[sharkmerry]

You are correct that they brought these innovations to market, but the point here is that the biggest determining factor is price.

The next line from your quote was.

>These subsidies distorted normal price signals which in turn subverted the ability of consumers to allocate resources to the most efficient competitors.

I think that makes clear that while Uber did introduce some efficiencies, they still were not competing on an even playing field given their massive funding

[manfredo]

> I think that makes clear that while Uber did introduce some efficiencies, they still were not competing on an even playing field given their massive funding

I don't think so. The article wrote that Uber, "skipped the difficult process of finding legitimate efficiency advantages" It sure seems to me that the author is claiming that Uber did not find efficiency advantages, or at least not any "legitimate" ones. This isn't the only place where the author essentially claims that Uber and Lyft provide no value:

> The narratives Uber has successfully manufactured are the key to how $80 billion was created out of thin air and key to the subversion of the market discipline that would normally limit these resource misallocations and welfare losses.

Apparently Uber's $80Bn valuation was "created out of thin air" and not, you know, building and engineering an internet based ride-sharing application.

> Uber is the breakthrough case where the propaganda-type narratives that dominate partisan political coverage successfully developed a multi-billion dollar private company from scratch.

This is just a small excerpt of a whole section that essentially tries to claim that Uber and Lyft's sole reason for their valuations were the narrative and hype they built up around their brands.

Personally, I think this author thinks that Uber and Lyft are going to be the next Theranos - the way he tries to attribute the former two's valuations with a narrative and propaganda rather than their product seems very similar to how Theranos was covered after its collapse. But unlike Theranous, Uber and Lyft actually have a product. One that may not turn out as well as its later investors as hoped, perhaps. But it's not going to crashing down to the bottom like a company that actually fakes having a product..

[sharkmerry]

>> I don't think so. The article wrote that Uber, "skipped the difficult process of finding legitimate efficiency advantages" It sure seems to me that the author is claiming that Uber did not find efficiency advantages, or at least not any "legitimate" ones. This isn't the only place where the author essentially claims that Uber and Lyft provide no value:

The efficiencies you state did not cause them to have lower prices though, the lower prices came the effect of the funding that turned into subsidies.

[manfredo]

Do you earnestly think that using a mobile app to pair drivers with riders (and especially multiple riders with similar destinations through pool) doesn't offer any efficiency advantage over driving around burning gas and waiting to be hailed?

On top of that, it's not just lower prices it's also better service. I'm sure there's some people that have their Uber horror stories, but I've had several cab drivers that said some really creepy stuff (stuff that a >6' man like me just kinda cringes at, but I can definitely see it being very uncomfortable for women). It's night and day, Uber/Lyft drives have always had clean cars, didn't pull any route shenanigans, and often had amenities like water and wifi. My only bad experience was when a driver messed up the destination and ended up getting on the Bay Bridge. He apologized profusely, ended the trip immediately on the app (so I barely got charged anything), and drove me to my destination.

While I think it's true that these companies are offering rides at unsustainable rates at the moment, I don't see customers ditching Uber and Lyft for cabs even if prices rise by 20-30%.

[geezerjay]

Confusing funding with subsidies is a very disingenuous mistake. Whoever thought of this nonsense was desperate to sell the idea that somehow rideshare services were less efficient than incumbent taxi services, which flies on the face of reality.

In fact, whoever came up with this nonsense is so distant from reality that he even failed to acknowledge that the main criticism that incumbent taxi services direct at rideshare services is that rideshare companies have a lower operational cost due to lack of expenses such as purchasing medallions.

[sharkmerry]

disregarding whether not purchasing medallions, is "clever" or "regulation avoidance"

Do rideshare companies have lower operational costs? Taxi's have presumably been profitable seeing as they dont have funding backing and have been around for years. while the two biggest rideshare companies dont make a profit

[manfredo]

> disregarding whether not purchasing medallions, is "clever" or "regulation avoidance"

A taxi medallion is required to accept rides from people that hail you from the street. That's it. Companies that schedule rides via phone do not require medallions, and never have. These have existed for decades, I remember my family using them to get to the airport when I was a kid in the 90s. Uber and Lyft just found a way to schedule rides via phone much, much quicker.

> Do rideshare companies have lower operational costs? Taxi's have presumably been profitable seeing as they dont have funding backing and have been around for years. while the two biggest rideshare companies dont make a profit

Taxi companies have been profitable, yes, but a large portion of their profitability comes from the artificially constrained supply of taxis. The medallion system constrains supply, thus inflating the cost of the service. Taxi companies' profitability was due to government interference, which let taxis grow complacent and offer non-competitive services. And now that they have competition from ride sharing, taxis are struggling. Taxis apparently aren't profitable when they actually have to compete.