Ridesourcing

[Guest jmecklenborg]

^Same with Theranos.  Not tech masquerading as tech.  Location + Stanford dropout = "tech".   

[taestell]

Now that the smartphone has been around for 10 years, all of the tech companies are trying to figure out what "the next big thing" is, and the only thing they can come up is stuff related to self-driving cars and carsharing. It's pretty unfortunate because for the most part they haven't been consulting the transportation planners, urban planners, economists, or existing car companies who already have the knowledge about that space. Instead they are taking a "let's just invent the technology and the details will work themselves out" approach.

[GCrites]

One reason for that is there's a certain personality type that refuses to "go backward". Walking and trains are "backward" and a major turn off to certain types of techies. This refusal to accept things on their own merits and appreciate the novelty of older technologies is what makes them so good at their televangelist-like tech presentations.

[Guest jmecklenborg]

One reason for that is there's a certain personality type that refuses to "go backward". Walking and trains are "backward" and a major turn off to certain types of techies. This refusal to accept things on their own merits and appreciate the novelty of older technologies is what makes them so good at their televangelist-like tech presentations.

 

My brother who works peripherally in "tech" and recently moved to California hates trains.  "The time for trains was 30 years ago", he told me.  He is madly in love with the muskman and frequently blushes and his eyes twinkle whenever he gets to say "tesla" out loud. 

[Gramarye]

Huh. Investors are aware of this unsustainable and impractical strategy?

 

Amazon still loses money almost every quarter. The stock market isn't about making a profit ... it's about raising the stock price. As long as you keep growing in market share with the promise that you will make money some day, your stock price will keep inflating. This is why so many tech companies never figure out a way to actually make money and end up being bought by a bigger company, who usually only intends to shut down their service and steal their talent.

 

I don't know where you get your information from, and it's going a little far afield so I won't go crazy about it on this thread, but the last time Amazon posted a quarterly loss was 1Q15, basically two years ago now, and that was an easily-absorbed $0.12/share.  Because Amazon plows the vast majority of its operating revenue back into expansion, its P/E is always sky-high, but the benefit is that it has about $15B in long-term debt.  It's a $400B company.  The income statement might have fundamentals-based investors worried, but the balance sheet is solid enough to crush diamonds, and the cash flow statement is similarly rosy because it shows $16B annual cash flow net of operating expenses; that money just doesn't drop into the earnings column because of the frenetic pace of capital expenditures and other investments.  It is not burning through investor cash, and it is not raising new capital with dilutive share offerings (at the end of 2012, there were 454M shares outstanding, and at the end of 2016, there were 477M, which is mostly just due to option grants and such).  It just isn't racking up a war chest like Apple is.

[David]

It seems like there is a bit of a campaign underway to keep bad Uber news in the news.  This is too good:

 

https://www.yahoo.com/finance/news/video-uber-ceo-argues-driver-203948442.html

 

So here is Kalanick unable to hide the fact that he's boring and still awkward with women while hitting the town with a pair of escorts:

 

But the larger point is that Uber tricked a bunch of people into buying cars in order to be full-time Uber drivers (be they Black or X) and now with the lower fares they can't possibly drive enough to beat the depreciation.  Unfortunately a lot of Black drivers didn't get the cheapest qualifying Black car (which I seem to recall was around $40k).  Instead they went out and bought brand-new $65k+ Lincoln Navigators and so on.  Poor gas mileage and horrendous repairs and depreciation.  A set of tires might be $1,500 or more. 

 

 

Wow. What a douche.

 

I saw that once this went viral, he made a (bullsh!t) statement on social media after finding out about this dude's hiddden cam.. Definitely an apology without teeth. Pretty funny that the CEO of Uber needs escorts.

[GCrites]

^Is there an app for that?

[David]

For escorts? Yeah, it's called Tinder.

[Ram23]

I know a guy who found out his girlfriend of several years (who he was about to propose to) was using whichever one of the escort apps/websites that's most popular right now (the name escapes me, maybe "Seeking Arrangement?") to make cash on the side. He made a fake account and found her and texted her from someone else's phone a few times just to be sure it was real - I was surprised the going rates in a place like Cincinnati were so high, especially because these young entrepreneurs are sidestepping the whole pimp aspect. I felt really bad for the guy but he sure as hell dodged a bullet just in the nick of time.

