I noted above, Uber is barely cheaper than a cab in Seattle, if it's cheaper at all (during surges...when people are actually requesting rides...it is easily more expensive).
You're going to have to work to convince me that Uber/Lyft aren't simply competing on price with each other over the entirely new market of "actually being able to call a car, unlike before." At least in most U.S. markets, aside from like NYC, SF, and Chi. For most Americans in most cities, taxis were a thing that existed in movies and nowhere else.
I never said it mattered who they were competing with. I literally said up thread:
Whether they are competing with traditional cab companies or with other competitors in the same space, they are burning piles and piles of VC money and fucking over drivers and all sorts of other shit to keep their prices from going up. This seems like very strong evidence they believe they cannot afford to raise prices and compete on service unless supply becomes constrained.
ie - It doesn't fucking matter they are competing with, they are losing money. So why don't they raise prices?
Because they can't to compete. Because price is what they compete on. That's the problem all these arguments have yet to explain. You don't burn literally billions of dollars like you are giving it a viking funeral if you could just plug the hole with higher prices.
Uber et all have to keep prices low to compete -> the customers in livery are price sensitive enough it's worth losing billions of dollars over -> ergo they cannot not function as a gig economy company and keep compensation to their drivers down because the business model (which technically doesn't even function now) doesn't function even more so if they tried to up prices
However, if it's other livery companies that they are competing with...and this is my point...this may or may not be true. You've very solidly made the point "Uber thinks they need to keep their prices low..." You've not refuted the potential reason for that being "...to maintain marketshare against Lyft.''
You say it doesn't matter who they are competing with (or rather imply it), but it does. Because if a city can simply regulate the minimum base fare that livery companies as a whole may charge, to ensure a fair earning for drivers, then it's entirely possible that Uber (and Lyft) can survive that increase in price. Because if it's actually app-based livery they're competing on price with, rather than cabs, then by forcing their competitors to increase as well you eliminate the price pressure. They wind up having to compete on other factors.
To be clear, I am saying that it matters very much who they are in price competition with, when we are talking about regulating both them and their competitors in the same space simultaneously.
Right. If they are losing money trying to get marketshare by keeping fares low, that means they are having to keep fares low in order to continue to attract customers. Which is exactly my points. If service was the issue here, Uber would raise it's prices to lose less money. But they don't. Because the price is the big factor at work. They are competing on pricing, not on service. And are (or were until very recently if that's changed) losing money doing that.
You still aren't demonstrating that they're losing money to get marketshare from regulated cabs. They could be losing money to get marketshare from other app-based livery services. They could be losing money to generate new marketshare altogether, from people who prior to Uber/Lyft as an option simply never utilized cabs at all. Basically losing money to gain marketshare from designated drivers and drunk driving. I'm unconvinced that most major US cities had a thriving cab system that was a viable, reliable option for intra-city rides to begin with. It was not my experience, including in Seattle (which was arguably not a small city).
As I noted above, Uber is barely cheaper than a cab in Seattle, if it's cheaper at all (during surges...when people are actually requesting rides...it is easily more expensive).
You're going to have to work to convince me that Uber/Lyft aren't simply competing on price with each other over the entirely new market of "actually being able to call a car, unlike before." At least in most U.S. markets, aside from like NYC, SF, and Chi. For most Americans in most cities, taxis were a thing that existed in movies and nowhere else.
I never said it mattered who they were competing with. I literally said up thread:
Whether they are competing with traditional cab companies or with other competitors in the same space, they are burning piles and piles of VC money and fucking over drivers and all sorts of other shit to keep their prices from going up. This seems like very strong evidence they believe they cannot afford to raise prices and compete on service unless supply becomes constrained.
ie - It doesn't fucking matter they are competing with, they are losing money. So why don't they raise prices?
Because they can't to compete. Because price is what they compete on. That's the problem all these arguments have yet to explain. You don't burn literally billions of dollars like you are giving it a viking funeral if you could just plug the hole with higher prices.
Uber et all have to keep prices low to compete -> the customers in livery are price sensitive enough it's worth losing billions of dollars over -> ergo they cannot not function as a gig economy company and keep compensation to their drivers down because the business model (which technically doesn't even function now) doesn't function even more so if they tried to up prices
You can burn through cash if your plan is to spend heavily now, build up mass economies of scale and brand presence, and eventually pull profit either from running your competitors out of business, or attaining economies of scale where revenue growth exceeds expense growth, and/or transformational technological change. They're not increasing their prices much because they don't -have- to. They can still pull cash in from investors, so they don't need to pull it from customers as much. Yes, if they jacked up their prices 100%, they'd probably lose customers, but saying that price is -the- thing they are competing on is overly simplistic. They don't want to plug the hole with higher prices because they want to plug it with economies of scale, which higher prices would work against. Prices are a factor, but they are not -the- only factor. The actual product that they are offering is quite strong too.
Right. If they are losing money trying to get marketshare by keeping fares low, that means they are having to keep fares low in order to continue to attract customers. Which is exactly my points. If service was the issue here, Uber would raise it's prices to lose less money. But they don't. Because the price is the big factor at work. They are competing on pricing, not on service. And are (or were until very recently if that's changed) losing money doing that.
You still aren't demonstrating that they're losing money to get marketshare from regulated cabs. They could be losing money to get marketshare from other app-based livery services. They could be losing money to generate new marketshare altogether, from people who prior to Uber/Lyft as an option simply never utilized cabs at all. Basically losing money to gain marketshare from designated drivers and drunk driving. I'm unconvinced that most major US cities had a thriving cab system that was a viable, reliable option for intra-city rides to begin with. It was not my experience, including in Seattle (which was arguably not a small city).
As I noted above, Uber is barely cheaper than a cab in Seattle, if it's cheaper at all (during surges...when people are actually requesting rides...it is easily more expensive).
You're going to have to work to convince me that Uber/Lyft aren't simply competing on price with each other over the entirely new market of "actually being able to call a car, unlike before." At least in most U.S. markets, aside from like NYC, SF, and Chi. For most Americans in most cities, taxis were a thing that existed in movies and nowhere else.
I never said it mattered who they were competing with. I literally said up thread:
Whether they are competing with traditional cab companies or with other competitors in the same space, they are burning piles and piles of VC money and fucking over drivers and all sorts of other shit to keep their prices from going up. This seems like very strong evidence they believe they cannot afford to raise prices and compete on service unless supply becomes constrained.
ie - It doesn't fucking matter they are competing with, they are losing money. So why don't they raise prices?
