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Comment by inkaudio | Hacker News Reader

When you charge far less than the actual cost of service you're going to get demand that does not reflect the actual market, hence not true "true" supply and demand. If I was selling dollar bills for 50 cents I would sell a lot of dollars bills. We've seen this before it's called Groupon. A key difference between Uber and Groupon is there are more drivers to con then there are businesses. Uber is losing billions dollars subsidizing rides, that is not a legitimate market. This is a farce to sell a growth story to raise capital and allow early investors to make huge gains, again see Groupon.

Uber was saying drivers could make 90k a year back in 2014 see: https://www.businessinsider.com/uber-drivers-salary-90000-20...

Which lead to this https://www.vox.com/2017/2/28/14766964/video-uber-travis-kal...

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Even then, having the city of New York set the price according to "utilization" isn't supply and demand either. It's price fixing.

One man's price fixing is another's correction of socially harmful behavior.

The free market will almost always devolve into worker exploitation unless there are rules.

It was a bad measure to try and solve the problem of Uber fixing it's own prices in order to create the current market dynamic. The cost of an uber ride AND the drivers wage are both subsidized by Ubers losses. If they didn't do that rates would go up necessarily. The Uber we know now simply can't exist forever, New York tried a bad way to illuminate the real price of the service so that the rest of the driving industry had a level playing field.

How many billions of stilts are needed to prop Uber up before it becomes obvious that it can't stand up at all and should be laid to rest?

It was a measure aimed at preventing Uber from externalizing their costs on society.

Uber isn't externalizing costs on society. Uber pays drivers more than they are worth, using venture capital. Drivers have an income they wouldn't otherwise have. Riders pay less than they otherwise would have.

The only ones who lose here are Taxi drivers who are being undercut. Taxi drivers don't represent "society", they represent the taxi lobby.

In the process replacing an industry that it may not able to sustain.

So what does a post Uber/post VC ad hoc transit market look like?

Once the VC dries up the market will start to show it's true colors and it may be that the model isn't sustainable, although I think it probably should be once rates rise.

If you are saying that venture capitalists and naive investors are paying for part of my ride each time I take an Uber why wouldn’t I want to get as many subsidized rides in as I can before they go broke? How am I as a consumer not gaining every time this happens?

https://en.wikipedia.org/wiki/Predatory_pricing

The idea is that while it is nice to enjoy subsidized rides at the moment, as a consumer you may suffer in the future due to Uber establishing a monopoly.

Uber has no moat, so cannot possibly exploit a monopoly. The hardest part of their service to replicate is the drivers, and since they're all contractors they are free to work for Uber's competitors!

Even if Uber gained 100% share of car rides in an area, if they decided to exploit that by increasing their prices it would be relatively easy to create a competing company and undercut them.

Uber can only compete on price, they have nothing novel that can't be replicated. Hard to imagine how they could control the supply in a meaningful way.

You are gaining as a consumer but many new retail investors in the stock or through ETFs may get burned when the business model stops working. Most of the shared economy startups are a house of cards expecting a magic bullet to solve their cost problem (self driving cars). The current stock holders are providing the hang time till that happens or not. The early investors will probably be all gone by then.

Do you have a pension? Pension and index funds buying Uber are the ultimate bagholders here.

Uber is basically a legal Ponzi scheme.

Your index fund is investing in a bad investment and you say the fault is that the bad investment exists? Why not choose a different fund?

We shouldn't put bubble wrap around everything in the hopes that no one can ever do anything that might harm themselves. This kind of mindset restricts the freedom of everybody.

You do know that an index fund has no choice to invest in the companies that make up the index?

Anyway the point I was making is that the bagholders are the little people.

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