Cooperatives can expand by cooperating with other cooperatives -- a bunch of local cooperatives might nest to form a regional one, etc. Those regional ones could form a federation with a single identity for global operations.
So, this problem can be addressed by cooperatives, it's just a different kind of structure that distributes power locally -- with centralized power deriving from the bottom up, by the membership of localized cooperatives. The organizational challenge for expansion is how to avoid administrative capture: how to keep centralized infrastructure controlled by localized entities.
I don't think this "franchise" challenge has been worked out with platform cooperatives. However, if this NY based cooperative becomes profitable, it could expand to other cities not by getting bigger, but by forking off the operational aspects into a cooperative-of-cooperatives, then, a Chicago driver's cooperative could be a member of this shared operational entity.
I've noticed credit unions in the US are like this. They are generally locally operated, but they have formed networks so that you can e.g. go into a branch in Maryland and perform transactions on your account held in Georgia. They have also banded together to develop credit union apps, since banking apps are essentially universal in function. Reaching critical mass for these ride hailing apps would be a challenge, but it is possible.
Many U.S. credit unions are members of CO-OP Financial Services [0], a cooperative of cooperatives, which provides shared ATM and branch services. Effectively making it one of the largest networks in the USA. There are other similar organizations that provide various backend and federation services.
The entire US payments system is a co-op payment network[1]. The Federal Reserve is owned by its member banks and they handle clearing for some absurdly large number of transactions. They use a slightly different nomenclature, but pragmatically it's a member owned co-op.
I don't think a global association of lyft, uber, didi, grab, doordash etc is exactly the kind of 'coop' that these people are going for. Your describing a coop of large organizations. This is a 'by the people for the people' type of organization, which the closest thing I can think for is a credit union.
Fraud from either side of the transaction is the primary issue payment networks deal with and that makes them a poor fit for coops. Ride sharing apps are very different beasts.
Which suggests non-coop payment networks are more successful in the market. It does not tell us anything about whether they are actually better for anyone.
One of the key advantages a large corporate model has over a small, local cooperative is the ability to effectively harness resources for shared infrastructure.
In the case of Uber and Lyft, that's all the technological infrastructure that goes into making the platforms work. This isn't a trivial amount of work that can be easily replicated by taxi companies or scrappy driver-owned coops, as attempts to do so have shown. As we're all familiar with, maintaining this infrastructure is also far from free or trivial.
Credit unions are an instructive example. Many offer membership in interoperative networks, but few are able to effectively compete with the customer-friendly offerings of big banks with centralized power structures. The ability to satisfy customers isn't some side-effect, it's a key goal. A localized organization that can't compete is worth nothing except as a cautionary tale.
With that in mind, I would say the organizational challenge of coops is thus: how to keep centralized infrastructure controlled by localized entities while being competitive with non-local entities.
The "big 4" accounting firms are structured similarly: a single global identity, but each country's org is independent, with local partners in charge and having partial ownership.
>> You can get off an airplane just about anywhere in the world and get an Uber. That’s huge value.
I wonder what percentage of people driving on roads are actually the old "jet set", people who travel internationally more than once a year. I'd bet that is actually less than 1% of western populations. I think the real market is locals, people who need rides home when drunk, rather than 1%ers going to and from airports.
(I love the irony of people who use uber because "owning a car is evil" and then hop on 1st class airline seats to fly to remote islands. I wonder how often people take ubers to get them to their private jets;)
The vast majority of people travelling aren’t jet-set or 1% flying in first - they’re just normal hard-working people flying in economy who happen to have a job that requires them to travel and don't have any choice in that matter if they want to put food on their tables and feed buying their children new shoes.
The vast majority of people travelling for work aren’t doing so by plane. From the perspective of overland transport, people going to/from airports are the 1%. The 99% are all the people who's jobs don't involve them flying anywhere.
A local coop doesn't have to go worldwide to be meaningful.
Not all businesses shall grow indefinitely. If they can get a core customer base and hold it steady, it'd be much more valuable and impressive over time.
They try to make a living, not to dominate the world for money.
If you're competing in a winner-take-all market, it is very difficult to compete without shooting for domination. I don't know if digital ride hailing is a winner-take-all market, but there's pretty compelling evidence it could be.
But I also don't think that commenter is disagreeing with you - when they say huge value, they're probably gesturing towards the fact that consumers will generally use whatever the most convenient and recognizable brand is. It will be hard for the coop to achieve a core customer base which allows them to survive if everyone gets off the plane and uses Uber instead of looking for the local coop.
Winner take all can be regional, though, with different winners in every city. Look at the phone companies, for example.
For taxis, drivers already use multiple apps. What could happen here is that drivers keep driving for uber, but advertise for the better paying app with everyone who gets into their car. Then all the local riders switch over to the coop app, and the drivers still driver uber a bit for the it of towners
I still can't quite grasp why local governments haven't taken the hint and reworked their local bus systems. Uber&Lyft have shown how much better app and on demand service is. But we're still circulating buses and spending billions on heavy rail.
