[blunte]

Maybe because I'm outside the unicorn bubble I can't see the magic, but I find something very warped about a business strategy that combines stratospheric valuation, intentional regulatory non-compliance, perpetual capital injections, service misrepresentation, and unprofessional corporate behavior... and results in massive financial losses year after year.

When I try to balance the elements, it frankly looks like an enormous grift. Some key early investors have probably made out really well, but at what cost to others involved?

Not that the taxi industry didn't need disruption - it desperately needed a modern ride calling and fare estimating feature. But being well regulated and having to compete with a maverick service that simply ignored rules meant that the taxi industry lost while Uber gained.

Drivers for Uber have come out losers as well, earning much less than expected.

Passengers did well at first, but surge pricing and eventual regulatory costs eroded that gain as well.

Late investors? The jury is still out on them, but likely they will be losers too.

Who won?

[treis]

>Maybe because I'm outside the unicorn bubble I can't see the magic, but I find something very warped about a business strategy that combines stratospheric valuation, intentional regulatory non-compliance, perpetual capital injections, service misrepresentation, and unprofessional corporate behavior... and results in massive financial losses year after year. >When I try to balance the elements, it frankly looks like an enormous grift. Some key early investors have probably made out really well, but at what cost to others involved?

I think you're way too pessimistic here:

(1) A whole industry of rent seekers (medallion owners) was mostly run off

(2) The taxi experience in cities other than NYC, Chicago, and SF got a million times better. Before Uber in a city like Nashville you call for a taxi and maybe one shows up at some point. Since Uber you can reliably get a ride whenever you want. And that's not even talking about discrimination.

(3) Uber caused a dramatic decline in drunk driving. Likely because of (2)

(4) It allowed people to make some money with a flexibility that traditional jobs don't offer

For me, Uber/Lyft has definitely had the biggest positive impact on my life out of any tech company in the last decade. The only close competitor would be Android/iPhone. I don't know if Uber is worth the ~60 billion that they were last valued at, but they definitely fill a legitimate role.

[therein]

> The taxi experience in cities other than NYC, Chicago, and SF got a million times better. Before Uber in a city like Nashville you call for a taxi and maybe one shows up at some point. Since Uber you can reliably get a ride whenever you want. And that's not even talking about discrimination.

That is a good point I hadn't considered until now.

I remember back in my college days in Champaign, IL right before Uber's debut, I would have to call three separate cab companies a day ahead of time and then the day of to get a ride to the airport, and only one would maybe show up.

I ended up befriending an Ethiopian cab driver that was really kind and responsible and only then this challenge came to an end.

[steve_musk]

As a recent UIUC grad, it takes a few minutes to get an Uber there now.

[therein]

Glad to hear a confirmation that what GP is talking about has had that positive impact as it sounds like Uber solved a genuine problem that existed there. :)

[da02]

What do you mean by, "and only then this challenge came to an end."? You simply stopped calling him?

[aplummer]

They mean: only after befriending the cab driver did the challenge of getting to the airport become easy.

[therein]

Exactly.

[funkaster]

> The taxi experience in cities other than NYC, Chicago, and SF got a million times better.

It wouldn't be fair to NYC and Chicago to compare them to SF. In my mind, the completely horrible broken experience of the SF taxi system was what created Uber & friends. I've been living in SF pre-Uber and having moved from a big city, the taxi system just drove me nuts, I could not understand why it was that fucked up. If it were as good as it is/was in NYC, prob we would've never seen Uber.

[starik36]

The part I really disliked about the NYC cabs is that you never knew how much it going to cost you. And similarly the driver never knew where they would have to go. With Uber, both parties have this information ahead of time.

Huge improvement.

[checkyoursudo]

I went to NYC for the first time about 20 years ago. I was looking for a cab from JFK to midtown. A limo driver said he'd take me for $30 (more or less -- I don't exactly remember). I had no idea really if that was a good price, but I remember thinking, "at least I know what the price will be," and I took his offer.

[jjeaff]

I was under the impression that Uber does not reveal the destination of the customer until they have picked them up. Is that not correct?

[beisner]

For trips over a certain length (maybe 45min) they get more information about that kind of length

[chimeracoder]

> The part I really disliked about the NYC cabs is that you never knew how much it going to cost you.

For black cab service, yes, you did. For medallion (yellow) cabs, it's always metered (except for the airport flat rate).

[brianwawok]

How much did you take Chicago cabs? It wasn’t great. Broken seat belts. Cabby talking on speakphone entire trip. Skip stop lights. A few extra turns to add some distance.

