Disrupting Uber/Lyft?

https://news.ycombinator.com/item?id=19982568

by permatech • 7 years ago

2 7 7 years ago

news.ycombinator.com

Recently the number of Lyft drivers on the road at ~5AM has gone down in my area substantially. Recently I met a driver that starts taken people "off the books" at 3AM and then drives on the app until 6 or 7AM. He suggested someone replicate the app, invite all 5 start Lyft / Uber drivers to join and offer riders the first ride free. Run the entire thing with a low overhead with profits going to the driver. Seems like an interesting way to improve the community.

lhorie3• 7 years ago

The problem with asking a Uber driver how to make a better Uber is he'll always tell you that the solution is to decrease overheads so he can earn more, when in reality the competition between Uber/Lyft already pushes margins to be thin. Also worth noting that a significant portion of these "overheads" go towards hidden support jobs that let drivers focus on driving in the first place (e.g. new driver onboarding, customer support, fraud detection, marketing, dev ops, etc).

permatech3• 7 years ago

When drivers are already driving for Lyft and Uber the on-boarding is taken care of.

Uber and Lyft are pushing margins down because they want to extract profit to pass back to shareholders. When revenue only goes to supporting the infrastructure and paying riders the only competition is who can deliver the cheaper ride. Delivering the cheaper ride for Uber/Lyft while also generating a profit means the driver needs to take a hit. Why would the driver take a hit when he can drive on a platform that pays better?

lhorie3• 7 years ago

Every company has to take care of its own onboarding, so sure it's taken care of... for Uber and Lyft. But not for a new competing service. A new competitor has to figure the local regulations etc for every city they operate on, setup driver intake centers, man these offices, etc. New cities also typically suffer from rampant fraud and anti-competitive practices (e.g. subsidizing rides via VC money). Dealing with this stuff isn't cheap either.

Uber and Lyft are pushing margins down because they want to extract profit to pass back to shareholders.

Profit comes from within those margins, so pushing it down (as in a race to the bottom) is at odds w/ shareholder yield. Also uber/lyft stocks don't yield in the first place (they haven't even had a single profitable quarter in the open markets yet...) In fact Uber/Lyft IPO stories have largely been told in terms of growth and market share.

Delivering the cheaper ride for Uber/Lyft while also generating a profit means the driver needs to take a hit.

You can't really have your cake and eat it too. If you're delivering a cheaper price, then by definition driver pay goes down too. Uber can increase margins via economies of scale (e.g. the same call center can support US, Australia and India, price shopping for insurance on a per-month basis actually makes a difference, etc). The whole game is actually about getting as much market share possible to increase the total margin through sheer scale.

Having seen a financial breakdown of costs per ride, I can tell you that you are severely overestimating what percentage of a ride's money goes to things other than driver pay. The vast majority does indeed go to the driver already, and the rest gets extremely complicated on a city-by-city basis due to intense local competition, regulations, and a million other factors.

Overall, it really just sounds like you are armchair-postulating without any grasp whatsoever on the industry...

thedevindevops• 7 years ago

Have you looked at:

https://www.ridesharingdriver.com/lyft-driver-requirements-m...

Try replicating that on a wafer-thin margin on top of the development and maintenance of the tech infrastructure.

permatech3• 7 years ago

Lyft/uber need to pay drivers and make a profit -- if a rideshare is employee/driver owned the profit is the same as the drive pay out. Margins can stay the same but how could lyft/uber keep drivers and make profit for shareholders?

Disrupting Uber/Lyft?

Related Stories