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Transportation AI Businesses

'Uber Is Doomed', Argues Transportation Reporter (jalopnik.com) 334

When an Uber self-driving car ran a red light last year, they blamed and suspended the car's driver, even though it was the car's software that malfunctioned, according to two former employees, ultimately causing Uber cars to run six different red lights. But technical issues may be only the beginning. An anonymous reader writes: Jalopnik points out that in 2016 Uber "burned through more than $2 billion, amid findings that rider fares only cover roughly 40% of a ride, with the remainder subsidized by venture capitalists" (covering even less than the fares of government-subsidized mass transit systems). So despite Google's lawsuit and other recent bad publicity, "even when those factors are removed, it's becoming more evident that Uber will collapse on its own."

Their long analysis argues that the problems are already becoming apparent. "Uber, which didn't respond to questions from Jalopnik about its viability, recently paid $20 million to settle claims that it grossly misled how much drivers could earn on Craigslist ads. The company's explosive growth also fundamentally required it to begin offering subprime auto loans to prospective drivers without a vehicle."

Last month transportation industry analyst Hubert Horan calculated that Uber Global's losses have been "substantially greater than any venture capital-funded startup in history."
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'Uber Is Doomed', Argues Transportation Reporter

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  • Sounds good to me (Score:5, Insightful)

    by dugancent ( 2616577 ) on Sunday February 26, 2017 @08:42PM (#53935707)

    Few companies rival the dishonesty, misogyny and downright shadiness of Uber. The quicker they are gone and a better company can fill their shoe (Lyft perhaps?), the better.

    Nothing of value will be lost.

    • by djinn6 ( 1868030 )
      But both Lyft and traditional taxis want tips, and I can never figure out how much I'm supposed to give. Is it 15%? 20%? $5? Should I tip more based on the ride length? If I'm already paying for service, what do tips do anyways?

      The fact that I don't have to worry about these things is enough for me to continue using Uber.
      • I tip inversely to the amount of odor in the car, be it the excessively potent air freshener (eau de carcinogen) or the smell of the driver's last five meals lingering about. It's really unpleasant to have an olfactory experience on your journey somewhere and a lack of odor is rare these days and deserves reward.

        Also why the hell aren't you tipping Uber Drivers? If their car doesn't smell I tip them too. Newbies might say they can't accept it, but they don't exactly come running after you if you leave a

      • Lyft allows a passenger to pay tips, but it's not necessary that one do. I drove for Lyft a while back, and while the app allows a passenger to select the tip, one didn't have to. A few passengers that I had tipped me in cash - w/o doing it thru the app. On one occasion that I used the service as a passenger, I tipped my driver to cover the cost of a toll, and more.

        I'd assume that even a Uber passenger can tip in cash, if he's so inclined.

      • by mrvan ( 973822 ) on Monday February 27, 2017 @12:34AM (#53936399)

        This comment does have merit. One of the really annoying things about traditional taxis is the uncertainty cost.
        - You almost never know beforehand because the cost is calculated en route
        - in some countries (thailand, vietnam, probably more) they try to avoid using the meter if you don't know what you're doing
        - After the journey seemingly random extras can get added for luggage, toll roads, airport fees etc. In civilized countries most are probably legit, but as a visitor how do you know?
        - Tips add to the uncertainty. If you travel a lot, you need to learn tipping customs for each country you visit.

        With uber, you see the total price on the app, including service and all extras, before you book the ride. I hate their business model and their disrespect for local laws and practice, but in Europe I almost totally avoid cabs because of the reasons above, and a decent app would go a long way towards making me use taxis more often.

        • Re:Sounds good to me (Score:5, Interesting)

          by cardpuncher ( 713057 ) on Monday February 27, 2017 @09:41AM (#53937811)

          It's not the app that eliminates these "annoying things", it's imposing a set of universal business conditions. Uber is trying to establish onerous universal business conditions on the basis that it makes deals with individual contractors, These aren't "deals" since there's an asymmetry of power and no actual negotiation and they aren't "individual contractors" in any rational labour jurisdiction. Uber's financial model may be hollow, but it's business administration model is also unsustainable if it has to be a worldwide employer.

