I would not minimize the amount of damage done to transportation, hospitality and dining, considering the importance of those industries in a lot of cities.

Softbank radically destabilized several economic sectors in an attempt to monopolize them. That kind of thing used to be a crime, and it should be again.

As a consumer, Uber was superior to taxis in a number of ways: clearer pricing, competitive pricing, ride sharing, transparent routing, digital history and receipts, integrating with other apps, etc. What damage do you think was done to transportation?

Yeah, the app was nice, no argument there. The problem is two-fold - one, it harmed economic actors who were not using a PE subsidized model. That means actual businesses were lost in exchange for one that basically cannot be profitable without a monopoly on pricing.

Second, their below-cost pricing also enticed municipalities to replace public transportation services with ride shares paid for by the muni. Now that the rates are jacked up, those calculations make no sense (which of course, they never did without subsidy). If your city already sold the busses and laid off transit employees, you are SOL. Not a problem in NY or SF, but definitely an issue in towns and small cities.

A free bonus one would be the audacity that Uber and Lyft demonstrated in forcing through a California proposition to create a special labor classification in order to keep enabling their less-than-profitable businesses.

> it harmed economic actors who were not using a PE subsidized model

The only impact on the "economic actors" I noticed was that traditional cabs are now less likely to rip me off knowing I can always call an Uber

> Second, their below-cost pricing also enticed municipalities to replace public transportation services with ride shares paid for by the muni

The point of public transportation is to help people, not the other way around. Public transportation isn't a good in its own right. Let's be clear that public transportation failed the least well off. Trains and buses run less frequently in poorer neighborhoods and on off peak hours. Uber was a god-send for these people. If a private solution can do a better job than public transportation, be more accountable, be sustainable in terms of profit without the need for public funding, then I say private solution should win

> The only impact on the I noticed

That's probably more about what you pay attention to than the actual impacts.

> If a private solution can do a better job than public transportation

I just explained why it didn't - the price point was completely based on private subsidy. I live in an urban area of a major city, and there are times and areas where it takes 30+ minutes to get a ride, including a few months ago when I was maybe 10 minutes from the international airport at a reasonable hour (~10PM). Busses and trains have schedules which are fairly reliable. They run late sometimes, but there is a pretty reasonable guarantee that they will show up. They won't cancel after 10 minutes, the muni is ADA complaint, and will only cost you $2.50 to get within a few blocks of your destination. Yes, buses have a coverage problem in the suburbs, but my suburban relatives (who love ridesharing) have also been complaining about the price and availability the last 12 months, so it doesn't seem like Uber/Lyft are able to fill the last-mile niche reliably at this point anyways.

Public transportation is also heavily based on subsidies. The ticket price only covers a fraction of the cost.

Public transportation is a service, not a business meant to run a profit. I don’t mind subsidies when the public pays for its own stuff.

There's research out there showing Uber has increased congestion on public roads, and I think also driven up carbon footprint per passenger. In part this is because it's cheaper than it should be. Incentivising less people per vehicle (taxis versus e.g. busses) is bad for society at large.

Is there a research on how many DUI deaths and accidents Uber has prevented? How about people who didn’t buy cars because Ubering is much easier?

6% or ~500 lives per year according to this article (though it notes an increase in vehicle related deaths, so some of that may be cancelled by the additional road traffic) - https://qz.com/2038153/drunk-driving-deaths-dropped-as-more-...

Not a bad result, but probably not worth the problems that their current business model entails. There's clearly opportunities for better transportation options, they just need to make economic sense.

There's a lot of research and much of it is conflicting, here's two examples with vastly different conclusions

https://jamanetwork.com/journals/jamasurgery/fullarticle/278...

https://www.nber.org/papers/w29071

Both researches show benefits but the nber one somehow twists it into a different narrative. I understand why hackernews users hate uber, but shouldn’t professional economists try to be unbiased?

The point of the nber study is that there's a ton of varying answers out there. If it's biased towards anything it's "good science."

> What damage do you think was done to transportation?

Uber/Lyft drivers destroyed traffic etiquette. I don't even drive and I saw it. For a few years there anytime you saw a driver doing something weird and/or dangerous it was Uber or Lyft.

