[danieltillett]

If they actually manage to raise this amount of money then an amazing amount of capital is going to be destroyed over the next couple of years. Uber and Lyft going head to head to try and grab a monopoly is an extremely effective way for investors to lose a truck load of money.

[OmarIsmail]

"Destroyed" is an unfortunate term to use. The drivers and riders will benefit who are predominantly not rich, so its actually a kind of stimulus.

[danieltillett]

It probably is closer to destroy rather than transfer. Yes there will be a shift of capital from investors pockets (pension funds ultimately) to drivers and consumers, but a lot of this capital will be squandered on drivers driving at less than full capacity and consumers not paying the true economic price. Neither of these is a very productive use of capital - there is of course the environmental cost of half-empty cars driving around too.

[OmarIsmail]

I see consumers not paying the true economic price as a form of stimulus. They're receiving more value than they are paying for, and so they presumably are living better lives and will be able to spend that saved money elsewhere (movies, food, etc). Similarly, if drivers are at less than full capacity that means there are more drivers than there would be without the funding, and thus more drivers getting paid.

No arguing against the environmental impact of course, other than the hope that cheap ride-sharing reduces the likelihood of car ownership.

[danieltillett]

This sort of stimulus is like paying people to dig holes and fill them back up again. Given the money being spent is mostly workers pensions I am not too sure that this is the best use of their future retirement income.

[mahyarm]

No it's more like providing very cheap transit fares, or free maid service. It's a useful transient service to most people who's value doesn't show a specific investment benefit like free daycare would. Digging ditches and filling them again provides no economic side value.

[danieltillett]

No it really is like digging holes. There is no long term value being created here. If they could afford to subsidise cheap transport indefinitely then there might be some value, but providing a service like this for a short period of time is providing no long term economic benefit.

We would be better off calling one side the winner and just giving each person using uber and lyft the subsidy in cash and letting them spend it in the most efficient manner.

[codyb]

Maybe not rich but a lot of the lower income people in my neighborhood in Brooklyn aren't using Uber or Lyft regardless of how cheap because they don't have much money period. You have to have a phone and internet access for these services so it's definitely not hitting the lowest brackets.

[danieltillett]

Yes the Uber/Lyft for poor people is called a bus. Hence why the bus network is so bad in so many location :(

[mrcrassic]

Do you have data to support this? I too live in Brooklyn and have found the opposite to be true.

[jakeva]

Brooklyn is a big place, and the person you're replying to did just say his neighborhood… probably little data available on any scale let alone the scale of one's neighborhood, aside from anecdotal.