If the app works then great but I'm not about to herald this as some great accomplishment. There is a reason Lyft/Uber completely steamrolled the taxi industry (aside from skirting regulations that were arguably bad to start with) and it's because they provided a 10000x better experience over calling a taxi dispatcher and waiting for cab (if it even shows up). I hated using taxis but Uber/Lyft changed all of that fixing all the problems with the taxi industry.
Plain and simple the taxi industry had a monopoly, got lazy, didn't innovate, and didn't give a shit about their customers. I relish watching them burn down in the same way I enjoy watching Google Fiber trouce it's competition.
Now if drivers want to create an app to compete with Lyft/Uber then more power to them, if they want to run it as a non-profit then great, just as long as their app isn't a buggy/crashing POS then I'll use it but I'm not holding my breath for that to happen. The best I saw from a cab company was a mobile website that asked for your location and allowed you to dispatch a cab after typing a short message. TWICE they never showed and once they didn't even read the message as I had scheduled the cab for a specific time and they showed up 45min early and called to ask where I was...
In the US the government-taxicab relationship tends to be corrupt and customer-taxicab relationship tends to be acrimonious, so something like Uber was good news.
In much of Western Europe there's less corruption on one end and less acrimony on the other end, so in Spain white-label apps like myTaxi or Cabify proliferated (whereas Uber only offers food delivery), in Denmark and Sweden each taxicab operation runs its own app, which they prominently advertise.
In Eastern Europe the concept of unlicensed unmarked "gipsy taxes" has been around for so long, that there is genuine pressure from voters for more regulation, licensing and safety standards, so any newfangled company that promises to seat you in an unmarked vehicle with dubious safety history will be viewed through negative lens of decades of yet another gipsy cab operator out to make a quick buck.
That's not the reason why Uber is getting moderately popular in São Paulo. We have a few great taxi calling apps and here the taxi service is fairly good and reliable (unlike Rio de Janeiro, where taxi service is hell, dishonest, rude and unreliable - there, Uber is a god sent gift).
Here in SP people use it only because of the price (about 30% cheaper than taxi). Uber Black was here for some time and no one never noticed. Only when they came with cheap UberX that people started using.
But taxi lobby fought back hard and Uber is oficially forbidden here until further regulation (unoficially still running though).
Anyway, just to share that here in SP is mostly a price competition. Not much else.
Taxis in Panama are also more or less unregulated. The cars are barely serviceable, the rates vary wildly, especially if the driver doesn't like your skin color, and congestion is so bad that if you want to get across town during rush hour, the driver will not even bother to pick you up.
Markets optimize for cost. The point at which they will begin to correct for congestion is well after the point of total gridlock (since it costs the driver very little to sit in traffic). You can't drive down fuel costs, so any cost savings have to come from driver salaries and vehicle maintenance. Hopefully the Uber app provides sufficient feedbacks to correct for the market's tendency to drive down those costs, but I tend to doubt it. There is no particularly effective way to provide disincentives for gridlock as far as I'm aware, beyond limiting the number of vehicles allowed on the road. Some countries do this for all personal vehicles already, which may work better than a medallion system, but I doubt it would be popular in the USA.
The existence of a densely populated area doesn't imply that most people live there. The majority of a population can be sparsely distributed just fine.
In Canada it only became true ~80 years ago that most lived in urban areas according to statscan. In the territories it's only reached parity in the last 10 years.
Yeah. You could (can) call a number, order a taxi, get one five minutes later. Typically with a very nice and polite 40-50 year old driver who has doing this for decades and knows all the streets AND is the best source for local gossip. When you pay (with a credit card!) you get a nice receipt. It's all quite nice.
I'm talking about the civilized northern European countries now, of course. In other parts of Europe, Uber is a major disruption because the existing service more resembles the US taxi non-service. Except possibly with even higher risk of being ripped off if you are not local.
In all parts of Europe though, just tapping in an app with automatic payment is more comfortable than calling a phone number.
I had a "US taxi non-service" experience in Toulouse, France, earlier this year. Taxi arrived late, no credit card payment accepted and we were gouged on price. Same experience in Brussels.
Uber, on the other hand, worked exceptionally well in Belgium, and in Eastern Europe (e.g. Prague).
I choose it because I prefer cars that actually show up when I wait for them. As far as I can tell, a taxi dispatcher is a placebo with no influence over where drivers go.
Thats not why the customers choose it. They choose it because now that everyone can be a taxi driver the cost goes down and so they get the same service cheaper.
Honest question, is it possible for a large and dominant system to innovate without competition ? or does the position makes it short sighted since all it's intrinsic indicators are in the green. Basically the perception of the world for said system makes it impossible to detect issues, that would be devoting energy to try to kill yourself, without someone pulling the rug and endangering you again.
> Is it possible for a large and dominant system to innovate without competition?
AT&T held a monopoly during the golden age of Bell Labs, which was one of the most prolific centers of innovation in the 20th century. Google has a de-facto monopoly over search traffic today, and I think they're a genuine innovator — or at least trying to be.
Peter Thiel writes: "Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and finance the ambitious research projects that firms locked in competition can't dream of." [1]
Hah. "Show me a competitor and I'll show you a loser" [1]
I like the idea that only anti-competitive (probably large) institutions can do stable long term projects (space exploration, say). I think it's hard to argue against that claim, really. Highly competitive firms do produce a lot of stuff, so they feel productive, but the pile of new apps that came out in 2015 will not propel us into a more livable world.
But a lot of resources went into the competitive clusterfuck of building them all! Those resources should have been allocated better.