Because they can't to compete. Because price is what they compete on. That's the problem all these arguments have yet to explain. You don't burn literally billions of dollars like you are giving it a viking funeral if you could just plug the hole with higher prices.
Uber et all have to keep prices low to compete -> the customers in livery are price sensitive enough it's worth losing billions of dollars over -> ergo they cannot not function as a gig economy company and keep compensation to their drivers down because the business model (which technically doesn't even function now) doesn't function even more so if they tried to up prices
However, if it's other livery companies that they are competing with...and this is my point...this may or may not be true. You've very solidly made the point "Uber thinks they need to keep their prices low..." You've not refuted the potential reason for that being "...to maintain marketshare against Lyft.''
You say it doesn't matter who they are competing with (or rather imply it), but it does. Because if a city can simply regulate the minimum base fare that livery companies as a whole may charge, to ensure a fair earning for drivers, then it's entirely possible that Uber (and Lyft) can survive that increase in price. Because if it's actually app-based livery they're competing on price with, rather than cabs, then by forcing their competitors to increase as well you eliminate the price pressure. They wind up having to compete on other factors.
To be clear, I am saying that it matters very much who they are in price competition with, when we are talking about regulating both them and their competitors in the same space simultaneously.
They're in competition with not using livery in the first place. Which is the point that people are overlooking. For all the comments about not using taxis because of service, the reality is that the middle class - the people Uber and other online livery services are targeting - just don't use taxis outside of a few specific cases because they don't need to. The primary livery userbase is bifurcated between the wealthy - for whom the service serves both as status symbol and allows them to devote their time to other activities rather than driving; and the urban poor - who can replace the need for car ownership with judicious use of livery services when a private vehicle is needed (for example, bringing groceries home after a monthly shopping run.) But the middle class just doesn't need to, because quite often people in the middle class have ready access to private transport - either they own a car, know people who do, or have the resources to rent a car when one is needed. (It's not surprising that Uber was preceded by car-sharing services like ZipCar, given this.)
Uber needed to make the price cheap enough that middle class users would buy in, and their problem is that when it comes to livery, the middle class is extremely price sensitive because they have the ability to walk away.
Right. If they are losing money trying to get marketshare by keeping fares low, that means they are having to keep fares low in order to continue to attract customers. Which is exactly my points. If service was the issue here, Uber would raise it's prices to lose less money. But they don't. Because the price is the big factor at work. They are competing on pricing, not on service. And are (or were until very recently if that's changed) losing money doing that.
You still aren't demonstrating that they're losing money to get marketshare from regulated cabs. They could be losing money to get marketshare from other app-based livery services. They could be losing money to generate new marketshare altogether, from people who prior to Uber/Lyft as an option simply never utilized cabs at all. Basically losing money to gain marketshare from designated drivers and drunk driving. I'm unconvinced that most major US cities had a thriving cab system that was a viable, reliable option for intra-city rides to begin with. It was not my experience, including in Seattle (which was arguably not a small city).
As I noted above, Uber is barely cheaper than a cab in Seattle, if it's cheaper at all (during surges...when people are actually requesting rides...it is easily more expensive).
You're going to have to work to convince me that Uber/Lyft aren't simply competing on price with each other over the entirely new market of "actually being able to call a car, unlike before." At least in most U.S. markets, aside from like NYC, SF, and Chi. For most Americans in most cities, taxis were a thing that existed in movies and nowhere else.
I never said it mattered who they were competing with. I literally said up thread:
Whether they are competing with traditional cab companies or with other competitors in the same space, they are burning piles and piles of VC money and fucking over drivers and all sorts of other shit to keep their prices from going up. This seems like very strong evidence they believe they cannot afford to raise prices and compete on service unless supply becomes constrained.
ie - It doesn't fucking matter they are competing with, they are losing money. So why don't they raise prices?
Because they can't to compete. Because price is what they compete on. That's the problem all these arguments have yet to explain. You don't burn literally billions of dollars like you are giving it a viking funeral if you could just plug the hole with higher prices.
Uber et all have to keep prices low to compete -> the customers in livery are price sensitive enough it's worth losing billions of dollars over -> ergo they cannot not function as a gig economy company and keep compensation to their drivers down because the business model (which technically doesn't even function now) doesn't function even more so if they tried to up prices
However, if it's other livery companies that they are competing with...and this is my point...this may or may not be true. You've very solidly made the point "Uber thinks they need to keep their prices low..." You've not refuted the potential reason for that being "...to maintain marketshare against Lyft.''
You say it doesn't matter who they are competing with (or rather imply it), but it does. Because if a city can simply regulate the minimum base fare that livery companies as a whole may charge, to ensure a fair earning for drivers, then it's entirely possible that Uber (and Lyft) can survive that increase in price. Because if it's actually app-based livery they're competing on price with, rather than cabs, then by forcing their competitors to increase as well you eliminate the price pressure. They wind up having to compete on other factors.
To be clear, I am saying that it matters very much who they are in price competition with, when we are talking about regulating both them and their competitors in the same space simultaneously.
They're in competition with not using livery in the first place. Which is the point that people are overlooking. For all the comments about not using taxis because of service, the reality is that the middle class - the people Uber and other online livery services are targeting - just don't use taxis outside of a few specific cases because they don't need to. The primary livery userbase is bifurcated between the wealthy - for whom the service serves both as status symbol and allows them to devote their time to other activities rather than driving; and the urban poor - who can replace the need for car ownership with judicious use of livery services when a private vehicle is needed (for example, bringing groceries home after a monthly shopping run.) But the middle class just doesn't need to, because quite often people in the middle class have ready access to private transport - either they own a car, know people who do, or have the resources to rent a car when one is needed. (It's not surprising that Uber was preceded by car-sharing services like ZipCar, given this.)
Uber needed to make the price cheap enough that middle class users would buy in, and their problem is that when it comes to livery, the middle class is extremely price sensitive because they have the ability to walk away.
Except, of course, for all the places where people were not using taxis because either buying a cheap used car or using public transportation, combined with walking, was more reliable and less inconvenient.
FFS, it was a gamble whether or not they would take debit cards. Combined with the obfuscation about the cost of a given trip, and that's an exercise in frustration.
That's ignoring all the problems with the taxi actually showing up, or taking a direct route rather than as many detours the driver think they can get away with.
