Quote:
Originally Posted by peter12
The obvious rejoinder would be that you stick with the devil you know.
Uber is novel. It seems that there is some sort of wealth transfer from investors to consumers. For once in this economy, the little guy is actually getting a break. But don't kid yourself, Uber is subsidizing your $1, $24, $65 ride. That is how they break into new markets so quickly, crush the competition, and that is why they are losing so much money.
The question that reasonable people, and I think some of these people work in City Hall, are asking is what is the long game? Taxis have kind of worked for a long time. The economics of maintaining a semi-public good like a city livery service are complex, and it includes maintaining a standard of living for drivers, keep vehicles somewhat roadworthy, providing some choice for consumers, and providing a modicum of security through livery insurance.
So to say that this is all due to a bunch of Northeastern Calgarians bribing City Councillors and the Mayor's office is total BS.
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Really interesting post, and I appreciated you spelling out some of the more hidden nuances. I have a question for you though:
What's your take on what their long-term game is? In the medium-run, won't taxi companies have to reduce their fares in order to compete with Uber's prices? In turn, with how unprofitable Uber has been thus far, they'll presumably raise their own prices, to both become more economically healthy, and reflect additional costs they'll incur to meet regulations should they choose to compete. Won't that be better for consumers in the long run? Is this not competition at work?