I'd prefer a responsive democratic state to direct the flow of resources and guide long term innovation, instead of a monopoly that trades stewardship of innovation for an upward redistribution of wealth and has zero accountability to anyone outside of it.
So the answer to the parent poster is a clear yes. How about the more difficult question: Do monopolies innovate more than competitive industries?
Peter Thiel's argument brings to mind similar arguments about billionaire philanthropists such as Bill Gates. Would we be better off if it simply weren't possible to amass such a fortune?
Not to nitpick, but that basic dynamic -- the prospect of decades of monopoly profits driving innovation -- was long acknowledged even when the US constitution was written; it's not just Peter Thiel's thing.
"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."
Leveraging (especially pooling) the massive R&D resources of large, secure companies, while also ensuring that they stayed large and secure, was a big part of how Japan went from a poor, ruined post-war country to a tech powerhouse so quickly. It's my personal go-to example when faced with the assertion that low-intervention, high competition markets are always the best idea, without qualification.
1) Every discussion of Uber includes these anecdotal testimonials of great Uber experiences and bad taxi experiences. Anecdotes don't tell us anything useful, and the pattern smells like astroturfing. For what it's worth, I use taxis regularly and find them reliable, pleasant and efficient - but so what?
2) If Uber wins on 10000x better experience, why do they need to invest so much in lobbying, violating the law, and treating drivers poorly? Why are they losing money?
Imagine a world where crony-capitalist incumbents legislate with the explicit purpose of stifling competition and protecting their monopolies. That is the world we live in.
Given that fact, as Uber your potential choices are to either: 1) ignore those laws until you grow large enough to mobilize public support 2) invest in lobbying yourself as a defensive measure 3) do both.
The fact that Uber is lobbying and in some cases outright ignoring laws has little to do with the quality of their product, and a lot to do with the realities of our current legal system.
At this point, it cannot be fairly characterized as anecdotal that taxi drivers routinely a) demand more than the regulated rate ("tipping"); b) refuse service to persons of color, with disabilities, and with undesirable destinations; and c) decline credit cards despite bearing the processor's trade dress.
(That's just the US, though, can't speak for France, not having researched the market there.)
Agree. The only city that I've used uber/lyft is SF, basically because the taxi system in that city was completely broken. In all other places/cities I don't even think and just use taxis: NYC, London, Paris, Berlin, Beijing, Santiago, Buenos Aires. In all those places even though the experience is not perfect, I have to say that for some reason I prefer it to the current lyft/uber experience. (I live in SF and use uber/lyft pretty frequently)
>>Plain and simple the taxi industry had a monopoly, got lazy, didn't innovate, and didn't give a shit about their customers.
I take this another SV hubris in trying to look at every problem like they've been working on it for a long time, or have better understanding than the actual people working in that domain for decades.
The only reason Uber like companies can give you those rides for a cheap price is not because there is some magic, or innovation happening there. Its because they are burning billions of that VC money to subsidize your travel, transportation is a very capital intensive business.
The day these companies are subject to the same tax rules as every body else and have to work without those billions in the bank, it will be game over. There is a reason why these airlines, logistics and transportation companies are always scraping from bottom.
Its very hard to run these businesses if you play by fair rules and don't cheat.
>> The only reason Uber like companies can give you those rides for a cheap price is not because there is some magic, or innovation happening there. Its because they are burning billions of that VC money to subsidize your travel, transportation is a very capital intensive business.
This is certainly NOT the case in NYC where I live. Artificial scarcity of taxis was created by the city government by limiting the number of medallions to 13,000 and as a result, taxi medallions had cost $1.2 million. Much of taxi fare went to paying for those $1.2 million medallions. Uber has offered lower fees, offers greener rides and lower still fees through Uber pool where passengers share an Uber than the taxi industry with a rating system so that you know if you are getting a good driver. Now those $1.2 million medallions are worth about $700K and many taxis are now not in use and the taxi companies are declaring bankruptcy.
It is possible that if the government had not created the artificial scarcity by limiting medallions Uber may not have gained traction.
The money already came from the sale of the medallions. It isn't a yearly fee, which is good, since at 150m taxi rides per year, that would increase the price of each ride by at least $100.
Though medallion sales also aren't worth anything near $15b, anyway -- the 1.2m figure is what medallion sales peaked at. Most sold for significantly less in the past.
Normally very few new medallions come up for auction; the city knows their value is in their scarcity. Though the current budget[1] accounts for some $400m per year from medallion sales, mostly from the continuing rollout of green/boro cabs, which, if coming from the rest of the system instead, would still be a pretty significant fare hike per ride.
they'll probably institute some kind of tax that if you have a medallion you don't have to pay. Since all the Uber data goes through the internet all the transactions can be tracked and taxed.
> That $15 billion is going to have to come from somewhere.
While governments may tend to think that way, it's ridiculous to assume that once they have a source of revenue it must never go away. That $15 billion could just go away.
More to the point, they already don't currently derive that level of revenue from taxi medallions; those medallions have already been sold. So the only question is whether they try to invent a new source of revenue by adding targeted taxes on something that isn't currently subject to targeted taxes.
Not only do I think you are wrong as other commenters have pointed out the artificial scarcity caused by medallions and the like but for me this isn't about price. I regularly paid $20 (including tip) to get a ride home or to downtown and had no major qualms with it. It's about leveraging technology which the taxi companies never did and are only now starting to do.
>>Its very hard to run these businesses if you play by fair rules and don't cheat.
Yes, exactly why the taxi industry has survived despite not innovating. Their protected status (your idea of 'play by fair rules and don't cheat') allowed them to be lazy and not give a shit about their customers.
