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Will the Uber/Lyft IPOs Finally Change the Public Narrative About Ridesharing?

manfredo 7y ago
> Uber is the breakthrough case of a company that skipped the difficult process of finding legitimate efficiency advantages, and used tens of billions in predator investor subsidies to fuel its rapid growth. This is just so blatantly false that it's hard to take the rest of the article seriously. Let's take just a cursory glance at Uber and Lyft's efficiency advantages: * Uber and Lyft have massive efficiently advantages over traditional taxi cabs and ride services. Taxis drive around the city burning fuel while they look for someone to wave them down. This results in considerable wasted time and gas between rides. Uber any Lyft drivers connect to the internet to get hailed by drivers, thus getting rides at a much higher rate and without burning gas driving around waiting to get hailed. * Uber and Lyft handle payment, thus avoiding the issue of cabs with credit card machines that don't work - and more often than not, mysteriously start working again when the passenger explains that cabs (at least in my city) are required to have operating credit card machines and if the machine is inoperable the ride is free. * The fact that ride share companies don't hail drivers on the street means that they are not required to be a part of the artificially constrained supply of taxi medallions. This allows for much lower barriers to entry for drivers, and eliminates the need to spend six figures on medallion. * GPS tracking of riders and drivers is a safety benefit. Saying that Uber and Lyft did not develop efficiency advantages is just willfully ignorant. There's valid complaints to be raised about these companies, but saying that they have not developed any efficiently advantage is just plain wrong.
- sharkmerry 7y ago
  You are correct that they brought these innovations to market, but the point here is that the biggest determining factor is price. The next line from your quote was. >These subsidies distorted normal price signals which in turn subverted the ability of consumers to allocate resources to the most efficient competitors. I think that makes clear that while Uber did introduce some efficiencies, they still were not competing on an even playing field given their massive funding
  - geezerjay 7y ago
    Confusing funding with subsidies is a very disingenuous mistake. Whoever thought of this nonsense was desperate to sell the idea that somehow rideshare services were less efficient than incumbent taxi services, which flies on the face of reality. In fact, whoever came up with this nonsense is so distant from reality that he even failed to acknowledge that the main criticism that incumbent taxi services direct at rideshare services is that rideshare companies have a lower operational cost due to lack of expenses such as purchasing medallions.
    - sharkmerry 7y ago
      disregarding whether not purchasing medallions, is "clever" or "regulation avoidance" Do rideshare companies have lower operational costs? Taxi's have presumably been profitable seeing as they dont have funding backing and have been around for years. while the two biggest rideshare companies dont make a profit
      - manfredo 7y ago
        > disregarding whether not purchasing medallions, is "clever" or "regulation avoidance" A taxi medallion is required to accept rides from people that hail you from the street. That's it. Companies that schedule rides via phone do not require medallions, and never have. These have existed for decades, I remember my family using them to get to the airport when I was a kid in the 90s. Uber and Lyft just found a way to schedule rides via phone much, much quicker. > Do rideshare companies have lower operational costs? Taxi's have presumably been profitable seeing as they dont have funding backing and have been around for years. while the two biggest rideshare companies dont make a profit Taxi companies have been profitable, yes, but a large portion of their profitability comes from the artificially constrained supply of taxis. The medallion system constrains supply, thus inflating the cost of the service. Taxi companies' profitability was due to government interference, which let taxis grow complacent and offer non-competitive services. And now that they have competition from ride sharing, taxis are struggling. Taxis apparently aren't profitable when they actually have to compete.
  - 7y ago
- georgeecollins 7y ago
  One quibble: >> * The fact that ride share companies don't hail drivers on the street means that they are not required to be a part of the artificially constrained supply of taxi medallions. This allows for much lower barriers to entry for drivers, and eliminates the need to spend six figures on medallion. That is not efficiency, that is regulatory circumvention. I think almost everyone agrees it is a circumvention that is good for consumers. But once you drive down the cost of medallions through competition you have no advantage. You sound so passionate about the advantages of Uber and Lyft I hope you are holding a lot of Uber and Lyft stock.
  - manfredo 7y ago
    > That is not efficiency, that is regulatory circumvention. I think almost everyone agrees it is a circumvention that is good for consumers. But once you drive down the cost of medallions through competition you have no advantage. No it is not. A medallion is required to accept rides from people that hail you from the street. Rides, say, scheduled over the phone are not required to have medallions. Services that you call and schedule a car to take you to the airport, for example, do not require medallions. These have been around for decades before Uber or Lyft. Uber any Lyft just found an effective and fast way of scheduling rides over the phone. > You sound so passionate about the advantages of Uber and Lyft I hope you are holding a lot of Uber and Lyft stock. Unfortunately none. I'm just point out the blatant falsehood of saying that Uber and Lyft did not develop any market efficiently.
thorwasdfasdf 7y ago
I don't know why investors would be so fatalistic. I mean, if Uber really was destined to do well, it will eventually show up in the profits and earnings in the years and decades to come. The only reason to cash out quickly right now is if they think future earnings will be terrible and it was all just a get rich quick scheme hinged on finding a greater fool

