Althouse: "The most important question surrounding Uber is not whether it is a platform or a transportation company, or whether its drivers are employees."

January 14, 2017

"The most important question surrounding Uber is not whether it is a platform or a transportation company, or whether its drivers are employees."

"It’s whether it can only recoup its investors’ billions by building a monopoly (or at least duopoly with Lyft) on the ruins of public transportation – and it may not take much to tear it all down."

35 comments:

Michael K said...: The Guardian. All I had to see,; 1/14/17, 6:53 AM
tim maguire said...: It's real killer app (as with the entire sharing economy) is that it ignores virtually all laws and regulations governing the transportation industry. Take that away and Uber goes away. Of course, the consumer will likely still be better off.; 1/14/17, 6:56 AM
Alan said...: A claim that someone may establish a monopoly that doesn't mention barriers to entry is absurd.; 1/14/17, 6:56 AM
Ann Althouse said...: So Uber is losing tons of money, but hopes to make money later after the competition is destroyed, and I take it the issue you are raising is that after public transportation is destroyed, there would be no end to all the new Ubers.

But what happens if public transportation goes away, then Uber gets expensive, because it needs to begin to charge what it costs and make a profit? Why would competition come in if the product can't be profitably sold at the price people accepted paying.

Eh. I haven't read the article carefully or thought about this much, but the city can always bring back buses. Don't thy add and subtract bus routes all the time?

If they've got trains, through, it's not flexible. You might not want to live through the wreckage in a city that relies on trains.

In any case, the streets in a place like NYC can't handle everyone going about in individual cars. There's a ceiling on the Uber-instead-of-the-subway alternative.; 1/14/17, 7:02 AM
MayBee said...: Uber came up with an app so it was easy to get transportation from exactly where you are to exactly where you want to go.
In London, the cab companies came up with a way to compete- they are clean, professional, knowledgeable, AND they created an app called Hail-O, so you could app a cab.
When I lived in Chicago, there was no such thing. For a while, you could Uber a cab, but the cabs weren't necessarily clean, professional, or knowledgeable. Why wouldn't you just take the cheaper option?

ISTM these old-school transportation modes aren't even trying. They don't want to make life easier or better for their consumers, they just want to make more rules.

(in London and Chicago I would take the bus when the route was easy and the stops were convenient, which was often. But the bus is full of cray. With Uber you only have your own craziness to deal with); 1/14/17, 7:08 AM
MayBee said...: I'll take a subway, but I've realized I hate them. I hate being underground. I hate feeling like I'm going to get stuck in a tunnel. I hate being afraid someone is going to push me onto the tracks. I hate being packed in. I hate having to breathe on the person I'm packed in next to when I'm standing. I hate the awful lighting. I hate it when it's too empty (that's scary). I hate climbing down down down to the tracks in the station. I hate it when my card doesn't work and I hit the unmoving crotch-high turnstile. I hate it when they have those barred turnstile doors and I have something awkward to get through (like a yoga mat). I hate being afraid I've somehow gotten on the express instead of the one that will stop where I need it.; 1/14/17, 7:14 AM
Laslo Spatula said...: Authentic Big City Dialog...

“How are you doing tonight, Gwen?”

“I’m doing well, Isaac. How’s my favorite Uber driver?”

“Doin’ great. Mo money Mo money — we know ALL about that, right?”

“Oh yeah. The guy in my last session tipped me two hundred dollars.”

“Sweet. Did he pay extra for using the back door?”

“Not even. Straight doggy-style. Meat and potatoes, baby.”

“You know, sometimes with me driving you around to all your ‘appointments’, I kinda feel like your pimp. Ha.”

“You’d beat someone down for me, Isaac? If someone needed beating down, I mean?”

“Oh yeah. Where I grew up, beatin’ someone down ain’t no big thing.”

“Good to know, Isaac.”

“You have someone that needs beaten’ down, pretty lady?”

“There’s always someone, Isaac: there’s always someone.”

“Ain’t THAT the truth.”

“Funny. You know, what WOULD you charge if you were to beat someone down? You know, just talking, of course.”

“Of course. I bet we would find a suitable exchange.”

“I’ll keep that in mind.”

“Hell, we might even work it out in Trade. Just talking’, of course.”

“Of course.”

“How big is he?”

“How big is who?”

“This guy who needs beatin’ down: is he a big dude?”

“Pretty big. Used to work as a bouncer at I strip club I was at.”

“So a big dude.”

“What would that be? Like, an hour of Trade, maybe?”

