If Uber works, you might be less happy with your transport options
marginalrevolution.com
marginalrevolution.com
Their tech is good, but they are a menace to society.
Uber is keeping a lot of drunk people off the road, which is a big win for us and for them.
I'm not questioning their tech, or even the value of service they currently provide. I'm only very, very seriously worried of a company with such weak moral backbone dominating the market. Does anyone seriously believe they won't start exploiting their position if they win big?
But we're not talking about IBM or Oracle here. We're talking about (what was just recently) a taxi startup.
Choosing their business model to be throwing VC money at lawyers to shield them from consequences of breaking the law around the world wasn't a decision made on a shareholder meeting on the top floor of a skyscraper. The pattern of behaviour, both at the business model level and more personal one stretches years back and suggests it's not the market pressures, but the company DNA itself that makes Uber act in the way they do. Keep in mind that not even a year ago, the media story was "Uber the knight in white armour against the old, evil goblins of the Taxi Mafia". The industry may in fact be goblins, but Uber turned out to be Sauron himself.
Also, if you look outside the US, we had Uber-like companies in Europe for some years. The process of destroying taxi monopoly was way under way here. It was going slowly, but in a way that didn't threaten the social order.
There's absolutely no evidence to suggest that disregarding one law that's considered unjust implies someone is going to disregard ALL laws. Rosa Parks didn't immediately decide to start murdering and raping people after she sat in the front of the bus. Uber does not promote "fuck the law". They promote "fuck this one particular law that sucks for everybody except a few who benefit from it".
Maybe we could have had a long, drawn out process where the taxi system was slowly dismantled over the course of several decades, but who benefits from that? Not the customers who are stuck paying for overpriced, inefficient taxi service. Not the many drivers who are able to get flexible part-time work.
Laws are extensions of social customs that happen when society grows beyond a certain size (think few dozen - hundreds of people). The things Uber does break are against social customs as well.
> When a law stops being useful to society, we get rid of it.
Yes, but the way we usually do it is not by someone unilaterally deciding they don't like it and breaking it, while raising enough money to keep its enforcement at bay.
> They promote "fuck this one particular law that sucks for everybody except a few who benefit from it".
They break this particular law (and a set of others, like tax laws, insurance laws, etc., as well as ideas of being decent and not threatening people who disagree with you - ideas that are sort of important in a civilized society) because that's the area they're doing business in. But other companies enlightened by their example will be breaking other laws. Who knows, maybe next SV-backed startup decides to ignore FDA? Because who cares about those "clinical trials", they're only slowing progress down. And the next one after that will ignore biosafety. Would you like to live in that world?
> Maybe we could have had a long, drawn out process where the taxi system was slowly dismantled over the course of several decades, but who benefits from that? Not the customers who are stuck paying for overpriced, inefficient taxi service. Not the many drivers who are able to get flexible part-time work.
We had that in Europe before Uber, and it was going fine. As a customer, I benefited from local company that offered pay-for-distance drive-by-GPS service stirring up the taxi market. They had some legal battles, there was a law adjustment, and the local market improved (the company is still around, and I'm still their happy customer). Rinse and repeat. That's how you do the progress of civilization.
> maybe next SV-backed startup decides to ignore FDA? Because who cares about those "clinical trials", they're only slowing progress down.
Maybe they will? If a company can reliably produce safe drugs without FDA trials, why wouldn't we want that? Right now we have expensive drugs that are very safe. Few people die because they got a drug that was manufactured incorrectly (presumably, I don't know the actual statistics), but many people die because they can never afford the drug in the first place. Maybe without the trials more people would die from bad drugs, but more would live because they'd have access to cures that were previously out of reach. I don't know, but it's a question worth asking. There's also the issue of the black market created by the high prices caused by FDA trials, where drugs are sold from shady online pharmacies and manufacture under who-knows-what conditions. Desperate people will take risks like that when they have no options.
If you were poor and contracted some rare disease where the treatment costs $100,000, but only has a .0001% chance of complications, would you rather die because you can't afford it, or try a $100 treatment that has a 1% chance of complications? Right now you don't even get the choice. For whatever reason we've decided it's better for people to die because they're poor than for them to die because of a manufacturing / clinical problem with a drug. If that's what we all think, that's fine, but we should be aware we're making that choice.
