Uber in trouble

westernpromise

https://www.telegraph.co.uk/technology/2019/08/09/uber-has-bigger-problems-5bn-loss/

Ultimately, Khosrowshahi argued, the taxi business's main competitor is car ownership. The hope, he said, was to get to a situation where people have no need to own a car.....A recent study commissioned by Uber and Lyft concluded that app-based taxi firms do contribute to congestion....Rather than persuading drivers out of their cars and into shared rides, they could in fact be luring people off public transport and adding more cars to the road....Data from HSBC suggests that using Uber or Lyft stops becoming cost-effective as soon as someone has to drive more than 700 miles a year

It strikes me that these companies, which are basically nothing but software and thus very easy to copy, will go the same way that ISPs 20-odd years ago - where after a short period of euphoria the market works out that they will never make better than utility returns on capital.

Herzlos

I don't know how competition will affect them, as these tech companies will need some critical mass in order to be useful. If you use company x but it's 20 minutes for a car Vs 5 from Uber you're going to take Uber unless company x is much cheaper.


I thought the concept of taxi/equivalents taking people from public transport was a given? Few people who have cars will chose to take a taxi when they can use their own car - I only use them when away and it's not worth the hassle of renting. Potentially, they'll become ubiquitous enough that people will question car ownership and start moving towards the hiring model. If I didn't need car seats and buggies and crap I'd probably be cheaper booking an Uber any time I needed to take the car anywhere.

westernpromise

If these services "stop becoming cost-effective as soon as someone has to drive more than 700 miles a year", the prospects for their ever replacing cars look poor.

There is also nobody who has yet demonstrated that the middleman can consistently make money out of being just the middleman. It feels like Uber will end up being just another minicab company, making minicab company returns.

lisyloo

Herzlos wrote: »

I thought the concept of taxi/equivalents taking people from public transport was a given? Few people who have cars will chose to take a taxi when they can use their own car

If you’re going away for more that a day or two then parking at a railway station can be more expensive than a cab.
However the cabs round our way aren’t reliable regarding times or finding the right town/street or turning up at all, so mostly I prefer to walk (unless it’s horizontal rain) as I have to allow time to walk anyway in case they don’t turn up or are late. I always stress we’re meeting a train but they still are not reliable enough.
I also can’t see using one to load up rubbish and green waste (which makes a bit of a mess) to go to the tip, so a number of situations where it’s much more practical to have your own car.
What if one isn’t available for some time or they are on peak pricing?

Nowhere near reliable enough currently for anyone outside a city center to get rid of their car.

Herzlos

westernpromise wrote: »

If these services "stop becoming cost-effective as soon as someone has to drive more than 700 miles a year", the prospects for their ever replacing cars look poor.

Where do you get the 700 miles/year from? A new car will depreciate by say, £6k/year so at 700/miles a year you'll be paying £8.50 in depreciation alone. Insurance @ £300/year is another 42p/mile.


Even with just those, and Uber at under £1/mile, means you'd need to be doing well over 7000 miles/year before Uber becomes more expensive than owning a newish car. The figures will change for older cars with lower depreciation.


Lets face it, there are already a huge percentage of people whose car ownership doesn't make any financial sense.

There is also nobody who has yet demonstrated that the middleman can consistently make money out of being just the middleman. It feels like Uber will end up being just another minicab company, making minicab company returns.

I'm not sure, it serves a purpose and provides a service. eBay is purely a middleman and does fine.

westernpromise

Herzlos wrote: »

Where do you get the 700 miles/year from?

HSBC cited in the article.

Data from HSBC suggests that using Uber or Lyft stops becoming cost-effective as soon as someone has to drive more than 700 miles a year, cutting off a large swathe of the huge $2.5 trillion total addressable market Uber says it wants to access.

getmore4less

We would be cheaper using public transport/taxis/hire than running the two cars.
Convenience wins.
When working car was a must as distances/location made any other options impractical.

What would help is if ride sharing was easier.
The technology could be put together to make that happen for all trips and would allow longer distances to be come viable for common routes like between towns and airport runs.

It works in other countries where you jump in and when enough people are prepared to pay the fare they leave want a cheaper ride you wait till the cab/van fills or they run like buses fixed fare you just stand on the route for a pickup.

hugheskevi

Where do you get the 700 miles/year from? A new car will depreciate by say, £6k/year so at 700/miles a year you'll be paying £8.50 in depreciation alone. Insurance @ £300/year is another 42p/mile.

My situation is probably a reasonable comparison, as I live in London, so a car is not a necessity but I have one just for convenience, typically doing about 5,000 miles per year, of which about 3,000 is usually driving longer journeys around the UK (just tourism, primarily due to the convenience of having a car) and 2,000 miles on shorter journeys around the London area. Given a similarly competitive and convenient alternative form of transport I could easily give up car ownership.

Comparing my personal statistics based a small car in London purchased second-hand at 3 years old) the comparison would be:

Depreciation: £643 p/a (£4,500 car, expected to be kept for 7 years)
VED:£30 p/a
Insurance: £314
Breakdown cover: £28
MoT, service, consumables, etc: £200
Fuel: 7.5 miles per £ of fuel

To get an Uber from my house to work would cost about £19 for a 7.2 mile journey, a cost of £2.64 per mile.

Doing 700 miles p/a in my car would cost £1,308 (plus parking costs and congestion charge) compared to £1,847 in Uber, so the 700 mile figure looks very reasonable.

There are also other considerations, as we use the car to take a friend's dog out, as well as for camping trips, for which Uber would be impractical, so Uber would need to be far more cost effective and convenient before I'd consider switching. So the only time I have taken taxi's other than for work are to the airport (and even that was a rare one-off due to train engineering work).

The main Uber users I know are younger folk without a car, frequently for late at night travel. We use it quite a lot at work too.

DigForVictory

As I've family with Black Cab certification, I really cannot feel too sad about Uber struggling.

Plus I share hugheskevi's multi-purpose driving, for which Uber isn't the right answer.

edgex

"Rather than persuading drivers out of their cars and into shared rides, they could in fact be luring people off public transport and adding more cars to the road"

but Uber et al are not 'ride sharing', they haven't been so for many years now. They are taxi companies, but without the actual service level you can get from a proper local firm.

cogito

edgex wrote: »

"Rather than persuading drivers out of their cars and into shared rides, they could in fact be luring people off public transport and adding more cars to the road"

but Uber et al are not 'ride sharing', they haven't been so for many years now. They are taxi companies, but without the actual service level you can get from a proper local firm.

How so? I can agree the price in advance, I know who the driver is which makes me feel safer and I don’t need cash.