The WSJ was accidentally too honest about Uber in print | Hacker News Reader

The WSJ was accidentally too honest about Uber in print

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41 pointsradmuzom20 comments

Sounds like they need a loyalty program, so customers have an incentive not to simply take "Uber or Lyft, whichever isn't surging right now."

So: UberMiles -- earn and redeem miles when you take an Uber. And there can be Gold, Silver, and Platinum levels you earn for taking more Ubers -- at the higher levels, you could get complimentary space-available upgrades, special discounts, or insulation from surge pricing. And they could partner with a bank to market an UberMiles credit card (earn one mile for every dollar you spend), and with Hilton to offer Points&Miles™ to hotel guests. And the miles can expire if there's no account activity for 18 months. And people can rant and complain and swear they're going to take all their business to Lyft when Uber inevitably changes the miles redemption chart to become more profitable.

IIRC Capital One had some sort of Uber promotion recently so they are likely testing the waters for such a move.

They only have their name brand, and Uber has to be aggressive because they're operating in a space with little barriers to entry. They cannot raise their prices - people do not depend on Uber and can switch at zero costs.

What worries me is that the online version will become the definitive version of the story. There is no way to know, without directly comparing against the print version, how the online version differs from the print version.

At least there is newsdiffs.org for tracking changes for the online version of the New York Times (and cnn.com, politico.com, washingtonpost.com, and bbc.co.uk).

The print version has the virtue of actually explaining a plausible mechanism by which they can become profitable. Building enough loyalty (or other form of competitive moat) to allow them to set a larger margin between customer price and driver pay, is a coherent strategy. The online version of the article, by contrast, just vaguely says that maybe if they grow they will (somehow) become profitable.

At least it is not as bad as banks. I wonder what would happen if for profit banks did not have interest bearing savings accounts.

"Build loyalty to charge people more and pay drivers less". The fact they redacted this paradoxical statement is all telling.

It's not paradoxical, there is no contradiction in it.

They really hope to capitalize on their first mover advantage and name recognition to be able to raise prices, lower compensation and still keep the customers and drivers.

how does one build loyalty by fucking people over?

How is profit "fucking people over"?

They aren't profitable now. Clearly that's unsustainable. To become profitable they need more revenue than expense. There are not many ways that this can happen, and one given is that the fare charged must be higher than what the driver is paid for that trip.

Actually, I believe they are highly profitable in the more mature markets. Overall they're losing money, but that's because they are expanding at an incredibly rapid rate.

I guess a potential problem will be if the smaller markets they are expanding into now don't turn out to be as profitable as the early ones once they mature.

> How is profit "fucking people over"?

There is a line of thinking that says that profit is by definition fucking people over.

I am not telling you that you ought to agree with that line of thinking, but I think you should at least familiarise yourself with it instead of dismissing the idea as if it came from another planet.

say, theoretically prices double, and you hear reports of uber drivers getting rate cuts.

How likely is this to engender feelings of brand loyalty in you.

You mean like virtually every corporation in America over the past 20-30 years?

No one will notice.

The few who do will be "spineless socialists."

> raise prices, lower compensation and still keep the customers and drivers.

that's what I mean by fucking people over but it's hopeful at best that people will remain loyal because there's zero cost of switching. As soon as Uber makes profit, others will jump right in with lower prices because there's no barrier to entry, no network effect. Your homies riding Uber? Oh okay, I guess I'm stuck with Uber since all my friends are on it (sarcasm). Unless they bribe city officials that it is illegal to operate as a Uber competitor in which case people would probably go even more apeshit.

Not by, in order to.

Exactly. First establish near or total monopoly, then profit!