…ya mean used cars?
Used cars are not more useful than new cars. Much less, actually.
Not everyone buys a $3,000 crap-mobile like me*. A nice used car is still going to cost $10k+.
The mere fact of car ownership either ties up thousands of dollars in an asset of declining value, or puts you on the hook for hundreds of dollars a month of loan/lease fees. When a person decides what they’re going to do car-wise, that’s part of the calculation.
*Paid under $3k for a 2000 Mercedes 320 wagon. Rides more like a Conestoga than a Mercedes, but it gets me to work and back, and hasn’t broken down once in 3 years.
…thats an…*extraordinary *point of view. The used car my dad bought 10 years ago is sitting outside the house in the driveway right now. I drive it every day: including today. Its a viable, convenient, and less expensive alternative to both new cars and to uber.
How is that much less useful to me?
…but plenty of people do. And its a viable, convenient, and less expensive alternative to both new cars and to uber.
Of course it is. And if I’ve got a choice of either buying a crappy used car that has lasted our family 10 years and we paid off in 2013: or giving money to a business that has proven itself to be a crappy employer, with a history of treating marginalized people like shit and has been one of the biggest contributors to the existence of the gig economy, that has a business model that doesn’t charge its customers enough to cover its costs and is relying on technology that doesn’t currently exist to save itself:
…I’m buying a used car. Because all of that is part of my calculation.
Uber aint gonna get shit from me.
What about Tesla, or Hertz, or Volvo? Someone is going to come out with a self driving car service, either using a vehicle share model or a fleet model.
When your car finally gives up the ghost and you’re looking to replace it, you (or millions like you) will look at the car service as an option, do they show up right away, are they low priced, is the service good, and compare it to laying out cash or taking out a loan on a new to you car.
…what about them?
Here in Wellington? Have you seen the size of the streets? The hills? People in Auckland are terrified when they come here and have to drive up some of the mad streets we have here.
The technology is decades away from putting self driving car services on the roads here IMHO.
Nah. I’m self-employed. My crappy car also transport all my camera and lighting gear from gig-to-gig. When my car gives up the ghost I’ll be buying another used car as soon as I can.
Your argument relies on a single use-case. But there are millions of different use-cases. I’m hungry and want to run down the road to get something to eat. I want to drive out to the Southern Coast and take photos of penguins. I randomly decide to go on a road trip up north. A close friend isn’t well so I drive over there to take them to hospital.
I look at everything I did **yesterday **and there is absolutely no way a car service would be of any fucking use to me in getting any of the shit I needed to get done done. And I’m not an outlier.
The technology isn’t there yet. When the technology is there the prices aren’t going to be lower than what Uber charges now: because the prices at the moment don’t even cover the costs of a ride. If somebody asked me to invest in a potential automated ride sharing system I wouldn’t politely tell them “no” I would tell them to “fuck the fuck off.” I couldn’t think of a faster way to loose all of my money.
I’m sure that one day things will change. But I’ll be dead by then so I won’t have to worry about it.
What I’m saying is that flooding the market with potential super-cheap rides isn’t a path to profitability. It’s that classic race to the bottom that happens EVERY single time companies compete solely on price. You end up with a price that’s just barely above cost, and nobody actually makes any significant money.
So what do you do? You differentiate, which is going to be difficult in a market that we’ve (in this thread anyway) defined as having pretty much utterly fungible autonomous car rides. Or, if you can’t differentiate, you do more sketchy stuff like limit the supply to artificially generate scarcity and thus higher prices. In other words, letting anyone be a taxi driver means that taxi rides will indeed get much cheaper than they currently are, but it also means that nobody will really make any money either. So the incentive would be to try to limit the number of potential rides so that you can charge more.
It’s probably cheaper by the trip, but I’d almost guarantee he’s paying more per mile than you are. So it’s going to be dependent on how much someone drives- I suspect your friend (and myself actually) are far from representative as far as driving patterns are concerned.
Your average 15k per year driver would spend something like 65 cents a mile for a total of $9750 per year.
Uber by comparison, would probably be somewhere in the ballpark of 30k (roughly $2 per mile).
To outprice car ownership for most people, you’d have to significantly undercut that 65 cents a mile , and I’m not convinced that can be done, even in the world of AVUber.
This is flat out incorrect. Hilariously incorrect.
…well that convinced me!
NOT.
What’s the purpose of trying to convince you? You believe that after automating the driving part of operating an Uber, after removing the human, that the price of an Uber trip won’t change.
It’s completely ridiculous, and as I said above, I’m not doing Finance 101. I’ll respond to posts that display some sort of market acumen, but not this stuff.
Because a new car requires fewer trips to the repair shop than an older car.
Right. But if there are at least 2 companies providing the service, there is no way to (legally) restrict supply to maintain a high profit.
It’s easy to differentiate. One provider could have luxury cars that are meticulously cleaned, and charge a higher price. Another could have really basic vehicles at cutthroat prices. Another may have vehicles with built-in child seats. There may be cargo vehicles of various types.
…well when you put it that way?
Still a vote for the “not”.
