Posted on 03/19/2017 4:28:15 PM PDT by dynachrome
Cities started to regulate Taxis, along with Barbers and others, to prevent some from loosing their jobs to lower priced competition. It was all about some being more equal than others. Public safety is merely the fig leaf.
If a jurisdiction has no legal requirements to operate a can company, then so be it. If a jurisdiction has a whole pile of them, then they should all meet the same standards. It's really that simple. Uber has built its business around loopholes in laws and other regulations like insurance requirements, and as those things get addressed they're having a harder and harder time running their business profitably.
Airbnb is the next one that is going to fade from the scene -- and for the same reasons.
P.S. -- Uber is a huge fan of strict legal requirements, when they want to use them to the company's advantage. Uber cut a deal with the New York City Taxi & Limousine Commission to meet the TLC's requirements for a cab/limousine company. Now Uber is a partner with the TLC in a legal battle to get Lyft out of the market.
What keeps a new company like Goober from starting up tomorrow and offering the exact same services as Uber for a much lower price?
“What keeps a new company like Goober from starting up tomorrow and offering the exact same services as Uber for a much lower price?”
Nothing. If you have the means to create the smart app, market it, and comply with various regulations, you can do it.
There is an innate advantage to being first to market though. Makes it difficult for competitors that come late to the game. But first in does not guarantee a win. Look at Yahoo and Google in the search engine wars. But also look at Bing. Once Google established itself as the defacto leader, even Microsoft could not cut much into its market share.
Uber now has a huge advantage with brand recognition, maps, logistics, a massive existing customer and contractor database, and lots of market research. They have tried many experiments, and know what works and what does not. They are way ahead of the competition.
On the flip side, big companies like Google, Tesla, or even car manufacturers may jump into the fray once self-driving cars become a thing. The cost of the driver is the number one expense for ride sharing. Self-driving cars will be more disruptive than ride sharing ever was.
The days of making money as a driver for Uber are numbered.
I spoke to a FedEx Ground driver about his Sprinter. I was surprised to learn that he was an independent contractor deliverer and the van was actually his.
I agree with everything you've said about the advantages of being the first to market. The problem with an app-based product is that the cost of entry is very low -- and there's always going to be someone who can come up with some new sales pitch to drivers and customers alike.
I suspect there are few entrants in that market because everybody sees that it is not a profitable enterprise in the long run.
Yeah. FedEx has completely transformed and adapted to marketplace competition. Changes like this are the only way that FedEx has been able to stay in business.
They added ground transportation, early morning delivery, and even same day delivery. They’re still the white collar service of the delivery industry.
“The problem with an app-based product is that the cost of entry is very low”
Once you are competing against a multi-billion dollar company, the barrier of entry is no longer low.
How would your million dollar company respond when everywhere you launch your service, Uber gives away millions of dollars of free rides for customer retention?
You’ve gotta have a big war chest.
“I suspect there are few entrants in that market because everybody sees that it is not a profitable enterprise in the long run.”
It’s not profitable when you are at a tremendous competitive disadvantage.
But, in spite of this, there are actually many other companies trying to enter that market space. You just have not heard about them because they are too small.
“self-driving cars are probably much further in the future than most people realize”
I think the opposite. I think they are going to arrive rapidly. Technological acceleration keeps getting faster.
The biggest obstacle to self-driving cars is government bureaucracy. But big corporations have become adept at navigating these waters and getting things done.
The second biggest obstacle is legal responsibility when it comes to who is at fault in an accident. Big companies will take on the risk at first. Then insurance companies will adapt.
The third biggest obstacle is consumer resistance. That’s not very hard to overcome. The biggest part of this will be addressing safety, such as preventing hackers from taking over cars.
It will be like touch tone service on landlines. First it was an option. Eventually rotary was not an option.
Expect for self-driving cars to be commonplace in 5 years.
In 10-15 years the debate will be what to do with the hold outs who still want to drive. Many places will start outlawing human drivers, or at least limiting where they can drive.
Of course a civil war in the US or a major world war would slow down this timeline drastically. So might major economic disasters.
Ok, lets assume self driving cars become a reality soon. The ride sharing companies are going to need depots to fuel, clean and do maintenance on the cars. That all requires expensive infrastructure and people to do it. And with no supervision in the car, I suspect there would be considerable more cleaning envolved
“The ride sharing companies are going to need depots to fuel, clean and do maintenance on the cars. That all requires expensive infrastructure and people to do it.”
Using the current model, consumers still may own the cars but will share them when they are otherwise preoccupied with work, sleep, eating, etc.
So, for example, if I owned a Tesla, I might go meet friends for lunch. While I am eating, the car might go pick a ride share customer up nearby, drop the customer off, and return to where I’m eating. I can make money with my car by allowing others to share it. But it is still mine (and not a business expense for Uber) to fuel, clean, and maintain.
Or Tesla may offer the ride sharing service rather than Uber. Or maybe there are several, and I pick the one that gives me the better cut.
