Is the Sharing Economy a SHAM?

[@3of11]

Remember the meme: 1990: don't get in stranger's cars 2000: don't trust people you meet on the internet 2010: literally summon a stranger from the internet to get into their car.

[@Monicalala]

My feelings exactly

[@alexandrebeaudry8377]

Hitchhiking is now glamourous.

[@montyi8]

1990s kidnappers missed this technology

[@michaelmurphy2112]

I hate to say this (because it makes me feel old) but the first two were in the 1980s and 1990s, not 1990 and 2000. 😧

[@RemziCavdar]

The difference is that now we have a mobile phone and GPS and whatnot. You can call 911 or 112 anywhere anytime.

[@feynstein1004]

Isn't that just predatory pricing? When a business deliberately lowers prices even at a loss to itself, to wipe out the competition and establish a monopoly? How is this any different?

[@dawidwtorek]

Yeah it is that. But thanks to the story of a tech innovation they get away with it.

[@cherch]

I think you’re right, I see no difference

[@sor3999]

It's not any different. Any video or article on Rockefeller will cite doing this as one of his offenses.

[@feynstein1004]

@@chase-warwick Yeah but who does it isn't relevant. The result is still the same. It's anti-competitive and the establishment of monopolies. There really should be regulation against this.

[@yash1152]

yeeah, predatory pricing was the term i was looking for.

[@draheim90]

Last week I paid $60 for an easy 20 minute Uber ride from an international airport to my hotel at noon on a Thursday. If that's not profitable for them, something is really messed up.

[@typicallytheo]

The driver probably got a measly $9 for that ride too

[@colorsofbird]

@@chase-warwick I guess also if they relocalized to another country, their own corporate costs would be much less... and everybody could really enjoy it. I don't get drivers are paid like **** when the software developer gets like 300k a year. This is solely a US problem

[@leiferickson3183]

@@chase-warwick Hmmm, if all these software devs are getting paid so much to work at all these companies that are losing money is that real supply and demand? Or is it an artificial bubble economy that is unsustainable? Pure Hype driven demand.

[@xenonsan3110]

@@colorsofbird 300k is not average. Maybe in California at FAANG companies but everywhere else isn't that high. Average remote software engineer makes 120k

[@xenonsan3110]

@ghost mall not to mention the burnout from working routine 50+ hour weeks and them taking advantage of contracts. Like some companies you can't even start a side business because they have written into the contract any idea you come up with for software they can own

[@jasonmacland8390]

All of these gig-work companies have the same business model: a middle man that takes a huge cut while others provide the actual service. Artificially low prices, shifting their operating costs onto the workers, drive existing services out of business, then jack up rates once they have their monopoly.

[@jasonmacland8390]

@Brother Teresa I literally say the same thing in the sentence that followed. My first point still stands. These companies take a significant chunk of every rideshare trip, delivery order, etc. simply for facilitating the transaction (literally, a middle man). Doesn't matter if they're profitable or not.

[@oceanwater6887]

Yes and this is possible due to vast amounts of venture capital. I hate those guys.

[@TheCastedone]

You said it. It's just Monopolizing and capitalizing on social engineering.

[@spencercase5370]

Just like MLM’s they tell people they can “be their own boss” and make money on their own terms, but if you were your own boss you’d decide how much you get paid. Instead, they have a virtual boss that makes demands but you can’t communicate with it

[@luisandrade2254]

That middle men is what allows the service. If you decide to take it on it’s your responsibility to provide the service and cover the operational costs because it’s YOUR operation. You’re not a worker anymore in that case

[@TomMcMorrow]

"If you're too young to remember the start of ride sharing apps" I've never felt older at 33.

[@kayleemcelroy3115]

I'm only 25 and didn't take an uber until a couple years into college, so I can't imagine someone watching these videos who doesn't remember a pre ride sharing world!

[@joeb1522]

I'm only a few years older than you and I remember the start of cell phones and the internet.

[@Clockradio92]

@@joeb1522 Same I'm a bit younger than OP and I still remember dial up internet and landlines.

[@SurprisinglyDeep]

Im in a similar age bracket as the OP. I remember hearing the sound of a dial up modem when starting up Netscape.

[@MA-gk6rf]

I was just about to post this! “Are there people out there… who are too young… to remember ride sharing apps?!” Apparently us 33 year olds are a thing of the past now!