[dnautics]

The worst part of the medallion story was how the industry tricked the driver's into investing back into the medallion scheme, thereby becoming small time exploiters the next generation of drivers (n=2) and in any case winding up with often negative assets when the inflated price cratered. Meanwhile the owners of say ticker TAXI and their trust fund kids are probably doing just fine

[dehrmann]

I lay most of the blame for this with the NYC TLC for restricting medallions in the first place. The real way to reduce congestion is use fees, and it puts a natural cap on the number of taxis. Ideally, the fees are used on improvements to mass transit.

[Gibbon1]

My take away from Uber and Lift was restricting the number of cabs was a mistake. Would have been better off all around to actually just partially subsidize them. And make buses/subways free.

I get a lot of flack for that position, my response is we heavily subsidize private cars.

[dnautics]

buses and subways don't have to be free to be awesome. In fact I suspect subsidization and political control of them is part of the problem. One of the world's best public transport systems, singapore, is at least partially privatized (it once was fully privatized, and arguably system quality is going down) - and it has the lowest fares I've been on.

[pmart123]

I’d agree with Uber making a big positive impact, but without the iPhone, there is no Uber. I’m not sure many remember the challenges to ordering a taxi/booking a ride pre-Uber. The problem though is it is very much like the airline industry pre 2014. It is a challenging business model with a lot a capital and resources required to make it work. Ironically, Travis probably could have sold Uber Eats to Amazon now and the self driving car unit to GM! But, a pre-ipo company probably doesn’t have a great initial business model when they feel that it is necessary to pivot from it.

[1stcity3rdcoast]

I used to call Uber in the early 2010-2012 days on my Blackberry by texting my current location. Worked great even without an app.

[SilasX]

Yep! You can see the option in this cache of the site from January 2011:

https://web.archive.org/web/20110109084838/http://www.uber.c...

[pmart123]

Interesting. I didn't know that. I wonder if there was any 00's era startup that tried to create a taxi hailing service prior to the app store developing? My gut says the iphone/app alongside location data was critical for widescale adoption.

[MrStonedOne]

>but without the iPhone, there is no Uber.

An Uber company that still took calls but actually accepted a cross street in downtown seattle would still be a million times better the yellow cab's "Sorry, but we can only dispatch to a full street address"

[pault]

I think about this all the time. I spent 2008-2016 in several countries outside of the US. Before I left it was incredibly difficult to be a socially active and employed adult without a car unless you lived in a major metropolitan area with a good public transit system. Taxis were around but totally unaffordable for more than a few trips on the weekend while drinking.

When I moved back my drivers license had expired and since I live in a different state now I will have to take the driving test all over again. I've been here for almost three years now and I never bothered buying a car because I can get anywhere in town for less than $15 within a few minutes of requesting a ride. My monthly rideshare costs are about $450, which is comparable to the cost of owning a car. There are some inconveniences but it has totally changed how I get around and where I choose to live.

[kinkrtyavimoodh]

I agree. This is even more true in countries other than the US, so ironically, places far away from the unicorn bubble.

I travel a lot internationally, and in so many countries I have been able to just get out of the airport, open my app, and hop on a ride—it's fascinating and amazing what a revolution it has been in barely 5 or so years.

[astazangasta]

Just like everything with Uber this is hooey. (3) does not appear to be true. https://www.thegeneralautoquotes.com/resources/uber-affectin... (2) may be true but only because Uber is subsidizing its expansion with a mountain of capital. It can't actually sustain the expanded driver pool, which also makes driving unliveable for individual drivers.

[treis]

From your cite:

>Based on our main findings, along with the above summary of the general habits of people who use rideshare services, the data seems to suggest (emphasis on “seem”) that many rideshare customers are opting to hail a ride home after an evening at the bar or club, rather than risk driving intoxicated.

[astazangasta]

This is what people have historically done when they are drunk, it is not a new behavior invented by Uber.

[treis]

It's not what people typically did because taxis were not generally available in most US cities. You couldn't rely on a taxi coming to pick you up at your home nor rely on one being there when you wanted to leave.

[astazangasta]

Nevertheless there are other options, such as calling a friend, taking the bus, walking, etc. It's not clear that Uber resulted in people who would otherwise have been drunk drivers instead calling a cab. People who drunk drive presumably don't arrive at that choice because of a minor inconvenience.

[mtnGoat]

Any source for #3? I'd be curious you read these statistics.

