The Uber/Lyft Effect: What About Here?

Should people buy a long-term investment based on a company that lost $2.7B last year? Uber may not be around in 3-5 years, so what would happen to the real estate value?

They are now offering “punch cards” for fares. One of my co-workers uses it to get to work sometimes. She said it’s normally $8 and up to $12 with surge. She bought 10 rides for $5/ea. They are good for anytime during the month including surge. It made me wonder if the driver gets short-changed on the fare, or if Uber pays the driver normal rates and eats the loss.

All the arguments about losses due to investment miss the fundamental point. Uber only generates sales if the product is priced at a loss. Unless they materially lower the cost (eg. autonomous cars), then they have no path to profitability. If they raise prices to profitable levels, customers will abandon the service. They just suspended autonomous driving work, because humans had to intervene so often. They aren’t even close. Even their own statements say that without autonomous cars they might not be able to survive as a business.

Porsche averages $99k revenue and $17k profit per vehicle. Imagine how fast they’d grow if they sold the vehicles at $58k each and lost $24k/vehicle. I wonder how much that startup would be worth. Pricing a product below cost is a great way to grow revenue, but it’s not a great way to run a lasting business.


I think human drivers in Uber and Lyft are temporary thing, necessary to get product/service off the ground. These guys in Uber and Lyft are on to something. In the future people will not own cars as much, they will see it as a service more than ownership. Human drivers will slowly disapper from those services. Computer drivers will be safer than humans. When our kinds will go to get driver license, in DMV, they will need to make a case why they actually need to drive the car, when 10-20 years of DMV accident data prove that humans are more involved in accident then machines. It makes sense - computers do not get tired, do not drink and drive, they will not engage in road rage, they follow rules of the road literally because they are programmed to do so. On the opposite spectrum - our friends grandpa had a tragedy - he likes to drive, but age and vision problems take toll and recently DMV sent him letter revoking his driver license. Talk about limiting mobility for seniors! Maybe it will be safer for everyone around him. But with self driving cars as a service - we are talking about new dimension of retiring benefits if you can save in and IRA way for an option to have access to those mobility services like Uber and Lyft

But investors love this type of business model and pay top dollars for their shares, go figure.

For the drivers to be temporary, self-driving cars need to be close to a reality. They aren’t. Uber and Lyft will go bankrupt before the technology is ready. It reminds me of when everyone thought 3g would make cell phones huge. It eventually did, but it happened so late a lot of the early pioneers went bankrupt before it happened. Even with cars,the first car companies went bankrupt fast. The first cars were no faster than a horse, and they were less reliable. The technology just wasn’t ready yet.

I maintain the real disruption of self-driving won’t be personal cars anyway. It’ll be the shipping and logistics industry. It’s pretty easy to compute the ROI and justify the purchase when comparing driver wage to the cost of an automated driver.


I agree - it may not necessarily be Uber or Lyft, but someone will learn from their mistakes. Apple is known to be on the tail end of introducing new technology to users, but when they do, it shines.
To your point about semis:

I can see how Elon will want to focus on colonizing space and if Tesla will not work out, Amazon will not mind buying this battery powered trucking technology from him.

1 Like

Do you mean Apple skips the innovators’ phase and join the beginning of early adopters’ phase? For iPad, Apple launched in the early Majority phase. For iPhone, do you consider Apple starts the innovators’ phase or join at the early adopters’ phase?

Someone mentioned, maybe Steve Jobs, that apple is a software company, they wait till they are sure the can integrate new technology into their products to make sure customer experience is great and a good fit for their walled garden ecosystem. They will try to avoid releasing product that is not polished. There is a topic on this on Quora:

Apple is past early adopters when it’s ready for mainstream. Early adopters used Palm and Handspring touch screen devices.

1 Like

You don’t have to the first. You have to do it “better.”

1 Like

“Transport as a service” and self driving cars are really two separate things. If you think self driving cars is ready, come drive in San Francisco for an hour or two. It’s vastly more complicated than driving in the burb. How does a self driving car navigate a 4-way stop? Does it read hand signals of the other drivers? Does it know to duck on the side to let a big bus through because the street is not wide enough?

Self driving on highway is pretty ready. On city streets hell no.

Even if Uber fails, other similar companies like Lyft will carry on. Transport as a service is here to stay. Uber and Lyft’s level of convenience and user friendliness is vastly superior to taxis, and that’s assuming you can even get one. Uber is bleeding money because it’s trying to dominate the market. It’s not unlike Amazon in its early days.

Taxi? Buses? Airlines? Already here.

None of them point to point. As a service they suck. Do you think there is a difference between Netflix and renting video from Blockbuster?

Hate to admit, I do occasionally Redbox for a movie…

No shame in that sir. I do it all the time. Too cheap for on-demand…,

1 Like

Uber can fly across ocean? Do we take Uber from SF to NYC? Taxi/ Limousine has point-to-point :slight_smile:

Yeah, I am still “concerned” about my over $200/mo Comcast bill…

It wouldn’t be difficult for taxi companies to replicate the app. It’s probably cheaper to let an app handle routing customer requests to drivers than it is to pay people to answer the phone and dispatch. So what’s the real difference to differentiate Uber? It’s price. Price is different due to avoiding taxi medallion fees and Uber subsidizing fares. They can’t subsidize fares forever.

Uber subsidizing fares has two goals I think. One is to beat competitors into submission. It works in China, but Uber was the one losing. The other is to lure people to try it out. It’s still a pretty new thing. I bet most people on here haven’t tried Uber. If fare is super low some folks may give it a spin.

Some years ago when Amazon started collecting sales tax, a coworker of mine argued it’s the end for Amazon. He said people shopped there just to save sales tax. I said no, shopping on Amazon is vastly more user friendly than hauling my ass over to Walmart.

There is price, and there is value. People are willing to pay more for better product and service. That’s the entire premise of Apple for example.


This is what we have now. But technology will get mature, and will slowly displace human drivers. We will start seeing DMV data that self driving trucks on freeways are safer because human drivers get into accidents when they fall asleep. With rising cost of labor, transportation companies will use less human drivers. Then DMV will create self driving freeway lanes. Next thing you know, 3 of 4 lanes on freeway are just for self driving cars. Once self driving is mainstream on freeways, it will be more convenient and faster not to drive yourself or we will be stuck in slow lanes. Freeways will not go away, but car ownership model will change, We will not need garage in our homes. When self driving cars will be safer than human, it will cost way more to have human drivers covered by insurance. And when DMV send renewal bill, it will include new items like “self diving lanes fund fee” and “human driver surcharge”. It will become niche thing to own and drive a car. And then transport as a service and self driving cars will be same thing. If all major players are working on self driving technology, I bet they are not doing it just for fun and to burn capital.

1 Like