[habosa]

I have a hard time verbalizing it but something about Uber creating all these millionaires sickens me.

In no order:

* The business is fundamentally based on ignoring the law.

* They've done nothing but lose money, more than any private company ever.

* The money keeping them afloat is very dirty (mostly from Saudi Arabia)

* The culture is well-known to be awful.

* The drivers are completely exploited, working long days with no security and taking huge financial and physical risk.

* Their headquarters is at one of the most awful corners in the city, which they've done nothing to improve.

And in the end they'll have to start making money. Which means either increasing their prices or increasing their cut. When that day comes we'll realize what we've lost.

But yet, all the people who signed up and coded the app will be millionaires.

Smells like society misallocating value.

[viscanti]

> They've done nothing but lose money, more than any private company ever.

This is a weird take for me. I don't mean to single you out but I see it everywhere. If I went and bought $100 worth of stocks, not many people would say I lost that money. Most people would agree that we have to wait and see how that investment works out. In every other context we call it "investing" (some investments work out and some lose money) but here it's just called "losing money" without even looking to see if it's a good or bad investment.

[mdorazio]

That's a rather poor analogy. If you go and buy stocks you're buying a security that can be traded back to fiat currency at any point in time. That's... not what startups do. A better analogy would be taking out a loan for $100 with fuzzy repayment terms. If the ROI on that loan is negative, everyone would agree that you're losing money, investment terms be damned.

[viscanti]

> If you go and buy stocks you're buying a security that can be traded back to fiat currency at any point in time.

It depends on the stock. But there are lots of types of investments. None of the rest are referred to as "losing money" until it's clear they lost money. The act of investing is investing.

> If the ROI on that loan is negative, everyone would agree that you're losing money, investment terms be damned.

My point is that it's too soon to say what the ROI is for Uber's investments. I remember lots of people lamenting the "losses" that Amazon had year-over-year, before they realized that it was actually a wildly profitable set of investments that the company had made, creating one of the largest companies in the world.

No one is playing an investment term semantic game here. I'm simply expressing how silly (and misleading) it is when people refer to businesses investing in things as "losses" before they ever know how those investments play out. You only know how an investment turns out when you know how the investment turns out, not when the investment first starts.

[mdorazio]

You and I must have had different Investments professors. If you invest in a stock and it decreases in value, you lost money. You might get that money back if it goes up, but it is absolutely referred to as losing money. People just like to play mental games and say things like "it's only a paper loss" or use the "unrealized loss" term which is for accounting purposes, but it's a loss regardless. If you don't believe me, take your rent payment and put it in a stock, then if it drops tell your landlord that you're not short the money - they just have to wait a while because it's an investment. Or put another way, had you not bought the stock before it went down, you could have used the same amount of money to buy more of it at the lower price point - i.e. you lost potential money even if it goes back up.

I believe the point of the parent post is that the entire business model of Uber is based on losing money on a unit basis to sustain the market. This is very different than companies like Amazon that lost money due to OpEx on growing the business in a sustainable way. The Amazon equivalent of Uber would be if Amazon paid for 20% of every item ordered out of its own cash balance. I agree that it might still turn out great for Uber in the end if various market forces align, but 1) I'm having a hard time thinking of a company outside of the VC-funded tech scene that could run Uber's financial games without going bankrupt, and 2) I personally think it's important to ask if the money going to keep Uber afloat is really best allocated there.

[speedplane]

If Uber wanted to be profitable, they could be tomorrow. Their growth would slow down, and they wouldn't be able to invest in next generation technology, but they could be a very profitable business.

[dmitrygr]

Given the insanely high price elasticity of demand on rideshare, i severely doubt this. Show me anyone who does not have both uber and lyft apps, and does not immediately go to Lyft when uber prices seem a tad high (or vice-versa).

[JesseAldridge]

* They created a transportation network that enables a huge chunk of the world to get from point A to point B quickly, safely, and cheaply.

> something about Uber creating all these millionaires sickens me

This feeling is called envy.

