[x_throwaway80bf]

I had to make a throwaway as well just because I couldn't believe this comment. This is so utterly false. You're essentially claiming that the value of these services is all based on the innovation of the _hailing_ functionality, but there are countless apps that recreate this functionality _exactly_ whether for 'regular' taxis or separately licensed cars. If what you want is for a driver to come to your exact location very quickly, you can get that _anywhere_. This, as a business model alone, is like Dennis on 30 Rock with his basement coffee business. It's so easy an ubiquitious that it's not worth mentioning as a differentiator _at all_.

Separately from this, it ignores the fact that there are cost-based reasons for these kinds of behaviors. Drivers, for example, have to think about round-trip cost. If you ask me to drive you from Washington Sq. Park to Astoria, I have to think about what fare to charge you such that it covers my expenses on the longer trip _as well as_ the likely problem of not picking up a return fare that takes me back to a high-traffic area.

This is all discussed with much greater statistical depth in the Naked Capitalism articles on Uber, but the basic problem is that none of the ride hailing services have found a way to make this any cheaper, except through massive subsidy (to pay drivers to be the ride stock in low-profitability zones they others wouldn't be in). And even with an innovation like self-driving cars, it would only make a difference if it is not a commodity. If it is a commodity (which, IMO, is the overwhelmingly most likely outcome for self-driving cars), then either Ubers completely captures all relevant IP for end-to-end commercial solutions ahead of any competitiors, or else Uber is licensing out the cars just like everyone else, and for whatever cost reduction it buys them for getting rid of drivers, it just creates a new price war race to the bottom on who can charge the least for the self-driving based rides.

I'm just so tired of all the mental gymnastics defending them. It really is total ownership of all IP for commercial self-driving cars or bust for this business model.

And if it busts, you'll see that all the niceties you describe in this comment are mostly the product of either (a) massive investor subsidy, or (b) easy and cheap-to-copy innovations like a map and location-enabled hailing app.

[throwaway_80bf3]

> This is so utterly false. You're essentially claiming that the value of these services is all based on the innovation of the _hailing_ functionality, but there are countless apps that recreate this functionality _exactly_ whether for 'regular' taxis or separately licensed cars.

There wasn't before Uber showed up. Last time I took a Juno, the driver asked me if he could text me a promo code so I could send it to me friends, that's when I stopped shopping around

> Separately from this, it ignores the fact that there are cost-based reasons for these kinds of behaviors. Drivers, for example, have to think about round-trip cost. If you ask me to drive you from Washington Sq. Park to Astoria, I have to think about what fare to charge you such that it covers my expenses on the longer trip _as well as_ the likely problem of not picking up a return fare that takes me back to a high-traffic area.

It's illegal in NYC for a yellow cab to refuse a ride request to any of the five boroughs. As for the livery cabs, the pricing was inconsistent for the same trips, over and over. Doubt any of it had to do with anything other than maximizing fare, which is their prerogative, since there there are no checks in place for that kind of behavior.

> This is all discussed with much greater statistical depth in the Naked Capitalism articles on Uber, but the basic problem is that none of the ride hailing services have found a way to make this any cheaper, except through massive subsidy...

I understand this. It doesn't invalidate the sea change in the experience of moving around NYC, particularly in the evening and late night.

> And if it busts, you'll see that all the niceties you describe in this comment are mostly the product of either (a) massive investor subsidy, or (b) easy and cheap-to-copy innovations like a map and location-enabled hailing app.

Let's hope (b). I doubt these innovations would have spontaneously arose from the taxi commission or the livery cabs.

[x_throwaway80bf]

> It's illegal in NYC for a yellow cab to refuse a ride request to any of the five boroughs...

Yes, of course. But the reason you don't see Uber drivers doing the same thing (or outright avoiding these unprofitable trips) is that they are subsidized to provide that unprofitable ride stock in areas where it's intrinsically not economical to provide ride stock. When you compel a yellow cab to do it, it means the prices have to be higher. This is why it makes less sense to compare the Uber experience to the yellow cab experience. It's like saying, "Would you prefer if a celebrity donated their first class Emirates seat to you, or a coach seat with United?" It ignores the mechanism by which the experience can be afforded to the end user (in Uber's case, huge subsidy, with no sign that the prices could be sustained absent the subsidy).

Overall I understand your comment and I realize you are aware of the counterpoints I'm making. The thing for me is that highlighting the good experience actually _is not a useful point of comparison_ with older, crappier cab experiences, specifically because everything we experience with Uber right now is inherently part of this huge ambient subsidy-based perception distortion field.

[throwaway_80bf3]

Ultimately no one did anything about the experience I brought up in the OP until Uber. This isn't an endorsement of Uber, more of a statement of fact. That anyone can now avoid all the old PITA of moving around NYC is good.

I generally don't consider the long term sustainability of the companies I purchase goods from. I do try to apply a vague and probably non-uniform ethical filter to them.