[@cheyenneharmon1022]

I remember when you could get a ride for less than $10 across town. The rideshares, this was always their plan, to get people hooked with low prices and price out the established taxis. Then once they had the majority market share, to raise prices.

[@abdiqanijama]

Yeah that’s how it felt when I discovered Uber in my town couldn’t believe their prices and convenience

[@LoveAndSnapple]

I don’t remember the last time I saw a taxi cab.

[@edselgreaves6503]

In my country, the taxis companies partnered up with ride-sharing apps to survive. Which is the best solution, because I remember how I had to keep calling 3 cab companies to try and book just one cab back in my college days in 2004, and if they couldn't get one to come my way I was shit outta luck. I'd have to either skip college or wait 2-3 hours to try again. It was torture. Ride sharing made it a buyer's market instead of a seller's market, so I am willing to pay a little more for that advantage. Those college days was back when taxi meters used to track distance 10 cents at a time, so at least it was affordable. But now they track by 25 cents at a time, so the fare still comes up higher if I order a taxi on its own without going through a ride-sharing app. At least rideshares keep the taxis accountable and on the tip of their toes.

[@AB-sy9tf]

Kind of like how Walmart entices people with low prices which eventually puts small businesses out of business. Then, Walmart can raise prices again on the sly as they control greater sectors of the retail market.

[@tayokarate]

Well then the cabs would become cheaper to use again if they overprice

[@VarsVerum]

I think the biggest problem with businesses nowadays is that being in massive amounts of investor debt is the rule, not the exception anymore. Debt can be leveraged very well to grow your business, but only in small margins, not businesses that are operating permanently in the red but getting carried by investors.

[@n_u001]

then they die and all that money is lost 😂

[@X.MillennialResponder.X]

Curious if the sunk cost fallacy plays a part in this too

[@SurprisinglyDeep]

I think a lot of the executives have "golden parachute" clauses set up so that if and when they lose their jobs they get hundreds of thousands of dollars. This is in addition to the tens of thousands of dollars they make each year. If they can intentionally or unintentionally "scam" the investors for a decade or two while remaining on the board of directors during that time, it doesn't matter if their reputation in in tatters afterwards and they are never again able to get hired anywhere. By that point they're already set for life.

[@masstv9052]

@@X.MillennialResponder.X The purpose is to eventually go public or sell to a larger company, thereby the original investors make more than they out in even if the company is losing money. And stock price can keep rising as long as the company is growing. The debt becomes an issue if they never become profitable before they stop growing

[@geostyma]

Can i add business loopholes to that? I feel like there has to be so much money that gets written as “loss” that is more likely just personal costs that everyone helps to pay for.

[@micahbush5397]

Going into this video, my answer was a resounding "yes"; I'm not paying someone else to do work I can do myself, and most of these gig jobs are probably under-paid anyway. Coming out of this video, my answer is an even louder "yes."

[@eliasmaslow7754]

All true, til you weigh an hourly rate of a taxi driver or whoever against yours. If it's less, you must buy or be at a loss. If it's more, you must not buy and innovate at doing it cheaper/faster yourself or hope that in the future you start making more money by subsidizing that activity.

[@kenim]

Its already bad that they are driving out legitimate profitable businesses but the worst part is that by this method, they “employ” without actually employing anyone thus being free of all the typical worker benefits. And the service provider that is fed the false narrative of self employed doesnt even earn more!

[@AudreysKitchen]

Free and open source solutions are what we need. In theory one could use Blockchain or similar algorithms to make a decentralized rideshare service where all the revenue paid goes to support the "business" and pay the drivers.

[@AudreysKitchen]

@@IOFLOOD ?

[@AudreysKitchen]

I think it's a pretty cool idea, giving the revenue directly to the drivers instead of tech executive

[@starcherry6814]

Blitzscaling sounds like a capitalist nightmare

[@kingmoank]

no, you mean a capitalists dream come true. 😂

[@PedroHCF37]

It sounds like neomonopoly to me. Alternatives become unviable.

[@JassonCordones]

@@kingmoank Exactly I don't how people do the mental gymnastics to filter monopolies from capitalist practices. What better way to guaranteeing profitability than crushing the competition you say you love? by offering good products and services? pfft people need to grow up.

