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Is uber a monopoly?

8K views 61 replies 28 participants last post by  Jermin8r89 
#1 ·
http://www.usatoday.com/story/tech/columnist/2016/12/26/how--save--world-uber-and-amazon/95757208/

BOSTON - During a recent ride with ride-hailing service Lyft in Boston, one of us struck up a conversation with the driver, Victor, about how he liked his job. His enthusiasm seemed genuine.

He talked the entire way to the airport about the glories of Lyft - about how it cared about its drivers and wasn't just transactional, like its competitor, Uber. Lyft paid more, for instance. But not if you drove just a little, only if you logged nearly a full time job's worth of hours. So naturally Victor was working for Lyft exclusively and reaping the benefits.

Lyft had Victor right where it wanted him. It had turned him into a "single homer," as economists who study platform businesses would call him - a person who uses one service exclusively.

It's where every platform business - services that connect users on two or more sides of a market, like Facebook (users and advertisers), Apple's iPhone (users and content producers), and Amazon (sellers and buyers) - would like to have each of us: locked in, and at their mercy. But we'd all be better off if Victor and the rest of us would go from being single homers to multi-homers. Here's why.

Lyft doesn't pay near-full-time drivers like Victor more than Uber out of the goodness of its heart. Nor is it why credit cards offer cash back. No company wants to be your friend. Each is trying to keep you captive on their app, site, or card.

Platforms' search for ascendancy in any category involves a "virtuous" cycle of ever-more customers, making your platform ever more attractive than alternative options. Think of the telephone: one is useless for making calls, two is only slight more useful ("Mr. Watson, come here, I want to see you."), but a few million, and you have a network that everyone wants to join. Amazon is your go-to e-commerce destination only if it really is the Everything Store, and indispensable to merchants precisely because it's your go-to e-retailer.

Amazon could be a lot bigger than we think


Despite its $300B+ valuation, the company goes through streaks of making slim or even no profits, . Yet it continues to invest in efforts like Prime. Why? Most likely it's because once it's got enough of us locked in, Amazon is going to raise prices (in fact, it already has for free-shipping minimums).

Because once a platform is indispensable to both sides of a transaction - to the providers of a service and the purchasers - you have a license to print money. But it's even more insidious than that. Once a platform vanquishes its competition, it's near-impossible for a start-up to come in and challenge its dominance.

Continue reading beloow

You don't see Airbnb offering big discounts, because it doesn't have to.
AFP/Getty Images
We see the homesharing platform Airbnb exploiting its dominance already. It doesn't offer sweet discounts to lure customers or hosts, because it doesn't have to. It's already at least twice as big as the nearest homesharing competitor, HomeAway, so even without a discount it provides more value, given the greater choice offered to both hosts and guests.

So we, as participants in platforms' fight for world domination, have two alternatives. First, you can succumb, paying a little more for the convenience that loyalty to one platform can bring. Sure, things will eventually get worse and more expensive - perhaps at the same time. But you're willing to forego future choice for immediate convenience. Think about a world where every service is run by the equivalent of your Facebook newsfeed algorithm.

Then there's option 2. Each of us can do our part to make sure Amazon and others never get to the point of ubiquitous domination. It might introduce a bit of hassle and inconvenience into your life, but only a tiny bit. But by taking on this challenge, you'll be doing the job that antitrust authorities, in an ideal world, might take care of on our behalf - ensuring that consumers and workers, rather than the owners of capital and algorithms - get a piece of the surplus that's created by new business ideas.

Option 1 presents us with a pretty dire picture of what the future might look like. And option 2 - multi-homing - comes with very little downside, it's easy to do, and can also help us to overcome our inertia to find ourselves better deals. Think about those credit card teasers we all get. As long as we keep businesses thinking they need to chase after us to try to lock us in, they'll keep on handing value to us rather than using it to pad their bottom line
 
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#9 ·
Its more of small buisnesses r struggling cuz of big corrparations comeing into our life more and more. U bring up "ride" in facebook then it thinks u need and uber. Amazon and eats take away from other buisnesses for their delievery. Its not much of a problem yet but when autonimous comes into play less and less workers will be working and struggling to find other work. Theres only one train service in boston run by keosk and they run the prices up now it seems twice a year now. Uber could do price hikeing once SDCs take away peoples jobs.
 
#10 ·
Uber is hardly a monopoly, at least not yet.
Of course they are. Travis is just like that little monopoly man. He tells you what you have to pay, he tells you what you have to drive, he tells you when you have to drive and he tells you to "Go to jail, go directly to jail. Do not pass go and DEFINITELY do not collect $200".
 
#13 ·
Uber

Uber is trying hard to be a monopoly by forcing low rates by subsidising rides and forcing drivers to subsidise rides against their will through rate cuts & market flooding of drivers.
I'd agree with that, but its going to be a tough situation to maintain. If people aren't making very much money at the "awesome ultimate side hustle", they 'll sit at home, drink beer and watch football games.
 