[capsulecorp]

Progress won. It is infinitely easier, more affordable, transparent, convenient, and the overall experience of riding uber is hands down better than any Taxi experience I've ever had by a an extremely long shot, anyone I've spoken to agrees. Sure there are still improvements, but all in all, as a frequent user, I have to say getting a ride is hands down better with uber than before it.

[ithinkinstereo]

Well it's easy to produce "progress" when you're willing to operate with massive losses fueled by other people's money. Take any customer experience that sucks and inject billions of dollars into it and lo and behold the experience improves mightly.

[Apocryphon]

It's a little like saying the theater-going experience has been improved thanks to MoviePass.

[alimhaq]

This is an incredibly shortsighted view of Uber if you're being serious. MoviePass doesn't alter the end experience of watching a movie at all, but Uber significantly changes the experience of getting a ride. I'm sure most people would agree that even if they had to pay the same price as a cab, they would prefer the Uber experience over the old model.

[Apocryphon]

MoviePass makes going to the movies far more bearable, for expensive ticket prices have long made theaters not worth going for a long time.

If Flywheel and similar taxi apps were priced the same as ride-sharing apps there would be greater competition with Uber and Lyft.

[capsulecorp]

I can't speak to that, I didn't invest in UBER or follow its financials. I just enjoy the huge convenience and overall greatly improved experience they have provided me over using taxis, so that is the answer I provided.

[vishnugupta]

Absolutely! Even in cities like Bangalore, far away from SV but still big, Uber (and Ola) created a new market altogether. In Bangalore for instance, hiring a taxi was an amazingly painful experience; in terms of lack or convenience as well as exorbitant price. Until Uber/Ola came along I had hired a taxi maybe 5 times in 9 years. Since then I've almost stopped using my cars. Uber/Ola has become my daily commute as well as for any errand etc.

Another aspect that's not discussed much is the drastic reduction of cognitive load. Earlier moving around in a city would require lot of planning - route planning, parking etc,. All of that is now a thing of history. And don't get me started on how ridiculously inefficient is car ownership and how mentally and physically taxing commute driving is!

[simple_phrases]

>Progress won

That's a unnecessarily simple reading of this situation, don't you think?

[seizethecheese]

No. I think I’m practical terms this is the major impact on the world, the rest of this thread is window dressing.

[specialist]

I found perhaps a dozen other taxi / ride hailing apps when I was making my own proof of concept.

Lyft's innovation was "regulatory arbitrage".

Uber's innovation was burning investor money.

There are times when I've pondered, "Gee, what could have happened if I had finished that POC?" But I don't think I would have ever thought to break the law, burn investors, or exploit drivers.

[bduerst]

Passengers won, since most rides were (or still are) subsidized from venture capital raised by the company. It's almost like a wealth distribution of it's own, through the value of on-demand transportation.

You could also talk about how it disrupted the taxi medallion market, which was an older solution to the trust problem of getting into a car with a stranger, but for many cities that wasn't really in need of disruption, just optimization.

[eeeeeeeeeeeee]

Passengers win for now, not necessarily won for good.

Do you think the public markets are going to allow Uber to keep bleeding this much cash year over year?

Prices will go up on consumers just as Uber has completely dominated the market and effectively has no competition. They’ll be able to charge whatever they want.

[bduerst]

Who cares? Markets are fluid and dynamic.

Passengers won for a while, and may keep winning, but nobody expects them to win to perpetuity just like nobody expects a market to remain static. If anyone is going to end up worse than before ridesharing, it's the people who put the money into the VC funds propping up the market.

[barry-cotter]

Everyone except owners of taxi medallions and maybe Uber investors and taxi drivers won. Black people who could actually now get a taxi won. People who wanted to reserve a car and have it show up on time won. People who wanted service in places taxi drivers didn’t want to go won.

Taxi regulation was so comprehensively captured and rider hostile, and this was true for so long, that there was never any reason to believe it would improve. If all Uber achieved was coming close to burning that entire industry structure to the ground Uber is a massive boon to everyone who wants a ride and doesn’t want to deal with lying, cheating, lying, racist taxi service.

[erikpukinskis]

> the taxi industry didn't need disruption - it desperately needed a modern ride calling and fare estimating feature

What about areas that had little to no taxi dispatch service before Uber/Lyft?

And what about regions where supply of cab driving licenses was artificially constrained?

[mertd]

Or where drivers:

- could refuse service based on factors like customer's race without repercussions.

- accept nothing but cash as payment.

- take the "scenic" route when they realize you're from out of town.