> As a customer, I benefited from local company that offered pay-for-distance drive-by-GPS service stirring up the taxi market. They had some legal battles, there was a law adjustment, and the local market improved
The fact that they had "some legal battles" and the laws was changed, implies to me that they were also operating in defiance of the law at the beginning. How is that different from what Uber does? Besides, now you have the taxis, your preferred company, and Uber as options. With your recommended strategy of "everybody obey the taxi laws", you would only have the taxis. Aren't you better off this way?
Customers don't know shit. They only see the cool, new, better taxi company. Ask around, most people don't realize Uber is operating illegally.
Questions you ask about FDA and consequences of prolonged trials are important. They are being asked. But my point is, you don't want random companies operating in the light while ignoring medical safety laws - that will lead only to people getting seriously hurt. You always have an avenue of operating under the radar; the enforcement around drugs is not that strict, if you want to ignore safety there are tons of ways to get pretty much any chemical. Folks over at nootropics communities order various experimental chemicals from chem labs, and it's probably even mostly legal. But they know all the dangers and they take full responsibility over what happens.
> The fact that they had "some legal battles" and the laws was changed, implies to me that they were also operating in defiance of the law at the beginning. How is that different from what Uber does? Besides, now you have the taxis, your preferred company, and Uber as options. With your recommended strategy of "everybody obey the taxi laws", you would only have the taxis. Aren't you better off this way?
They didn't break the law. They found a loophole in the licensing process and exploited it. Taxi companies got angry, the issue went through the legal system and the law was adjusted in a way that took into account the innovation and increased efficiency, while also keeping the good parts of the existing system. Contrast that with Uber, which not just breaks the law, they're being blatant about it.
Customers do know one important thing. Uber is beneficial to them and taxi regulations are not. The taxi regulations were set up to protect the taxi companies, not the customers.
I don't think it's likely that any business is going to start flouting regulations that actually protect customers from something, because harming your customers is not a good business model (tobacco industry aside).
There are a lot of things that are beneficial to some parties while being destructive to everyone else. Strip-mining is beneficial to those enjoying the cheap metals. Dumping toxic waste into a river is beneficial for those upstream, not so much for those downstream.
> The taxi regulations were set up to protect the taxi companies, not the customers.
Some, maybe, and many eventually grew to serve taxi companies more than the customers. But not all and probably not most, initially. A lot of regulations and the monopoly taxi companies get exist, so that you:
- can actually get a ride if you don't live in the city centre
- can actually get a ride if you're sick, elderly or disabled, in a car that's equipped to handle you
With Uber you can't get either of the above, because it's unprofitable for the company and the drivers (actually, a friend is reporting that people are now lying about their location and then calling to the driver directly to ask them to start counting the fare on their way; we'll see how that dynamics evolves).
> I don't think it's likely that any business is going to start flouting regulations that actually protect customers from something, because harming your customers is not a good business model (tobacco industry aside).
Of course they are, and they're constantly doing it. Things like safe medicine, safe food, safe clothes, etc. were all things we had to fight them in courts for. If you're the only provider of something your customers need, you can be as evil like you want to them, and they will still buy from you.
Also, regulations are not usually about company vs. their customers, because those are not the only parties of the transaction. Regulations also serve to protect the rest of society from externalities that are being dumped on it through the transaction. In case of Uber, they have a good value proposition for customers. But they dump a shit ton of externalities on the rest of us, including fucking over their drivers, destroying the taxi industry while not covering for all the parts they dismantled like catering to elderly and disabled, and eroding the rule of law. Oh, and fucking us all over again with taxes that should have been paid.
To take your tobacco industry aside, they're not really hurting their customers. The customers were obviously participants in voluntary trade. And the families that have to take care of them and bury them when lung cancer finally ends its work were not the customers, so why would a tobacco company care about them?
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I understand the appeal of Uber. People who like them like them, because they're breaking the law in their favour. But that's a stupidly childish attitude. The next company will break law in favour of someone else, and then you'll be pissed.
Except taxi regulations don't actually accomplish any of these things. It's well known that if you want to go from Manhattan to Brooklyn you better get in the cab first before telling the driver that, or they'll drive away. Even then, they might demand that you get out anyway. If you look like you might inconvenience the driver, or if you're black, good luck getting them to even pull over in the first place.