[Guest jmecklenborg]

^With women tending to be attracted to successful men, you've got to wonder why someone like Kalanick would have to resort to hiring dates.  Sorry but it's just not that difficult to meet women, especially if you're already semi-famous. 

[Cleburger]

^With women tending to be attracted to successful men, you've got to wonder why someone like Kalanick would have to resort to hiring dates.  Sorry but it's just not that difficult to meet women, especially if you're already semi-famous. 

 

Because by hiring them, you can also fire them at the end of the night.   

 

[GCrites]

^With women tending to be attracted to successful men, you've got to wonder why someone like Kalanick would have to resort to hiring dates.  Sorry but it's just not that difficult to meet women, especially if you're already semi-famous. 

 

 

I'd argue that women like losers just as much since a lot of losers are smooth. So it doesn't really matter either way.

[Guest]

Hiring escorts is just par for course in SF tech. It's really kind of a power thing for rich young people. Pre-IPO tech companies like Uber have groupies (and dudes like Kalanick have the Bay's notorious "Founder Hounders"). But the party scene in tech has gotten lamer in the last two to three years (which makes no sense since there are more frat/sorority all-stars than ever in SF history). 2012-2013 was the peak party scene in SF since that was the start of the bubble after the Facebook IPO. The reason the party scene has declined a little is because some of the best nightclubs and bars have lost their leases since then and have been priced out of SF. SF nightlife is still very good compared to most of America, but it's more conservative and hoity-toity than it was back when Facebook had their IPO. The house party scene is almost completely dead now...no one wants to to risk their lease in the world's most competitive housing market. At my last place in SF, we used to have fraternity/sorority parties for adults (complete with kegs, slap the bag, and flip cup). No way could we pull that off in today's housing market...

 

I won't even get started on the Uber recruiter who tried to get me to take a job at HQ. It's too bro for this thread...

[mrnyc]

whats the old saying? you don't pay for the escort and the sex, you pay for them to go away. anyway, can confirm lots of rich and famous like escorts aka hookers for that and a variety of other reasons, like that they wont run out and tell stories or try to entrap them. or so they hope. its just another way to throw around money.

[TBideon]

What the f-k are you guys talking about?

[UrbanSurfin]

Ridesourcing apparently hurts transit ridership, adds to road congestion, and pollutes the air:

https://www.nytimes.com/2017/03/06/nyregion/uber-ride-hailing-new-york-transportation.html?hpw&rref=nyregion&action=click&pgtype=Homepage&module=well-region&region=bottom-well&WT.nav=bottom-well&_r=0

 

[Guest]

^I already have seen this in San Francisco on weekends. Muni ridership on Friday and Saturday nights seems way down compared to five years ago. While I welcome the change (you can actually get a seat on the bus!), I'm worried about the political effects. San Francisco and Oakland are some of the most under-developed cities in the world when considering their insatiable demand and ever-increasing prices (especially Oakland, which is laughably anti-urban with the greediest NIMBY politics in America). The destructive politics of the Bay hold it back from reaching its full urban potential. Big-time rail transit investments are desperately needed in the Bay, but if Muni shows drops in ridership on some routes, it gives fuel to the transit haters. "See, we don't actually need a BART subway under Geary! The bus ridership is slightly down on this route!"

 

And if it's down any given month, it's largely due to Google busses replacing public busses...

 

The techno-libertarian obsession of the Bay is very scary. "I got mine, screw you!" might as well be the official slogan of Oakland and San Francisco at this point. The regressive, faux liberal, DINO, NIMBY politics of Oakland are terrifying. Oakland foretells a future of little to no public investment, socialism for the rich, and capitalism for everybody else. Uber is as anti-hipster as it gets, but the politics of Oakland are a perfect fit for them. And since they'll own their building (a rarity among tech companies), they will be able to sublease the space to hungrier start-ups if they ever downsize. I'm banking on that being their long-term goal. Companies are insane to stay in San Francisco or Oakland these days since they screw their employees out of ever having good quality of life. 100k salary just isn't enough here anywhere. 200k is rapidly becoming the minimum to live alone in a decent neighborhood, but few companies can pay this outside of equity (though the equity compensation is worth a lot more in the long run). I think a lot of companies like Uber will end up moving to much cheaper cities like Seattle, LA, Portland, etc.