I find this amusing, 'Fair' seems to be a word with different meanings to different people based on where they stand.
A journalist thinks, Uber is fair and innovative but a ad blocker is unfair and cheating. Steve Jobs collaborating with other CEO's to drive down programmer salaries is unfair and cheating, while Uber offering the same to drive down driver salaries is perfectly fair to us.
I imagine a job market where companies bid for programmers who would work for least prices. A global kind of a platform which consistently drives our salaries lower.
I find this amusing, 'Fair' seems to be a word with different meanings to different people based on where they stand.
From one of Raymond Smullyan's books: There was one Japanese diplomatic code the US code-breakers couldn't quite figure out during the war, but they settled on an interpretation of "Pro-Japanese" as a working theory. Years later, one of the US crypt-analysts met a Japanese foreign service member and found out from him that the code meant "sincere."
You're right about a lot of things, but 100% wrong in implying that people who have been working in the domain for decades actually know how taxis better than Uber does.
The problem is not knowledge, it's service. Taxis are a perfect example of regulation and stagnation. The shitty service taxis provide have nothing to do with it being hard to provide a good taxi service. They could have provided a better service, they just have no incentive to, because they were protected.
Capital intensive because of the completely backwards requirement of owning a medallion that goes for millions of dollars?
The regulatory capture that entails means that the industry has no reason to improve service because nobody is allowed to compete with them. That's not "SV hubris", that's basic understanding of big business.
I use Uber a good amount (~10x a month) and while I like the service I just don't see why everyone is so impressed with the company. Let's consider what people like about Uber:
"It's so much more convenient to use an app than a taxi dispatch" - totally true. The taxi industry was definitely lazy. But now most Uber markets also have a competitor to dispatch a taxi by phone (Flywheel, etc).
"The drivers are not (jerks|unsafe|scary|etc)" - at this point half of the smart taxi drivers have gone to Uber, there's not much of a difference in driver quality.
I think the real thing that nobody else can do that Uber does is sell you a cheap ride. Uber is cheaper than a taxi in almost every city (30% in my experience). If taxis were 10% cheaper than Uber, I'd go to Flywheel immediately. How did they achieve this low price? Simple: by ignoring laws, not paying for expensive regulations, and passing more costs on to the driver.
This is not impressive to me. I could think of 10 industries that could easily be 'disrupted' if you add the rule 'You're allowed to ignore all existing laws and regulations'. I could provide you with a $20 massage ... assuming you don't want a licensed massage therapist. How about a $10 light repair ... assuming you don't want a real electrician.
You might respond: "but habosa, who cares? You're getting a good ride at a lower price with more convenience". My frustration comes from the precedent this sets. Uber says that if you have enough VC funding, you can make lawbreaking and regulatory blindness a central pillar of a billion-dollar company. There are a lot of people who have invested in credentials such as taxi medallions (or the equivalent in other industries) because they didn't have a hundred million dollars of VC funding to shake off the lawsuit. And some Uber-like company can come into their space and instantly devalue their investment. I don't believe the ends justify the means because soon there will be an Uber we don't like, and there will be nothing we can do about it.
>"The drivers are not (jerks|unsafe|scary|etc)" - at this point half of the smart taxi drivers have gone to Uber, there's not much of a difference in driver quality.
Au contraire - the rating system put consequences in place for poor driver behavior. Previous to that I had plenty of drivers simply never show or show fabulously late for pre-booked appointments. I don't know if Uber will penalize a driver for taking too long to show, but I know I can with a poor review. Not only will my negative feedback make it to a customer service rep but if enough people also rate him low he's out of the system. There's no equivalent feedback loop in the taxi system.
Depending on locale, taxi drivers have a feedback system. You can complain to their licensing authority. In some place that complaint is a joke... In other places, it actually works.
> "The drivers are not (jerks|unsafe|scary|etc)" - at this point half of the smart taxi drivers have gone to Uber, there's not much of a difference in driver quality.
Totally not my experience. Somehow Uber's rating system has coerced gonzo taxi drivers into sane drivers w/ good customer service. That's the real disruption, IMHO.
I would say that the average Uber driver is, as you said, better than the average taxi driver.
But I have a few counterpoints:
1) That's a good argument to adding a rating system to taxis, not trashing the industry entirely.
2) I bet if taxis were much cheaper than an Uber a lot of people would go for the cheaper ride over the better one. Sort of like how UberBlack is so much less popular than UberX.
I was in complete agreement with you until the last sentence. "An Uber we don't like" probably won't happen because if people don't like a service, they won't use it. An unpopular business can rarely force itself on customers.
And it seems that the same is true of Uber itself. It's possible that the existing laws and regulations aren't necessary. People seem to be able to conduct themselves properly without being licensed and bonded. I consistently hear more good things than bad things about Uber, and all of my personal experiences have been positive. Whatever they're doing, it's working.
The same might not be true for an electrician or a massage therapist. As much as I hate to say it (deep breath), the Free Market seems to be sorting this out just fine. I'm not going full libertarian and suggesting we conduct social experiments with the FDA or the fire department. But in some cases, maybe the best way to figure out which regulations are really necessary is to ignore them and see what happens.
By an "Uber we don't like" I mean "an uber that comes into your industry" (or an industry of your family members, etc).
As far as The Free Market, I agree 100% that Uber provides a good service. However I feel bad for the people who made investments in the taxi industry by following the law and then had those investments completely devalued by a lawbreaker with good PR.
A ton of america's certifications are not necessary, I'd bet. But the proper method for removing those certifications is not to just ignore them with a fat stack of money. One day that will go wrong.