> As a consumer, Uber was superior to taxis in a number of ways

I'd say that likely depends where you are.

It shouldn't matter if they were successful or not, the method is, as parent wrote, sustainable and has no place in a supposedly stable economy.

Just like a robbery is illegal no matter if it was successful or not.

Plenty of other companies employ the same tactic but within one company and calling products "loss-leaders". Microsoft can run GitHub without making any profits with GitHub itself, as they can spend money earned elsewhere on running GitHub as a "loss-leader", just in order to push out any competitor that doesn't have a huge corporate behind them.

This method has 2 parts: lose money while creating a monopoly, then jack prices once consumers have no choice.

However, none of the Uber style businesses have an actual moat, so they can never implement part 2. This whole set of investments is one big subsidy to consumers.

The fact that businesses get destroyed by a cheaper or free alternative is not a bad thing unless that consolidation leads to higher prices in the long run.

Github is a great example in saas area. Utterly trivial for most customers to switch away or self host. They have no moat so they can't really jack prices.

Now there are political issues with... essentially private companies creating public goods(see google search, social media, github to some extent, youtube/Twitch). However these are governance issues, rather than economic ones.

(Disclosure, I worked at GitHub at one point)

> Github is a great example in saas area. Utterly trivial for most customers to switch away or self host. They have no moat so they can't really jack prices.

I'm not sure I agree with this. It may be true for single developer code hosting, but GitHub as a business is much more than just that.

GitHub makes money off three things, only one of which is the "core" code hosting business and two of which have solid moats: - GitHub Enterprise {Cloud, Server} - Actions (Azure compute minutes) - Advanced Security (code scanning, secret scanning, etc.)

For customers operating in this environment, it's _extremely difficult_ to move because the latter features are built in to their business process (e.g. a compliance requirement that there are no known vulnerabilities dictates the use of GHAS, and they've already gotten signed off so switching to a different provider requires going through a more stringent audit in the future). GitHub doesn't have to raise prices, they just slowly add new functionality that boosts the usage of Actions, GHAS, etc. which both provide actual benefit to those customer segments and increase revenue (and eventually get new, larger customers on board).

That large scale usage also offsets the cost for their free tiers, which in turn keeps the single developers hosting their code on GitHub. Even though it's fairly easy for them to move their repos elsewhere, the halo of other features plus the community (which is really the asset) keeps developers on the platform.

> However, none of the Uber style businesses have an actual moat, so they can never implement part 2. This whole set of investments is one big subsidy to consumers.

The big bet on Uber was against the ability of the governments to fight back against predatory bullshit - and for a while, it did seem like the big coffers of Uber cash would win over the established system of taxi regulations and employment laws. And at that point, they'd have the moat to crush the competition.

All of the Uber style businesses are also based around convenience, and as a consumer my elasticity for convenience is not very elastic(I don't know if this is the same for the general population). Pre-Uber, I can almost count on one hand the number of times I took a taxi somewhere but Uber made it cheap and fairly frictionless, so why not! Now it is still fairly frictionless but more expensive, and is just not worth it as much.

But surely the concept of loss leaders can't be problematic in itself? I have no problem with a supermarket subsidising the price of one product to get me in the door, for example.

The argument is that you should be. There's no free lunch; somebody is paying for it, and for every time that you notice that you're getting a deal there will be another time where you're getting screwed, whether or not you happen to realize it. And in the meantime, allowing large companies to throw their weight around like this reduces competition, which harms consumers in the long run even if you benefit in the short term.

Not saying I disagree but in my country, the minute Uber Eats started charging for delivery and stopped giving out subsidized free food was the minute a bunch of competitors popped up

So yeah, for a while it was only uber eats but they didn't maintain that lead without those subsidies that were (apparently) a net positive for consumers

> somebody is paying for it

Ok, and what if it was the investors who were paying for it?

VC funded startups have been a very successful method of transferring wealth from rich investors to consumers.

Different products. GitHub, more or less, has zero marginal cost for an additional customer. So they can afford to give away their product solely to starve the market for competitors.

Supermarkets can't do that because they have a significant marginal cost for each good sold/given away. They can't afford to give away milk to 10 million people to get 500k of them to pay for something else. So the market distortion effects are much more limited in the case of physical goods.