          There are models (such as franchising to established taxi operators) that would deliver the consumer advantages (with the possible exception of the subsidised price). And if Uber were really "just an app", the comparatively low cost of operating the IT infrastructure could be lost in the increased efficiency established firms could get from adopting it. However, Uber is actually a fantasy that a de facto monopoly of personal transport can be established just in time for the drivers to be eliminated in favour of autonomous vehicles. Fortunately, the money will run out way before this could ever happen, but there's nothing so mad as a man on a mission...

          • I'd mod you up if I had points.

            To put it another way, Uber are a taxi company, but its the pretence that they are a ride sharing app that is supposed to make all their bad business practices look like a disruptive technology instead. If it was a ride sharing app then any monetary exchange would be a private matter between driver and passanger and not something fixed by Uber.

    • Try any cab company. All much worse.

      At least Uber brings value to the customer. Like actually showing up on time.

  • Uber is far from the only company guilty of this... MLM's come to mind as one other noteworthy category of companies that do it constantly.... it's clearly not illegal, or else many MLM's would not exist.
    • it's clearly not illegal

      It is illegal for public companies to misstate their earnings.
      But Uber is not a public company.

  • by 50000BTU_barbecue ( 588132 ) on Sunday February 26, 2017 @08:53PM (#53935753) Journal

    rube? What am I missing?

  • covering even less than the fares of government-subsidized mass transit systems

    Which mass transit systems? Plenty get closer to 20% back.

    • The government is providing a public service though in these cases, so there is no expectation to turn a profit. Uber's venture capitalists and investors are eventually going to get skittish.

      • by Dunbal ( 464142 ) * on Sunday February 26, 2017 @09:27PM (#53935889)

        Uber's venture capitalists and investors are eventually going to get skittish.

        Which is why there was such a rush to try and IPO it over the past few years. That way the founders and investors could get out with their cash and Wall St. (read - your 401(k)) would be left holding the bag. After all, the Fed is pumping so much printed money into the system something has to soak up all that extra cash. Nowadays it's IPO's. But god help us when the bottom drops out of the market NEXT time...

        • by hey! ( 33014 )

          That way the founders and investors could get out with their cash and Wall St. (read - your 401(k)) would be left holding the bag.

          Only if the managers of your 401(k) were idiots.

          After all, the Fed is pumping so much printed money into the system something has to soak up all that extra cash.

          The Fed doesn't just "print money", either figurative or literally (the Treasury does the literal printing). It has several methods for adding money to the economy, all of which are quite reversible.

      • Unless they manage to rapidly pivot to driverless cars.
        In which case, those VCs could be walking away with a _lot_ of cash.

  • by s.petry ( 762400 ) on Sunday February 26, 2017 @08:58PM (#53935773)

    Uber is a taxi company, it made a name and got support by creating jobs and employing people. Their push to automatic cars destroys the very thing that made them popular to begin with. Uber isn't a car manufacturer, and not an automotive tech company. Any beating they get is well deserved at this point, because they put social engineering above society. The CEO should, but of course won't, be thrown out on their behind.

    • by Motherfucking Shit ( 636021 ) on Sunday February 26, 2017 @09:07PM (#53935813) Journal

      Uber is a taxi company, it made a name and got support by creating jobs and employing people

      Don't try telling them that. According to Uber, they're creating "ride sharing opportunities" and they're "independently contracting" people.

    • and quick. Mostly cheap. There were so many recently out of work people who still have cars from when they had jobs that Uber didn't have trouble finding employees.

      The reason they might be doomed is they're subsidizing those rides with investment capital. OTOH they might be like Amazon, e.g. allowed by investors to operate at a loss with the expectation of massive profits when they clear up their legal troubles (allowing them to pay much, much less than minimum wage while paying no benefits whatsoever)
    • by TheRealMindChild ( 743925 ) on Sunday February 26, 2017 @10:57PM (#53936179) Homepage Journal
      Their push to automatic cars destroys the very thing that made them popular to begin with. Uber isn't a car manufacturer, and not an automotive tech company.