[TAForObvReasons]

It's hard to explain to people without a strong sense of morality and fairness, but many of us were taught to do the right thing, that "ends don't always justify the means", and that people who cheat or lie or steal or engage in other dubious activities will eventually be punished. If you read the parent post, there's a strong sense that the author doesn't believe the ends justify the means. Your comment suggests that it's ok to do morally reprehensible things in the favor of profits, which is why it's difficult to empathize with the parent.

When you're taught to always do the right thing and not to engage in the profit-maximizing morality-disregarding behavior we see from companies like Uber, when you make the decision not to become employees of those companies, seeing that others did decide to work with those companies really forces you to re-evaluate how the world works. The first step in that process involves disgust reflecting on the bad actors.

[kitkatkid]

I have a strong sense of morality and fairness and want to do the right thing, which is why I love Uber (and Lyft, et al).

A single entity managed to smash apart the corrupt, racist and unaccountable taxi cartels in thousands of cities. No more taxis refusing to pick up dark skinned riders, no more taxis refusing to drive to neighborhoods where those same people live. No more apathetic dispatchers who don't care that the taxi driver was drunk or the car was being driven by someone other than the license holder. No more exploitative cartels bidding up taxi medallions and forcing low-skilled immigrants to work 14 hour days while preventing competition.

Ride sharing apps have fundamentally made the world a better place, especially for women and people of color. I feel far safer taking an Uber in an unfamiliar city than I ever did with the luck of a taxi, both in terms of physical safety and in terms of getting scammed.

[moorhosj]

Isn’t the point made that it’s “cheap-ness” is based on VC subsidization of each ride? People can critique things without being envious, no need for the snark.

[grandridge]

It's not envy he's correct. When Uber left Austin there was a ride hailing app up in about a month. It's a bunch of people that got bailed out in 08 with zero percent money thinking they are smart looking to be part of the next big thing. Uber will never be profitable. But all early investors will treat ipo as an ATM, complete opposite of what stock market is for

[hestefisk]

He has a fair point though. Uber make a lot of money and do not pay their fair share of taxes in the countries in which they operate. That’s not envy.

https://uk.reuters.com/article/uk-uber-tax-britain-idUKKBN18...

[joeblow9999]

This is just one interpretation. Let's not forget the model is innovative, and a vast improvement on the old way of getting a ride. There's no question they have created value and the folks who showed up to work to make it happen aren't necessarily evil, scofflaws, or toxic.

[bosie]

> Let's not forget the model is innovative, and a vast improvement on the old way of getting a ride.

I am genuinely not trying to be play dumb but what is the innovation or vast improvement? Apps like mytaxi were pretty much showing up before/after uber came to light, without violating laws or exploiting folks. Also, how does such a claim get balanced to the vast financial loss they seem to be accumulating?

> created value

For whom?

[uwuhn]

As someone who uses Uber and Lyft on a daily basis, and has done so for the past three years, their existence has measurably made my life better. Taxis were never an option due to a combination of cost, time, and inconvenience.

[mdorazio]

While I agree, it's important to note that the reason for all three of those improvements is billions in subsidies + exploited drivers. If Uber rides were not subsidized, they actually followed employment and licensing laws, and drivers actually accounted for their total expenses properly, the cost we be pretty close to what taxis charge, number of available drivers would decrease, and wait times would increase. The things you and I like about Uber a direct result of unsustainable economics.

[sokoloff]

I talk to most of my Uber drivers and almost always ask about the economics. Most of them seem to have a good grasp on the fundamentals and fall into one of two categories: subsidizing the car they already have and supplementing income or driving full-time in a car dedicated to ride-sharing. In the first case, they’re pretty obviously easily covering the marginal costs. In the second case, I can’t know, but they should able to evaluate it on their own pretty easily, just like the local snowplow operator.

I don’t buy the narrative that the company is built on the backs of a bunch of exploited drivers (assuming you believe taxi drivers are not exploited; if you believe they are as well, that’s probably a different argument than the one I’m refuting).