“We’re just talking’, of course.”

“Oh yeah. Just talking.”

“A big dude, right? An hour sounds good. But it’d be a back door hour.”

“Back door? You’re gonna put the big hurt on him?”

“Hell yeah. He’ll be crying like a bitch, and he won’t even know why.”

“You like the back door, don’t you, Isaac?”

“Baby, I’m a Back Door Man.”

“Ah. The men don’t know…”

“…But the little girls understand. You got it, Gwen, you got it.”

“Well, this is good to know, Isaac. Just talking, of course.”

“Of course, Pretty Lady. And we’re here…”

“Thanks for the ride, Isaac.”

“See you in an hour?”

“Half-hour, this time. I won’t even be taking off my shoes.”

“Ha! Be safe, little girl…”

“I will, Isaac: I always am…”

I am Laslo.; 1/14/17, 7:24 AM
Ann Althouse said...: "I hate being afraid someone is going to push me onto the tracks."

I've had that feeling ever since a notorious incident in the 1970s. I never stand where I could be pushed. Get on the other side of one of the pillars. You've got to assume there is always someone crazy who will succumb to the ideation of pushing. Don't be the figure on the edge that unleashes that crazy urge. In fact, how do you know you won't be overcome some day by a mad urge to jump? How can we trust the human brain. I trust the pillar.; 1/14/17, 7:27 AM
Laslo Spatula said...: "I hate being afraid someone is going to push me onto the tracks."

I don't like the subway because I am afraid that I am going to push someone on the tracks.

Same with standing by people on balconies.

I struggle mightily against my Gravity Fascist impulses.

I am Laslo.; 1/14/17, 7:42 AM
Curious George said...: "But what happens if public transportation goes away"

It won't. Unlike private entities it doesn't have to ever be financially viable. Proof? Look at all the empty buses driving around Madison.; 1/14/17, 7:45 AM
MayBee said...: In fact, how do you know you won't be overcome some day by a mad urge to jump? How can we trust the human brain. I trust the pillar.

Ha ha ha yes! I fear I'll have that mad urge! I have that same fear when driving on bridges and when driving and there's a wall next to me. I don't want to crash into the wall, but what if all the sudden I want to?; 1/14/17, 7:50 AM
rehajm said...: They make some dubious claims and assumptions to arrive at their public transportation rosary clutching. For starters:

-Uber mainly competes with taxi and limo services, not light rail. Uber Pool pricing might attract a few riders but it certainly isn't their main customer base.

-They point only to DC Metro losing money and conclude it's because of Uber. Are there other reasons for the loss? Could the fact public transportation fares are unsustainably low because it is (and is supposed to) be a government subsidized public service affordable to everyone? Is public transportation efficiently managed or does it serve other interests like politicians and government workers? Could this be happening everywhere?

-The story correctly notes Uber is a low margin business but then lumps it together with other high tech firms with rapidly expanding margins in their growth phases. Uber is much more similar to a lower margin tech company like Amazon, which ran operating losses for many years.; 1/14/17, 7:52 AM
Michael K said...: In Los Angeles, the new rail system did not go to LAX. The cab companies did what they do best. Bribed a few politicians.

They may now have added a line to LAX but I don't go there anymore.

Uber will be followed by self driving, short term rental cars.; 1/14/17, 7:56 AM
steve uhr said...: Predatory pricing is risky and rarely successful. Unlikely uber will put public transportation out of business since everyone knows that if that happens uber will attempt to get monopoly profits.

If I were uber I would be worried about software that turns every driver into its own business. Uber gets 20% of each ride. That provides big incentive for other software producers who want a chunk of the the business. Get rid of the middleman.; 1/14/17, 8:27 AM
MadisonMan said...: I've downloaded the Uber app -- but haven't used it yet. I figure as soon as I start using it, the company will fail. That's how it usually works.; 1/14/17, 8:54 AM
Rusty said...: Wait!
Are you telling me that this Uber thing is being financed by private investors ant not taxpayer subsidies?

!

Have at it, boys. Good luck.; 1/14/17, 9:04 AM
Curious George said...: "MadisonMan said...
I've downloaded the Uber app -- but haven't used it yet. I figure as soon as I start using it, the company will fail. That's how it usually works."

What apps have you used where the company failed?

As an aside, I've used Uber twice. Easy, convenient. Nice drivers with no BO. Clean cars.; 1/14/17, 9:05 AM
SGT Ted said...: Government transportation isn't sacred.; 1/14/17, 9:29 AM
rehajm said...: Before Uber, why didn't the taxi monopoly put public transportation out of business?; 1/14/17, 9:48 AM
Paul Snively said...: Dr. Althouse: In fact, how do you know you won't be overcome some day by a mad urge to jump?