> Uber is the breakthrough case of a company that skipped the difficult process of finding legitimate efficiency advantages, and used tens of billions in predator investor subsidies to fuel its rapid growth. This is just so blatantly false that it's hard to take the rest of the article seriously. Let's take just a cursory glance at Uber and Lyft's efficiency advantages: * Uber and Lyft have massive efficiently advantages over traditional taxi cabs and ride services. Taxis drive around the city burning fuel while they look for someone to wave them down. This results in considerable wasted time and gas between rides. Uber any Lyft drivers connect to the internet to get hailed by drivers, thus getting rides at a much higher rate and without burning gas driving around waiting to get hailed. * Uber and Lyft handle payment, thus avoiding the issue of cabs with credit card machines that don't work - and more often than not, mysteriously start working again when the passenger explains that cabs (at least in my city) are required to have operating credit card machines and if the machine is inoperable the ride is free. * The fact that ride share companies don't hail drivers on the street means that they are not required to be a part of the artificially constrained supply of taxi medallions. This allows for much lower barriers to entry for drivers, and eliminates the need to spend six figures on medallion. * GPS tracking of riders and drivers is a safety benefit. Saying that Uber and Lyft did not develop efficiency advantages is just willfully ignorant. There's valid complaints to be raised about these companies, but saying that they have not developed any efficiently advantage is just plain wrong.

sharkmerry 7y ago
You are correct that they brought these innovations to market, but the point here is that the biggest determining factor is price. The next line from your quote was. >These subsidies distorted normal price signals which in turn subverted the ability of consumers to allocate resources to the most efficient competitors. I think that makes clear that while Uber did introduce some efficiencies, they still were not competing on an even playing field given their massive funding
- geezerjay 7y ago
  Confusing funding with subsidies is a very disingenuous mistake. Whoever thought of this nonsense was desperate to sell the idea that somehow rideshare services were less efficient than incumbent taxi services, which flies on the face of reality. In fact, whoever came up with this nonsense is so distant from reality that he even failed to acknowledge that the main criticism that incumbent taxi services direct at rideshare services is that rideshare companies have a lower operational cost due to lack of expenses such as purchasing medallions.
  - sharkmerry 7y ago
    disregarding whether not purchasing medallions, is "clever" or "regulation avoidance" Do rideshare companies have lower operational costs? Taxi's have presumably been profitable seeing as they dont have funding backing and have been around for years. while the two biggest rideshare companies dont make a profit
    - manfredo 7y ago
      > disregarding whether not purchasing medallions, is "clever" or "regulation avoidance" A taxi medallion is required to accept rides from people that hail you from the street. That's it. Companies that schedule rides via phone do not require medallions, and never have. These have existed for decades, I remember my family using them to get to the airport when I was a kid in the 90s. Uber and Lyft just found a way to schedule rides via phone much, much quicker. > Do rideshare companies have lower operational costs? Taxi's have presumably been profitable seeing as they dont have funding backing and have been around for years. while the two biggest rideshare companies dont make a profit Taxi companies have been profitable, yes, but a large portion of their profitability comes from the artificially constrained supply of taxis. The medallion system constrains supply, thus inflating the cost of the service. Taxi companies' profitability was due to government interference, which let taxis grow complacent and offer non-competitive services. And now that they have competition from ride sharing, taxis are struggling. Taxis apparently aren't profitable when they actually have to compete.
- 7y ago
georgeecollins 7y ago
One quibble: >> * The fact that ride share companies don't hail drivers on the street means that they are not required to be a part of the artificially constrained supply of taxi medallions. This allows for much lower barriers to entry for drivers, and eliminates the need to spend six figures on medallion. That is not efficiency, that is regulatory circumvention. I think almost everyone agrees it is a circumvention that is good for consumers. But once you drive down the cost of medallions through competition you have no advantage. You sound so passionate about the advantages of Uber and Lyft I hope you are holding a lot of Uber and Lyft stock.
- manfredo 7y ago
  > That is not efficiency, that is regulatory circumvention. I think almost everyone agrees it is a circumvention that is good for consumers. But once you drive down the cost of medallions through competition you have no advantage. No it is not. A medallion is required to accept rides from people that hail you from the street. Rides, say, scheduled over the phone are not required to have medallions. Services that you call and schedule a car to take you to the airport, for example, do not require medallions. These have been around for decades before Uber or Lyft. Uber any Lyft just found an effective and fast way of scheduling rides over the phone. > You sound so passionate about the advantages of Uber and Lyft I hope you are holding a lot of Uber and Lyft stock. Unfortunately none. I'm just point out the blatant falsehood of saying that Uber and Lyft did not develop any market efficiently.

thorwasdfasdf 7y ago

I don't know why investors would be so fatalistic. I mean, if Uber really was destined to do well, it will eventually show up in the profits and earnings in the years and decades to come. The only reason to cash out quickly right now is if they think future earnings will be terrible and it was all just a get rich quick scheme hinged on finding a greater fool