The General Economics Thread

People don't want to share taxi/rideshare rides. That's antithetical to the concept. There may be a market for lower-cost, shared rides using microvans or minibuses, but that's not what Uber and Lyft are targeting.

It would also reduce the impact of surge pricing, meaning less profit for Uber or Lyft

You think this decision is gonna affect Uber Eats in Minneapolis?

It was when they started, though. If traditional taxis have caught up since, I'm willing to chalk that up to the competitive pressure from rideshare apps. The taxis industry is infamously resistant to change, with most major cities using government regulation to artificially enforce the status quo and insulate taxis from actual market conditions. That's why rideshare apps had to do the "no they're not taxis, honest" thing in the first place — because if they were legally taxis, then the entrenched taxi companies would have just crushed them with regulation.

Anyway, it's admittedly a more niche use case, but one advantage that Uber and Lyft still have over local taxi companies that have their own apps is that Uber and Lyft work everywhere. I'm in a different city basically every week, and having to download a different app and make a new account every time would be a pain in the ass. That's probably a bigger factor for rideshare's bottom line in tourist destinations than someplace like Minneapolis, but it's still got to be something that they're thinking about. They can afford to pull out of Minneapolis rather than play ball with regulators, but how long can they afford to keep doing it? Can they drop out of a half-dozen cities? A dozen? Twenty? What if it's a major market like NYC? Something's gotta give eventually.

Yeah, because it's the same system.

Edited by Zendervai on Mar 16th 2024 at 3:30:21 PM

So this is where the regional variance comes in, Addison Lee was founded in the U.K. in 1975 and I believe has always done fixed price rides (like all private hire cabs) I’m not sure when they rolled out an app (I remember when you’d book by phone call against a standing account in 2010/2011). The Wikipedia page on Taxis in the UK lays out the difference between street hire taxis and private hire taxis.

Uber also doesn’t have great penetration everywhere. I live near a town of around 25,000 and from the train station I can get a metered taxi from the rack or book (via app or phone call) a fixed price taxi from one of several local firms, but I’d be waiting forever to get an Uber. I remember several years back visiting a city of 155,000 and also having trouble getting an Uber.

I feel like the niche that would best service someone like you isn’t a business like Uber, it’s someone building an app that uses your location to make you a booking with an operation relevant to your city and handles payment processing for you.

& X3 Not always, Uber in you UK has Uber car drivers as employees but Uber Eats delivery people contractors, specifically because an Uber car driver can’t hand the work off to someone else (due to being a registered taxi driver) while an Uber Eats delivery person can have someone else deliver the food (which is also why Uber Eats, Just Eat and Deliveroo are hotbeds for black/grey market labour).

Edited by Silasw on Mar 16th 2024 at 7:48:55 PM

I would be quite happy to pay 30% less for a taxi ride rrom the airport by riding with another person, the taxi dropping them downtown, and the taxi dropping me in my neighbourhood.

And the difference from a bus route is that it’s far more versatile (it goes when and where there’s demand), takes you from your origin to your destination rather than places approximately close to both, and doesn’t involve transfers.

Most countries in the developing world have a shared taxivan system that does supplement (or stand in for, in places without formal public transit) that way, and I’ve found it really handy. If we could make it economical (i.e. possible to earn a living wage doing with fares remaining fairly low) in richer countries, I think it would be great.

Edited by Galadriel on Mar 16th 2024 at 7:52:32 AM

I mean, the real solution is to build cities in a way that's structured around public transportation such as buses and trains instead of cars. America actually used to have cities like that, but all that infrastructure was demolished to make way for cars and highways.

All this talk about setting up a ride-sharing app that actually let's you share a ride with someone is fixing a problem that we already found a solution for over a hundred years ago. A smarter taxi system won't change things

That's what happens when society is shaped to fulfill the needs and wants of big business instead of the other way around.

I'm trying to figure out the through line from my parents and most of their friends being able to afford a home and a second home when they were my age, to me not being able to afford to live within 750 miles of where I was born and raised.

Well, there would be an increase in demand due to population growth, but I think more impactful are artificial limits on supply due to scalping and wages not increasing proportionately with inflation.

Yeah, it’s a combo of wages not meaningfully increasing in decades and an artificial restriction on housing.

It’s a whole thing that middle income housing is just straight up not being built anymore. It’s all luxury condos, big houses in suburbs and the minimum legal requirement of low income housing. Middle income housing (which is like, bungalows and adequate apartments) isn’t something that’s easy to get super rich off of, so it’s just straight up not being built anymore in most places.

The purchasing power of a full time job has reduced dramatically in Europe and North America over the last few decades, especially relative to housing prices.

It’s primarily a housing shortage issue. The relationship of wages to housing costs is (at least in Canada) WAY out of wack with the general relationship of wages to inflation.

And that, in turn, is partly a consequence of the growing wealth disparity.

Screw it, can someone crash the housing market?

That's a Monkey's Paw wish if I ever heard one. Remember 2008?

Edited by M84 on Mar 21st 2024 at 9:52:43 PM

That would produce a short-term glut of already constructed homes, followed by a decline in construction, and then an even deeper shortage.

"Crashing the housing market" would indeed produce a repeat of 2006-2008, only many times worse depending on how deep the crash goes. Forcing home prices down would force calls on trillions of dollars of debt, which the global financial system may not be sufficiently capitalized to withstand.

Moreover, we'd be acting against the financial interests of hundreds of millions of homeowners around the world, many of whom are in their respective middle-classes. Rich people wouldn't be harmed nearly as much. Far from equalizing things, we'd be dragging down the people on the next rung up.

And lo the cry was heard across the lands: "Join us in the crab bucket!"

Edited by Fighteer on Mar 21st 2024 at 11:22:34 AM

Then how much do people have to put up with high rents or even homelessness to prop up the rest of the economy?

In the US, one of the largest lobbies against building more denser housing is people who think it would bring dowon their property values. Do we have to bend to their rent-seeking demands because doing otherwise would be 'bad for the economy'?

It's more that crashing the housing market won't solve that problem. It didn't solve it back in 2008.

The problem is that the housing market is so intertwined with the rest of the economy that when it crashes, it fucks up damn near everything else.

If this is making you think that the whole global economy is an unstable house of cards or an increasingly top heavy Jenga tower...well, yeah.

Edited by M84 on Mar 22nd 2024 at 12:11:52 AM

Again, the problem of 'too big to fail'. I think then, perhaps landlords shouldn't been allowed to become 'too big to fail' in the first place

We would have to go back centuries in time to fix that.

Landlords have been hated for generations for a reason.

The options aren't "crash the market" or "do nothing". We can use zoning laws and tax incentives to encourage building new, affordable housing units without tanking the value of existing stock.

Yeah, there are options besides "let it all burn". And like I said, "let it all burn" didn't solve the problem before anyway. It won't solve it now.