You can complain of course, by sending a message into the black hole of the taxi regulation bureaucracy, but it's unlikely anything will ever come of it. With an app that allows immediate feed back and user ratings of each driver, drivers are far more accountable to providing a satisfying customer experience than they ever were under the taxi regulations.
> If you're the only provider of something your customers need, you can be as evil like you want to them, and they will still buy from you.
Yes, like if you've manipulated the local government into making it illegal for anyone else to provide your service unless they buy a multi-hundred thousand dollar taxi medallion.
This claim is absurd. Please provide proofs.
I'm only saying that executives make decisions amorally with regard to what helps or hurts their company. I'm not suggesting they are all serial killers.
Also once driverless cars are available, starting competing businesses should become trivial (aside from having the necessary capital), and in fact it's quite possible that the final outcome will be the car manufacturer themselves offering an Uber-like service instead of selling the cars.
By the way, what sane company would ever want to facilitate (real) competition for themselves? The natural goal of every company is to have a monopoly. Market economy works by hanging that carrot in front of everyone and then trying to make sure no one reaches it.
- sabotaging competition, at some point even hiring people to do it and providing them with burner iPhones and credit cards
- threatening journalists
- privacy issues
- tax evasion and the whole contractor vs. employee thing
- (purposefully) basing their business on drivers without proper insurance
- abusive rating system (though here I'm not sure if this isn't simply a good idea with very hard to solve side effects)
There was also a long article posted here few months ago that detailed the way Uber squeezes the money out of the drivers (already locked-in by car loans they were encouraged to take) once they establish their market domination.
And note, I am not denying that the current system is corrupt and barely functioning. I'm happy that it's getting upturned. But we've been doing it in Europe for some years now, and it didn't require anyone to behave like this.
They were trying to sign drivers on competitor services up to Uber. They weren't sabotaging anything and were taking legitimate rides, just promoting Uber while taking them.
Not to mention your argument sounds suspiciously like Intelligent Design believers explaining how the universe was obviously created by god since it is built on a fragile interplay of fine tuned distances and sizes and if only they were slightly different humans wouldn't exist!
EDIT @TeMPOraL: I'm the one that argues that it is all within-the-system, without the need for an external omnipotent actor. You're the one that thinks we must introduce the government as an external (above the rules) omnipotent (law-making) actor to the system of human interaction that is originally solely comprised of people and rules that apply to everyone without exception (but you want to introduce the external actor "government" as an exception to this otherwise global rule).
Hence why I argue that what you said is akin to Intelligence Design arguments. You are saying this delicate societal balance is all thanks to the external actor called government, like ID-folks say the balance of the universe is due to god. Both of you believe systems would collapse without this external omnipotent actor. The similarities are not just superficial.
Well, it's a huge issue in Europe now, creating a lot of mess. The tension between member countries of the EU has increased, and some people worry that the whole issue may actually turn into a civil war. The world isn't limited to having only one problem at a time.
> Not to mention your argument sounds suspiciously like Intelligent Design believers explaining how the universe was obviously created by god since it is built on a fragile interplay of fine tuned distances and sizes and if only they were slightly different humans wouldn't exist!
Did not see that coming... I don't see anyting but superficial similarities. The difference is, we've seen how societies big and small form and evolve over time. We've been observing it for thousands of years, and we took notes. We know what happens when the rule of law breaks, how fragile it is. It's all within-the-system, there is no need to postulate an external omnipotent actor.
EDIT to reply to 'planfaster's edit:
I don't see where I introduce government as an external actor. Government is a completely in-system being, it's something that occurs naturally whenever a society grows past certain size, when it can no longer hold together by enforcing the rules directly through day-to-day interaction between its members. It's just a more formal form of in-group coordination, and a common pattern in all human organizations - companies, churches, clubs, etc. Hell, it's even the base of multicellular life itself (also note that we have a name for cells that refuse to coordinate with the rest of the organism and instead decide to grow as much as they like - they're called cancer).
A government is something a society forms that allows it to grow beyond a very small size. I implore you to show me a thriving organization or society with more than 500 members that doesn't have a formalized set of rules and governance.
My point against Uber would work the same way if "Uber" was just a village asshole with a horse, going against the "rules that apply to everyone without exception".
But if you want to play it as religious debate, then tell me please, who paid for the roads and the schools and police? How do you call the entity that orders those projects and distributes the resources to accomplish them?