You could at least make an effort to convince me. This is Great Debates after all.
Concession accepted.
Yet here you are, still responding to me.
I don’t think I’m reading this wrong. I’m sorry that you feel I am not worthy of your “expertise”. But you do you.
…this is an extraordinarily poor argument. Possibly needing more trips to the repair shop does not make a used car “much less useful” as a new car to me. Both cars still have equal “usefulness”. Maybe one car might spend more time in the shop than the other: but the other comes at a price-point I simply can’t afford.
Ok, Ok,
When a today Uber operates, much of the money, about 75% goes to the driver. Out of that money, the driver absorbs the cost of running the car, and pays himself for his time.
Take the driver out, and the whole bit about paying himself for his time goes away completely. The income from the trip only has to cover the cost of running the car, and some marginal profit. The human owner doesn’t have to waste 8 hours a day sitting in the car for it to pick up fares 8 hours a day. The car owner can be doing his regular job, eating, watching a movie, or sleeping.
That reduces the amount of pay that the car owner needs to make AVUber worthwhile. I’m not going to go drive a car for 5 hours at $5/hr net income, but if my car could go out and earn that on its own, while I’m sitting at my job, why wouldn’t I let it? That’s an easy $100 a week, after paying for gas, maintenance, wear and tear, and regular cleanings. A paid dinner out with the wife every week, and I just have to say yes when AVUber comes calling.
Now, you may say “but why would they lower price?” Competition. Uber isn’t going to be the only game in town for long if they’re charging human driven prices for computer driven cars. The barrier to entry isn’t that high, and price will be a big driver of who gets the most rides.
It may be a low priority FOR YOU. But reliability is a very common reason people choose to buy a new car rather than a used car.
…the 75% that goes to the driver isn’t the important part of the equation here.
Its the 25% that goes to Uber.
Is that 25% enough to make Uber a sustainable, profitable business?
No it is not. Which is why they are investing so heavily in developing automated cars.
You do realize that the “car owner” in a uber-centric automated business model isn’t going to be you or I or anyone other than the corporation currently known as Uber?
They have no intention of waiting for millions of people around the world to decide to adopt automated-car-technology on the chance that some percentage of those people decide to throw their automated car into the ride sharing pool.
Uber’s business model isn’t based around ride-sharing. Their business model is based around disruption. Its very clear what their intentionsare.
Taking the driver out of the equation simply gives Uber the opportunity to increase the margin they take from each-and-every fare from 25% to something that might actually give them a chance for sustained profitability. But they also have to invest billions of dollars in aquiring fleets of automated cars. And keep them maintained. And fight the red-tape that every country and every county that they operate in will throw at them. And upgrade them every-so-often.
And thats assuming a smooth roll-out. But with Uber’s history of cutting corners and pushing boundaries a smooth roll-out is something I wouldn’t be betting money on.
So the assumption that the price is going to come down is a pretty fucking big assumption. There are far to many variables for you to comfortably predict that. We don’t even know what the eventual business model for automated cars is going to be. If automated cars are kept out of private ownership then all your assumptions get thrown out the window.
Congratulations. You’ve invented a brand new business model. Because this isn’t the business model that Uber and the other companies are currently investing billions of dollars into. If Uber get their way and restrict private ownership of automated cars: then you have your first major set of regulations you will have to get through in order to make your business model viable. Good luck!
Once again: Uber’s pricing structure isn’t based on competition: its based on disruption. They deliberately priced themselves at a price-point so they could enter new markets and take away market share from the existing taxis.
The barrier to entry **is **going to be high. As in really fucking high. As in billions and billions of dollars of investment in infrastructure, fleets, regulations.
The real test will be to see what the companies that aren’t run by cowboys decide to do. Those companies will set their prices at a rate that will give them a sustainable margin. That will give you a benchmark on where the pricing will eventually lie. We are years away, probably decades away though, from seeing that happen.
…this is an **extraordinarily **poor rebuttal.
There are millions of people out there that have the same priorities as me.
There are millions of people who when looking for viable, convenient, and less expensive alternatives to new cars will choose to buy a used car over the inconvenience of an automated Uber.
“Reliability” is subjective. And used cars are generally “reliable” enough that millions of people choose to buy a used car instead of a new one.
Proponents of automated Uber (or similar models) have the job of convincing me and other people like me that an automated service will be more reliable than just going out and buying a used car off Trade-Me. Insisting on characterizing the car that has been part of our family for 10 years that I’ve had to take to the shop only 3 times to do do any work on as “unreliable” is failing to convince me of your position.
Some will, many won’t. Because owning a new-ish used car is almost as expensive as owning a new car. And owning an older used car means unreliable transport, potential for expensive repairs, and taking time to get the car to the shop more often than you would a new car. Otherwise 17 million Americans wouldn’t be buying new cars every year.
You may be perfectly happy with a used car. But some people have less tolerance for unplanned breakdowns. Some people value their time more, and therefore value the reliability of their vehicle more than you do. And some people consider it a good investment to buy a reliable new car with warranty than take chances with a used car.