[@yoavmor9002]

@@JassonCordones Wish monopolies were a thing in only Capitalist societies though... Even if you give government the power, the executive will have a monopoly on everything because he would have the authority to do as he pleases in the name of the economy, and no legislator or court could stop him

[@JassonCordones]

@@yoavmor9002 I don't know how that is a counter example. what you just described is just a capitalist society with an authoritarian government. Both those things aren't mutually exclusive. i.e. China

[@Pandrogas]

The race to the bottom in prices for lots of these companies tend to permanently damage industry perceptions. Small businesses that innovate still can't compete due to commoditization of services and customer expectations en masse. All that ever mattered to these tech companies was their stock price which isn't strictly governed by reality on the market. Anti-trust law in the country is just plain broken. On the bright side, some of these apps have been the inspiration for the occasional city-wide co-op for restaurant delivery or even ride-sharing.

[@joeschmo507]

Gig “work” is a blight upon distressed workers and people will continue getting hurt until we demand career dignity (because simply asking for “safety” doesn’t get the job done).

[@ybergik]

Gig work is awesome for everyone who is willing to work but not wanting to give up all their freedom. Been freelancing for 4 years now, earning more than ever and I don't have to ask permission to take time off.

[@justiniusjustinius137]

Watching some middle-aged guy delivering fast food to some obese millennial and begging for a good review was the saddest, most undignified thing I have ever seen in my life. Delivering fast food used to be the job of teenagers, now it is how adults make ends meet. This system ain't sustainable; you can only humiliate people for so long until they strike back.

[@rainbowunicode8352]

@@justiniusjustinius137 I appreciate that you allude to the (American) cultural practice of expecting teenagers to work under humiliating conditions that we would not otherwise subject "adults" to. The tricky part seems to be having everyone agree on who exactly the "adults" are.

[@justiniusjustinius137]

@@rainbowunicode8352 I didn't argue delivering the food was the humiliating part but the fact that these workers often need to beg or harass customers for positive reviews to keep their standing with the company they work for (sorry, are independent contractors for) underscores the asymmetry of power between them and said company. You can reasonably expect teenagers to do that type of low-skilled, unqualified work for short periods of time while they are young - It is the modern equivalent of an odd job - but when full-grown adults need to rely on the "gig economy" or "side hustles" to make ends meet maybe we have to reassess the system itself. Some people have no doubt made poor decisions which has led to them having to take these types of delivery jobs (comparable to an itinerant worker of yesteryear) but there is no way in hell it accounts for how many people of that age have little choice but to in order to survive.

[@ziksy6460]

I heard a great bear thesis for ride sharing companies: "Being a taxi driver were never known for being a high paying job. Meanwhile, you've got people in Silicon Valley trying to earn 6 figure salaries by skimming off taxi drivers' earnings. That doesn't sound like a very good business model."

[@tylerpeterson4726]

This criticism doesn't make sense to me. Many low paying jobs have been successfully automated by high earning computer engineers. E.g. we don't see any telephone operators anymore because highly skilled electrical engineers built automatic telephone switching equipment. Uber failed to automate away the driver (which, IMO, killed any reason to invest in them), but they have long since automated the taxi dispatcher. Of course an automated taxi dispatch isn't something that attracts customers, so they had to offer rides below cost to gain market share, which is the real problem.

[@themanwiththeplan1401]

@@tylerpeterson4726 there was already automatic taxi dispatchers before uber, but only a few companies used it.

[@CarFreeSegnitz]

They’re also trying to save on regulatory costs. Where I live taxis are required to submit to inspections and pay an annual license fee. Uber & Lyft get away with it by not employing drivers directly, merely facilitators. AirBNB skirts the hospitality taxes that hotels & motels carry. Sounds great for now until all the regulated players have been run out of business, then we’ll see a race to the bottom for cutting expenses. AirBNBs that hand you a mop and rag. Uber that operates rickshaws with noisy two-stroke engines. Food delivery that promises you will get your food… eventually.

[@pluspiping]

That might be the best two-sentence explanation of this business model I've heard yet. It really is that simple. And that insane.

[@ShaunakDe]

Uber's (artifically) low priced have also been used as justification in many cities across the US to cut back on mass transit investments, or worse treat them as "alternate mass transit". While US urban planers have never been the most visionary, an increase in pricing will hit these policies the most.