#18 ·
Exactly how are ridesharing companies illegal when they are not identified as anything that has been regulated? That is why Uber fights soo hard against being called a taxi company. They would then have to be regulated as a taxi company. It's a technicality that hasn't been addressed yet.
 
#25 ·
The answer here is really the individual states and the legal definitions that already exist in those states. If ride sharing activities meet the legal definition of "taxi" in a state right now BEFORE TNC regs are drawn up- and Uber isn't getting the appropriate license, yes, it is illegal.

If TNC activities don't qualify as "taxi" or "limo" or those activities aren't regulated in a state, then it wouldn't be illegal.
This is the best answer
 
#30 ·
That's not ridesharing. That's carpooling. There's a difference because profit is involved.

A private pilot can charge a passenger 50% of the costs. Once past that 50% rule you (the pilot) must have a commercial license and carry proper insurance. Uber drivers get paid more than 50% of the cost yet carry iffy insurance at best.
 
#37 ·
In what world is the taxi industry a monopoly? The same app Uber provides can be used anywhere. Try using a local taxi app a measly 100 miles from their base location.

Uber is a business that can only succeed by continuing the use of investor money to subsidize drivers and riders. Taxi's survive because they earn as profit for the drivers AND the company. The taxi monopoly only exists in your mind.

Uber hasn't had a profitable year yet. Why hasn't the IRS shut them down?
Maybe there's some top IRS officials on Travis' secret payroll.
 
#38 ·
Let's not get side tracked here. I am referring to this message. There are currently 36 states that have regulations established for rideshare companies. There are more coming. However, the term "rideshare company" or TNC is new term and regulations have not been fast to regulate "rideshare companies or TNC". Just because regulators are slow to pass regulations, doesn't make the business illegal and yes I agree that they are subject to regulations. Still doesn't make them illegal.
I disagree. Just because a taxi company calls itself something other than a taxi company, it's still a taxi company. This one is operating outside of the law. It's lucky that the general public shielded it from the law.
 
#41 ·
I like your initiative. Just make sure that Milton Bradley makes the game as realistic as driving for Uber. ie many more bankruptcy cards in Community Chest, the houses and hotels in rubble, many more Go to Jail spaces, the car piece missing a wheel and especially the little Monopoly man looking identical to Travis.
 
#42 ·
In this fledgling industry, Uber can/could become yesterdays news.
The TLC industry flourished for years on a horrible customer service model.
Bohica (google it) was the norm.
What the geniuses in the Rideshare Ivory towers haven't figured out yet is that the feedback system insures that the bad apples get taken care of,courtesy of the passengers themselves.
Good drivers with clean cars are the key, and the company that in the end rewards it drivers best will come out on top by getting and retaining the them, $68 Billion valuations be damned.
Uber can only eliminate rivals with red ink for so long.
 
#44 · (Edited)
They are the two sides of the same coin.
You need to be stupid to compare Lyft to Uber, or google to Yahoo, at&t to Verizon, Facebook to twitter....they are sharing the market that's it, this is the free market, we have to have at least to competitor producing the same product or service type, if there is no competitor, we need to create one to give the consumer the choice, Lyft comes 1 year after Uber, can we expect another Ridshare company beside Uber and Lyft? of course "reinvent the wheel" is only waste of time and money.

Uber and Lyft still new growing companies, give theme couple more years to see the entire image, now both of theme rely on independent drivers and their cars, this is not going to let theme grow much, so they're going either to hire drivers as employees, using Uber cars with signs, or they are going to operate like high tech Cab companies. and drivers will be subcontractors.
 
#49 ·
Words mean things.

If you alter your behaviour to comply with the law, you are simply a good citizen. You're not exploiting a technicality, you're obeying the law.

America is unique in that our system is designed to limit government. That is, some functionary isn't allowed to make rules up to suit his convenience.
 
#51 ·
Free market does not mean that every company has its own rules.
Free market means that Gavrament set business regulations that are the same for all companies.
Nobody said that, but every company has its rules, these rules has rules which the government seated up.
To better Understand, you can take 2 football teams, they may have two different plans to play and win the game, but they have to follow the game rules.
what makes Lyft different form Uber?
Uber call incentive promotions or boost, Lyft call it prime time
Uber use x1.5 or x2 for the incentive, Lyft use 25% 150%....
The logging button on Lyft app, is the old one on Uber
They both Use google map
They pay the same fare/mils and minute
If ther is any difference it may be the flavor or taste, like Pepsi and coke.
 
#53 ·
To Karen!
Unfortunately USA was uniq but now becoming more and more thried world country.
Example. Now we have ruling oligarchy in power. Some Chief executive salaries are $8.000,00 p/h
per hour at the same time not paying workers min wages.
Since 1984 middle class is disapiring, workers Unions are les than 7% of organized worke force.
1% make more money than rest of 99%
What procentige of workers is underpay so much that have no choice than apply for food stamps.
The reality is: We live post truth time. The Facts are not relevant any more.
The lie is the King, "Hannibal Ante Portas"
 
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