On-demand service is drastically less efficient than fixed-route service. That's the main reason Uber/Lyft is already several times more expensive than bus or train service for the same route, and it would be even more expensive if Uber/Lyft drivers made the same total comp per hour as bus drivers including benefits, fuel, vehicle depreciation/wear and tear, insurance, etc. Not to mention the additional congestion and pollution you'd get if you replaced every bus during rush hour with 25 cars or whatever.
It does not really come out to be that much more. As an example, each unlinked trip costs $5 for my local system. Most trips will take a transfer so a realistic estimate of the per trip cost is $8-10. Looking back at my Lyft history most of my trips cost $8-15 so very comparable.
It looks dramatically different because buses are subsidized while Uber/Lyft is taxed and for profit. To continue using my city as an example, farebox recovery rate is ~30% and that doesn't include capital expenses. The difference is made up by tax revenue. On the other hand out of my fare, ~10% is sales tax, Uber/Lyft take another 20-40%, leaving 50-70% to go to paying the driver for the ride.
The problem ultimately is coverage. If you want to provide frequent service to all parts of the city you end up running a bunch of near empty buses. That kills the efficiency benefits of the buses and when you look at the system as a whole it ends up being about the same as on demand.
I don't think buses and rail systems should be phased out in cities. In every city I've seen, buses and rail carry a lot of people in a much more cleaner and efficient manner.
Most, if not all rail is electric. Buses are transitioning to electric in Europe. Geneva has a very nice battery-less (supercap based) bus fleet which carry a lot of people continuously.
No car based transportation can reach the same density.
Taxi has its uses (speed, precise location, etc.), but is no replacement for mass transportation.
Few places need the theoretical density that buses provide and even less need the level that rail provides. Most of the time they're running at 10-20% capacity. Or at least that's what happens in my city.
I'm not talking about taxis. Something shuttle bus or van sized. We don't need to put 200 cars worth of people in trains to solve traffic issues. Putting 200 cars of people into 30 shuttle buses is good enough.
> Most of the time they're running at 10-20% capacity.
That's not what I've seen in Amsterdam, Geneva, Stockholm, Barcelona, Istanbul and my hometown. They work at least 30% capacity all day long, and when the demand is low, the bus numbers drop in all lines, but you never wait more than ~15 minutes for a new one, in most lines. They also reduce the number of trains on rail systems when the demand is low.
> Something shuttle bus or van sized. We don't need to put 200 cars worth of people in trains to solve traffic issues.
It's not a traffic issue. In modern Europe, it's not about solving the traffic. The governments focus on providing ways people to reach where they want. When you enable it, people doesn't crave for their cars, they use the cheapest and most practical way. In Barcelona, you're almost always walking distance from a underground station so, you don't need a car most of the time.
In my city, due to its geography, it's not possible to have an underground network that dense (at least where I live) and my office is not on a easy to reach place via public transport. If it was the opposite, I'd happily leave my car at home, but I can't.
OTOH, all the public transit lines are working at least 50% capacity all day long, carrying people around the city, and in some places you can literally go from door-to-door using public transit only.
> Few places need the theoretical density that buses provide and even less need the level that rail provides.
Almost every major urban city and metropolitan area needs buses and rail service to function effectively, the population density requires it, and it is the proven, mature, and scalable solution to providing high capacity transport. Massive roads used by primarily single occupant vehicles, is the non-scalable, inefficient solution.
> Most of the time they're running at 10-20% capacity. Or at least that's what happens in my city.
Just because you see <i>a bus</i>, at <i>some</i> time of the day being underutilized, is not indicative of much. That same bus on the same day/shift could be at or near capacity, earlier or later in day carrying commuters, or students that got out of class, etc. making it worthwhile.
Capacity planning for a transportation network/system means it has to be sized for its maximum or peak demand (typically during commute hours), so it also makes sense to use its excess capacity during off-peak hours given it is largely paid for to meet peak demand (buses and trains sitting around midday depreciating, and operators being paid a full shift to do nothing, is a poor use of high value assets and resources). This is similar to other systems like energy, telecom, etc.
> I'm not talking about taxis. Something shuttle bus or van sized. We don't need to put 200 cars worth of people in trains to solve traffic issues. Putting 200 cars of people into 30 shuttle buses is good enough.
Same point above about sizing for peak. Additionally this does not match modern fleet management best practices, which would strive to minimize the number of vehicle types in the fleet. Typically this is a standard ~40 foot single level bus. Possibly with additional types (longer articulated or double decker) for lines with higher demand/passenger loads, if needed. A common fleet type minimizes driver and mechanic training, makes buses and personnel more interchangeable and operable across the entire route network, creating efficiencies and economies of scale. These are the same reasons why Southwest Airlines and Ryanair exclusively fly B737s.
Upwards of 80% of the cost structure of providing bus or train service (the marginal cost of running an additional bus/train) is dominated by labor costs in the USA and other developed countries, where labor is expensive and capital, broadly defined, is cheap; so capital replaces labor where possible (developing countries tend to be the opposite). Or to put it another way, 20-40% of the cost structure is the cost of the vehicle. Using smaller, cheaper, low capacity vehicles does not significantly reduce the underlying cost structure, and in fact will increase inefficiencies and costs elsewhere in the system.