Tangentally, I think AirBnb will one day get bitten by this. They're gonna have some shady AirBnb burn down without a fire alarm or give a bunch of people an infectious disease and everyone will realize why we have hotel regulation. Again this is another service of which I am a happy customer, but we are playing with fire.
I have to disagree, in that Uber/Lyft's success cannot be attributed merely to the price differential from flouting regulations; they significantly increased utility by applying modern IT to ride services: mutual rating, seamless payment, finding the the nearest driver/best route, remote monitoring of the route taken, quick complaint resolution, pairing people into carpools, and the reassurance of seeing where the car is. Those are things the cab companies could have done, but didn't. (At least, they could have asked regulators for the relevant exemptions on grounds that it would enable better service.)
Remember, they started as (what's now called) UberBlack, which simply allowed licensed limo drivers to fill in dead spots between requests. And, they had to overcome the barrier of not being able to just flag down a passing taxi.
They also solved a major collective action problem: drivers privately benefited from screening destinations (and races); enforcement of the laws thereagainst were far too spotty, and victims themselves had to bear a disproportionate private cost to testify and make the system work. So Uber/Lyft put a "veil of ignorance" over destinations, ensuring that everyone got a random share of the bad routes. The reputation system also obviated much of the reason for for discrimination against "scary looking" people.
Furthermore, even flouting regulations should tolerated if the provider can accomplish the goals of the regulation (thereby revealing a more efficient way), and it looks like Uber/Lyft have solved the traditional problems of e.g. discrimination, fighting over fares, clogging major pickup locations, drivers being targets of robbery, longhauling, declining credit cards, kidnapping passengers, reliable service and whatever else. If Uber/Lyft were externalizing major costs that the regulations were preventing, it would have shown up by now.
(FWIW, I think they are externalizing a cost in terms of screwing over drivers and bystanders on insurance, but the incidence seems to be rare enough that if they were forced to cover this, it would not significantly impede their business model.)
I agree with a lot of your points, however I think that most of the points for Uber/Lyft that you made are also true of Flywheel or any other system of "regular taxi dispatched by a mobile app". And we have that now, but they are not widely used because they can't compete with Uber on price (and lack of marketing, etc).
Every time I see an article about Uber or taxi drivers I feel thankful that I live in a place where apps like Hailo exist. Every time I read the comments on these types of articles I see people pointing out what the people want/need and how taxi companies could make it work while thinking to myself "Hailo already does this".
It was created by ex-taxi drivers too and every taxi driver I talk to speaks very highly of them and how they manage to satisfy both drivers and passengers. Hopefully they can manage to expand further
I'm not sure if Hailo works like MyTaxi, which is quite popular in Barcelona (specially since Uber got banned). Personally, I don't like it. It's just an app that replaces calling a taxi company. So yeah, better than calling, I agree, but it's not as good a service as Uber. Why? Because you're dealing with taxis. In Barcelona, you either live in a part of town where there are taxis driving by your street all the time anyway, so why use it? Or, like me, live somewhere where taxis don't really go as much. So when I use MyTaxi, they're always quite far, and very often cancel the ride when I've already been waiting for a few minutes, probably someone hailed them on the street. So overall, not the awesome experience that Uber always has been for me.
Hailo is actually available in Barcelona (as well as Madrid), and it deos basically work as you describe. However, your issues sound very similar to how it was in Dublin but they started expanding further and now they cover the entire county and they're pretty damn good. There's even competitors over here (Lynk is one I think), which is usually a great sign.
If anything, I think the Hailo case shows that these drivers will have a tough go of things. Hailo managed to get significant funding, had their own in-house engineering team and still had to pull out of all of North America. It's a difficult market to compete in (unless taxi manages to leverage their monopoly status to keep new apps like Uber out).
Hailo looks pretty good. I'd never heard of it before.
However, VTC Cab operates "as a nonprofit association with a membership fee" which is pretty sweet. I'd like to see more platforms operate that way-- either as a non-profit, or as a co-op-- in order to avoid the exploitive nature of platforms like this.
I don't quite get why it matters if it's for profit or not. If its about the uber-driver split then we're talking about lowering the 20% fee, not a huge deal in the scheme of things. Presumably the fee will not be that far from that 20% cut.
The more substantial part of the grievances that taxi and limo drivers usually have with uber is about prices and the number of participants in the market. That is a negative sum game. Drivers' gains come at the expense of consumers and (often) other drivers.
What ends up happening with for profit and relatively low entry (or well-defined entry) markets is that it's a race to the bottom in prices. Someone is going to have to pay more or be paid less. Investors won't want to be paid less and consumers don't want to pay more.
So it's the people providing the service who bear the brunt of the force of competition. They get paid shit and/or get treated like shit.
From this perspective, a co-op for taxis sounds like a splendid idea for everyone except investors.
Plus the profits for international technology platforms - especially as they mature - leave the local and national community, often ending up in a tax haven.
People should be focusing on local and national businesses (and things like co-ops) to keep their communities alive. The startups that are celebrated on this website are the antithesis of that mindset.
I'm think you've got a leap there. I agree that when the barriers to entry go down (as uber does to the taxi market) prices go down. Obviously the drivers don't like this. But, as you said it's not just investors in the mix. It's the consumers that this plays against..
But, for this dynamic to be more favorable for drivers you need to price fix and/or get drivers out. Either way, it's not the best for consumers. It also seems unlikely to succeed unless they can prevent new drivers from undercutting them on Uber. This is effectively a cartel of some sort, regulating prices and producers.
I'm not against co-ops. In some cases they make sense and maybe this is such a case, but they are not a neutral party. They have their interests and those are not necessarily everyone's best interests. They also will use regulation and/or market power to benefit themselves at others expense, if possible.
