> 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.
>> * 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.
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
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
manfredo|6 years ago
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.
georgeecollins|6 years ago
>> * 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.
sharkmerry|6 years ago
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
thorwasdfasdf|6 years ago