[adventured]

> it's important to note that the reason for all three of those improvements is billions in subsidies + exploited drivers

First, they're not exploited drivers. You could claim any worker is exploited at any and all times. It's not a statement with any grounding to it in this case. They are not being held hostage by Uber, this is the best labor market in two decades. You could claim all workers at every big and small company are all universally exploited. The person making $15 / hour should be making $30; the person making $30 / hour should be making $60.

Second, almost every major tech company you can name exists due to initial venture capital or investor subsidies (including Apple, Amazon, Google, Salesforce, Workday, etc). Amazon bled a lot of red ink before they turned seriously profitable (not nearly so much as Uber granted), because they were investing massively to achieve scale. It was venture capital and investor money broadly that subsidized that build out and enabled them to have low prices. So what? It was widely claimed for 20 years that they couldn't generate a substantial profit, and now they are thanks to opportunities they grabbed hold of (perhaps Uber Eats will be that for Uber, or any number of other things).

[cm2012]

I'll second that - it was literally life changing for me.

Plus, drunk driving deaths are down like 30% nationwide. Tens of thousands of lives saved.

[joeblow9999]

How is this possibly downvoted? I suspect only a political agenda could be the cause but I'm willing to hear otherwise.

[barry-cotter]

Here’s your political agenda.

In the entire Anglophone and Francophone world the taxi industry was awful. In the US they were and continue to be racist. They lied about availability and scheduling and they did it for decades. Many people on this website are familiar with the area that used to have the worst taxi service anywhere in the US, San Francisco. Taxi service in NYC existed in large parts of the city in theory but good luck getting a taxi driver to follow the law and actually take you there. And everywhere, absolutely everywhere, the taxi regulator was useless, completely captured by the taxi companies. These awful taxi companies lobbied to keep supply artificially low and prices high, for decades. In France the taxi drivers attacked Uber drivers. Uber’s civil disobedience was completely justified if it broke taxi monopolies.

In countries where taxi service was good and regulators not completely captured Uber has not done much. I’m aware of only one country, Japan.

Fuck the entire taxi industry, with their exploitation of tourists, four hours of saying someone will pick you up in half an hour, racism, tax evasion and broken credit card machines.

That’s the political agenda that supports Uber.

[Slartie]

> I’m aware of only one country, Japan.

Germany is one of those, too. We have fairly good taxi services in any larger city, at least as far as I've seen as a user in the last 15 years. They usually have clean cars, are there on time (or waiting in taxi queues in front of public spots) and take you to your destination without major detours. I've never encountered any case (visible to me as the customer) of tax evasion or trickery with manipulated meters, so I guess correct metering is properly enforced by the regulators. And, very important: they also had apps for summoning them spontaneously and tracking their approach and optionally paying them relatively quickly after smartphones became ubiquitous and had those in widespread use by drivers, either provided by private non-taxi-related corporations (like MyTaxi) or by conglomerates of taxi companies that bound together to develop an app.

But I had multiple opportunities to "enjoy" taxi services of the classic kind in the US, specifically San Francisco and Miami, before and after Uber was a thing. And I definitely see quite a difference to the level of service I enjoyed back home, especially in the "before" time. I even think that this difference wasn't present in the minds of the Uber management - they probably thought that any taxi service in the world was generally as bad as the one in San Francisco and was thus in need of "disruption", and it seemed as if it took a while for them to notice that this wasn't the case, and to realize that people in places of the world with fairly well-working taxi networks might have much less understanding for their "civil disobedience", as you call it.

[freewilly1040]

Traditional taxis are no less exploitive than Uber. The death of protections for rent seeking medallion holders is a net win for both consumers and drivers.

[rockinghigh]

As an employee, I do not find the culture awful. I has improved considerably. As for the headquarters, Twitter, Square and Microsoft also have offices there. Do you also blame them? What do you expect these companies to do about homelessness?

[hestefisk]

What’s the source of the claims, ie Saudi Arabia being a major source of equity? Not trying to be difficult but it’s a set of pretty bold statements and could benefit from some of evidence.

[the_watcher]

Uber very famously took $3.5B from the Saudi government: https://www.bloomberg.com/news/articles/2018-11-03/the-insid...