A co-op isn't supposed to be a neutral party, it's supposed to represent the workers (and possibly, the customers, depending what type of co-op).
The reason I would support a co-op version of Uber over the actual Uber is exactly because that would be an organisation run democratically by it's drivers.
I'd prefer one where customers got a vote too over that as it goes.
But this is why it makes a difference whether it's a corporation, a non-profit, a worker's co-op or a workers-and-customers co-op: Who gets control? Who gets the profit?
Non profit's are marginally better than corporations because at least the few in control can't obviously easily use their power to directly claim it's resources for themselves.
Worker's Co-ops are marginally better than non-profits, because they give democratic powers over the decisions of the organisation to all of the workers, not just the bosses.
Customer Co-ops are marginally better than Worker's Co-ops because the customers also get a vote in that democratic enterprise.
And of course, often, visionary leadership from a single benign dictator that can ignore his customers, his workers, his shareholders and just DO THE RIGHT THING is powerful like dynamite.
Dynamite can be used for good or evil, obviously.
As you said, some things need managing in different ways.
Also: I've never actually used Uber or any of these other apps. I tend to get the bus frankly. The bus timetable apps are great ;)
you act like co-ops work different than any other organization. Uber has used political power to get politicians to back down which is basically the same as getting politicians to pass regulations.
Unfortunately Hailo already tried to expand further - they were in New York until a few months ago, but were barely a blip on the radar compared to Uber and (to a lesser extent) Lyft.
Assuming you meant NYC, the problem for Hailo/Mytaxi/etc is that yellow cabs are only allowed to pickup street hails and can not be dispatched to you directly. So unless such regulations are loosened, these apps just won't work.
There was/is an active pilot for "e-hailing", which Hailo participated in. I tried it - hailed a cab with the app and it drove up to meet me. However, people kept trying to get into it while I made my way over to it - people just aren't used to yellow cabs behaving that way.
Uber vs this, looks like Apple vs Android (or PC many years ago).
What I mean is, to compete with Uber it's a good idea to build taxi calling platform that all local taxi networks could adopt (and brand to some degree). Same way that Google needed to create open platform that established mobile manufacturers could participate in.
They will eventually adopt it because it brings customers (and they can't adopt Uber), and customers will adopt it because they'll be able to use central platform to call local taxi with all the conveniences of pre-defined destinations and automatic payment.
I think the Uber is successful not because of price achieved by hiring non-professional drivers with their non-professional cars and getting the price down. I think they are successful because you no longer need to talk to the driver or manually pay to get somewhere.
"Angry French Uber drivers have created their own Uber"
Now that's a misleading title. These guys seems perfectly reasonable, and it is clearly an alternative platform that suits better their own interests than Uber, not something done by an angry mob.
I still don't understand why Uber couldn't let drivers set their own fares. It seems to me that it should create a healthy market that in the end would be great outcome for consumers.
E.g. some hours are much less profitable for Uber drivers - so they set the fare higher and thanks to that you can always find a driver when needed. On the other hand, higher current fare works as an invitation for the new drivers. It auto adjusts to drivers/users availability in given region.
Because Uber is using these people as a resource and allowing them to set their own rates would cut in on Ubers margins.
Drivers provide capital goods (a vehicle) and work (as opposed to hiring a bunch of employees which you'd have to pay even if there was no work) and they provide these at a moments notice at Ubers discretion.
If Uber allowed drivers to set their own rates that would initiate a 'race to the bottom' reducing the fares and thus Ubers percentage.
Because it is convenient to make these operators out to be independent entities for legal reasons does not rule out Ubers desire to treat them as unpaid employees for totally different reasons.
From Ubers persective some independence is good, just enough to not assume any responsibilities that go with operating a company like this but too much independence (such as control over the rates) is a bad thing.
The 'new middlemen' have to ride a very fine line here to protect their income stream.
A real free market is simply not in Ubers interest, they would like the prices to stay as high as possible, basically what the market will bear.
>If Uber allowed drivers to set their own rates that would initiate a 'race to the bottom'
Not necessarily, it could easily go both ways as it would create a market for people that want to pay more for "better" drivers.. people with nice cars (teslas and generally expensive automobiles) just to be seen in them or to experience riding in them, drivers that pamper their clients with newspapers, in vehicle entertainment, free water, etc.
You're right, it could go the other way. Note that Uber drivers protested the recent Uber price drop but Uber only drops the price to compete with other companies and does not care what happens to the drivers who are just a resource to them.
So individual drivers may well increase their rates if they're left free to do so.
But the biggest discriminator between getting a lot of fares and not getting fares will be price, not newspapers or free water and I suspect that the majority of the drivers would drop their prices in order to compete with other Uber drivers, rather than with other Taxi companies.
This then takes away control from Uber over their revenue stream and would quickly erode the market. In countries where I've been where cabs were completely de-regulated cab rides were ridiculously cheap because of this effect.
Right, but what would the UX look like for that? You're suddenly selecting multiple options, filtering based on your criteria, then having to reselect when there's not enough drivers that meet your criteria, etc. etc.
Part of the beauty of the uber experience is that (at least from a UX perspective), it's very very frictionless. You make two, maybe three selections and hit go, and you the car arrives.
Right, but there's three or four of those and you can only select one. The GP was describing filtering based on driver quality, on car style and model, etc.
That could easily balloon to a pretty large number of elements.
Not many people would regularly pay more for a more glamorous taxi ride. Most people I know see it as a commodity, "This driver hasn't died in a car accident, good enough for me".