An excessive number of small vehicles instead of a reasonable number of large vehicles, where each vehicle requires a driver, will maximize inefficiencies and create diseconomies of scale, resulting in higher overall system costs, lower transport capacity, and higher congestion and pollution in space constrained urban areas. Efficient use of space in constrained urban areas is key attribute of transportation systems [0][1][2].
You're arguing theory and not what's happening in the real world. As an example, your cite says that rail has a theoretic density of 60-90 thousand an hour. But in my city we're spending several billion dollars to build a new rail line that is expected to carry 20,000 people a day.
Theory and practice are different. And in most places in the US your theory doesn't translate into practice.
> You can get off an airplane just about anywhere in the world and get an Uber. That’s huge value.
You can get off an airplane just about anywhere and get a taxi at the taxi stand, but that never enabled a global company.
Airports with local unlicensed taxi services generally have advertising in the airport for arrivals. Installing a new app in each city, and putting in payment information is more hassle (especially if payment options aren't geared towards international visitors), but you do it once per trip, just like the in flight entertainment app.
>You can get off an airplane just about anywhere and get a taxi at the taxi stand, but that never enabled a global company.
Because it didn't streamline the process as much as Uber/Lyft (and the use of internet). It's a big difference when you don't even need to talk to anyone.
>but you do it once per trip, just like the in flight entertainment app.
And that is enough friction to make Uber/Lyft worth it. The in flight entertainment app has a monopoly. If there was sufficient broadband access on the plane, no one would get the in flight entertainment app either.
However, I might download a new local app if I found out the local app's fare were sufficiently cheaper, since the friction of downloading a new app is relatively low.
> The single benefit of Uber having a global presence likely already outweighs the value of these local coops.
That and a willingness to subsidize rides to the tune of billions of dollars per year. A coop is going to struggle to provide rides at a "competitive" rate when the competition is paying people to use their services.
What is causing Uber's losses? The customers are paying money, the drivers are getting only a fraction of it.
Are the drivers actually getting more money than the customers are paying? Are Uber's data center and transaction costs really high? Or is it the armies of lawyers and business development people?
The basic value proposition of ride share seems viable. If Uber's losses are overhead, maybe somebody can compete.
Yes, the the customers pay more money than the drivers get, but from that difference Uber must pay the salaries of all their software developers, they must pay for infrastructure, they must pay for app development, product managers, hr, etc.
If you look at Uber financial reports, you’ll see that they earn profit on rides, and their losses are due to their attempts at expansion in other segments.
Uber used to subsidize rides a lot, and it still does in some foreign markets where it is trying to get a foothold, but this is not really happening in US anymore.
There's no reason why we can't have a coop based version of a WeChat like super app with all of these services on a single shared platform.
Most people don't get on planes that often so the value of global scale is not something that would prevent them from getting disrupted in a place like NYC. I'd be willing to pay a large premium for gig work if I knew that 95% of it went to the worker and they weren't being exploited by a bunch of clowns in SV.
I'd argue that standardization at the protocol level benefits almost everyone more than the current paradigms. Any app works with any taxi network.
I want to use Lyft as my client, great. I land in a city, and I can ping drivers working for any pool, co-op, or team.
WeChat just replaced the AppStore/OS. If each service is its own entity inside WeChat, youve just nested the problem one level down. The client browser should be completely divorced from the rest of the network. There should be an IMAP/HTTP level hailing protocol. You want gmail but I want outlook, great we can still talk to each other.
A single global brand can be an advantage, but I wouldn't be so sure that's the case with a rideshare app, in a city with a strong identity like NYC. In terms of brand positivity, I can see New Yorkers proudly switching to this. (And if Uber retains the "just got off the plane at JFK for the first time" market, so what.) The real question is whether they can compete on price and UX.
The thing you describe as valuable... isn't. The idea of someone who spends Monday in Madrid, Tuesday in NYC, Wednesday in Moscow and can't be bothered with too many apps is just an idea. That person doesn't actually exist. There is zero value to you for Uber serving other random cities around the world that you will never visit.
Serving NYC is easily a large enough market to be successful. Serving a borough would be.
A huge value for a relatively small amount of people and uber customers.
It's also not really very true. Its been a year since I traveled outside of the USA but on my last two international trips Uber was not available in those countries.
But then Uber also has to setup the meta-structure operationally to actually legally and financially operate in all those jurisdictions and that incurs a higher cost overhead than a local coop.
So, this problem can be addressed by cooperatives, it's just a different kind of structure that distributes power locally -- with centralized power deriving from the bottom up, by the membership of localized cooperatives. The organizational challenge for expansion is how to avoid administrative capture: how to keep centralized infrastructure controlled by localized entities.
I don't think this "franchise" challenge has been worked out with platform cooperatives. However, if this NY based cooperative becomes profitable, it could expand to other cities not by getting bigger, but by forking off the operational aspects into a cooperative-of-cooperatives, then, a Chicago driver's cooperative could be a member of this shared operational entity.