Quote of the Day

Well We’re Now in the Sandpaper Condom Period of “Ride Sharing”, Where Investors Earn Back Their Investment by Hurting Everyone Else.

—Ian Welsh, discussing the predatory, monopolistic, and outright criminal business model of Uper and Lyft

Their model always was to use huge amounts of money to subsidize the service, drive cab companies out of business, and then jack up prices.

Now these services cost more than taxis, pay their drivers less, and are finally making a profit. 

Uber started in 2009. It incurred losses every year until 2023 except for a profit in 2019 which was due to selling subsidiaries in various countries. Numbers before the IPO are difficult to obtain, but it lost 31.5 billion from 2016 to 2022. Let’s assume a loss of equal to funding during the pre-IPO period, so 24.7 billion. This seems reasonable, since Uber never made a profit during the period.

So we’ll estimate Uber’s total losses at 86.2 billion from 2009-2022.

In 2023 Uber made a profit of 1.9 billion and in 2024 it made a profit of a little under ten billion. Prices for rides on Uber are between ten to twenty percent higher than taxi rides, rising to as much as 50% higher during surge pricing periods (when there’s the most demand.) Driver’s on average, get paid less than taxi drivers used to.

So–the workers get less, the customers pay more.

………

Everyone knew this was the play, and that people were getting subsidized rides now (Uber was much cheaper than taxis in the early years) in exchange for getting fucked over later. Well we’re now in the sandpaper condom period of “ride sharing”, where investors earn back their investment by hurting everyone else.

This should never have been allowed. Uber and Lyft violated massive numbers of laws and were just allowed to do so thru non-enforcement. The end result was obvious and it’s here now: worse wages, higher prices and less ability to regulate the industry.

This is one of the prominent models in Silly-Con Valley, which is why I have always advocated for prosecutions against both the founders and the funders of these sorts of companies.  They are engaging in securities fraud, and violations of anti-trust law.  (That's to say nothing of the Taxicab regulations violated by the Gypsy cab companies)

We need to start arresting these folks.