Wednesday, May 24, 2017

Uber Death Watch

They don't have any kind of intellectual property or even network effect that can get them to a monopoply, they lose money on every ride, robot cars aren't going to save them because they won't work, and, oh, they break the law and in reality lose much more on every ride.

But Uber’s handling of passenger payments raises questions about a larger legal issue, potentially far more substantial: not the pocket-change difference in the commission but whether that entire $2 in taxes is improperly coming out of the drivers’ wallets.

Back when Uber first appeared and it was the Coolest Thing Ever and everyone would brag about their cheap and luxurious cab rides I tried to tell people: whatever (real!) problems there are with local cab regulation, there are very good reasons why there are supply-restricting medallion systems for local cab companies. One of them is that without some sort of monopoly or mandated supply restriction, this type of of business is unlikely to be profitable (thinking of profit broadly, including for drivers). The regulations exist to ensure the market exists. All of Uber's clever (and sometimes illegal) ways to try to beat this fact aren't going to work.