[sobiolite]

So I do think we're in a bubble, but I also remember when all the discussion around here was around Uber, and I read many, many hot takes about how they were vastly unprofitable, had no real business model, could never be profitable, and only existed because investors were pumping in money and as soon as they stopped, Uber would be dead. Well, it's now ten years later, Uber still exists, and last year they made $43.9bn in revenue and net income of $9.8bn.

[nirui]

Oh dear, we are definitely in a bubble, it's just not in the way of total burst.

Back when everybody got into website building, Microsoft released a software called FrontPage, a WYSIWYG HTML editor that could help you build a website, and some of it's backend features too. With the software you can create a website completed with home, newspages and guestbooks, with ease, compare to writing "raw" code.

Now days however, almost all of us are still writing HTML and backend code manually. Why? I believe it's because the tool is too slow to fit in a quick-moving modern world. It takes Microsoft weeks of work just to come out with something that poorly mimics what was invented by an actual web dev in an afternoon.

Humans are adoptive, tools are not. Some times, tools can better humans in productivity, sometime it can't.

AI is still founding it's use cases. Maybe it's good at acting like a cheap, stupid and spying secretary for everyone, and maybe it can write some code for you, but if you ask it to "write me a YouTube", it just can't help you.

Problem is, real boss/user would demand "write me a YouTube" or "build a Fortnite" or "help me make some money". The fact that you have to write a detailed prompt and then debug it's output, is the exact reason why it's not productive. The reality that it can only help you writing code instead of building an actually usable product based on a simple sentence such as "the company has decided to move to online retail, you need to build a system to enable that" is a proof of LLM's shortcomings.

So, AI has limits, and people are finding out. After that, the bubble will shrink to fit it's actual value.

[sahila]

This is fair but it's also assuming that today's AI has reached its potential which frankly I don't think any of us know. There's a lot of investment being spent in compute and research from a lot of different players and we could definitely make some breakthroughs. I doubt many of us would've predicted even the progress we've had in the last few years before chatGPT came out.

I think the bubble will be defined on whether these investments pan out in the next two years or if we just have small incremental progress like gpt4 to gpt5, not what products are made with today's llm. It remains to be seen.

[PlunderBunny]

I think Uber’s profitability has also been achieved by passing what would be debt to a traditional taxi company (the maintenance of the fleet of taxis) onto the drivers. I think many drivers aren’t making as much money as they think they are.

[ctoth]

Did this change since Uber was created? Did Uber previously, back when people were making their "Uber is Doomed" comments pay to maintain drivers' cars? If not why bring it up?

This is a pattern where people have their pre-loaded criticisms of companies/systems and just dump them into any tangentially related discussion rather than engaging with the specific question at hand. It makes it impossible to have focused analytical discussions. Cached selves, but for everything.

[heavyset_go]

Yes, Uber paid drivers more in the beginning, and even facilitated car loans for them lol

[charcircuit]

But did their business model require them doing that forever? That seems like something they can cut back on once there is a healthy size of drivers in a market.

[dvfjsdhgfv]

Yeah I agree it was the original plan from the beginning: use Saudi money to strangle competition and then get the prices back to taxi level (or higher). I believe they partly succeeded by making a compromise here: they both cut the payments to drivers and increased prices.

The original plan worked because in the switch-and-bait phase they were visibly cheaper so in the last year people's mental and speech model changed from "call me a taxi" to "call me an uber". But at least in my local market, the price difference between a taxi an and uber in 2025 is negligible.

[heavyset_go]

A decade ago in NYC, they were giving out free rides left and right. I used Uber for months without paying for a single ride, then when they started charging, they were steeply discounted. I could get around for a little more than a subway fare.

Lyft did the same thing, got a bunch of free rides for a while with them, too.

[PlunderBunny]

What I think has never changed, is that most people do not understand depreciation on an asset like a car, or how use of that vehicle contributes to the depreciation. People see the cost of maintenance of a vehicle as something inevitable that they have almost no control over.

[watwut]

Yes, Uber was paying drivers more and that is how they were able to have good service.

[oblio]

Awesome, Uber is profitable by creating a society damaging business model which is copied by other companies.

Phew, I'm so sad I was a Uber critic from early on...

[keeda]

I think the point is about Uber's profitability and not necessarily about their business practices or ethics, and we should be careful not to conflate the two. It is absolutely valid to criticize the latter, but that (so far) seems mostly orthogonal to the former.

Now, it is totally possible that their behavior eventually create a backlash which then affects their business, but then that is still a different discussion from what was discussed before.

[frm88]

There is also a significant difference in insurance. Taxi companies usually have comprehensive insurance, hence the higher standards for drivers and vehicles (monitored and maintained) while Uber has a more differentiated model (part driver, part company, not monitored):

https://jjlegal.com/blog/rideshare-vs-taxis-understanding-ac...

[thisisit]

This is underselling the Uber story to a degree. The original sell for Uber was that their total addressable market was the entire auto industry because people will start preferring taxis over driving. They are still trying to achieve that with similar stories now pushed to sell robotaxis.