Right, like the government, which is always growing (like cancer) and never dwindling, always passing new laws and regulations but never deprecating any, all the while refusing to coordinate with the rest of the organism since it claims to be exempt from the laws and regulations to which it subjects its cells/people.
Just like all the cells in the body go by one rule (don't grow unchecked), and cancer doesn't (it grows unchecked), so is everyone under government forced by it to go by one rule (do not initiate force) that government doesn't need to (it may initiate force unchecked).
Do you really not see the similarities?
I am not against a formalized set of rules and governance, I am for it. You are the one who seems to be against it since you are for an actor that does not abide by those rules and governance, namely the government. I am for everyone, without exception, abiding by a set of rules and governance, and the first rule is the one we all agree on so much that the government enforces on us, namely, do not initiate force.
Roads in the US were started by cyclists and war veterans:
http://www.roadswerenotbuiltforcars.com/the-petition-that-pa...
Walter Block (philosopher) has a free book (all his books are free, as he has irrefutable arguments against intellectual property) on the problem of roads: https://mises.org/sites/default/files/The%20Privatization%20...
The problem of schools and police are not as hard (the government of South Africa uses only private police, non-Prussian school models do not require teachers, etc) as that of roads, so I leave them to you as an exercise.
It seems to me like you believe governments are aliens from outer space that land their alien militaries and alien parliment buildings on our planet and start doing the governing. Governments are actors created within the system; if they're extempt from anything, they're extempt from it by our own design. Like, you know, instead of everyone keeping everyone else under MAD stalemate, some time ago people agreed they'll let one group monopolize the violence, and it worked out for the better for everyone, and that group is by definition extempt from "no violence" rule.
> I am not against a formalized set of rules and governance, I am for it. You are the one who seems to be against it since you are for an actor that does not abide by those rules and governance, namely the government.
I honestly feel like you're trolling me at this point.
Again, I am for a formalized set of rules, and I am suggesting that the rule be "do not initiate force". You on the other hand, have not suggested any formalized set of rules, as something cannot be a rule if everyone is helpless to keep the biggest offender from breaking it.
> "do not enforce coordination", means cancer
You say things like that, and you think I'm trolling you? Not to mention, the word is "exempt", not "extempt".
> Governments are actors created within the system
This is meaningless when both good and bad are created "from within" according to you. If I pointed to US History and asked you were Central Banks on the good side or was Andrew Jackson on the good side, I'd say Jackson, but you'd still point out the Central Banks "are actors created within the system". So to me this is meaningless. It's better to talk about how much consent the government has. Recent Gallup polls show more than half of Americans fear their government. I'd say fearing and consenting do not go together. So it seems the people are saying they'd like to treat the cancerous government within our country.
> some time ago people agreed they'll let one group monopolize the violence
They did, or do you assume they did? If the people did agree to this, as you said, then please point me to the historical documents, like a social contract being signed by everyone in a given territory. Otherwise, don't make up facts while trolling me and calling me a troll.
Also, it's called civil disobedience.
Evidence we spent last few years discussing here, on Hacker News.
I am not going into dive into Swedish cab companies, but Uber is a Godsend in comparison[0]
Not only do other Swedish cab companies retain proven homophobic islamists as drivers, they actively hide it[1]
[0]: http://unvis.it/www.expressen.se/nyheter/utslangd-ur- http://unvis.it/www.aftonbladet.se/nyheter/article19644907.a...
> Not only do other Swedish cab companies retain proven homophobic islamists as drivers, they actively hide it[1]
And Uber had their share of rape accusations, but I personally think those kind of arguments are too easy to state and too hard to prove, so I'm not even digging them up. Every organization hiring humans will have such cases eventually, but what I'm concerned with are the company-wide problems and their impact on society.
The set of privately owned vehicles is going to decrease as a function of increase in population density and truly alternative transportation options.
It still takes a while to find an Uber driver in lower density areas, and in both the City and the Suburbs, alternative services like Curb and myTaxi have been leveling the competitive gap between Uber's microservice taxis and traditional taxis.
But an Uber-facilitated ride-for-hire is still a taxi ride, albeit one that's easier to schedule.
Cars will go away when people don't need them. Yes, some people wealthy enough to afford to take a taxi everywhere are going to get rid of their cars. And it does constitute further saturating a market with car hiring options.