They're in competition with not using livery in the first place. Which is the point that people are overlooking. For all the comments about not using taxis because of service, the reality is that the middle class - the people Uber and other online livery services are targeting - just don't use taxis outside of a few specific cases because they don't need to.
See, and I do agree with much of what you're saying. I agree that the primary things Uber competes with on price are a) Lyft and b) not taking a car at all. Taxis are irrelevant to the conversation, for the most part, apart from the extent to which they were formerly unavailable as an option much of the time (or terrible).
Once we accept that, I'd agree that yeah there's some question as to whether there exists a price point at which these companies...and their drivers...can turn a reasonable profit and still attract a reasonable volume of business. I do think there's room to increase in price. I think after years of having this available as a service...something taxis never were before, which is to say functionally available in most markets...the middle class may have decided that this is a service that is worth paying for, and possibly even a slight premium. Hell, they already do, in that a huge portion of rides happen under surge pricing. People who own cars have found it valuable to have somebody else drive them for various reasons, the main ones being traffic, parking, and drinking. I don't think that after years of having this available as an option they'll walk away as easily as you think.
Do I think they can double prices? Hell no. Do I think that prices could increase marginally, and potentially enough to make driving pay reasonably? Maybe. Don't know. And maybe it'll take another company entering into the space with less baggage and taking a smaller cut of fares to make that happen? I don't know.
I do think that "regulate fares to a level that produces an effective living wage" may be a reasonable way to find out. In many markets. I do agree that there may be no price point at which the average customer is willing to pay a reasonable rate for the human labor (in additional to vehicle operating costs) required to drive them out to a bar, or deliver them food. I do think there's some room, and possibly substantial room, above the current fares before we hit that wall though. I don't know that we've ever really explored that price space, because black car services were previously less accessible, and cabs were almost entirely nonfunctional. Uber originally had to drive prices to the bottom due to both competitors and the need to induce demand...but it's possible that as of now the latter is less of an issue, and regulating the entire market together would allow some increase.
Right. If they are losing money trying to get marketshare by keeping fares low, that means they are having to keep fares low in order to continue to attract customers. Which is exactly my points. If service was the issue here, Uber would raise it's prices to lose less money. But they don't. Because the price is the big factor at work. They are competing on pricing, not on service. And are (or were until very recently if that's changed) losing money doing that.
You still aren't demonstrating that they're losing money to get marketshare from regulated cabs. They could be losing money to get marketshare from other app-based livery services. They could be losing money to generate new marketshare altogether, from people who prior to Uber/Lyft as an option simply never utilized cabs at all. Basically losing money to gain marketshare from designated drivers and drunk driving. I'm unconvinced that most major US cities had a thriving cab system that was a viable, reliable option for intra-city rides to begin with. It was not my experience, including in Seattle (which was arguably not a small city).
As I noted above, Uber is barely cheaper than a cab in Seattle, if it's cheaper at all (during surges...when people are actually requesting rides...it is easily more expensive).
You're going to have to work to convince me that Uber/Lyft aren't simply competing on price with each other over the entirely new market of "actually being able to call a car, unlike before." At least in most U.S. markets, aside from like NYC, SF, and Chi. For most Americans in most cities, taxis were a thing that existed in movies and nowhere else.
I never said it mattered who they were competing with. I literally said up thread:
Whether they are competing with traditional cab companies or with other competitors in the same space, they are burning piles and piles of VC money and fucking over drivers and all sorts of other shit to keep their prices from going up. This seems like very strong evidence they believe they cannot afford to raise prices and compete on service unless supply becomes constrained.
ie - It doesn't fucking matter they are competing with, they are losing money. So why don't they raise prices?
Because they can't to compete. Because price is what they compete on. That's the problem all these arguments have yet to explain. You don't burn literally billions of dollars like you are giving it a viking funeral if you could just plug the hole with higher prices.
Uber et all have to keep prices low to compete -> the customers in livery are price sensitive enough it's worth losing billions of dollars over -> ergo they cannot not function as a gig economy company and keep compensation to their drivers down because the business model (which technically doesn't even function now) doesn't function even more so if they tried to up prices
However, if it's other livery companies that they are competing with...and this is my point...this may or may not be true. You've very solidly made the point "Uber thinks they need to keep their prices low..." You've not refuted the potential reason for that being "...to maintain marketshare against Lyft.''
You say it doesn't matter who they are competing with (or rather imply it), but it does. Because if a city can simply regulate the minimum base fare that livery companies as a whole may charge, to ensure a fair earning for drivers, then it's entirely possible that Uber (and Lyft) can survive that increase in price. Because if it's actually app-based livery they're competing on price with, rather than cabs, then by forcing their competitors to increase as well you eliminate the price pressure. They wind up having to compete on other factors.
To be clear, I am saying that it matters very much who they are in price competition with, when we are talking about regulating both them and their competitors in the same space simultaneously.
They're in competition with not using livery in the first place. Which is the point that people are overlooking. For all the comments about not using taxis because of service, the reality is that the middle class - the people Uber and other online livery services are targeting - just don't use taxis outside of a few specific cases because they don't need to. The primary livery userbase is bifurcated between the wealthy - for whom the service serves both as status symbol and allows them to devote their time to other activities rather than driving; and the urban poor - who can replace the need for car ownership with judicious use of livery services when a private vehicle is needed (for example, bringing groceries home after a monthly shopping run.) But the middle class just doesn't need to, because quite often people in the middle class have ready access to private transport - either they own a car, know people who do, or have the resources to rent a car when one is needed. (It's not surprising that Uber was preceded by car-sharing services like ZipCar, given this.)
Uber needed to make the price cheap enough that middle class users would buy in, and their problem is that when it comes to livery, the middle class is extremely price sensitive because they have the ability to walk away.
Except, of course, for all the places where people were not using taxis because either buying a cheap used car or using public transportation, combined with walking, was more reliable and less inconvenient.
FFS, it was a gamble whether or not they would take debit cards. Combined with the obfuscation about the cost of a given trip, and that's an exercise in frustration.
That's ignoring all the problems with the taxi actually showing up, or taking a direct route rather than as many detours the driver think they can get away with.
Now you're just trying to flip the arrow of causality, and given American car culture and everything that entails, especially for middle class America - I think the evidence is more on the side that taxis aren't attractive to the middle class because of their access to personal transportation, and not on the side that the middle class was driven to personal private transportation because taxis were horrible. And again, if the matter was just quality, then why are online livery services so loathe to raise prices? Livery service among the middle class is highly price sensitive, because most in the middle class don't (outside of a handful of cases, like traveling for work) need to use livery like the wealthy and the urban poor do. Straphangers don't choose public transit over livery because it has better service, but because it's cheaper for what is functionally the same service.