Uber was undercutting traditional taxis either through driver incentive or cheaper pricing. Many hot takes were around the sustainability of this business model without VC money. In many places this turned out to be true. Driver incentives are way down and Uber pricing is way up.

That said, this is also conflating one company with an industry. Uber might have survived but how many ride sharing companies have survived in total? How many markets have Uber left because it couldn’t sustain?

In a bubble the destruction is often that some big companies get destroyed and others survive. For every pets.com there is one Amazon. That doesn’t mean Amazon is good example to say naysayers during the dot bubble were wrong.

[theamk]

Simplifying Uber's story to "pricing or more drivers" misses the most important part.

Uber was undercutting traditional taxis because, at least in the US, the traditional taxis was horrible user experience. No phone app, no way to give feedback on driver, horrible cars, unpredictable charges... This was because taxis had monopoly in most cities, so they really did not care about customers.

The times when Uber was super-cheap have long passed, but I still never plan to ride regular taxis. It's Waymo (when availiable) or Lyft for me.

[kccqzy]

Well just look at the price of Uber and Lyft rides. I regularly had single-digit fares on both Uber and Lyft early on. Of course they were unprofitable then. Now that they have gained mindshare they have increased prices drastically.

[crmd]

Uber proposed $43.00 yesterday for a 23 minute drive from park slope to brooklyn heights in New York City, versus $2.90 for a 35 minute R train ride.

I am humbled by how myopic I was in 2010 cheering for a taxi-hailing smartphone app to create consumer surplus by ordering taxis by calling taxi companies.

[pton_xd]

Uber charged me $85 (plus tip!) for a 35 min ride from the airport. Yeah, my fond memories of those nascent rideshare apps are long gone...

[aianus]

Yellow cab is still more expensive and the cars are dirtier. I wonder why they don't try to compete on price at least with Uber.

[zug_zug]

It's been my experience (~ 4 years ago) that generally taxis were cheaper than Uber in new york, especially for anything like "Get me to the airport", sometimes like $25 cheaper.

[kjkjadksj]

In my experience its actually cheaper at least for airport rides. $50 flat through yellowcab app and no surge nor tip when ordered through app compared to $65 at best sometimes well over double during a bad surge.

[Cthulhu_]

Does Uber pay the same licenses and insurance fees yet?

[kjkjadksj]

Airport trips these days are often over $100 for me. What is crazy is yellowcab will take me to my area for $50 flat tip included through their app. We’ve exceeded even taxicabs by this point.

[gruez]

>versus $2.90 for a 35 minute R train ride.

Comparing the two makes as much sense as comparing how a $500k rolls royce and a $1k shitbox both get you from point A to point B.

[naoraanoi]

Yeah this keeps coming up so I checked.

Uber sunk overall, until profitability, less than $100 billion over nearly 2 decades.

By analogy (which is basically anecdotal evidence but with cognitive rhyme) we should have profitable LLMs in about 320 years.

[pessimizer]

The story about Uber was that they were going to be unprofitable until they destroyed taxi services, then they were going to charge more than taxis and give less of a share to the driver.

Nobody is predicting that AI is going to do that. One thing I hadn't considered before is how much it was in google's interest to overestimate and market the impact of AI during their antitrust proceedings. For the conspiratorially minded (me), that's why the bottom is being allowed to drop out of the irrational exuberance over AI now, rather than a couple months ago.

[Terr_]

> Nobody is predicting that AI is going to do that.

... Now that I hear it out loud, I can't help thinking if maybe it's something we should be thinking about.

Subsidization to destroy competitors followed by lock-in is obvious, but is there any way these systems could turn professionals into serfs?

[deadfoxygrandpa]

it doesnt look likely that any particular ai service will have a moat. every time one of them does anything right now, theres a dozen competitors able to match it within months

[LaGrange]

I mean, hey, maybe they _will_ increase all those 10x programmer's bills to 20k per month. At least that would be funny.

[watwut]

Uber was unprofitable and when it ceased to be unprofitable ceased to be better.

They did managed to offload price on weaker actors party by simply ugnoring laws and hoping it will work for them. It did, but it was not exactly some grand inspiring victory and more of success of "some dont have to follow the law" corruption.

[kjkjadksj]

At the prices they were charging back then that was indeed the accurate take. Of course prices rose and a lot of middle and lower income riders were kicked to the curb in favor of those who can afford to blow another $60 per leg on a night out. I guess there turned out to be enough of them at scale.

[master_crab]

That’s not exactly world changing money.

They found the niche and market to operate in and are running with it until the next thing “creatively destroys” their business model.

That’s a far cry from the multi-trillion dollar hype bubble surrounding AI.

[conradkay]

It's a 200 billion dollar company, roughly what Anthropic is raising at

[casey2]

The "hot takes" were that they were using investor money to illegally undercut the taxi industry until ride share had an oligopoly and that the government would stop them from breaking the law. I don't know why law enforcement is considered a hot take here, but I have a few guesses.