[@pluspiping]

Combine that with their leaked intention to outcompete public mass transit, and you have a very worrying business model and economic landscape. Yikes.

[@WhenYoureAlexa]

The last couple of minutes were very important: sometimes the industry doesn’t need changing. *Sometimes things can’t be made cheaper.* I think the entire point is that people are trying to make something cheaper that can’t be outsourced (with exploitation). You can’t be profitable and offer a service cheaper than a taxi unless you start taking away worker protections.

[@Jose04537]

In the future there will be no workers to exploit (automation).

[@honkhonk8009]

Uber isnt a job. Uber basically realized that anyone can be a taxi driver, and how its not an actual job.

[@jrcastanho]

People who could afford taxi were already paying for it. Uber made it so that we could ask for a ride without having to stand on the street. Here in Rio the taxi drivers have an app the works the same way as Uber, but only for taxi; it's a little more expensive, but it's lucrative for the driver.

[@SurprisinglyDeep]

@@honkhonk8009 While it is indeed a job that almost anyone can do, just because a job is unskilled labour does not mean that it's a job. Even stuff like flipping burgers, moving boxes at a warehouse or stocking shelves at a grocery store is still a job due to the time and physical labour required.

[@Angel24Marin]

@@Jose04537 Also there will be no costumers to use said automation.

[@ScrapPalletMan]

It saddens me that Wall Street corporations are removing money from small towns when it's us individuals, in our own communities giving each other rides.

[@brajeshsingh2391]

yes but they are giving employment. I mean Uber allows to you have a vehicle where you can ride for money. Its helpful. Similarly Air BnB lets us check in a family room. These services like transportation and hospitality have existed for decades. Just being reinvented. Not so sure about food delivery services. I thought eating out was a part of American culture and lifestyle. Therefore I doubt if its going to be that successful but nothing wrong in Uber and Airbnb.

[@hopelesslydull7588]

Solution: Start your own local ride sharing company for your community or just build a stronger community where you can just ask for rides.

[@stevend776]

@@hopelesslydull7588 even better, save even more money and just don't purposely build car-depedent sprawl that requires each citizen to spend a small (relative) fortune on cars. City Beautiful, Not Just Bikes, etc cover that well. But that would require the American people to work together, facilitate a working political system, and overcome massive corporations when the vast majority of us see corporations as friends and politics as entertainment, lmao.

[@hopelesslydull7588]

@@stevend776 Absolutely, but we can't unbuild what is already here with a snap of a finger. Strong Towns aren't built in a day. It's kinda the whole thing. Incremental growth on the human scale is inherently slow and people can't not drive in the meantime.

[@stevend776]

@@hopelesslydull7588 fair fair! we got a long road ahead of us. I like to think of how many people started biking and/or walking in covid and maybe we'll start thinking of at least extending shoulders so small errands can be done safer. It'd be a nice start

[@joeb1522]

Amazon didn't make a profit for about 20 years. They charged cheap prices and got away with not collecting sales tax, making it much easier to compete with Walmart and other retailers. Once they got huge market share, they raised prices, started charging sales tax (due to a supreme court case), and now they make a profit.

[@mizuhonova]

Did they raise prices though? Almost any item I can find in walmart/target is usually cheaper or same price at amazon.

[@joeb1522]

@@mizuhonova They did raise prices over time. They used to be super cheap. They charge $119 per year for Amazon prime. Walmart or Target don't charge for the privelidge of going to their store. And Amazon raised prices by 5% to 10% when the supreme court forced them to collect sales tax. I find Amazon is cheapest about 50% of the time when I compare to a few other retailers. So they are still a good deal often.

[@88Xlmk]

I'm not from the US, but Europe. 99% of things offered on Amazon can be found for less with 10-15 min drive. I would expect it is the same in the US, so why are people even shopping on the site?

[@Oxazepam65]

Great video. I came to the same conclusion and I think the analogy of selling 1 dollar for 75 cents is the best so far. Food delivery company will have a hard time making a profit. If they ever try to charge the real price, customers will go get the food themselves.

[@j4k3br4k3]

Couldn't agree with you more on these creative accounting companies. I will day though that part of the reason these companies are unprofitable is because they are focused on growth and reinvesting any profit that comes in the door.