      Google wasn't an OS or a phone company, either.
    • by quantaman ( 517394 ) on Sunday February 26, 2017 @11:01PM (#53936193)

      Uber is a taxi company, it made a name and got support by creating jobs and employing people. Their push to automatic cars destroys the very thing that made them popular to begin with. Uber isn't a car manufacturer, and not an automotive tech company. Any beating they get is well deserved at this point, because they put social engineering above society. The CEO should, but of course won't, be thrown out on their behind.

      Yeah, the self-driving car focus is odd, I'm sure there's opportunities for some cool AI managing the Uber fleet, but they've never distinguished themselves as an elite R&D company. They'd be a big consumer of self-driving cars but I don't see them as a manufacturer.

      I really think they're in a situation where they have too much VC money and don't know what to do with it. Their fundamental issue is how to turn their network profitable before the traditional Taxi companies are able to get their own app out there.

      • No, it makes perfect sense. Becoming the (temporary?) leader of the taxi-without-regulation market has given them massive amounts of venture capital. And what better way to spend it than to hire the best and brightest (say, the entire Carnegie Mellon CS faculty) to solve the self-driving car problem, which could cement their lead for decades in the future?

    • by phantomfive ( 622387 ) on Monday February 27, 2017 @02:23AM (#53936647) Journal
      I'm 90% sure that their push to do 'self-driving cars' is primarily an attempt to push up valuation for an IPO (or series X round). The work they've done so far seems more aimed at publicity than basic research (self-driving cars now picking people up!............with two software engineers behind the wheel. And has trouble recognizing pedestrians).
    • Uber is a taxi company, it made a name and got support by creating jobs and employing people.

      That part is correct.

      Their push to automatic cars destroys the very thing that made them popular to begin with.

      Wow, that is so wrong. It enhances what Uber does in many ways:

      1) It allows more cars to be at places where and when real humans do not want to drive.

      2) Because there is less need to draw as many human drivers to a place and time to meet demand, surge pricing can be lower.

      3) It means less employment of dri

  • by sandbagger ( 654585 ) on Sunday February 26, 2017 @09:04PM (#53935803)

    Who'd have thunk it?

    Uber's not special. If you want to open a lemonade stand you're free to do so. The second you start feeding people en masse then society has a right to make sure your kitchen is clean and you aren't accidentally poisoning people. They're transporting people in bulk, that means some oversight from a public safety perspective is warranted and that means everything that goes along with the rest of the economy including not lying to people about income.

    The sharing economy will change things, but only so far. Is the medallion system we've used up until now for taxies ripe for reform? Sure! Why not have a sanity check to bring it into the 21st century. However, pretending the rest of the world, including vehicle inspections, truth in advertising laws and the like do not exist is not the sharing economy, it's being a dumbass.

    Like Napster, this may only evolve into a different set of problems.

    We'll see if taxis survive self-driving cars.

    • It's the new definition of the "shared economy". You take the risks, they take the profits. They just copied Wall Street and "too big to fail" with their version of "sharing", where profits are private and risk is public.

      • by lucm ( 889690 )

        Except in this case, people who pay the bills are venture capital firms, and those don't eat at the Fed trough, they burn their Google/Facebook/Etc billions. Like that poor sap who subdisized Twitter with his Google money before getting stabbed in the back by a homeless dress designer he hired out of pity in the first place (all true, look it up).

    • They're transporting people in bulk, that means some oversight from a public safety perspective is warranted

      In some places, taxis are actually subject to some oversight from a public safety perspective. In those places, it's reasonable to be upset about Uber not doing those things well. In other places, they really aren't. There's really no oversight occurring. In those places, it is not reasonable to be upset at Uber, because they at least do minimal background checks in at least most places where they do business. Taxis are not as safe as you imagine, nor are taxi drivers (in any sense.) Taxi drivers who have b

  • by Applehu Akbar ( 2968043 ) on Sunday February 26, 2017 @09:10PM (#53935825)

    If I were running Uber, I would have had it concentrate on an assortment of US cities that are friendly to open-market taxi service, rather than blowing its budget fighting City Hall in every monopoly city in the world. By being profitable and having the capital to treat its drivers well in the short term while getting ready for self-driving cars in the long term, it would eventually expand into monopoly cities because the customers would demand it.