This is not so obvious to me. If rides are cheaper then perhaps more people are willing to use it.
Plus, there clearly is a point where drivers don't find it economical anymore. And it seems from the article, that so far it is Uber who's trying to make rides cheaper.
"Not necessarily, it could easily go both ways as it would create a market for people that want to pay more for "better" drivers.. people with nice cars (teslas and generally expensive automobiles) just to be seen in them or to experience riding in them, drivers that pamper their clients with newspapers, in vehicle entertainment, free water, etc.
"
All great theories, but in practice, history has shown that the thing that drives most situations like this is price, not anything else.
Exactly, when I was living in Chicago, I had drivers who were literally worth 2-3x what I paid for my trip all because of driving nice CLEAN cars, treating me literally like royalty and many other things.
Taxi's I've taken didn't care about anything and I'd sometimes step in some fluid I'd assume was puke from a previous fare and they had no care outside of giving me dirty looks because I only gave a $2 tip on a $10 fare.
Followed by Uber eliminating drivers all together in the future, where possible, with self-driving vehicles. I have this nervousness, excitement, that would could see the biggest free fall in all of history for a company at some point in the future if they ever legitimately start abusing (that's what I would call it anyway) the relationship with the drivers.
> Followed by Uber eliminating drivers all together in the future
Nah, having to own and maintain a fleet of vehicles would bring about similar issues. Uber wants driverless vehicles but they'll want to subcontract to fleet owners (or individuals), not to be on the hook for maintenance and legal issues.
Perhaps Uber will turn into a franchise operation where you get a franchise, buy a few cars and a base somewhere cheap to store and clean them and you just send them out to earn money.
But there will be a much more consistent experience from a services that vertically integrates the whole thing. Some people will prefer that. I will prefer to have more than one transportation company in the future.
That's what the surge pricing system is intended to do, to some extent. However, significant variance in pricing removes the reliability and consistency of the service. Designing a UI to allow the user to see the supply market and set a rate xyr's willing to bear would also be a nightmare.
Surge pricing aims to balance the supply/demand curve and a consistent experience, resulting in more future rides.
Sidecar is trying the different model AFAIK. I'm myself very doubtful that it would work well in practice - as a consumer I don't want to haggle the price in the ordering process, I just want hassle-free ordering experience with the constant price level.
For one thing, the app experience would be significantly more complex for users because the consumer would need to choose between drivers based on pricing.
This is called disintermediation. In short, unless you can convince at least 51% of the drivers to join your platform in a very short period of time, your offering will be inferior (longer ETAs, lower earnings per hour for drivers) due to the network effect. As times go on, your drivers will leave the inferior platform. This is assuming that your app is at least good as Uber's.
There's not much of a network effect with taxis. Someone's going to build a free aggregator so you can see which local service has the closest car and it will become a commodity.
The network effect was just explained above. The more drivers on the system, the shorter the ETAs. The shorter the ETAs, the more riders want to use that system. The more riders on the system, the less downtime between each ride for drivers. New entrants have to subsidize the market (pay drivers more than they make and give riders steep discounts) in an attempt to catch up.
Recent reports about Lyft burning hundreds of millions of dollars in a relatively short amount of time, without gaining much market share most places, shows just how high of barrier there is. Hailo pulled out of all of North America this year for similar reasons. It's just really expensive to try to subsidize your way to competing with the network effect.
Well, there's a difference between being able to work for multiple systems, and having all or nearly all drivers actually doing that. Is there anything to suggest that all or nearly all drivers actually do that? In SF i see most uber drivers exclusively driving for Uber (but most lyft drivers seem to be on both systems). That's an admittedly small sample size, so is there some evidence that isn't accurate?
You don't need the drivers working for multiple systems, you just need the users to be using an aggregator that connects to multiple providers, like Kayak or Expedia do for flights.
Once the user is blindly choosing between providers based solely on price/ETA then the established companies have no advantage anymore and the margins will go to zero just like the airline industry.
the idea that it's a winner take all market is crazy to me. it's too big a market and too many people to sell the service. Can't be long before priceline, expedia etc gets in on the game. if lyft let sellers set pricing wouldn't that offer better pricing to win over that segment of customers. If Uber is able to transition to driveless cars that might be different.
There's no reason to suspect that consumers (or indeed drivers) will only use the one service though. Consumers are focused more on specific availability than average availability, and just because Uber has more drivers doesn't mean they won't sometimes only be able to offer the second quickest time and lowest price to a person waiting in a specific place. Provided there are enough drivers to ensure that it's worth consumers' while checking their app, the service can remain viable. Traditional telephone-booked taxi services usually aren't local monopolies.
From the article: "The geolocalized app offers the same basic services as Uber; users can hail black cars, rate their drivers, and drink free bottled water."
Does the app also remove drivers with consistently low ratings from the system? From where I stand, _that_ is the killer feature of Uber. In the early days, I was happy to pay a premium to Uber not to put up with the typical crap you get from cabbies in Los Angeles. For example, swearing the entire duration of a cab ride from LAX to El Segundo or Manhattan Beach because they were hoping to go for a longer ride.
I've never had an Uber or Lyft driver that was anything but pleasant to talk to.
An app that functions much like Uber (handles payments, hailing, logistical things, etc.), has a recognized brand and federated logins (users can travel and use it in different cities, much like they can Uber), but which can be sold to municipalities, counties, and states, as a means for managing their taxi infrastructure. In other words, Uber, but for licensed cabs who manage and publish their own pricing structure through the system.