 

It's amazing that kids keep moving out here to work at companies like Uber at this point. The big equity opportunities are gone, and they won't last long in the housing market. Five years ago, nothing made more sense than working at Uber's SF office (those lucky early employees are set for life and can achieve the Bay Area dream of retiring by 30).

 

Recent grads are much better off moving to Seattle or LA at this point. Even second tier Portland might make more sense. If outside of the West Coast, good tech jobs are still available in Denver. Though still very car-dependent, Denver is seeing lots of urban infill along its new transit lines. Austin also pays well for the low cost of living, though it's a terribly suburban city with laughable urban neighborhoods and housing stock compared to Cleveland/Cincinnati/Toledo/Columbus.

 

Which begs the question, why haven't Ohio cities tried to nab Silicon Bay companies? So many companies spanning a wide range of industries are looking to leave San Francisco and Oakland at this point. It's really dramatic with older finance companies like Charles Schwab.

[Guest jmecklenborg]

^It wouldn't be tough to force a surcharge on Uber/Lyft for any route that is mostly duplicative of the subway or a bus route.  That surcharge would go directly to the transit system. 

 

So a ride that has a beginning and end 1,000 feet outside an existing route would have no surcharge.  One with either the point of origin or destination within 2,000 feet would have a $5 surcharge.  One with both would be $10. 

 

So all trips within Manhattan would have a $10 surcharge and that would push ridesharing toward what it does best -- connecting odd points at odd hours. 

 

 

[Guest jmecklenborg]

From another article:

 

New York’s century-old subway is straining to handle nearly six million passengers each day — its greatest ridership since the 1940s and up from about four million in the 1990s. More than a third of subway delays are caused by overcrowding, which accounted for nearly 30,000 delays in November. As passengers jostle to get on and off, trains must sit longer in stations, leading to a cascade of delays along a line.

 

So the haters of public transportation will be quick to note a recent downtick in subway ridership, but overall ridership is WAY up in the past 20 years despite almost no physical expansion of the network. 

[taestell]

Grover Norquist recently tweeted: "In a world of UBER/Lyft and self-driving cars--why build massive inflexible concrete pyramids called mass transit."

 

I replied with the comment, "What would happen if NYC shut down its subway and 5.6 million additional cars were added to the streets every single day? Think about it."

 

His response: "If you read my comment it was why build more Fixed rail--where busses (plus) cost less, more flexible. Sunk costs are sunk."

 

 

So I guess he believes no future city should ever build a transit system that's capable of increasing the density of new development around transit stations. And the fact that the existence of the NYC subway had an impact on the actual development of the city around those subway stations... well, whatever, who cares. But going forward, we should just grow outward and outward and force everyone to rely on Uber and Lyft to get around.

 

 

Pretty surprised that Grover Norquist responded to me, though.

[David]

 

Pretty surprised that Grover Norquist responded to me, though.

 

He responded because you brought up a valid point and embarrassed him. He felt the need to defend himself (and did a horrible job.)

[GCrites]

While buses hold a lot more people than a car, in a congested city like NYC a 40-foot lurching bus is still very disruptive to traffic.

[Guest jmecklenborg]

What happens with self-driving cars & Uber/Lyft when our GPS satellites malfunction or during an extended power-outage?  During Katrina and even Cincinnati's 2008 wind storm people were crippled when their cell phone batteries died. 

[GCrites]

And that's with 5-day dumbphone batteries

[Guest jmecklenborg]

And that's with 5-day dumbphone batteries

 

 

An entire generation of kids is coming up not knowing that cell phones didn't always need to be charged every single night. 

[TBideon]

I'm astounded by the anti-rideshare tone in this forum. It changes people's lives - employees to a degree but especially customers - and the pro's have so vastly outweighed the cons that I'm legitimately shocked by the cynicism.

 

 

[jjakucyk]

I'm astounded by the anti-rideshare tone in this forum. It changes people's lives - employees to a degree but especially customers - and the pro's have so vastly outweighed the cons that I'm legitimately shocked by the cynicism.

 

It's not tone so much as analyzing the facts.  Here's what I see, and if the truth hurts, then so be it.