    • by quantaman ( 517394 ) on Sunday February 26, 2017 @11:12PM (#53936219)

      If I were running Uber, I would have had it concentrate on an assortment of US cities that are friendly to open-market taxi service, rather than blowing its budget fighting City Hall in every monopoly city in the world. By being profitable and having the capital to treat its drivers well in the short term while getting ready for self-driving cars in the long term, it would eventually expand into monopoly cities because the customers would demand it.

      The risk with that strategy is every city you ignore is going to start its own Uber clones, clones that are going to get favourable treatment from local regulators and be the favourites of local consumers.

      If you don't have a presence in that market users are going to flock to the local start-up and one of those start-ups might take off and become your main competitor. Uber has a bit of a paper empire, all they really have is their network and mind-share, and ride-sharing apps are a natural monopoly in the same sense as social networks. They're trying to establish their monopoly so they become the Facebook and not the Myspace.

      • "The risk with that strategy is every city you ignore is going to start its own Uber clones, clones that are going to get favourable treatment from local regulators and be the favourites of local consumers."

        Monopoly cities are by definition cities in which it's illegal to compete with taxi companies that have been granted status. Therefore no local startups, but if a major company like Uber can become well-liked by both customers and drivers elsewhere, voters in monopoly cities will demand change.

        • "The risk with that strategy is every city you ignore is going to start its own Uber clones, clones that are going to get favourable treatment from local regulators and be the favourites of local consumers."

          Monopoly cities are by definition cities in which it's illegal to compete with taxi companies that have been granted status. Therefore no local startups, but if a major company like Uber can become well-liked by both customers and drivers elsewhere, voters in monopoly cities will demand change.

          By that definition many of the cities in which Uber is currently deployed are "monopoly cities". It doesn't mean they can't operate, it means that they're vulnerable to fines, their drivers are sometimes ticketed, and they might even get court orders against them. But they often still find ways to operate.

          Uber's problem is the regulator is more likely to look the other way for the local start-up, or they're going to make a hole in the regulations that allows the local company to compete but bans Uber. These

          • "By that definition many of the cities in which Uber is currently deployed are "monopoly cities". It doesn't mean they can't operate, it means that they're vulnerable to fines, their drivers are sometimes ticketed, and they might even get court orders against them. But they often still find ways to operate."

            Yes, this is Uber's current business model. The problem is that, although it builds the brand over large areas, it also causes most of the company's resources to be dissipated fighting lawsuits and payin

  • by JoeyRox ( 2711699 ) on Sunday February 26, 2017 @09:12PM (#53935833)
    Amazon is subsidizing its prices with losses and venture capital. Amazon will never be profitable. Amazon's advantage over B&M will disappear after they start charging sales tax. Amazon's shipping expenditures are too high. Blah blah blah.
    • by aaarrrgggh ( 9205 ) on Sunday February 26, 2017 @09:32PM (#53935913)
      Yes, I agree. I had no idea how Amazon would still be around today "back then."

      The key difference is Amazon went public early, and the VCs cashed out. With Uber, the VCs still have real control over the operation, and are going to want to recover their money. Uber is in OK some markets, and loosing hand over fist in others. The VCs will likely force them to consolidate operations to viable markets.

      The problem is Uber really wants self-driving cars. The math on that is still a number of years off. After taking out $1.10/mile of round-trip costs for the car, the $2/mile fare price point doesn't leave much room for profit. There is likely to be more pressure as local services kill trips less than 1.5 miles.
    • by Karlt1 ( 231423 ) on Sunday February 26, 2017 @11:24PM (#53936233)

      Amazon wasn't profitable as a whole because it kept plowing money from its profitable departments into expanding into new markets. Amazon's most profitable division right now is AWS. AWS is a scalable business where cost don't scale linearly with the number of customers. Uber is not profitable because it is subsidizing each ride. Uber doesn't gain the benefits of scale using its current business model.