[@x2x3456]

Technically, from an accounting perspective, reinvesting profits won't impact profitability. If you had a profit at the end of the period, you wouldn't pay it out by way of a dividend but rather reinvest it that point. It would however affect your cash flows, because you'll busy using up any spare cash to grow the business.

[@aprildawnsunshine4326]

Of course they're focused on growth, it's the Walmart model. Move into an area, undercut the competition till you drive them out and then jack up the prices as much as possible.

[@richsamuel2922]

Kind of like a Ponzi scheme one day everyone who is going to use the product will already be using the product and then they will be forced to be profitable or be no more.

[@growtocycle6992]

@@x2x3456 not all investments add to equity (eg. Marketing, employing more staff). However, it often does (adding to your point).

[@ImSimplyAHuman]

Uber/Lyft are just holding on til a fleet of self-driving cars can make them profitable. 🤷🏼‍♀️

[@dosadoodle]

This seems to be spot on. They are also banking on a company like Waymo selling them the tech rather than putting out a competing service, but Waymo seems to be putting out their own service, even if in a very limited capacity at the moment.

[@honkhonk8009]

@@dosadoodle now you have companies like Ford in the bussiness, that are redefining themselves as transport companies, working on this. I

[@TheCastedone]

Exactly

[@wealthiness]

Except Uber sold theirs

[@Striker50_]

They're purposefully having high expenses to not be profitable (avoiding taxes) and classifying as growth companies

[@Iffy50]

I'm laughing inside. "Investors" these days love to buy things based upon name recognition and what the company stock has done rather than what the profits were.

[@johnvictorroderos8842]

A lot of investors don't invest in a company based on current valuations, they invest based on what the company is worth 5-10-15 years from now.

[@Jose04537]

@@johnvictorroderos8842 possible value* *cries in Yahoo & Sears*

[@honkhonk8009]

Iv heard that some people wont invest in anything, unless its within 10km of san francisco or silicon valley.

[@Iffy50]

​@@johnvictorroderos8842 That's a valid strategy for investing, but that is as much a gamble as an investment.

[@thejatomis]

This seems to be the only play when none of these new-fangled companies issue dividends from their stocks.

[@thomasnewton8223]

In a way this seems similar to truckers shifting the cost of actual trucks to the employees, rather than supplying them. There was an excellent planet money episode on this practice that ends up leaving truckers indebted and receiving heavily sliced paychecks. Companies are shifting risk to those at the lowest social rung and it leads to incredible abuse.

[@BryceLovesTech]

We have an Airbnb next-door and it’s a nightmare. Imagine having a different group of vacationers next-door every week who want to party

[@draheim90]

Same. Live in a fairly decent gated condo association that expressly forbids Airbnb and similar short-term rentals, but unit across the street from us still does it and they seem to market to young and dumb partygoers. Cops are called on a regular basis for noise complaints after midnight, smoking in common areas/stairwells, acts of vandalism and theft, and so on. They had a small fire a few months ago and even a report of animal cruelty towards a neighbor's dog that resulted in a large vet bill. It's weirdly difficult to enforce the HoA laws and regulations apparently. Unless you use the wrong shade of paint for your window trim or sill, then lookout for hundreds of dollars worth of fines.

[@ShaudaySmith]

That's so common and it makes so much sense why apartments, condos and other communities ban AirBnB and other short-term rentals options. My last apartment started listing units on AirBnB for short-term occupants and crime SKYROCKETED that last three months we were there.

[@michaelnajera7958]

Same. Can someone explain to me why it’s better to sink all your savings into a mortgage, taxes, repairs rather than renting and putting it into an 8% mutual fund? At least mutual funds spread risk. What’s to say my house will even be worth anything by the time I retire?

[@typicallytheo]

@@michaelnajera7958 Mortgages are a good thing. Imagine having a video game and every time you open the game you have to start at the beginning instead of saving throughout the game and starting at your last save point; that is essentially the difference. Mortgage = ownership, renting = borrowing. Besides, taxes, repairs, maintenance are just expenses passed down to you, the tenant. And plenty of people have a house and mutual funds at the same time. And while most home values rise regardless, location is the number one factor that causes the most change in value; that is up to you to educate yourself on what is good and what is bad in terms of location.