Now, I'm not suggesting that this would necessarily lead to immediate gains in customer satisfaction, but it avoids creating a monopoly on driver employment, which really bad in the long run, for many reasons. Some of the bad things that can and will happen, if Uber corners the global market (they haven't quite yet):
1. Replace all drivers with self-driving cars, starting with the busiest routes first
2. Raise both fare prices and the percent they charge to drivers (we've seen them experiment with the latter many times)
3. Take (even more) shortcuts to increase profits, at the expense of driver and rider experience, since there is nowhere else to look
So, while Uber makes most taxi companies today look bad (quality, and price in some cases), the situation is not sustainable when they become a monopoly.
I'd love to see some kind of universal "Hailing" API. Something that would allow a single app to coordinate rides wherever you go.
I travel as well, and really wish I didn't need to have an entire folder of transportation apps on my phone.
But alas, I have a feeling that many services would not go along with this because of direct competition in the same market area. And some probably just aren't sophisticated enough to publish an API, much less adopt a centralized / standardized interface.
"Whereas Uber takes a 20 percent commission for every trip in Paris, VTC Cab charges its drivers a monthly fee of €250"
So the drivers need to make at least €1,250/month for this model to be better than Uber (for the driver)? Not to mention that it has a higher upfront cost.
Sounds like most drivers would rather pay 20% on whatever they make than pay an upfront fee with no guarantee of revenue.
I'm sure there are plenty of drivers who drive for Uber to supplement their income, not replace. If they already have a car, they only need to cover the additional mileage/depreciation, not pay for the entire car lease.
>they only need to cover the additional mileage/depreciation, not pay for the entire car lease.
Don't forget the extra insurance required when you are using your vehicle to transport passengers, commercially. Of course, not many people actually buy it, which is essentially insurance fraud. Don't think so? Call your insurance provider and ask their opinion.
Bear in mind that the other costs for the driver are the same - they need to pay the car lease, insurance, etc in both cases. As far as I can tell, the only difference is 250 vs 20%.
What's the user experience like? There is a lot of talk about these "worker-own" apps/networks, however I very much doubt that they are able to compete with the uber level of service in the longer run. You need lots of software engineering etc skills to run this kind of service smoothly.
You need lots of software engineering etc skills to run this kind of service smoothly.
True, but customers can and do put up with a terrible product if they have a good reason. Look at things like Napster - that was an appalling product but it had millions of users because it did something people really wanted. In the case of an owner-operated Uber clone, that app could be much worse if people want to support a business owned by their local drivers more than they want the smoother service of Uber.
I have no idea how many people are anti-Uber enough to support a rival whose tech is only, say, 70% as good as Uber, but I wouldn't be that surprised that it'd be enough to work in some regions.
Technically yes, but some platforms increases the priority of drivers the longer they've been waiting.
For someone operating on multiple platforms, they'll have to go offline when the other app gets a ping. This resets their priority, and really just results in a multi-operating driver getting 80-90% of their pings in the busiest app.
I don't care about the REST API, but I care how well the app works etc. It doesn't sound trivial to me. Showing the locations of the car and the customer in real-time, routes in real-time, having all the communication systems working all the time, the reputation system etc.
It looks like real time locations when I've taken uber, unless you mean not real time as in slightly delayed time to get GPS, go to uber and then back to my phone.
It matters to me, it tells me tech isn't second hand unlike EVERY OTHER TAXI COMPANY with their shitty unreliable apps.
It's a litmus test. Obviously your milage may vary but I've taken more Uber per month than I have taxis per year before Uber came to Stockholm. They made it so available.
That wouldn't make it REST either. It meets the REST constraints granted automatically through use of HTTP, and doesn't meet any more through its design.
It seems to me Uber's management openly disregards their workers (but tell me if I'm wrong) and they openly disregard other social goods such as the law. I see this in actions and occasionally in words too.
If Uber becomes the dominant service, which due to the network effect would be the only place to find customers/drivers, what will they do to their workers?
There's no reason to think Uber will, out of the goodness of their hearts, do any less than use their full market power to take as much as possible from their workers.
It's great that they are deciding to compete in the marketplace rather than the courtroom.
It'll be interesting to see if the zero-commission model works for them though - The 20% Uber takes is actually fairly reasonable (and much less than what a traditional taxi company takes from their drivers) when you consider CC fees & Collections, customer support costs, customer acquisition costs, marketing, etc is all covered by that. Uber is spending huge amounts of money on growing the customer base (which is good for drivers as they have a liquid market of ride requests coming in all the time), and a service like this will most likely not be able to invest as much in that since they don't have the commission and investment to pay for it.
> He says it costs more than $200,000 a year to maintain the app, which was developed by Multi Brains LLC, and his organization has begun buying ads on Google and Facebook.
That sounds a tad bit less (even assuming 250K, to account for "more than") considering it includes salaries for >2 app developers, hardware/AWS costs and marketing costs which seem to include Google and Facebook ads. What am I missing here?
Looking at their android app store page, Multi Brians LLC has built over a dozen Uber clones https://play.google.com/store/apps/dev?id=592351321420775866... . The UI is very similar between the apps and I assume the backend is shared so there's not much dev cost for an additional app.
I can easily see then offering an opt-in protocol for their clients allowing users/travellers from one system to book rides in another system/city. Bingo!
App looks pretty nice which makes a change. Here (Newcastle, UK) a lot of taxi companies have their own apps which are not even stable hence Uber is useful (the only reason I actually use Uber)
I am most curious about how the numerous seasoned VCs who have poured money into Uber, failed to recognize the thin barriers to entry for a would-be competitor.