    • They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown. --Carl Sagan

  • by turkeydance ( 1266624 ) on Sunday February 26, 2017 @09:18PM (#53935861)
    incandescent bulbs=taxis. CFL=Uber. LED=autonomous.
    • by lucm ( 889690 )

      I have a LED lamp and I hate it. Just like I hate my LED flashlight. LED sucks, it's very bright, I guess it would work well in a surgery room but for home it's awful.

      • I have a LED lamp and I hate it. Just like I hate my LED flashlight. LED sucks, it's very bright, I guess it would work well in a surgery room but for home it's awful.

        You know, ye olde 7W Cree lamps which are just a few bucks now that they're brought out better ones have none of these problems. They are dimmable, they don't flicker, and they put out a nice warm light in a reasonable quantity. There's lots of lamps put out since which are even better.

      • Far be it for me to explain the obvious but brightness is entirely a function of power consumption... and that, believe it or not, can be changed. Perhaps you don't like the color temperature of the bulbs you've used?
        • I just want a lamp that doesn't make the room feel like a near-death experience or an alien abduction. I don't want to do a college degree in lightbulbs.

          During science class in high school I was usually drinking beer under the bleachers with trailer park girls; it was fun but apparently it leaves me at a disadvantage when it comes to lightbulbs. I'll do some light reading but really until I find a lamp that works I'm anti-LED.

      • Why would you hate your LED flashlight? As you said, it's very bright. It's also extremely energy-efficient, something very important in a flashlight. It sounds like you don't like the color spectrum that some LEDs have, but while that is an understandable complaint with LED room lighting, who cares about the color spectrum of a flashlight? All that's important is that it's bright and lasts a long time on a battery.

        There's good LED bulbs out there for lamps and other room lighting; you probably picked c

  • by StandardCell ( 589682 ) on Sunday February 26, 2017 @09:24PM (#53935885)
    While I respect what companies like Uber are doing, it seems they could care less about the existing rules and why they're even there. And I'm not talking about the artificial scarcity of the medallion system or taxi company monopolies or the lack of flexibility in for-hire transportation, because that does need to be addressed.

    What I'm talking about is a company that repeatedly flouts existing regulatory framework because it wants to "revolutionize" for-hire transportation. Drivers don't have to undergo local training (e.g. London drivers who have to memorize the road system in London prior to licensure). Driver vehicles are not required to undergo commercial-grade inspections for safety. Drivers are specifically disallowed by Uber from purchasing commercial insurance for their vehicles, as Uber claims that they will insure passengers up to $1M per passenger. Either the Uber driver is in violation of state insurance laws because they don't have the minimum required insurance, or Uber is in violation of those same laws by not being a licensed insurer with all of the regulatory and reporting burden of an insurer in that state. Want to guess where that leaves an Uber passenger in a crash?

    Even if we ignore all of that, now we come to the self-driving vehicle which, even with GPS, lasers and camera AI, has to match years of a trained natural neural network of the most complex organism known on this planet with tremendous amounts more context to make not only technical but ethical decisions and keep not only the passengers safe, but also the car they're in, other people's cars and property, and most of all other lives that are on the road.

    It's not an impossible problem to bound to a certain acceptable level, but not within the timeframe that Uber hopes. When considering its fundamental underpinning is compromised by its ethics and its arrogance that is being challenged by governmental and non-governmental entities, and is subsidized by free-flowing VC money, I can't say that the prediction of the demise of Uber is unlikely.
  • Volentary Expenses. (Score:5, Interesting)

    by wisnoskij ( 1206448 ) on Sunday February 26, 2017 @09:39PM (#53935935) Homepage

    Uber is paying a huge cost to corner the market while it is till a new and opening market. But all of these costs are voluntary and could be given up in a day.

    At the end the of the day, Uber is a very simple software company that could operate on a shoe string budget of half a dozen employees and a few servers.