Since you asked...

I've long said I have a strange combined phobia: acrophobia with agoraphobia (irrational fear of heights coupled with irrational fear of open spaces). But that doesn't really get to the problem. The problem is that, when I find myself in a high, open place—which, being 6'4" with a 40" inseam often just means "a high place with a normally-located guard rail"—my irrational fear is not that I'll fall. My irrational fear is not that I'll be pushed.

My irrational fear is that I'll jump.

Obviously, it has never happened; the operative word is "irrational." But I'm very much aware that that is the nature of the ideation. And having confessed it to other people, I've been surprised by how common it seems to be!; 1/14/17, 9:58 AM
n.n said...: How can we trust the human brain.

A scientifically valid puzzle with profound implications: origin vs expression, or perhaps a reflection on a bureaucratic structure of consciousness.; 1/14/17, 10:21 AM
Mikec said...: MayBee has the most knowledgeable posts. Laslo is not only a hoot, he has identified a new, money making opportunity for uber.; 1/14/17, 10:35 AM
readering said...: Uber and lyft will die when amazon and ups deliver us in drones.; 1/14/17, 11:11 AM
mockturtle said...: This comment has been removed by the author.; 1/14/17, 11:16 AM
Joe said...: I'm still puzzled as to why Uber is lauded as a good example of capitalism when it is one of the most unprofitable businesses in history. I think its adulation is due almost entirely to government sanctioned monopolies being its biggest competitor.

I suspect that Uber is intended to go bankrupt, erase its debts and eventually be purchased by the second incarnation of Uber, not surprisingly largely run by the first. Among many others, the railroad and cable television industries did this.; 1/14/17, 11:57 AM
garrison said...: This is the usual pro-government BS from the Guardian. It's about the evils of business against the benevolence of government. The author completely missed the importantance of point to point transportation. I recently rode a Uber group Prius and it was just what the urban planner would have wanted, 5 people and their luggage carpooling from SAN airport to the hotel. Total wait 5 minutes.; 1/14/17, 1:11 PM
garrison said...: This is the usual pro-government BS from the Guardian. It's about the evils of business against the benevolence of government. The author completely missed the importantance of point to point transportation. I recently rode a Uber group Prius and it was just what the urban planner would have wanted, 5 people and their luggage carpooling from SAN airport to the hotel. Total wait 5 minutes.; 1/14/17, 1:12 PM
rehajm said...: Joe said...
I'm still puzzled as to why Uber is lauded as a good example of capitalism...

It's lauded because it's a far superior product.; 1/14/17, 1:13 PM
robother said...: The key problem with public transportation (and public infrastructure in general) is summed up in the accounting term depreciation. Subways and bridges do literally depreciate over time. But public entities (even those run as enterprises) literally don't account for that in pricing tolls or subway tokens.; 1/14/17, 1:39 PM
HoodlumDoodlum said...: Before Uber public transportation was doing very well. Everyone remembers that, right?

Autonomous cars disrupt all of this, obviously. End the idea that individuals can't all use cars in NYC isn't necessarily true with a strong autonomous car (only) system.; 1/14/17, 1:49 PM
Joe said...: It's lauded because it's a far superior product.

Anyone can make a superior product if they're willing to lose billions. That's not a fine example of capitalism where you actually make money while delivering a good product.

(Plus, you're going up against cab companies, which are notorious for being absolute, and very expensive, shit. Not a hard target.); 1/14/17, 1:52 PM
Bilwick said...: Only Big Brother can deliver transportation safely and well! Love Big Brother! Big Brother loves you!

(Thus ends today's Two Minutes of Hate against Uber.); 1/14/17, 2:07 PM
Chuck said...: Because, what a loss it would be, if we had a clean, private, efficient, 21st century transportation system, instead of a nineteenth century train system operated by public sector labor unions.; 1/14/17, 2:12 PM
gbarto said...: I live in Silicon Valley and love Uber. But I don't work in the tech sector. If it turns out Silicon Valley billionaires are subsidizing my rides it's icing on the cake.; 1/14/17, 2:24 PM
rehajm said...: Joe said...

Anyone can make a superior product if they're willing to lose billions.

Oh no Joe, honey. Uber isn't actually losing billions. You fell for a trick...; 1/14/17, 7:27 PM