Right. If they are losing money trying to get marketshare by keeping fares low, that means they are having to keep fares low in order to continue to attract customers. Which is exactly my points. If service was the issue here, Uber would raise it's prices to lose less money. But they don't. Because the price is the big factor at work. They are competing on pricing, not on service. And are (or were until very recently if that's changed) losing money doing that.
You still aren't demonstrating that they're losing money to get marketshare from regulated cabs. They could be losing money to get marketshare from other app-based livery services. They could be losing money to generate new marketshare altogether, from people who prior to Uber/Lyft as an option simply never utilized cabs at all. Basically losing money to gain marketshare from designated drivers and drunk driving. I'm unconvinced that most major US cities had a thriving cab system that was a viable, reliable option for intra-city rides to begin with. It was not my experience, including in Seattle (which was arguably not a small city).
As I noted above, Uber is barely cheaper than a cab in Seattle, if it's cheaper at all (during surges...when people are actually requesting rides...it is easily more expensive).
You're going to have to work to convince me that Uber/Lyft aren't simply competing on price with each other over the entirely new market of "actually being able to call a car, unlike before." At least in most U.S. markets, aside from like NYC, SF, and Chi. For most Americans in most cities, taxis were a thing that existed in movies and nowhere else.
I never said it mattered who they were competing with. I literally said up thread:
Whether they are competing with traditional cab companies or with other competitors in the same space, they are burning piles and piles of VC money and fucking over drivers and all sorts of other shit to keep their prices from going up. This seems like very strong evidence they believe they cannot afford to raise prices and compete on service unless supply becomes constrained.
ie - It doesn't fucking matter they are competing with, they are losing money. So why don't they raise prices?
Because they can't to compete. Because price is what they compete on. That's the problem all these arguments have yet to explain. You don't burn literally billions of dollars like you are giving it a viking funeral if you could just plug the hole with higher prices.
Uber et all have to keep prices low to compete -> the customers in livery are price sensitive enough it's worth losing billions of dollars over -> ergo they cannot not function as a gig economy company and keep compensation to their drivers down because the business model (which technically doesn't even function now) doesn't function even more so if they tried to up prices
However, if it's other livery companies that they are competing with...and this is my point...this may or may not be true. You've very solidly made the point "Uber thinks they need to keep their prices low..." You've not refuted the potential reason for that being "...to maintain marketshare against Lyft.''
You say it doesn't matter who they are competing with (or rather imply it), but it does. Because if a city can simply regulate the minimum base fare that livery companies as a whole may charge, to ensure a fair earning for drivers, then it's entirely possible that Uber (and Lyft) can survive that increase in price. Because if it's actually app-based livery they're competing on price with, rather than cabs, then by forcing their competitors to increase as well you eliminate the price pressure. They wind up having to compete on other factors.
To be clear, I am saying that it matters very much who they are in price competition with, when we are talking about regulating both them and their competitors in the same space simultaneously.
They're in competition with not using livery in the first place. Which is the point that people are overlooking. For all the comments about not using taxis because of service, the reality is that the middle class - the people Uber and other online livery services are targeting - just don't use taxis outside of a few specific cases because they don't need to. The primary livery userbase is bifurcated between the wealthy - for whom the service serves both as status symbol and allows them to devote their time to other activities rather than driving; and the urban poor - who can replace the need for car ownership with judicious use of livery services when a private vehicle is needed (for example, bringing groceries home after a monthly shopping run.) But the middle class just doesn't need to, because quite often people in the middle class have ready access to private transport - either they own a car, know people who do, or have the resources to rent a car when one is needed. (It's not surprising that Uber was preceded by car-sharing services like ZipCar, given this.)
Uber needed to make the price cheap enough that middle class users would buy in, and their problem is that when it comes to livery, the middle class is extremely price sensitive because they have the ability to walk away.
Except, of course, for all the places where people were not using taxis because either buying a cheap used car or using public transportation, combined with walking, was more reliable and less inconvenient.
FFS, it was a gamble whether or not they would take debit cards. Combined with the obfuscation about the cost of a given trip, and that's an exercise in frustration.
That's ignoring all the problems with the taxi actually showing up, or taking a direct route rather than as many detours the driver think they can get away with.
Now you're just trying to flip the arrow of causality, and given American car culture and everything that entails, especially for middle class America - I think the evidence is more on the side that taxis aren't attractive to the middle class because of their access to personal transportation, and not on the side that the middle class was driven to personal private transportation because taxis were horrible. And again, if the matter was just quality, then why are online livery services so loathe to raise prices? Livery service among the middle class is highly price sensitive, because most in the middle class don't (outside of a handful of cases, like traveling for work) need to use livery like the wealthy and the urban poor do. Straphangers don't choose public transit over livery because it has better service, but because it's cheaper for what is functionally the same service.
The reason they aren't putting up their prices is because they're looking to grow more than they are looking for profit right now. They're looking to edge out a business by growing their service revenue at a greater rate than their cost of revenue, which they are bumpily doing at their current prices. Their core operating business is basically breaking even, but where they're losing money is because they are dumping huge amounts into market expansion and R&D. They're not putting up their prices now because they want to get asses in the seats so that they can build up their customer base. They aren't yet being pressured to deliver profits over growth yet, so they are still pursuing growth.
For middle/lower/upper class price sensitivity, while price elasticity is definitely a thing (if Ubers were 100% more expensive than a cab all the time, it would hurt, but that's not really in the cards), I'm not so sure that its as elastic as you are postulating for middle class livery consumption. While, yes, middle class people often do have more access to private transportation options than the poor, looking at Uber's user demographics, it looks like the most common use of Uber is for travelers (where ease of use is key), followed by business (typically price inelastic), young adults travelling to "events" (concerts, bars, clubs, sporting events), and then people without driver's licenses. Of those, I'm most familiar with the second last, because that's where I use Uber (and seems like the most middle class use of Uber) and where I know for a fact that taxis are dismal at serving, and also where surge pricing is likely to be most likely to apply too. Often, if you're going to an event once a week or so and you offer the average middle class person like myself the choice between an hour wait for a cab for $15 or an Uber immediately for $25, they'd take the Uber hands down because while I do have my own car, my options -in the moment- are relatively limited and I do value my time enough that I'm willing to pay extra for service.