    But the investors are obviously willing to spend billions building an iron grip on a transportation monopoly.

    • Iron grip? (Score:2, Insightful)

      by Anonymous Coward

      In reality Uber don't own the infrastructure (the cars and the people), they just provide the app. There's no loyalty to apps, and the drivers look at tomorrow's paycheck not yesterday's.

    • by Type44Q ( 1233630 ) on Sunday February 26, 2017 @10:48PM (#53936149)

      ...Uber is a very simple software company that could operate on a shoe string budget of half a dozen employees and a few servers.

      Six engineers and six thousand lawyers, you mean?

  • For its first several years of running, Amazon.com lost money hand over fist, but when they finally did start to make money, they really did. I suspect it's the same with Uber. It's still early days and they're knocking out the competition. As long as they stick with it, they'll do spectacularly well in the long term.
    • Re: (Score:2, Informative)

      by Anonymous Coward

      It was completely clear by anyone that could read a general ledger that Amazon made the choice to be not profitable, but to expand and to turn their revenue back into the business. Their day to day P/L in fact looked very healthy early, it was simply the case they spend their money building datacentres / warehouses / accqusitions / (insert method of business growth here), which on the ledger for a financial year is a loss but pays dividends down the road. Remove a lot of the business expansion and you have

    • Amazon branched out into providing compute platforms and online storage solutions - which was a brilliant move by them, and one I don't quite see Uber pulling off. Amazon sell everything, Uber just gives you a lift when you're too drunk to drive. I don't think they're in the same league.
  • by u19925 ( 613350 ) on Sunday February 26, 2017 @10:48PM (#53936151)

    Self driving cars are the future. Once there is self driving cars, the taxis will be as cheap as private cars on per mile basis when averaged over entire year. Most people would stop owning cars and large families may keep only one car. Also, this naturally leads to all electric cars as well. The taxis will take people to work in rush hour and then will charge themselves and will be ready in the evening.

    Any business that depends on traditional car ownership is in peril. Gas stations, repair places, parts, dealers, car insurance, paid parking etc. Even auto makers are in big trouble because you will need far fewer taxis as they can service more people per vehicle.

    • Even auto makers are in big trouble because you will need far fewer taxis as they can service more people per vehicle.

      The automakers are not collectively in any trouble at all, because someone is going to have to build these vehicles and that someone is going to be the automakers. Remember, there are literally billions of humans without mobility today. If these new types of transportation network permit more of them to have mobility, that represents a need for more vehicles. Some automakers will almost certainly fail, or at least some redundant marques, but there will continue to be a need for a large number of vehicles in

  • Yes Uber required and still requires deep pockets to get completely up and running. And investors will give those big bucks simply because the potential profits will be so astounding. The only real danger to uber is that having paved the way for a very new mode of travel another company may receive the benefits as they did not have to bear the initial deep costs of starting up the new technology. Uber paved the financial road not only for itself but also for its competition. And now drivers' pay ch
  • by cloud.pt ( 3412475 ) on Monday February 27, 2017 @06:22AM (#53937255)

    Wow, that comment title. Now that I got you attention: it's exactly that.

    Let unicorns be unicorns. If there is a market for it, let it be. There are investors, drivers, and passengers willing. So the company doesn't show a profit? Who cares. Do you know how many sports associations (with financial definitions) actually make a profit? I'll give you the European example: more than half, including the top-tier-most soccer clubs are technically bankrupt. Do you see them going down anytime soon? Hell no! And there are people investing like it's the risk capital panacea.

    Now when I see an article bashing at a company with terms like "subprime", it reminds me of the 2007 real estate and mortgage crisis. Saying stuff like "fares are 40% subsidized by venture capitalists" is yet another great remark at the target of such bullshit. They WANT stock price to go down, it is widely known that saying shit about a company is the best way to bring it down. Why do you think Trump talks so much crap about China? This holds especially true when the company ahs no public stock but only a very speculative valuation, but it applies generally, and in some instances, it is considered a crime.

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