That said, I'm a software developer and my very generous salary is the indirect (via the demand curve) result of the destruction of manifold entrenched business models at the hands of VC subsidies. If I spent all day hailing yellow cabs it wouldn't make a difference.

[x_throwaway80bf]

> I generally don't consider the long term sustainability of the companies I purchase goods from.

We could probably go on at length about the moral problems here, but likely not productive in a comment thread.

> That said, I'm a software developer and my very generous salary

I'm not sure how to read that. I am also a software engineer, and even very high salaries in wealthy urban zones are typically not 'generous' in the sense that good software labor creates a vast wealth surplus for the shareholders and ownership, to such a degree that the high salaries are still not very fair.

> the indirect (via the demand curve) result of the destruction of manifold entrenched business models at the hands of VC subsidies.

Sure, but usually companies are expected to demonstrate evidence that the subsidy wouldn't be _permanent_ .. that there is evidence of a path to profitability.

The reason it's worthwhile to draw much more attention to the VC subsidy situation with Uber is that they have not been able to do that, and have instead generated unprecedented losses without making any progress towards profitability. It makes it incredibly different than typical cases when VC subsidy creates a short term runway to profitability. That is not what's going on.

[ghaff]

Perhaps I shouldn't have been, but when Dara Khosrowshahi got put in as CEO, I was a bit surprised that part of his mandate wasn't to adjust fares to the point where is was a sustainable business and, if that turned out to be impossible, turn off the lights. I know things like self-driving get held up as some sort of magical pixie dust coming RSN, but close your eyes and hope a miracle happens doesn't seem the best approach to business strategy.

[x_throwaway80bf]

Rather than 'turning off the lights' Uber is surely planning to find some means by which they can use hype to drive their valuation higher in preparation for an IPO.

When a company in this situation goes to IPO, it is generally a tool for the existing investors (who know that their investment is not worth the perceived, hype-driven valuation) to externalize the losses out onto unwitting regular folks who passively come to own Uber stock through some random 401(k) manager or speculative day traders.

Uber's IPO will inevitably be a massive wealth transfer from regular folks to Uber investors, who will get good returns on the original investment (because they will be able to sell their stock at the hype-inflated prices), followed by a massive stock correction lowering the price to the true valuation that correctly prices in this subsidy effect and the strength or weakness of the business model.

After that correction, the price movement will reflect aggregated beliefs about whether Uber can innovate and find solutions for these problems. But the problem is with that initial externalization of losses from the IPO. Once original investors and early employees are paid out of the proceeds of that, they are free to leave and don't need to care about the long-term profitability of Uber, which in turn means that as long as they can keep levering up the valuation through hype now, they don't need to fix any of the fundamental problems (and, sadly, they are acting rationally, unless people find ways to ensure their portfolios do not come to include Uber after the IPO, and refuse to buy until they wait out the correction).

[liveoneggs]

> It's illegal in NYC for a yellow cab to refuse a ride request to any of the five boroughs.

This is true and only a direct threat of report as they start to drive away will occasionally stop them.

"I had my Off-Duty light on, I don't have to take your anywhere at 5pm" is the normal reply

[mancerayder]

The people who get punished here are the tourists and people who are new to town. If you're new and don't know the rules, or you don't speak English natively, it might be hard to argue against some yellow cabbie who suddenly shakes his head and mumbles and points out the window while you're anxiously trying to get a cab for the second or first time in your life.

Also if you report them they do have a GPS tracker that can validate their location - supposedly, or so I'm told, TLC will take that seriously and 3 dings against the driver will trigger some sort of penalty.

[liveoneggs]

yeah I had a yellow cab pick me up from Chelsea Piers once and not turn on his meter. It was a short trip and the driver turns around and asks for $20-something. I laughed in his face and left. I'm sure he got plenty of tourists on the same scam.

[epc]

Consumers do not care about market externalities. Consumers do not care about the "cost based reasons". Yellow taxis were given a monopoly in NYC, the trade off was to accept all rides within the City.

I lived in Brooklyn Heights and DUMBO for years, and quite routinely filed TLC complaints about drivers who refused to take a trip from even Lower Manhattan to DUMBO.

I live in Manhattan now, and after a series of extremely bad Yellow Taxi rides, have given up and switched to using Lyft.

Uber/Lyft/et al are clearly using investors' funds to subsidize their businesses. And it's completely irrelevant to me as a consumer. I need to get from one point to another in a safe, economical manner, and NYC's Yellow Taxi fleet is failing at that.

[x_throwaway80bf]

I agree generic consumer opinion won't really take into account the subsidy and unprofitability situation.

That is in fact my entire point: because generic consumer opinion or anecdotes don't qualify themselves based on the subsidy mechanism, it means generic consumer opinion or anecdotes are largely irrelevant for purposes of comparing with older taxi experiences or assessing a claimed value-add of a newer ride-hailing company.

In other words it doesn't add information to say that consumers like to be given better quality things for free.

> I need to get from one point to another in a safe, economical manner, and NYC's Yellow Taxi fleet is failing at that.

