Originally published at: https://boingboing.net/2024/03/15/uber-and-lyft-say-theyll-leave-minneapolis-rather-than-pay-drivers-its-new-minimum-wage.html
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Buh-byeeee!
Taxi apps aren’t difficult you know. Mobile phones, networks, GPS, cloud servers, now they are all difficult but Uber and Lyft are just freeloading on actual innovation.
Taxi apps are trivial compared to all that.
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I believe them.
I don’t think there would be a lot of demand in Minneapolis at the resulting price levels. When I’m in Seattle, I don’t use ride sharing apps casually the way I do everywhere else. A 25 minute trip from pioneer square to the airport can easily be >$50.
I don’t intend this as a remark on the justice of the proposal or whether it is good public policy. Just that as a matter of business, it is possible that these price levels would make it not worthwhile for them to operate there.
When ridesharing entered the mainstream, they got people hooked on very cheap hired cars and introduced a ton of new, non-substitutionary demand. Prices steadily rose and some of the demand was sticky, but these price increases do impact demand. Seattle is one of the only places I’m willing to try to figure out how to take transit during a 24 hour business trip.
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Yeah, Uber and Lyft prices prices are unsustainable. Not only do they shaft the drivers with starvation wages, last I heard the companies aren’t actually profitable. As near as I can tell, the idea was to undercut taxis by undercutting their prices and ignoring legal requirements to get a lock on the market. That “lose money until you corner the market,” thing works well with software because even though something like Windows cost more than a billion to develop, the marginal cost for the millionth copy is near zero. Even with drugs, the companies with drugs already approved can cut prices below the cost of another company getting approval to manufacture it. So pharma douches can keep the prices high because they could drop the prices. But you just don’t have the same efficiencies of scale when providing transportation. The only real way to get efficiencies of scale for the costs of fuel, labor, and vehicles is to put more people in the vehicles. We call those busses. At some level Uber and Lyft are giant pump and dump stock schemes. They are always looking for more investors to make good on the losses they experience and there just isn’t a real hope of profitability.
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“If taxi regulations didn’t exist, we’d be forced to invent them.”
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If you would like allllll the info on this, we have a fantastic local politics person in Minneapolis:
Their @WedgeLive social media accounts on the various platforms are especially good.
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They aren’t difficult in hindsight. One of the reasons that Uber and Lyft were able to slide into the market is that the incumbent taxi companies were too sclerotic and mutually antagonistic (and sometimes too technophobic) to come up with apps of their own. The ride share companies took their window of opportunity to undercut them with a loss-leader business model and establish their brands.
Things are better now, but while Uber and Lyft are exploitative toward both labour and shareholders, the taxi industry needed a wake-up call as well. NYC is still struggling to tame the medallion monopoly and they still can’t figure out the novel concept of staggered shift changes.
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Plus, originally - and this was their USP at the time - after cornering the market, replacing everything with robotaxis.
And it would have worked… if only the timeframes for autonomous driving spouted by Google and Tesla and, lest we forget, themselves would have been true.
So now they have cornered the market1) but are still waiting for the magic cars.
1) In some places, anyway. Labour laws, consumer protection, regulations. You know where to look.
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… meddling kids.
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If your business model relies on underpaying your employees, your business should fail. The solution to all this, by the way, isn’t just reforming taxi regulation, or increasing regulations on ride share services. It’s public investment in public transportation. I’m not going to hold my breath for that, but that’s what we need to prioritize.
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They never shoulda torn up the streetcars.
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They’re trying to bring them back in Kansas City, but it still has pretty limited service area.
ETA: And it’s free! https://kcstreetcar.org/
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The tech tycoons running any kind of vehicle-related company are pathologicaly opposed to public transit. From their Libertarian POV it’s the literal Road to Serfdom.
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Liberitarian tech tycoons have no problems whatsoever with having serfs.
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This story played out in Austin TX some years ago. The city passed an initiative requiring fingerprinting and background checks for drivers. The ride share companies Did Not Like that, and joined forces in a massive campaign to defeat the initiative at the ballot box. When they failed, they did leave, lobbied the incredibly corrupt state lege, and had the initiative overturned.
There was a local driver-owned ride share service that sprang up, but the pandemic killed it.
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Arcade City Austin is still going; I took one to the airport. Is that who you meant, or was there another?
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I wouldn’t be surprised if they’ll do it tactically; to try to apply pressure to regulators; but, unless there’s a provision in the law that specifically provides a competitive advantage it seems less obvious that a reduction in demand would make pulling out logical:
Unless there’s a surprisingly high fixed cost involved in keeping the app operating in a given city it seems like there would be no downside(in terms of pure business case; there’s the separate question of the value of making an example of those who oppose them) to continuing to serve what demand does exist.
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I don’t use Uber or Lyft full stop; as Cory Doctorow says the rideshare business is a bezzle. I’ll support taxi companies when I need a point-to-point ride and can’t use my own car (only 1,100km last year) or use public transit.
Lots of cities have fast public transit to their major airports. In Vancouver the Canada Line goes from downtown Vancouver into Richmond and right to the main terminal a lot faster than I can drive. It’s about $9CDN for a 2-zone round trip compared to $30 for a cab one way.
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I was thinking of Ride Austin.
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Better to lose a private service than to change the law just to support an unjust and unsustainable business model.
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