Loss leaders are fine, but it should be illegal to run at a loss in order to drive out competition. (And, I believe, it already is.)

Presumably determining if a loss leader exists to destroy competitors is tricky though?

Like, MS aren’t going to come out and say “we want to bury gitlab”, even if that was the intended goal. there’s always going to be some vague brand building excuse to hide behind.

(I don’t think this is the case for GitHub, but to illustrate the point)

It is somewhat tricky, but sometimes it can be (and has been) proven; people do say all kinds of things while doing illegal stuff, and sometimes even write it down or send it as an email.

This is a good point — the LIBOR scandal springs to mind when thinking of the inexplicably brazen things written down whilst committing white collar crime!

You need to explain what exactly needs to be made illegal, cause it's just regular VC to me. Many VC businesses lose money for a long time, including the likes of FB or Amazon, the strategy being illegal doesn't sound right to me.

> the method is, as parent wrote, sustainable and has no place in a supposedly stable economy.

But isn't the parent's point that if SoftBank is losing money, that it'll eventually correct itself?

It’s a huge problem in the sense that these companies destroy a lot of otherwise viable businesses.

I believe Son has succeeded with this strategy if the bar for success is him getting rich and getting others rich. In the early 2000s he came from nothing, made a fortune, lost it all, and then remade it again. But at the end of the day, his strategy essentially hypes a company which then IPOs and he offloads his risk to the general public. He might be a good example of survivorship bias, how many have tried this very same thing only to fail miserably?

> But he utterly failed.

Maybe. If so, we're talking about a single investor out of at least hundreds that have similar, if not so insane, models. They work out fine, many of those posting here work for a company funded by such back in those days.

In the late 90's/early 00's it was interesting to see which sites took off and which did not. I owned a hosting company and was fairly active in the community. It was an open secret that the giant sites of today were simply losing money on a monthly basis due to infrastructure costs with rich investors picking up the tab.

Other competing bootstrapped companies with regular Joe founders simply could not keep up when their competitors could simply burn $100k/mo in bandwidth and server bills while instead they needed to be responsible with sustainable growth. I had more than a handful of founders/company owners who had previously perfectly sustainable models built up over half a decade only to be crushed by loss-making VC money.

I often wonder how much different the Internet would look like if a startup remained a startup, and not some high finance big business industry that took over the title.

> But he utterly failed. All he did was redistribute investor money into consumer pockets(and weirdly distort some markets in ways that are difficult to understand).

One might argue that the effects of "gig economy" and similar "modern tech" companies on local economies are damaging as well, beyond "weird distortions":

- residents suffering from noise and rising rents thanks to AirBnB and copycats

- taxis going out of business because they can't compete with Uber leading to people depending on regulated, discrimination-prevented taxis having issues, and to people in "high demand" situations like airports or event venues being squeezed for their money

- restaurants, many of which were already at the edge of financial survivability prior to COVID, facing extortion by delivery apps - either use them and depend on them, or having the delivery apps simply subsidize your competition until you go broke

- employees of all these companies who end up with down-pressure on their wages, and city governments with funding issues because employment tax income collapses as well, and as a result of that everyone else because governmental services degrade

Someone will always pay for the supposed "inefficiencies" that cut-throat capitalism "identifies" - and in almost all cases it is those at the lowest rungs of society that bear the worst load.

That's not all. Softbank's oversized investments into hype machine companies drove investors away from funding legitimate companies in those spaces. The approach of throwing huge sums of money at dubious companies is a huge tax on innovation.

> and weirdly distort some markets in ways that are difficult to understand

The hypocrisy of social engineers presently touting outcome-based economic management policy generally (doesn't apply here apparently, or maybe that's HN selection bias), and the general lack of antitrust enforcement post Nixon don't have something to do with it?

It is only a relatively small problem, because the guy at the helm appears to be not sufficiently successful with his approach. That said, he did have some notable wins ( Alibaba comes to mind ), so whether we discount is as luck or something else, the approach mirrors venture's unicorn search ( 19 will be busts, but one will be a massive payoff ).

Separately, just because Son is losing a lot does not mean that a better equipped investor won't try to do the same, but better. At that point, this strategy would absolutely be an impediment to regular consumer.