This seems like a red herring tacked on at the end, since Uber is not providing this either (because of the subsidy) and from an analytical perspective, it's irrelevant if average consumers are aware of this yet or not.

[epc]

An analytical perspective which ignores consumer sentiment in a market economy is academically moot.

Medallion owners could have been more flexible with leasing terms as Uber flooded the zone, but did not.

Taxi drivers could have ceased discriminating against outer boroughs, but did not.

Medallion owners relied upon the monopoly to extract as much money from the market as possible without investing in vehicles or drivers or technology.

Taxi drivers frittered away the minimal public support they receive with strikes against GPS and credit card machines.

[x_throwaway80bf]

> An analytical perspective which ignores consumer sentiment in a market economy is academically moot.

Nobody is saying to ignore it... where are you getting that? I'm saying to analyze it _more carefully_. We definitely should analyze the fact that consumers like the app experience, increased supply, etc.

But you are saying to stop there and declare victory for Uber. But I am saying go further.

Then you see the experience exists only because of an intrinsically unsustainable subsidy, so it's not actually comparable to preexisting taxi services, driver behaviors, etc. Only after this point of carefully analyzing consumer sentiment qualified by the factors actually driving it can we realize that the consumer sentiment on its own really doesn't matter _in this particular case_.

I think you're trying to say that consumer sentiment, if not backed by an actually profitable business model, is like selling a dollar for 90 cents, and the happy consumer sentiment would totally not be indicative of a business model that can sustain the factors that the customers actually like... which is also what I am saying!

[kbenson]

> You're essentially claiming that the value of these services is all based on the innovation of the _hailing_ functionality

To me it just looked like an anecdote.

> I'm just so tired of all the mental gymnastics defending them.

Perhaps you're seeing people defending them when other people are just trying to share their experience? If so, I agree, that would get tiring.

[x_throwaway80bf]

> Perhaps you're seeing people defending them when other people are just trying to share their experience? If so, I agree, that would get tiring.

The context of when they choose to share experiences casting Uber as a catalyst for significant improvements provides a lot of evidence that it's not just an anecdote in a vacuum, but rather is meant to defend Uber.

I'm all for positive experiences, and I _really want_ ride hailing services to somehow be profitable, because it could add competition and create various experiences that I am willing to pay (the current subsidized prices) for.

What's tiring is seeing repetition of the positive anecdotes without the necessary accompanying asterisks that qualify it based on the _inherent_ profitability issues with any service that tried to solve these problems. Then we can at least acknowledge that the nice, upgraded experiences from these apps is purely a _donation_ from a group of investors, which means it's irrelevant as a comparison with prior taxi experiences unless those investors are willing to make it a permanent donation.

[yellowstuff]

I feel like you don't really disagree with the parent comment, you're looking at a separate issue.

From the lived experience of the consumer in NYC Uber was a revolution in convenience, reliability and overall experience. We already had car services, and Uber was functionally similar to a car service plus a hailing app, but it ended up being so good it competed with taxis as well. The quality has diminished and there are competitors now, but Uber is still better in most situations than taxis or traditional car services, and isn't significantly worse than Lyft or other apps.

From a business model perspective you can say that Uber is only competitive because it burns money, and eventually if SDCs don't come quickly enough they will be forced to jack up prices or go out of business. It's a valid argument, but doesn't have anything to do with how consumers experience Uber today.

[beagle3]

There is one more issue: Uber and Lyft massively increased supply. It is not clear, as you mention, whether this could have happened without investor aubsidy - but it is likely. Medallion allocation is a political subject which does not necessarily correlate with demand; and the established way medallion owners rent them out results in it being uneconomical for drivers to do more than a given amount of rides per shift - a result of which is that supply at peak demand (rainy days) is significantly lower than even what the medallion system allows for.

[x_throwaway80bf]

This isn't very relevant for discussions about NYC, since all drivers have to be licensed, and many drivers work for fleet owners who rent out the cars for shifts. Few (if any) NYC drivers user their personal vehicle, and it is very likely they lose money spending that time as drivers when they do.

So this issue is extremely complicated. Yes, medallion politics are inefficient. Are they as bad as overtly scammy practices to leverage up supply by exploiting poor economic judgement of the class of people who consider being an Uber driver?

Honestly, it's not clear to me, but certainly should not be seen as some type of free enterprise victory over the medallion system.

[Spooky23]

I disagree but think you make a good point that shouldn't be downvoted.

The issue here is really a fundamental conundrum around providing services that are of general utility to the public. At one point, people in the country couldn't get electricity, because densities were low and profitability low as well.

NYC has the same issue with cabs, which is addressed by regulation but also required savvy consumers willing to complain. Uber/Lyft address this in their apps and via subsidy... and they do this because the promise of universal service is essential. Once you allow exceptions, you get back into the situation where you can't get a ride to a black neighborhood or can't get a ride if you're the wrong ethnic background.

[liveoneggs]

your reply is not at odds with the parent statement. Getting a cab, even in manhattan, often sucks.

When the subsidies stop the ride-hailing thing will be totally different but we don't know how it will look.