[@Monicalala]

Beats a halfway house as your direct neighbor

[@xenonsan3110]

Thank you for mentioning AWS. Literally they are most of the cloud and people don't seem to know or realize it

[@honkhonk8009]

yeah. Its honestly insane. Their not bad at it either. Luckily for the tech sector, amazon has strict guidelines and is a pain to work with, so alot of people can just refuse to work for them when it comes to this shit. Amazon is stupid convenient with miraculous service. The stuff they offer is INSANE. of course it comes with the fact their workers are overworked though, but their stupid efficient.

[@xenonsan3110]

@@honkhonk8009 Yeah it just sucks. Like their services are amazing, their docs they are getting better at. But almost everything uses them and I hate that when I start a project I basically only get to choose between AWS, GCP, or Azure. Sure Heroku and Digital Ocean exists but all the new services that will be hot in industry are only on those platforms

[@abdiqanijama]

I couldn’t believe pricing and convenience of Uber when I discovered in my town, then when I thought about it I said they would take taxis out of business then increase prices, that’s exactly what they did after these years

[@honkhonk8009]

Honestly i couldnt care less. Taxis were shitty and costed like $30 to get from point A to B. Cant wait for their self driving shit.

[@abdiqanijama]

@@honkhonk8009 if they go self driving, they would apply same model, kill drivers business then increase prices; technology was supposed to help consumers & owners don’t get what’s with tech companies

[@Mischu708]

In my city uber and bolt are almost as expensive as usual taxi. The only difference is convenience and, in the past, better behaved drivers.

[@AkibanaZero]

Pretty much the same in our neck of the woods. Even the taxi service here has an app similar to Uber's and it's almost as convenient. I say "almost" because it often takes a long time to find a taxi for us while Uber is almost instant.

[@Mischu708]

@@AkibanaZero In Budapest I've seen bolt being just another taxi company (yellow cars, huge signs on top reading BOLT) and in Romania it is another Uber. So i guess at the end of the day it comes down to convinience and legal requirements for all of them.

[@AkibanaZero]

@@Mischu708 yeah, and at the end of the day they're all just glorified taxi services. At this point, I don't care if it's the local taxi service or Uber. I just want to get to my destination so a £1-2 difference in price really doesn't matter to me.

[@Striker50_]

Even if they're the same price, taxis aren't pulling up to your door in 3 minutes

[@Mischu708]

@@Striker50_ Nieder does uber/bolt. With the usual traffic it's more like 5-20 minutes.

[@joshmorcombe4907]

Great video, but I wish you spent a little but more time on how the workers are getting screwed over. It's not just low wages, they also don't have any benefits or worker protections, since they're not classified as employees. Many of them work extreme hours for next to nothing, especially when you factor in that they usually need to buy and maintain their own equipment with their own time and money (which can sometimes even be more than they make in total, especially for uber/lyft drivers). And since the tech startups are pushing out the traditional industries, a lot of them have no choice, no other job they could turn to instead. This whole section of the economy is just rich people exploiting the poor so they can suck up even more money.

[@joeb1522]

If the drivers aren't making much money, what is stopping them from getting a traditional job? I know several people with full time jobs and they do uber or Lyft a few hours a week to supplement their income and it works great for them. You could argue the workers are exploiting the company since the workers are paid well that the company has never made a profit.

[@joeb1522]

@@Johneyt54 Yeah, some people don't realize how putting huge mileage on their cars really decreases the value.

[@Jose04537]

The Supreme Court of United Kingdom ruled they should be classified as workers. And California voted in a referendum to also classified them as workers, but of course Uber is suing about the last one. It just the beginning of the end for "independent contractors". You're not independent if you have a boss (even a digital one) or follow someone else rules (term of service)

[@SurprisinglyDeep]

@@Johneyt54 That's a good point about equity. Uber probably only makes sense if a person is using a car they don't intend to resell later.

[@AkibanaZero]

@@Jose04537 This. I'm a writer on Fiverr, a freelancing platform, and can confirm that the platform's ToS might as well be a micro-managing boss. Beyond that, they use ridiculous notifications and metrics to force freelancers to respond to queries as quickly as possible. All without paying a dime for benefits or contributing to a pension.

[@JustABill02]

I remember about 10-15 years ago, there was a company trying to get people to use printed postage instead of stamps. The software cost $50, came with $50 in free postage and a free printer. Similar printers at the time were between $200-$350. Unfortunately I had just bought a new printer, but several of my coworkers brought them. The business model seemed insane then and still does now...