 

One, calling out of the reprehensible behavior of some of these ridesharing companies and their executives.  That has no bearing on the service per-se, but shitty companies are shitty companies.  Being anti-Microsoft doesn't make one anti-computer, nor does being anti-Uber make someone anti-rideshare.

 

Two, noting that rideshare companies are operating at a loss and subsidizing rides with venture capital funds.  That's not a sustainable business model in the long-term, and it's questionable if it's even viable in the short-term as a method of undercutting the competition.

 

Three, realizing that ridesharing isn't a substitute for transit but a substitute for taxis.  That some rideshare executives and techno-narcissists like Elon Musk think self-driving pooled vehicles are going to be some sort of panacea akin to the General Motors highway-utopia dreams of the 1930s is rather laughable in its naivete.  They ignore the severe street capacity constraints inherent in single-occupancy trips (whether human or computer chauffeured) compared to bus or rail transit, as well as the unaddressed issues of parking spaces, overall pavement required for operation and storage, stormwater runoff, air and noise pollution, and danger to pedestrians and cyclists. We see how the GM "happy motoring" philosophy has turned out, and I see no reason to believe that a world of near universal electrically powered, self-driving, shared cars wouldn't lead to another sort of Jevons paradox situation. 

[TBideon]

I really don't understand the focus on the inner workings and community of Uber. I mean, god knows how many horror stories you'll find at Facebook, Google, Netflix, LinkedIn, Amazon, and any start-up that has become a major market driver. I'm sure Uber has a crappy work culture, but they certainly don't have a monopoly with bad internal behavior. Just imagine how Steve Jobs interacted with employees; he probably made Travis Kalanick look like a saint even at his worst.

 

As for their operating on a loss, well, I don't really buy that as an issue. Don't most start ups operate on losses and private funds for their first x number of years. Sometimes they adapt like Amazon and Facebook and make some bank. Other times they fall apart like a Joost or a Keen Home. Why criticize a company for that reason unless you're a shareholder?

 

And as for your third point, I definitely have a different perspective. Rideshare supplements public transportation; it doesn't replace it. By and large, people will walk, bike, drive, bus, or train to work and back, but they may use Uber for going out after or on weekends. Who wants to take a bus at 2am when you can have a private car driving you home? That would really impress a date. And who wants to spend a ridiculous amount of money with a hostile cabdriver as opposed to be a private car for a fraction of the price.  It allows people to travel throughout their cities, spend money in places they wouldn't ordinarily go, and not drunkenly pull a Thelma and Louise after a couple too many drinks on East 4th. And never mind how people in low income areas can now share the convenience of a cab experience; that has to count for something too.

 

And I don't understand that doom and gloom; you're vastly overselling just how many rideshare cars there are at any given point. We aren't anywhere near some dystopian setting like you describe. We aren't even decades from it.

[GCrites]

One thing that is very annoying is using the mere existence of ridesourcing as an excuse to underfund public transit. They are still cars. A car can only be a car, and few of its limitations can be altered by how it is controlled or its method of propulsion.

[taestell]

I really don't understand the focus on the inner workings and community of Uber. I mean, god knows how many horror stories you'll find at Facebook, Google, Netflix, LinkedIn, Amazon, and any start-up that has become a major market driver. I'm sure Uber has a crappy work culture, but they certainly don't have a monopoly with bad internal behavior. Just imagine how Steve Jobs interacted with employees; he probably made Travis Kalanick look like a saint even at his worst.

 

I'm not sure if you've kept up with all of the stuff coming out about Uber in recent weeks, but it has been a steady stream of stories about how terrible their company culture is. It goes way beyond overworking their developers (which happens at most tech companies) and underpaying their drivers. The biggest one was the story about multiple women who all reported their male supervisor for sexist behavior, and each one of them was told, "well, it's his first offense, so we're not going to do anything about it." It wasn't until later that they realized that they had all reported the same guy and were each told "it's his first offense." That's the kind of problem that only exists when you have an HR department that doesn't care about its employees.

[taestell]

Three, realizing that ridesharing isn't a substitute for transit but a substitute for taxis.  That some rideshare executives and techno-narcissists like Elon Musk think self-driving pooled vehicles are going to be some sort of panacea akin to the General Motors highway-utopia dreams of the 1930s is rather laughable in its naivete.