But folks that don't live within walking distance to daily needs like their bank, grocery stores, barber, doctor... are going to rack up extra costs switching to hired cars.
If your town grows 2x or 4x and suddenly there's a grocery store two blocks down? Less need to get in the car. In those scenarios, eventually yes you're going to see the cars-per-person go down.
I'm rehashing I suppose, but fleets of subscription-service autonomous cars will be the next big disruptor. This is where Uber could make that big dent -- when you have a stable cadre of always-on, always-ready people movers, optimally distributed for service, picking up and dropping people off.
These could replace that second car, or the beater you keep limping along to get down the highway to work.
This may be a bit too simple. Technology is solving these problems, too. Online banking continues to improve. Instacart is expanding to more cities. People are consulting with doctors over FaceTime for a flat fee. Many other errands can be batched up into one day a week or month. With all these improvements combined together, Uber becomes an economic choice for many people sooner than later. (I have saved ~60% on car costs over the past year by switching to Uber exclusively. I realize not everyone is in the exact situation I am, but I'm not riding Uber because I have money to throw away.)
Is it a good thing for me and my social graph that I don't have to leave my cul de sac to do almost any of these social commons activities?
But yeah on your personal anecdote, a few years ago I moved from the suburbs of a larger city to the center of a larger city, so in that respect I too have seen pretty substantial savings getting rid of my car and just using public transportation and cabs when necessary. If I lived outside the center, though, I'd still be appreciably encumbered and spend more if I just took cabs from my house to get anywhere.
Can you give us the low-down on your living situation? As in, are you out in the sticks or in a flat downtown somewhere? It's good to frame info like that in the living situation so we can understand its applicability.
Perhaps, but fares would have to drop by about half.
My daily commute is 18-25 minutes each way. Current Uber rate is about $20-25 to get me between home and work (midwest metropolitan city). That works out to 249 * $ 20 * 2=$9960 / year to take Uber currently. True cost to own for my current vehicle is between $4000-5000/year.
My wife has a car as well and needs one during the day. If Uber became close to cost effective with owning, I'd drop my car, take Uber, and we could use my wife's car for all our other transportation needs.
But the opposite is going to happen when they stop subsidizing fares. At the moment, they are ripping off their drivers and still making a loss on each ride they sell. Their strategy is predatory pricing and that won't go on forever.
I'd be willing to share rides (with other passengers that is) as long as it gets me from where I want to my destination with a single hop and pay a reasonable price for that. At the moment I'm taking two buses to work and I can beat that with a bicycle (14 km or 8 miles in 40 minutes at best, 70 minutes at worst).
That time should be beatable using smart routing of small vechiles (I have 5-20 min of waiting for my connection typically), using "maximum flow" rather than "shortest path" algorithm. There is such a bus service available here but only in the urban areas so it won't take me to work from where I live.
Honestly, I'm fine with it. I don't have a car, and the all my transportations needs are met by a combination of Lyft and public transit (ultimately, it's cheaper and probably faster to take the train downtown). I'm fine with everything else going away.
Now this all assumes an efficient market. If Uber were to start abusing its monopoly powers, that would be something to be legitimately concerned about...
I wonder if they plan to do that:
The article agrees that a more efficient use of resources won't cause (net) harm. It claims it might harm transportation and benefit everything else, for a net benefit.
I think Tyler's point is, there is a stock of underutilized cars that gets converted to Ubers. Hypothetically, I needed a car for work, and I decide to drive it for Uber on weekends.
In the long run, I decide I don't need a car because Ubers are so available. The supply of Ubers then goes down, while demand goes up, since I don't have the option to drive myself.
I don't think there is any mechanism here that would drive the cost of an Uber ride down. Total transportation cost goes down because the total of Uber plus self-driven cars go down, but the mix goes to more Uber, less self-driven cars.
I think as Uber over time ceases to benefit from an 'arb' where it piggy-backs on sunk-cost cars and personal insurance, the cost of Uber-ing goes up, but overall transport cost goes down because people don't have to pay for underutilized cars.
It's possible that over time the mix of cars goes to utilitarian electric models, and a 'fun' car becomes a specialty item like a high-end sports car is today, and some people don't love their new options.
But if you believe in free markets, you would have to say that the market has spoken and arrived at a revealed preference for paying less for transport in a utilitarian vehicle that is not underutilized.