[@NovelNovelist]

As I recall when Uber and Lyft came out they were marketed as LITERAL ride sharing services. As in drivers weren't driving around taking people to random locations; instead it was more, "I'm going twenty miles up the highway ANYWAY, so if the passenger's starting and end destinations aren't too far out of the way, I'll pick them up and let them SHARE this ride for a few bucks." I think economically the model does work from that standpoint because the driver isn't trying to make a living offering a service, just RECOUP a fixed cost they were paying for their own trip anyway. Of course the obvious issue is that for riders, it seems a bit luck of the draw whether someone is actually going your way or not, much less at the exact time you want to go.

[@m8956]

I'm already on that road. I've stopped using all ride share and food delivery services. They're too expensive and the service part is in decline. I'm just going to do everything myself, like i should be doing anyways. The use of these services is supposed to create convenience and save us time. But if we don't use that time to be productive or enjoyable then it didn't save anything. "My time is worth more than blah blah blah". Its only worth more if you used that time to make money or create the circumstance for you to make more money.

[@ShaudaySmith]

Exactly. My coworkers and i used food delivery systems all the time when we had to go into the office. It made sense for us to pay extra so we could keeping working. There were a lot of drivers in our area so food was always on time. But the pandemic made going to get food "an activity" and the extra cost for convenience didn't make sense. The gig economy might collapse entirely, or just contract for only extremely select areas make it work for Employer, Employee, and Customer.

[@m8956]

@@costaet Read someone's entire comment first. I clearly said "The use of these services is supposed to create convenience and save us time. But if we don't use that time to be productive or enjoyable then it didn't save anything" So not only did you not disagree or rebuff me, you just parroted my comment back to me.

[@SurprisinglyDeep]

@@m8956 He did read your comment. A person has more to do eith their time then just make money or research ways to make money.

[@samuellarreal]

Interesting video, the tech industry has some really scary corners

[@ddude27]

This is why I don't understand how people just follow what's popular and not truly sustainable. We have only ourselves to blame for these tech companies to start to dominate the fundamental things we do and need now.

[@craigcarter400]

The best recourse for drivers / couriers like myself is to only take rides / orders that make sense fiscally.

[@brymht]

Amazon seems like a different case entirely. They forgo massive profits in order to reinvest. They would be far more profitable if they didn't put a ton of money back into their own development; and they do this by choice.

[@rodrigoastinzatostado9766]

Well, that explains Tesla's stock's high price despite the actual business' structural losses.

[@sylinmino]

Tesla's actually finally profitable, making them one of the companies that actually made it work.

[@rodrigoastinzatostado9766]

@@sylinmino Really? That's good to hear. It's been a while since I last checked the stock, thanks for telling me :)

[@ogunbekuno2009]

@@sylinmino their profitability is highly dependent on their CAFE credit sales, which is highly unsustainable considering the rest of the auto industry is rapidly electrifying

[@shahrumali8640]

@@sylinmino Yes. Tesla takes publicly funded climate change credits and upsells them to the biggest polluters on the planet to turn a profit.

[@sylinmino]

@@shahrumali8640 true, but it's more of a stopgap because a lot of Tesla's expenses aren't continuous operating losses, but finite infrastructure construction. If their actual maintenance was unsustainable then there'd be a bigger problem.

[@ladylove34]

Can you do one on influencers? It seems similar in that companies write a check, and the influencer has to be the writer, creative director, ad man, actor/model, set and set design, props, camera man, post-production, etc. They also are the ones who face backlash from an insensitive post, rather than the companies sponsoring the videos. Another issue that is scary is what influencers say to get views/affiliated link clicks. I happened upon a video claiming almond milks at the store were dangerous, vaguely claiming "added icky stuff," and recommending a certain almond milk...that sponsored the video! He was making money hand over foot - KZbin revenue, sponsorship, and affiliate link purchases for people who bought the milk from his link. The comments were full of people scared of the store milk! Misinfo makes money.

[@pqrstsma2011]

when UberX was first announced in 2013-14, (in where i lived back then), it was never intended to be a primary source of income, it was more like "drive a few hours, get $20 to buy yourself a treat (or a half tank of gas)!"

[@BriefNerdOriginal]

I believe that this is one of the best analysis I have seen on the topic. Not new, but so wonderfully accessible. Kudos for your great work.