I live in a smaller midwestern city. Before Uber, taking a taxi to the airport or train station was not an option for me. That's because the taxi and limo services in my town were so unreliable that they would sometimes show up an hour or two late; or not show up at all. That's annoying enough to get home from the bar, but at least I can call around until someone does show. It doesn't work at all if I have a plane or train to catch.
So I would drive to the train station and airport and leave my car parked for the duration of any trip, which isn't cheap. What Uber brought to the table for me is that I can open the app and someone will reliably show up. It wouldn't matter to me if Uber charged twice as much, it is still the best alternative for me on a service level. Also, I have traveled for work and leisure through many of the bigger cities of the United States, where taxis do actually show up/are available curbside. If you look at the distribution of experiences between all the taxi and Uber rides I have taken (probably n>100, each), there is no overlap in the distributions. My worst Uber trip has been better than my best taxi trip in the United States (UK and Germany are a different story).
I don't like Uber as a company. I'm actually using their name as a generic placeholder in this, since I try to take Lyft when I can hoping that they are slightly less shitty. I think drivers are employees. I hope some other company providing the same service crushes them. But the service they provide has been super valuable in my life. As in, one of the biggest tangible improvements that Silicon Valley has provided me.
I know it's anecdotal, but for myself and everyone I know in London, we switched to Uber because it was reliable and easy to use. Black cabs would frequently refuse service if you wanted to pay by card, were very difficult to hail, and refused service if you were going far from central. Uber was superior to private cab companies in that you didn't need to find the local one, and could just use it anywhere. The price was the icing on the cake.
In this moment, I am euphoric. Not because of any phony god’s blessing. But because, I am enlightened by my intelligence.
On the flip side of the coin, I basically grew up in the front seat of a Boston cab. My dad drove a cab there for years as our family's primary income while he was in school. The taxi system has always been super shitty and exploitative of drivers, whether it's Uber siphoning driver profits or Orange Cab Company charging massive fees to the drivers to rent a cab from them in the first place.
Uber is a shit company, but taxis were never a bastion of social responsibility either.
My sole experience with a non-uber/lyft service was attempting to use the local taxi service in Oxford which had banned both uber and lyft. I foolishly thought that since the oxford service had an app and that I could make a reservation a day ahead of time that things wouldn't be too bad. The service sent me a text message canceling my reservation at the exact time they were scheduled to pick us up leaving my wife and I scrambling to get us and our luggage to the train station. My worst experience with uber/lyft is that we once got matched to a cab who was driving the wrong way on the freeway and took longer than expected to pick us up.
Battlenet ID: NullPointer
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HenroidMexican kicked from Immigration ThreadCentrism is Racism :3Registered Userregular
Uber and Lyft must classify drivers as employees, judge rules, in blow to gig economy
A California judge has issued a preliminary injunction that would block Uber and Lyft from classifying their drivers as independent contractors rather than employees.
The move on Monday came in response to a May lawsuit filed by the state of California against the companies, which alleged they are misclassifying their drivers under the state’s new labor law.
That law, known as AB5, took effect on 1 January. The strictest of its kind in the US, it makes it more difficult for companies to classify workers as independent contractors instead of employees who are entitled to minimum wage and benefits. The lack of workers’ compensation and unemployment benefits for drivers has become increasingly urgent during the coronavirus pandemic, as ridership plunges and workers struggle to protect themselves.
California is the largest market in the US for Uber and Lyft and the state where both companies were founded.
The lawsuit, and Monday’s injunction, are the most significant challenges to the ride-hailing companies’ business model thus far. Judge Ethan Schulman of the San Francisco superior court delayed enforcing his order by 10 days to give the companies a chance to appeal.
Henroid on
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HenroidMexican kicked from Immigration ThreadCentrism is Racism :3Registered Userregular
By the way I fucking hate the phrasing of "in blow to gig economy." Like whose side is The Guardian and its editors on?
Uber and Lyft must classify drivers as employees, judge rules, in blow to gig economy
A California judge has issued a preliminary injunction that would block Uber and Lyft from classifying their drivers as independent contractors rather than employees.
The move on Monday came in response to a May lawsuit filed by the state of California against the companies, which alleged they are misclassifying their drivers under the state’s new labor law.
That law, known as AB5, took effect on 1 January. The strictest of its kind in the US, it makes it more difficult for companies to classify workers as independent contractors instead of employees who are entitled to minimum wage and benefits. The lack of workers’ compensation and unemployment benefits for drivers has become increasingly urgent during the coronavirus pandemic, as ridership plunges and workers struggle to protect themselves.
California is the largest market in the US for Uber and Lyft and the state where both companies were founded.
The lawsuit, and Monday’s injunction, are the most significant challenges to the ride-hailing companies’ business model thus far. Judge Ethan Schulman of the San Francisco superior court delayed enforcing his order by 10 days to give the companies a chance to appeal.
The timeline here goes to show just how far large companies can push compliance.
January: the "Uber needs to treat its employees like employees" law goes into effect.
May: California sues because Uber is ignoring the law.
August: Judge says that Uber has to stop ignoring the law...in 10 days, to give Uber time to appeal, which it did immediately. (Will probably fail, but that's the way the game is played.)
November: A ballot measure Uber paid for to undo these changes gets voted on.
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OrcaAlso known as EspressosaurusWrexRegistered Userregular
Uber and Lyft must classify drivers as employees, judge rules, in blow to gig economy
A California judge has issued a preliminary injunction that would block Uber and Lyft from classifying their drivers as independent contractors rather than employees.
The move on Monday came in response to a May lawsuit filed by the state of California against the companies, which alleged they are misclassifying their drivers under the state’s new labor law.
That law, known as AB5, took effect on 1 January. The strictest of its kind in the US, it makes it more difficult for companies to classify workers as independent contractors instead of employees who are entitled to minimum wage and benefits. The lack of workers’ compensation and unemployment benefits for drivers has become increasingly urgent during the coronavirus pandemic, as ridership plunges and workers struggle to protect themselves.
California is the largest market in the US for Uber and Lyft and the state where both companies were founded.
The lawsuit, and Monday’s injunction, are the most significant challenges to the ride-hailing companies’ business model thus far. Judge Ethan Schulman of the San Francisco superior court delayed enforcing his order by 10 days to give the companies a chance to appeal.
The timeline here goes to show just how far large companies can push compliance.
January: the "Uber needs to treat its employees like employees" law goes into effect.
May: California sues because Uber is ignoring the law.