I'm not happy about the way Uber got here but I also don't want to go back to the world before it.

[Axsuul]

The consumers won.

Before Uber, traveling abroad in another country meant getting scammed by taxi drivers. After Uber, there is now a safe, trustworthy, and familiar mode of transportation when in a foreign place.

Note: Lyft is only domestic.

[sasper]

Precisely this. I'm an expat and have lived abroad for the last 10 years. Uber has made my life more simple and less stressful when traveling. No longer do I have to figure out how to book a cab at an airport after landing, or how much it really should cost me. I no longer have to hail a taxi on the street and be charged 5x what a normal fair would be because of the color of my skin or the accent in my speech.

Uber has revolutionized transport in all of the areas it has disrupted. Bad comes along with the good, but for consumers, the good outweighs the bad (at least for now while the prices are VC subsidized).

[grvdrm]

Incredibly useful point. It's easy to look at these companies through the U.S. lens but they have changed the game for international travel as well.

[dnautics]

I definitely won! An early driver (2009), I'd just quit a low pay postdoc job, and 1.5x'ed my take home pay. Since I was a Lyft driver, Uber gave me a crazy signing bonus including 50 hours a week at 40 an hour (I found the farthest Starbucks in the service area and worked on coding katas). At the end of the year when I got my 1099 I calculated that Uber lost $8k on me, which is about as much as I put in the crypto currency markets around that time...

[pochamago]

I certainly won. In my city of 400,000 we only had one unreliable cab company, Uber is much better than the alternative. Uber Eats also destroys the previous delivery service that was around. They're a really valuable service to me

[stephencoyner]

Riders won big. The ability to order a car and get a ride in minutes is now engrained into society. Who can imagine major metros in the US without ride share? The continued capital injections and subsidized prices have been great for consumers.

[masonic]

One needs to include in their calculation of winning and losing whether their private data means anything to them.

Uber, for example, sucks from your phone access to your camera, all of your contacts, your location at all times, your microphone at all times, and the ability to dial or text from the phone itself.

At the same time, all of the people in your contacts have their privacy productized as well, involuntarily and silently.

The ride isn't the product. The riders are.

[orbifold]

You can order an Uber from Maps and don’t have that problem.

[masonic]

Only if your device has Uber installed on it AND you are logged into the Uber app. By then, they already have all your data, and that ride is fully linked with your other usage. And as a bonus, Google also now has those details added to youf dossier.

It's sad how easily people can be duped transparently.

If you don't have Uber installed, Maps doesn't even show you the option.

[orbifold]

Ah my bad I just vaguely remembered having this option when I was in Vienna, I guess I must have had Uber installed at that time.

[dralley]

https://qz.com/1540608/the-problem-with-silicon-valleys-obse...

[makeitstop]

“desperately”

Are you sure you’re outside the bubble? Because the taxi industry could have done with some improvement, but it didn’t “desperately” need “disruption”. People got from a to b just fine, and drivers got paid.

The only thing that desperately needs disruption is the destructive influence SV has on societies that were doing just fine before its “disruption”.

[xixixao]

Don't know where you've been getting taxis, but they were literally one of the worst services anywhere I've ever been to. Prague: ton of documented defrauding of customers, taxi drivers making little money otherwise, fights over stations, literally mafia stuff. London: You know how everyone is lovely and polite, say in restaurants? Not so in London taxis, you'd hardly get a hello, drivers would always purposefully drive you as long as possible to make the most amount of money, etc etc

It was heavily unionized and the only people winning were at the top of unions, everyone else was losing. Yes, it desparately needed disruption.

[ghaff]

London is one of the last cities I would complain about taxis in—and one city where I don’t use Uber. (Not that I use a lot of cabs because the transit system is good.)

[samsolomon]

Are you the one in a bubble? The taxi industry was an absolute mess outside a few select cities—at least here in the US.

[teen]

Not sure how all three of drivers, Uber's profit, and passengers could all be losing. I think passengers are making out quite well atm. I haven't owned a car since Uber has been around, and get chaffeured around at a super affordable price.

[sokoloff]

Most of the Uber drivers I speak with are also doing better than if Uber didn't exist. (Naturally, if they didn't believe that, they wouldn't be driving for Uber still, but even as I engage halfway deeply into how it's going for them, most of them seem to genuinely understand the costs and have good reason to believe they're being made [sometimes much] better off by driving for Uber.)

[justapassenger]

That strategy works, even on public market - check Tesla.

[sfcguyus]

Lance Armstrong