Depending on where you are, some of the traditional taxi companies may already be there:
Like this one
Or this one
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Because they aren’t taking a percentage. Rather, they are charging customers less per ride than they are paying the drivers per ride. (This despite the fact that they are paying their drivers utter shit wages). Their business plan is to drive all the local cab companies out of business, become the world taxi cab monopoly, then raise rates. All the talk about self driving cabs, yadda yadda, is just bullshit designed to confuse those who might stand in their way.
In the topsy turvy world of post Reagan antitrust enforcement, this kind of predatory behaviour designed to give them a monopoly position in the market is not illegal. And in the looking glass world of venture capital, pumping billions of dollars into the company on the bet that they manage to continue to hoodwink regulators long enough to become the new world taxi monopoly is a wise investment instead of throwing money down an unprofitable rathole.
eta: Sorry, they do take a percentage. But that percentage is eaten away by all the discounts and free rides promtions and other costs of growing their customer base on the one end, and by the staggering amount of liability insurance they have to pay for on the other end.
Getting more detail is tricky because they’ve never actually allowed an honest accountant to do their books - looks like every financial statement they’ve ever issued has been a tissue of lies and spin designed to make the company’s staggering losses look less scary to investors.
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Once upon a time, long ago, IIRC, their business plan was to skim off the most affluent users of taxis by offering a superior service at a premium price. Basically “wouldn’t it be cool if you could summon limousine service with an app.”
But somewhere along they way they gave up on that model because it wasn’t a big enough piece of the urban transport pie to feed all their venture capital investors, so the backup plan of becoming a world taxi monopoly through skulduggery was born.
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Oh, and if you have to break a few laws to do that? Go ahead. Let the lawyers fix it up later. Maybe.
“Disruptive” = “Ignoring laws” Not that some of the local laws creating a shortage of taxis weren’t long overdue to be gutted.
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Be clear that the problem was not the drivers. Medallions were grabbed up in bulk by companies who then dribbled them out for hundreds of thousands of dollars.
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Definitely not the drivers – that’s why I call it a monopoly racket. At a certain point in NYC a medallion could go for $1-million+. Unless a limit was put on the price such that it might be affordable to a driver who secured modest financing that system was broken and had to go.
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It should have been a non-transferable lottery based system from the get-go. With safety regs that if you fuck up, you lose it. It is necessary to limit the number of drivers because we’re seeing exactly what happens when that isn’t done with unrestricted ride-“sharing”: wages drop like rocks.
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You seem to be assuming Uber intends to keep paying drivers long term. Self driving cars are just around the corner, especially in urban areas.
Don’t underestimate the ability of NYC to organize a new racket.
Carjacked in a self driving car, just say’in
it’s quite the opposite of course.
just like air bnb doesn’t have to pay hotel tax – and thus “disrupts” traditional hotels and bed-and-breakfasts – uber doesn’t treat it’s employees as such ( thus avoiding employee taxes ), and they don’t pay for medallions ( which is what kept taxi-driving at a somewhat livable wage. )
rules were put in place to even the market playing field, but these companies avoid that, and aren’t held accountable.
if they can’t win even when they cheat, it’s pretty much just straight up incompetence.
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This gives another look at the financials. Uber’s plan is to become the major player in every Urban market, that’s not actually cheap.
First you have all the political and legal battles with the local government, that costs a lot of lawyers and lobbyists (and expect the locals to throw in a few weird rules to advantage any local cab startups).
Then you need a bunch of drivers, that means ads and recruiters. Plus resources to interview and perform background checks on the drivers, not to mention some kind of physical office to appease local regulators and give potential drivers a place where they can come and talk to someone.
And now finally you need people actually using the app, so now you need to give away a bunch of free rides, buy ads and send out PR people to chat up reporters to get in the papers.
Once all of this is done you can start collecting your 20% (assuming regulators didn’t push you out, or you never managed to build a critical mass of drivers or users).
I’m really not a fan of Uber, but I don’t buy that they’re fundamentally unprofitable. As long as they’re confident that they’re highly profitable once established in a market (which their investors apparently are) then the massive losses while they have investor capital look like a rational strategy.
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