August: Judge says that Uber has to stop ignoring the law...in 10 days, to give Uber time to appeal, which it did immediately. (Will probably fail, but that's the way the game is played.)
November: A ballot measure Uber paid for to undo these changes gets voted on.
I mean, that's how they got their penetration in the first place. They went blatantly illegal, tried to drum up enough support that it was then toxic to slap them down as they so richly deserved.
#BREAKING Uber CEO says the company will likely shut down temporarily if a court decides to classify drivers as employees.
Uber would likely shut down temporarily for several months if a court does not overturn a recent ruling requiring it to classify its drivers as full-time employees, CEO Dara Khosrowshahi said in an interview with Stephanie Ruhle Wednesday on MSNBC.
“If the court doesn’t reconsider, then in California, it’s hard to believe we’ll be able to switch our model to full-time employment quickly,” Khosrowshahi said.
I am betting they do not want to implement it in CA because other states will see it isnt the end of the world and put in place similar legislation.
He's a shy overambitious dog-catcher on the wrong side of the law. She's an orphaned psychic mercenary with the power to bend men's minds. They fight crime!
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HenroidMexican kicked from Immigration ThreadCentrism is Racism :3Registered Userregular
I am betting they do not want to implement it in CA because other states will see it isnt the end of the world and put in place similar legislation.
Speaking as someone who has worked for a company founded and headquartered in in California, it has NOT influenced other states into bringing employment laws up to the same level (or even close). When the company can it will ride the bottom-most legal protections for employees.
I am betting they do not want to implement it in CA because other states will see it isnt the end of the world and put in place similar legislation.
They're also hoping that all they need to do is hold out until the election.
I would go one farther than that. Uber is holding its service hostage to pressure people into voting for the ballot measure.
“If the court doesn’t reconsider, then in California, it’s hard to believe we’ll be able to switch our model to full-time employment quickly,” Khosrowshahi said.
The law was signed in September of last year. It went into effect in January. You had time.
Anyone want to spin up a ride share app that isn't evil asap? it seems like there is an opportunity here.
Not sure that's possible. The only reason Uber got anywhere was all the VC money chasing the dream of destroying public transportation and creating a monopoly/oligopoly out of the results.
Now, consider the idea of converting Uber into something cities own and run as a part of the over public transportation? That might be possible.
All opinions are my own and in no way reflect that of my employer.
Anyone want to spin up a ride share app that isn't evil asap? it seems like there is an opportunity here.
Not sure that's possible. The only reason Uber got anywhere was all the VC money chasing the dream of destroying public transportation and creating a monopoly/oligopoly out of the results.
Now, consider the idea of converting Uber into something cities own and run as a part of the over public transportation? That might be possible.
I thought the actual operating costs were not that crazy, the company hemoraged money to get brand exposure and try to develop a self driving car and pay greedy fuck c-suite people?
It's weird because I don't feel like Uber should really cost that much...
Essentially executives are meant to take pay cuts and remain multi-millionaires. But the 1980s transformed America so that the executive pay rate and % increase of that pay be protected at all costs, at the expense of the workers.
Now, consider the idea of converting Uber into something cities own and run as a part of the over public transportation? That might be possible.
Oh, you mean Via? Not exactly the same as Uber, obviously. But a pretty neat implementation of pooled app-based rideshare to connect poorly-served neighborhoods to faster transit. In this case (to save you the link) you use an app that looks almost exactly like Uber's to call a ride, which must either begin or end at a served light-rail station. That ride will then pick up you, along with 2-3 other passengers, and take you to/from that station. They say they may pick-up/drop you 2-3 blocks from your non-transit point if it improves efficiency, but in my experience they always dropped you right at the spot. Best part is that as long as you were taking transit already, it was free. You paid with your ORCA card (Seattle's transit card), and the fare would transfer to/from whatever other covered mode you took.
As somebody whose home was theoretically served by a bus route two blocks away but in practice could never rely on that shit, Via was awesome.
Via did use actual King County vans, not personal transport. And obviously the drivers were employees paid hourly by the city (presumably through a subcontractor). But from the user perspective, it was 100% "a shared Uber to/from the light rail," and it was fucking great to have for south end neighborhoods.
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I'll reiterate that I cannot personally compare Uber prices to taxi prices, because pre-Uber I never lived in a location where taxis were a viable way to get anywhere but to/from an airport. The price was irrelevant. But, I can google around a bit and see articles like this:
https://www.consumerreports.org/personal-finance/uber-vs-taxi-which-is-cheaper/
So looking at NYC specifically, the median cab ride (apparently?) costs less than the median UberX. For the bulk of rides...which is to say short point-to-point rides within a city, rather than long airport hauls...taxis appear to be cheaper or at least very price-competitive. In peak periods, they're definitely price-competitive due to surge pricing. Which is to say Uber/Lyft riders are often paying roughly the same amount for a ride in non-peak periods for shorter hauls, then paying a substantial premium to get a ride during peak.
Looking at Seattle, it appears the base fare for a taxi is $2.60 drop fee, and $2.70 per mile (plus $0.50 per minute in traffic). Meanwhile UberX runs $3.50 base fare (with a minimum $5.80 total fare), $1.60 per mile, and $0.27 per minute. This makes Uber look cheaper for any ride over a mile or so, though the fact that Uber's per-minute charges run for all minutes of the ride (versus taxis only being allowed to charge while stopped or moving extremely slowly) does close the gap. But the real kicker is the fact that this is a base fare, and there's little to no guarantee you'll ever actually pay that base fare on Uber rather than a surge rate. Whereas that taxi rate is it. That's as high as it goes, ever.
Point being that it's not just NYC where taxis are very price-competitive...or even outright cheaper on average...than an Uber for intra-city trips. It's a thing. People don't care, and call Uber anyway, for all the reasons that aren't price.
Price sensitivity between app-based services has definitely been an issue, and driven fares down and driver compensation into the toilet. Also, the fact that these companies have inserted themselves in as an inappropriately-well-paid but largely-unnecessary middleman in the transaction has done as much or more to erode driver pay. But outside of airport trips and such, I'm not seeing that Uber destroyed taxis on price or due to price sensitivity between app-based livery and regulated taxi cabs. Indeed, it appears that riders often wound up paying a premium and did so happily because these services worked where taxis in many markets simply did not. "Worked" meaning "would actually show up and pick you up and get you to a destination in some semblance of a reasonable timeframe."