The money is automatically transferred to my account. Presto. I just paid for my lunch.
“And with no supervision in the car, I suspect there would be considerable more cleaning envolved”
Probably will require cameras monitoring the ones using it. Or maybe there is an inspection process upon return like with rental car companies. Or both. The review system seems to help keep the average passenger (and driver) in check right now. Too many bad reviews, you get booted from the system.
This model will probably cut the cost of using ride sharing services by 50%. It will probably become cheaper and more convenient for the average consumer to just use these services rather than owning vehicles.
At some point, companies may raise the capital to own and maintain the vehicles. That won’t be too hard when it is profitable to do so. The current model dumps the cost of maintenance and depreciation on the driver / owner. The ride sharing companies are better off not owning them for now.
Guess I am behind the times, there are companies that do that now like Getaround. That it not something I am willing to do, but I guess others are.
We are now in a paradigm where people either trust the technology too much (they think it can do more than it is capable of doing), or they don't trust it enough (they aren't willing to use it even if it costs the same as a regular car). The tragic crash in Florida last year where the Tesla operating in "auto-pilot" mode crashed into a tractor-trailer should be a warning to everyone about the limits of technology. If a self-driving vehicle can't even reliably detect a tractor-trailer in its path, then I'd say we're really back to the drawing boards on that technology.
And the technology is the easy part, as you suggest.
Government bureaucracy isn't really an obstacle here at all. In fact, it is likely going to be a huge biggest asset for manufacturers of self-driving cars ... because the only way I see these things getting any traction in the next 25+ years is if governments force people to buy them.
Another Freeper posted a link to an article on a thread about the same subject a few days ago to demonstrate how underwhelming today's technology is. It was titled "Reporter Rides Driverless Car," and it was all about the research being done in driverless technology at Princeton University.
The article was published in a California newspaper ... in 1960.
Other than the car driving itself, there's nothing that prevents anyone from doing this right now. Uber can have drivers sitting in Starbucks and McDonald's locations all over the country, just waiting for someone to park at the restaurant next door for lunch. Or an even more feasible scenario would be an Uber driver "borrowing" your car while you're sleeping at night ... to pick passengers up at airports and pick drunks up at bars. But nobody even thinks of doing this sort of thing with their cars, because nobody likes the thought of strangers occupying a vehicle.
And even if you might be inclined to pursue this sort of financial opportunity, I can guarantee you that the first time your car came back with a scratch on the door or a snot on the steering wheel would be the last time you ever let a stranger into it.
“But nobody even thinks of doing this sort of thing with their cars, because nobody likes the thought of strangers occupying a vehicle.”
Hyrecar is doing it right now. Although, I don’t think their business model will work.
The problem is, ride sharing drivers are the loss leader when it comes to taking the depreciation hit on their personal vehicles. The car is not currently the profit center. The app is. And the driver is secondarily. But the car is an expense.
Hyrecar is trying to find a way to make a profit on the car, but it really just adds to the expense that drivers already have if they own a car. I suppose it might help if someone wants to drive for Uber without the commitment of buying a car. But without the depreciation and the amortization of the car costs over time, paying the full, real costs of a car plus profit for the owner up front, makes it unlikely the driver will have anything left over. Might not even make minimum wage. In fact, might even lose money.
Self-driving cars will probably disrupt the ride sharing industry which is currently disrupting mass transportation and taxi service.
I agree in part that there is a some protectionism however as a taxi driver my experience is that it is not all about that.
Well I guess we’ll see. Obviously you’ve put a lot of thought into it. But if the true cost of taking you downtown is $12 and you are only charged $4 something, at some point, will have to give.
They are a private company and can make whatever rules they want for their organization. No one is forced to enter into a contract with them.
And then you sit down in the puddle of barf left by the passenger who paid $5 to get home from the bar.
“They are a private company and can make whatever rules they want for their organization. No one is forced to enter into a contract with them.”
Uber recruits people with promises of certain money making opportunities. There is a contract.
Uber then decides to notify all of its drivers that they are no longer allowed to have a gun in THEIR vehicle.
These are not employees. These vehicles are not company property. In fact, Uber really has no way of knowing who has a gun. They can only terminate a driver’s contract when they discover the driver is carrying a gun.
You are wrong. It makes as much legal sense as your cell phone carrier dictating that you can not carry a gun while under contract with them. Uber has as much right to dictate this as they do to dictate what color underwear the passenger or driver must wear. It is none of their business. The only thing they have the right to dictate is that contractors follow the law.
They have no right to do so. And they should be liable for any act of violence against an Uber driver’s car or person.
This is quite different from a store who posts a sign that guns are not allowed. You, as a customer, can choose to take your business elsewhere.
This is also quite different from a company that hires drivers to drive company vehicles. In that case, it is their property.
States ought to pass legislation that invalidates such provisions in contracts or makes the companies that use them liable for civil damages, attorney fees, and court costs when a “contractor” is harmed while doing work for them.
Uber wants the benefits of their drivers being contractors when it suits them, and employees when that suits them.
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