Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Thursday, July 14, 2022

Uber: criminal?

Uber app (many years ago).

Ride hailing has never really made sense as a business.  The people who serve as taxi drivers tend to have limited work choices which is why they did/do type of work.

It wasn't particularly remunerative but it paid the bills.  But the costs (car, gas, labor, maintenance) were expensive enough that it wasn't a good competitor to public transit.

Uber (and Lyft and others) inserted themselves (intermediaries) between rider and driver to capture a significant portion of the transaction. Making it even less profitable for drivers.

And they lowered the ostensible cost of the trip through venture capital subsidization, driving traditional taxi companies out of business. 

Making it easier for them to reduce reimbursement rates to drivers, who had few alternatives since local providers were now out of business.

These firms evaded regulation, but were able to mobilize their customers as advocates and pay for campaigns to support what they were doing, making it difficult for elected and appointed officials to challenge their narrative.  (If they even had the understanding to be able to do so, they'd lose. Mostly.)

And they did this at the expense of the success of public transit as well as adding to traffic and congestion even while arguing they did the opposite.

124,000 files from Uber were leaked to the Guardian and they found that "Uber broke laws, duped police and secretly lobbied governments, leak reveals."

It's merely proof for what I had been writing on and off for years.

-- "Misunderstanding Uber, Taxi regulation and what we might call the "Overground Economy"," 2013
-- "App based ride services and creative destruction and plain old destruction," 2014
-- "The false promise of ride hailing as a pro-city transportation mode," 2018
-- "What a terrible idea: deregulating taxi fares in DC for mobile-based hails," 2014
-- "Taxi fares in DC and not planning," 2011
-- "DC and taxis: need for a comprehensive plan,"2012
-- "Taxis," 2011

Although one thing that was brilliant from ride hailing was the creation of a unified (inter/)national mass market for "taxi" type trips.  

Before the rise of the app you had to know who was the taxi provider in every city and contact them to get a ride, unless you hailed a cab on the street or went to a taxi stand. Plus, without an app it was more sticky and less efficient.

The app even built in payment capabilities.  No more finding cash or using your credit or debit card.  It was all built in.

With Uber and Lyft, one app worked not only across the US, but in most countries across the globe.

Hailo had an office in the U Street district of DC.

A startup called Hailo tried to do this for taxi companies independently of firms like Uber, but they didn't have the capital and ability to compete--plus many taxi companies were technologically laggard and didn't understand they ought to jump on the Hailo bandwagon.  

Hailo didn't last long ("Hailo Shuts Down: How Taxi Drivers Sabotaged a Golden Opportunity and Handed Uber and Lyft the Keys," Frommers, 2014).

That's the advantage of "disruptive innovation," you just do it, rather than trying to convince existing firms to join up.

Guardian has many stories based on the leaked documents.

-- "The Uber Files

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At 10:36 PM, Blogger Richard Layman said...

Uber’s story shows what happens when a firm moves fast and breaks things

At 6:57 PM, Anonymous h st ll said...

idk bro i don't agree. cabs barely worked pre Uber (arguably didn't work at all depending on your ethnicity/where you lived)

hailing on an app and all it benefits are a massive improvement

now they have upped prices a lot so people are starting to returning to using cabs when it works. and your analysis neglects to mention the pointless sucking of driver benefits/user utility that was artifical scarcity due to medallion prices/tiny amount of licenses etc depending on the city

transit has repeatedly shot itself in the foot and is often ineffective despite record investment/spending which never seems to translate into more service or quality of service delivered

At 11:23 PM, Blogger Richard Layman said...

Fair points. Excellent point about supply restrictions severely constraining income.

And yes. The app aspect is f*ing brilliant.

But they use it like medallions to handcuff drivers, when it out to function more like a credit/debit card percentage (eg 5% not 50%). Or it could be like an app subscription of $100-$200 per month.

This way it's indentured servitude.

Wrt transit failures, why is it that it can work so well overseas or in Montreal?

At 10:37 AM, Anonymous charlie said...

app based taxi hailing can work well.

I think the Post/Guardian series could have done a better job distinguishing between the original uber idea and "ride-sharing" that really Lyft invested and uber expanded.

But evidence of a massive misallocation of capital.

At 1:59 PM, Blogger Richard Layman said...

There's an article in the Times about all the delivery services and maybe everyone doesn't want stuff in 15 minutes. Um, Kozmo.

I'm not great with numbers, but I don't see that these kinds of businesses are viable, especially with no barriers to entry.

Will read cite. Thanks.


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