I suppose I have a weird POV on this though, because my partner is also so rabidly anti-taxi that I've argued with her that we were waiting longer and paying more to get a Lyft rather than just use the taxi stand right there and she still pretty much refuses. That's the brand taxis built, apparently. The thing that you pay a premium and wait longer to avoid; the thing you do only as a last, desperate resort. The view of taxis in many or even most American markets was "maybe drunk driving isn't that risky."
Ooh, I think I know why Uber started with black luxury cars! Basically, as long as you use expensive cars, and dispatch them instead of allowing hails, you can bypass the medallion system altogether, because you're running a limo service, not a cab service. (Ubercab's pitch deck, indeed, notes that they don't need a medallion.) The initial pitch was actually legal. Wow.
Right. If they are losing money trying to get marketshare by keeping fares low, that means they are having to keep fares low in order to continue to attract customers. Which is exactly my points. If service was the issue here, Uber would raise it's prices to lose less money. But they don't. Because the price is the big factor at work. They are competing on pricing, not on service. And are (or were until very recently if that's changed) losing money doing that.
And the point of all this re: the gig economy is the way in which this paradigm effects their business model and it's workers. Uber and the like function by using the gig economy to off-load hard to track costs onto their drivers and keeping their prices lower then is profitable to attract customers. Judging by how their businesses work they functionally cannot treat their workers better or not be a gig economy setup with all it's inherent issues (which would cost more) because even while doing that they are still losing money.
You still aren't demonstrating that they're losing money to get marketshare from regulated cabs. They could be losing money to get marketshare from other app-based livery services. They could be losing money to generate new marketshare altogether, from people who prior to Uber/Lyft as an option simply never utilized cabs at all. Basically losing money to gain marketshare from designated drivers and drunk driving. I'm unconvinced that most major US cities had a thriving cab system that was a viable, reliable option for intra-city rides to begin with. It was not my experience, including in Seattle (which was arguably not a small city).
As I noted above, Uber is barely cheaper than a cab in Seattle, if it's cheaper at all (during surges...when people are actually requesting rides...it is easily more expensive).
You're going to have to work to convince me that Uber/Lyft aren't simply competing on price with each other over the entirely new market of "actually being able to call a car, unlike before." At least in most U.S. markets, aside from like NYC, SF, and Chi. For most Americans in most cities, taxis were a thing that existed in movies and nowhere else.
I never said it mattered who they were competing with. I literally said up thread: ie - It doesn't fucking matter they are competing with, they are losing money. So why don't they raise prices?
Because they can't to compete. Because price is what they compete on. That's the problem all these arguments have yet to explain. You don't burn literally billions of dollars like you are giving it a viking funeral if you could just plug the hole with higher prices.
Uber et all have to keep prices low to compete -> the customers in livery are price sensitive enough it's worth losing billions of dollars over -> ergo they cannot not function as a gig economy company and keep compensation to their drivers down because the business model (which technically doesn't even function now) doesn't function even more so if they tried to up prices
However, if it's other livery companies that they are competing with...and this is my point...this may or may not be true. You've very solidly made the point "Uber thinks they need to keep their prices low..." You've not refuted the potential reason for that being "...to maintain marketshare against Lyft.''
You say it doesn't matter who they are competing with (or rather imply it), but it does. Because if a city can simply regulate the minimum base fare that livery companies as a whole may charge, to ensure a fair earning for drivers, then it's entirely possible that Uber (and Lyft) can survive that increase in price. Because if it's actually app-based livery they're competing on price with, rather than cabs, then by forcing their competitors to increase as well you eliminate the price pressure. They wind up having to compete on other factors.
To be clear, I am saying that it matters very much who they are in price competition with, when we are talking about regulating both them and their competitors in the same space simultaneously.
You can burn through cash if your plan is to spend heavily now, build up mass economies of scale and brand presence, and eventually pull profit either from running your competitors out of business, or attaining economies of scale where revenue growth exceeds expense growth, and/or transformational technological change. They're not increasing their prices much because they don't -have- to. They can still pull cash in from investors, so they don't need to pull it from customers as much. Yes, if they jacked up their prices 100%, they'd probably lose customers, but saying that price is -the- thing they are competing on is overly simplistic. They don't want to plug the hole with higher prices because they want to plug it with economies of scale, which higher prices would work against. Prices are a factor, but they are not -the- only factor. The actual product that they are offering is quite strong too.
They're in competition with not using livery in the first place. Which is the point that people are overlooking. For all the comments about not using taxis because of service, the reality is that the middle class - the people Uber and other online livery services are targeting - just don't use taxis outside of a few specific cases because they don't need to. The primary livery userbase is bifurcated between the wealthy - for whom the service serves both as status symbol and allows them to devote their time to other activities rather than driving; and the urban poor - who can replace the need for car ownership with judicious use of livery services when a private vehicle is needed (for example, bringing groceries home after a monthly shopping run.) But the middle class just doesn't need to, because quite often people in the middle class have ready access to private transport - either they own a car, know people who do, or have the resources to rent a car when one is needed. (It's not surprising that Uber was preceded by car-sharing services like ZipCar, given this.)
Uber needed to make the price cheap enough that middle class users would buy in, and their problem is that when it comes to livery, the middle class is extremely price sensitive because they have the ability to walk away.
FFS, it was a gamble whether or not they would take debit cards. Combined with the obfuscation about the cost of a given trip, and that's an exercise in frustration.
That's ignoring all the problems with the taxi actually showing up, or taking a direct route rather than as many detours the driver think they can get away with.
See, and I do agree with much of what you're saying. I agree that the primary things Uber competes with on price are a) Lyft and b) not taking a car at all. Taxis are irrelevant to the conversation, for the most part, apart from the extent to which they were formerly unavailable as an option much of the time (or terrible).
Once we accept that, I'd agree that yeah there's some question as to whether there exists a price point at which these companies...and their drivers...can turn a reasonable profit and still attract a reasonable volume of business. I do think there's room to increase in price. I think after years of having this available as a service...something taxis never were before, which is to say functionally available in most markets...the middle class may have decided that this is a service that is worth paying for, and possibly even a slight premium. Hell, they already do, in that a huge portion of rides happen under surge pricing. People who own cars have found it valuable to have somebody else drive them for various reasons, the main ones being traffic, parking, and drinking. I don't think that after years of having this available as an option they'll walk away as easily as you think.