 

And that is my biggest problem with ridesharing services. Yes, they're great, and they add a lot to our transportation system. The problem is that now we have a bunch of tech guys and libertarians (which have a pretty big overlap) coming out of the woodwork and saying, "We don't need transit now that we have Uber and Lyft! Subways and light rail are antiquated technologies! Let's cut government funding for transit and let private companies handle it!"

 

This is also why I'm extremely nervous about the "Smart City" grant that Columbus got. They're going down the path of "let's throw a bunch of money at self-driving cars and ridesharing" instead of investing in building the transit that will allow large numbers of people to get where they need to go inexpensively.

[Guest jmecklenborg]

The core issue remains that they are exploiting the drivers.  They're being wildly underpaid because the drivers (especially immigrants) don't understand how 1099 contracting works + there are zero benefits + liability has been pushed down on drivers + Uber has engaged in predatory lending aimed largely at its immigrant driver workforce. 

[TBideon]

Uber drivers are not predominantly immigrant:

 

https://assets.entrepreneur.com/static/1421949314-uber-demographics.jpg?_ga=1.268673141.504900838.1487184709.

 

https://www.forbes.com/sites/briansolomon/2015/05/01/the-numbers-behind-ubers-exploding-driver-force/#601e2a6e5750

 

And as for not understanding how a 1099 works, grown ups have to own up to their responsibilities.

 

And as for the ugly culture within Uber, that kind of chaos exists throughout other start-ups; it's by no means unique to Uber. Also, I haven't heard about similar nonsense from Lyft.

 

And again, rideshare is not replacing public transportation by any means. It may force public transportation and especially toxic cab companies to evolve at some point, but unless Uber and Lyft start launching shuttles, buses and trains in all markets, rideshare is still relatively niche.

 

As for wages, the numbers are all over the place. But the average gross seems to range between doubling and tripling minimum wage. And for most, it's not really a fulltime job - just extra work.

[Guest jmecklenborg]

Those stats from 2015 are wildly out-of-date.  Uber and Lyft had many college-educated drivers in the beginning.  Most of those people are long-gone after the company started dropping driver pay precipitously in 2014. 

[TBideon]

As of mid-August 29, 2016:

 

https://www.quora.com/What-are-the-demographics-of-Uber-drivers-in-North-America

 

"Tl;dr: Uber drivers in the U.S. are mostly male, white, high-school graduates between the ages of 30–49 who make less than $50k per year."

 

 

Article from Jan 8, 2017:

 

http://ridesharenews.org/2017/01/17/rsg-2017-survey-results-driver-earnings-satisfaction-and-demographics/

 

"Rideshare drivers reported as being predominantly white, making up 78.three% of complete drivers, which is greater than the nationwide (common inhabitants) common of 62.6%.  Other ethnicities like Hispanic/Latino reported simply 7.1% in comparison with the nationwide common of 17.2% and Black/African Americans reported 6.eight% in comparison with the nationwide common of 13.2%."

 

If you have something more updated, please do share.

[GCrites]

Immigrants aren't white?

[TBideon]

In the context of driving services, not all that often.

[taestell]

And again, rideshare is not replacing public transportation by any means. It may force public transportation and especially toxic cab companies to evolve at some point, but unless Uber and Lyft start launching shuttles, buses and trains in all markets, rideshare is still relatively niche.

 

And again, that's exactly what some conservatives and libertarians are trying to do. On the previous thread of this page, I shared a post from famous anti-tax advocate Grover Norquist saying that we should no longer be building rail transit in this country because Lyft and Uber can take their place.

[David]

Personally, I think it's messed up that a business model can exist and be implemented, with full awareness from investors, wherein ridership is subsidized 40% through investor cash with the goal of bankrupting and eliminating competition in a short amount of time - whether it be taxi companies or other ride-share companies like Lyft. I'm starting to ask myself if regulations should exist to prevent such cut throat business practices. Uber fares will inevitably skyrocket soon. It's malicious and it's a very real conspiracy and as a consumer I'm glad that I'm aware of it along with all of the political stuff I've been informed of.  After everything I've heard about Uber, it makes me no longer want to use their service. I've never personally ordered an Uber but I've thrown in on at least four rides.  As a consumer, I do care about how companies treat their workers as well as their ultimate goals and intentions. Uber / riide-sharing being a different concept from public transit is a no-brainer. I don't see any need to lambast people for sharing their anecdotal stories and latest news regarding Uber. I'm personally glad that I was made aware of it and able to spread the news along.

