[brc]

Ot of everything that surrounds uber, the interplay and economics of the taxi industry hitting the rocks is interesting to me in an economic case study.

Your example shows that a lot of businesses take advantage of credit to increase their returns but probably are never able to see where the problems are going to come from. Even ten years ago if you'd have said we would be in this situation it would have been unimaginable.

The angle most taxi sympathisers are going for is the 'poor taxi driver' angle. But in reality the taxi drivers can just switch. It's the people who are all-in on taxis who are in trouble, with their business model built around a constant amount of passenger miles which probably hasn't changed in years.

[thenipper]

It's pretty disingenuous to say that taxi drivers can just switch. My gut says that most taxi drivers aren't in a position to easily invest in a capital resource like an automobile.

Though it makes me wonder if you could start a business that rents out cars to potential ride sharing drivers. You get $X per hour that they use it and at the end of their shift they drop it off with another rent. Basically reinventing the taxi cab model.

[jeromegv]

Some people have tried that. I think the issue right now is that UberX rates have dropped so much for drivers, that if you add an intermediate in the middle, there is either very little margin for the intermediate, or a very shitty salary (under minimum wage) for the driver.

[brc]

So sounds like the taxi industry then.