Do I think they can double prices? Hell no. Do I think that prices could increase marginally, and potentially enough to make driving pay reasonably? Maybe. Don't know. And maybe it'll take another company entering into the space with less baggage and taking a smaller cut of fares to make that happen? I don't know.
I do think that "regulate fares to a level that produces an effective living wage" may be a reasonable way to find out. In many markets. I do agree that there may be no price point at which the average customer is willing to pay a reasonable rate for the human labor (in additional to vehicle operating costs) required to drive them out to a bar, or deliver them food. I do think there's some room, and possibly substantial room, above the current fares before we hit that wall though. I don't know that we've ever really explored that price space, because black car services were previously less accessible, and cabs were almost entirely nonfunctional. Uber originally had to drive prices to the bottom due to both competitors and the need to induce demand...but it's possible that as of now the latter is less of an issue, and regulating the entire market together would allow some increase.
Now you're just trying to flip the arrow of causality, and given American car culture and everything that entails, especially for middle class America - I think the evidence is more on the side that taxis aren't attractive to the middle class because of their access to personal transportation, and not on the side that the middle class was driven to personal private transportation because taxis were horrible. And again, if the matter was just quality, then why are online livery services so loathe to raise prices? Livery service among the middle class is highly price sensitive, because most in the middle class don't (outside of a handful of cases, like traveling for work) need to use livery like the wealthy and the urban poor do. Straphangers don't choose public transit over livery because it has better service, but because it's cheaper for what is functionally the same service.
The reason they aren't putting up their prices is because they're looking to grow more than they are looking for profit right now. They're looking to edge out a business by growing their service revenue at a greater rate than their cost of revenue, which they are bumpily doing at their current prices. Their core operating business is basically breaking even, but where they're losing money is because they are dumping huge amounts into market expansion and R&D. They're not putting up their prices now because they want to get asses in the seats so that they can build up their customer base. They aren't yet being pressured to deliver profits over growth yet, so they are still pursuing growth.
For middle/lower/upper class price sensitivity, while price elasticity is definitely a thing (if Ubers were 100% more expensive than a cab all the time, it would hurt, but that's not really in the cards), I'm not so sure that its as elastic as you are postulating for middle class livery consumption. While, yes, middle class people often do have more access to private transportation options than the poor, looking at Uber's user demographics, it looks like the most common use of Uber is for travelers (where ease of use is key), followed by business (typically price inelastic), young adults travelling to "events" (concerts, bars, clubs, sporting events), and then people without driver's licenses. Of those, I'm most familiar with the second last, because that's where I use Uber (and seems like the most middle class use of Uber) and where I know for a fact that taxis are dismal at serving, and also where surge pricing is likely to be most likely to apply too. Often, if you're going to an event once a week or so and you offer the average middle class person like myself the choice between an hour wait for a cab for $15 or an Uber immediately for $25, they'd take the Uber hands down because while I do have my own car, my options -in the moment- are relatively limited and I do value my time enough that I'm willing to pay extra for service.
So I would drive to the train station and airport and leave my car parked for the duration of any trip, which isn't cheap. What Uber brought to the table for me is that I can open the app and someone will reliably show up. It wouldn't matter to me if Uber charged twice as much, it is still the best alternative for me on a service level. Also, I have traveled for work and leisure through many of the bigger cities of the United States, where taxis do actually show up/are available curbside. If you look at the distribution of experiences between all the taxi and Uber rides I have taken (probably n>100, each), there is no overlap in the distributions. My worst Uber trip has been better than my best taxi trip in the United States (UK and Germany are a different story).
I don't like Uber as a company. I'm actually using their name as a generic placeholder in this, since I try to take Lyft when I can hoping that they are slightly less shitty. I think drivers are employees. I hope some other company providing the same service crushes them. But the service they provide has been super valuable in my life. As in, one of the biggest tangible improvements that Silicon Valley has provided me.
Uber is a shit company, but taxis were never a bastion of social responsibility either.
You can't give someone a pirate ship in one game, and then take it back in the next game. It's rude.
https://www.theguardian.com/technology/2020/aug/10/uber-lyft-ruling-california-judge
Their owners are Russian so anything to help the west slide into irrelevancy. Which would be accelerated by the gigification of just about every job.
The timeline here goes to show just how far large companies can push compliance.
January: the "Uber needs to treat its employees like employees" law goes into effect.
May: California sues because Uber is ignoring the law.
August: Judge says that Uber has to stop ignoring the law...in 10 days, to give Uber time to appeal, which it did immediately. (Will probably fail, but that's the way the game is played.)
November: A ballot measure Uber paid for to undo these changes gets voted on.
I mean, that's how they got their penetration in the first place. They went blatantly illegal, tried to drum up enough support that it was then toxic to slap them down as they so richly deserved.
It's total bullshit.
That sound you hear is just me screaming into the void.
Welcome to 2020, where every bad idea you can think of is getting trialed.
They're also hoping that all they need to do is hold out until the election.
I would go one farther than that. Uber is holding its service hostage to pressure people into voting for the ballot measure. The law was signed in September of last year. It went into effect in January. You had time.
Not sure that's possible. The only reason Uber got anywhere was all the VC money chasing the dream of destroying public transportation and creating a monopoly/oligopoly out of the results.
Now, consider the idea of converting Uber into something cities own and run as a part of the over public transportation? That might be possible.
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I thought the actual operating costs were not that crazy, the company hemoraged money to get brand exposure and try to develop a self driving car and pay greedy fuck c-suite people?
Oh, you mean Via? Not exactly the same as Uber, obviously. But a pretty neat implementation of pooled app-based rideshare to connect poorly-served neighborhoods to faster transit. In this case (to save you the link) you use an app that looks almost exactly like Uber's to call a ride, which must either begin or end at a served light-rail station. That ride will then pick up you, along with 2-3 other passengers, and take you to/from that station. They say they may pick-up/drop you 2-3 blocks from your non-transit point if it improves efficiency, but in my experience they always dropped you right at the spot. Best part is that as long as you were taking transit already, it was free. You paid with your ORCA card (Seattle's transit card), and the fare would transfer to/from whatever other covered mode you took.
As somebody whose home was theoretically served by a bus route two blocks away but in practice could never rely on that shit, Via was awesome.
Via did use actual King County vans, not personal transport. And obviously the drivers were employees paid hourly by the city (presumably through a subcontractor). But from the user perspective, it was 100% "a shared Uber to/from the light rail," and it was fucking great to have for south end neighborhoods.
and create a bunch of good will because "we're not the bad guys" is the low fucking bar we are at.