 

[Cleburger]

As someone who travels for a living, often times to small markets where Taxis are rare, Uber is a godsend.  One way or another this industry seems like it's going to be crooked--whether it's Uber driving prices down, extortion for Taxi medallions or rank and file Taxi drivers cheating their unaware customers.

 

 

[GCrites]

^An Uber driver can take you through too many Zones, but they're not going to get paid for it.

[Guest jmecklenborg]

Is Uber Over?  Nice clever clickbait headline for yet another anti-Uber article.  Predicts Uber might be remembered as the Myspace of ridesharing. 

 

https://www.citylab.com/commute/2017/03/is-uber-over/518727/

 

Young people are coming up not knowing how crazy the 90s dot-bomb period was...that Google only rose to prominence because of Yahoo's crazy payout to Mark Cuban...and that Friendster and Myspace were basically the exact same thing as Facebook.  Google and Facebook and Apple and Amazon have been pretty solid for 10-15 years.  Young people would benefit from seeing something as huge as Uber suddenly collapse. 

[GCrites]

^It's still not as good of a lesson as Pets.com or whatever since it wasn't The Market that decided that Uber wasn't worthwhile. Rather then The Market getting burned it's a bunch of "reckless" VCs that got what they deserved for being VCs. The Market has no sympathy for VCs.

[David]

I was young but I remember a lot of the dot com non-sense. I remember radio ads non-stop, talking about how you should buy websites with the .cc extension. They claimed you could buy cocacola.cc or sites for other common brands and re-sell the domain to large corporations who would have no choice but to cave in and give you a crazy amount of money for the domain name as .cc was taking over. Ha.

[GCrites]

As if people who worked for those companies didn't also hear those ads.

[Guest jmecklenborg]

In the late 90s, there were all sorts of TV ads for random websites.  They usually had a pair of narrow black or colored bands at the top and the bottom throughout.  That let you know there was some serious "tech" being discussed, well before "tech" entered the vernacular.  It was the precursor of the wide screen flat screen formats we were all familiar with by 2008 or so.  So now whenever I watch Braveheart or whatever on a flat screen, the whole time I'm subconsciously thinking I need to buy the domain. 

[GCrites]

Is Uber Over?  Nice clever clickbait headline for yet another anti-Uber article.  Predicts Uber might be remembered as the Myspace of ridesharing. 

 

https://www.citylab.com/commute/2017/03/is-uber-over/518727/

 

Young people are coming up not knowing how crazy the 90s dot-bomb period was...that Google only rose to prominence because of Yahoo's crazy payout to Mark Cuban...and that Friendster and Myspace were basically the exact same thing as Facebook.  Google and Facebook and Apple and Amazon have been pretty solid for 10-15 years.  Young people would benefit from seeing something as huge as Uber suddenly collapse.

 

Currently Facebook is going through the downscaling of its market that MySpace went through in the late 2000s where it gets taken over by users that are less "edgy" and more rural. i.e. hillbilly Buy/Sell/Trade groups and "I Roll Coal! If you don't like it GTFO!" This actually might not be that bad for the company if they keep showing up since they're spenders rather than latte sippers whose money all goes to rent.

[Guest jmecklenborg]

^Yeah, I remember Myspace being dominated by white trash and other low-class culture.  This + teenagers kept college people and college graduates off MySpace.  When Facebook started, it was *only* the people who wouldn't be caught dead on Myspace.  Facebook was fun at the beginning (I was on it the first year) because inside jokes could be aired out in the open.  But the honeymoon only lasted for 1-2 years. 

[TBideon]

At 138.62 points a share and a market cap over $400 billion and continued overseas expansions, I would say the honeymoon period isn't remotely over.

 

And once they start developing hardware, ooo boy

[Guest jmecklenborg]

By honeymoon I meant when it was actually fun.  Believe it or not there was a time when you got on Facebook and there were friendly and funny posts by people you actually wanted to hear from.  No political arguments, no fake news, no parents.  No "marketplace", no sponsored posts.