Bitcoin? Really? What kind of alternate reality do you live in that there are millions of folks out there with:
(1) bitcoins
(2) the technical wherewithal to use them
(3) actually would consider doing so in a cab?
Bitcoins are exactly the opposite of credit cards, they are far from instant and it's more then a swipe/touch/insert + a pin, signature or even nothing.
The taxi drivers in Paris are much more likely to compete if they think of what the customer wants which is lower fares and a quicker ETA in a reliable taxi. With the new app, since they are not paying the 20% fee of the Uber drivers, they should undercut Uber by 20% thus attracting more customers and making up in volume money they lose by having lower prices.
The VTC app should also implement the equivalent of Uber pool which is greener than regular taxis while being able to offer customers even lower rates while improving driver income.
NYC does have a taxi app for e-hailing called Arro which is able to compete with Uber when Uber uses "Surge pricing" since the taxis don't charge surge pricing.
Agreed. I was flabbergasted when I got to that point in the article and it was clear they were trying to compete with Uber by ... charging significantly higher prices?! Good luck with that. They aren't charging 20% on every fare, so if anything they should be lower.
And so goes the free market, in its most refined form .. how easy it is, after all, to simply clone a service in some other language, some other framework, and continue to deliver to customers.
What bothers me most is how the OS vendors are asleep at the wheel, again. These kinds of services - "I am [here] and want [blah]" - are broadly applicable. "Word"-"Summoning" apps are a dime a dozen. Shouldn't this be a builtin by now?
Because users demand it, perhaps? I mean, stay with me, but I happen to think Dropbox is a calamity that only was possible because of the Browser wars taking out pretty much everyone, with the survivors basically going insane. Peer-to-peer service discovery, built-in, should be a major feature by now. I shouldn't need to worry about my Face-privacy; my portable computer has the capability to handle that for me. If only someone would program it so.
But they don't get the huge 20% commission on the ride? Well that's amazing.
Also looking at how much it cost them to maintain the app, if they have 1000 drivers subscribing for just a month they already have reached a turn over.
I just hope it offers the same kind of experience Uber does: drivers are ranked, and thus can't act like taxi drivers.
PS: in Romania the rate/km is written on the cab. Even similar taxis can have very different rates. Most people don't see that and get screwed afterwards. In Vietnam they use fake counters and increase the price x10. I welcome any solutions to these problems (and Uber is def. one)
"I just hope it offers the same kind of experience Uber does: drivers are ranked, and thus can't act like taxi drivers."
On Halloween, I saw this older Uber driver pick up/take home one groups of drunks, and idiots all night. This driver had a black Uber approved SUV. One passenger insisted on taking a 10 foot tree branch home to her destination. She tried to stuff it into his new SUV, and ripped the headliner. The driver offered her water. She then told the driver if he didn't get her home, with her light saber she would leave him a bad review. He let her hold the branch outside the SUV. Her light saber was scratching the new paint.
Passengers shouldn't be able to leave any remarks, unless their was a major problem with the ride. People have gotten way to finicky, and think they have a right to review every aspect of this sharing economy.
While I watched this guy smile, and open doors; I thought how would I handle these people. I think it would be along the line, "Get in this 4 door Uber approved chariot--that I'm still trying to pay off. Shut the F--- up, and I'll take your drunk a-- home. If you keep quiet, I won't throw the mineral water at you."
> Passengers shouldn't be able to leave any remarks, unless their was a major problem with the ride. People have gotten way to finicky, and think they have a right to review every aspect of this sharing economy.
You're one time anecdote won't replace my manes rides with french taxi drivers who behave like thugs. I don't know about the rest of the world, but here in France people were pretty happy about Uber mostly because of the way taxi drivers behave.
Exactly. While there are obviously some decent drivers, as a group, they are a slimy bunch both in the car as well as outside the car.. Committing violent assaults during the Uber protests, throwing bricks, setting fires and just being altogether distasteful.
On several occasions in Avignon, I pre-paid for taxi service to the train station and during the first instance, the guy never showed, the second instance the car arrived 30 minutes late. Still attempting to get the refund.
I've used Uber all over the world and never once have I had issues like this. I have no sympathy for taxi drivers. They don't care about me when a freelance client wants to underpay me, nor do I expect them to. I'm a big boy. If some business condition arises that affects my livelihood, I don't go set fire to the Prefecture, I adapt.
Driving a car for money is still a thing. Supply and demand exists. Thus the market can solve this. The taxi crowd wants to distort the market to protect their fiefdom. While that helps the special interest, it harms the overall public.
Yeah, unfortunately one way review systems take the "customer is always right" mantra to the point of permitting blackmail. At the very least, unreasonable customers should be possible to report.
If I was Uber, I'd make the app record video (only uploaded in the case of a negative user review on either side). The phone/tablet is usually mounted anyways, so it should get a good view, and at minimum get audio if the customer is out of view
Apps like these existed before[1], many real and licensed taxi drivers participated. Only difference I can think of is that the driver decided the price (as he had to), app was there to just check it for users. You could pay both through the app and in person I believe.
Plain and simple the taxi industry had a monopoly, got lazy, didn't innovate, and didn't give a shit about their customers. I relish watching them burn down in the same way I enjoy watching Google Fiber trouce it's competition.
Now if drivers want to create an app to compete with Lyft/Uber then more power to them, if they want to run it as a non-profit then great, just as long as their app isn't a buggy/crashing POS then I'll use it but I'm not holding my breath for that to happen. The best I saw from a cab company was a mobile website that asked for your location and allowed you to dispatch a cab after typing a short message. TWICE they never showed and once they didn't even read the message as I had scheduled the cab for a specific time and they showed up 45min early and called to ask where I was...