[@jplwunder]

Wow, that was a good video... Probably one of the best you guys ever did!

[@desiv1170]

I'm reminded of the SNL commercial/sketch for First Citywide Change bank. The bank that just makes change. I love this line: "All the time, our customers ask us, “How do you make money doing this?” The answer is simple: Volume."

[@jorgecardoso5863]

Apps like uber, and here in brazil, food delivery are a real nightmare to the workers, who are underpaid, lack any insurence and are legally unemployed, since there is no law to force the apps to give them basic working rights. And the workers have no real other option than working for them.

[@felipereigosa96]

Ok I don't know anything about business but couldn't this blow up in our faces in a huge way? Big company, being subsidized by the investors, drives all the local businesses out of business. Then the investors get fed up and the big company fails and we end up with nothing. Suppose Uber fails, there won't be taxis anymore to fall back on. Imagine the same for spotify, amazon, airbnb...

[@mlv5746]

The amount of knowledge you ondense in under 10 minutes is astounding

[@economicsinaction]

Another great video guys ! I am a big fan of the channel :)

[@BertLiu]

This is eye-opening. Thank you, Phil, Julia, and team. Keep it up

[@Tsunami14]

So very important. This is the big problem with investment rounds and the focus on "valuation" and total customer acquisitions.

[@m1ndfckd]

Love the video, would be nice if you also covered how Airbnb is destroying housing market is Europe when people aren't able to get affordable homes for rent.

[@chungusmychungus]

What a great, well informed and courageous video. Please talk about this phenomena more- of people investing everything into companies without a lot of restraint.

[@addanametocontinue]

Imagine a world where a company can't turn a profit even when it pays its workers peanuts.

[@AikenAdventures]

When we were children, we were told not to talk to strangers and not to get into strangers’ cars. Now, we literally summon strangers using the internet for us to climb into their cars.

[@alexandrebeaudry8377]

As an idealist who want to start a company, this is raising awareness.

[@OlliHazard]

Some people would take issue with the use of the word “sharing.”

[@Jose04537]

“Political language (double speak) is designed to make lies sound truthful, murder respectable, and to give an appearance of solidity to pure wind” George Orwell

[@federicoromero6130]

I gave up my car 6 years ago to rent it for Uber. After a couple of months it was evident that I was waving away any profit in regular car maintenance.

[@argentaegis]

1: "...should be a luxury..." This is a BS statement. A hundred years ago you could have said the same about hot running water or instantaneous communication. I want my laundry folded, rooms cleaned and I want it on middle income. In 20 years I'll have it. Hell, I can get my room vacuumed today. Right now, I can summon a car from my phone and it magically appears without having to make a phone call to some surly person who tells me it'll be thirty minutes for pickup if they even bother to service where I live. 2: I drove Uber briefly, and earned enough on weekends to buy a new TV. I did it as an experiment. I essentially replaced "watch TV" with "drive for Uber". It wasn't great money at all. It was a few extra bucks whenever I could fit it in. Never struck me as a viable full time gig, but it was a pretty easy way to get enough for that TV. 3: I don't remember a lot of ability to summon taxis from without that annoying phone call before Uber. I do remember a lot of enforced monopolies for taxi medallions ect. That monopoly argument works /for/ Uber as much as it might work against. 4: There's near zero cost to switching ride share services, as a driver or passenger. That kind of competition for wage and cost was a phantom before rideshare services. It's a lot easier to avoid that monopoly concern now than it was before Uber. 5: As for the general argument on the hazards of blitzscaling... There's not an easy answer to "network effects exist and are geometric".

[@lwolfer5170]

Really enjoyed this one! I enjoyed how the information was delivered without it sounding like a conspiracy theory.

[@worldisone1975]

I was thinking on this topic from when my Uncle shop closed because customers wanted products at very cheap prices as online giant provide at even at low of cost price.

[@macrumpton]

In a lot of these companies main way to save money is by shortchanging their workers by denying benefits, claiming they are independent contractors, having the workers absorb costs that are usually paid by employers. It is basically a scam that sucks in workers who are desperate or do not have the skills to see they are being bilked. In a way the restaurant industry has done the same thing, paying the workers a pittance and having them depend on tips to make a livable wage, so a rainy night or a few cranky customers means that bills don't get paid.

[@sleepysteev2735]

Never before have I been more proud to hold a bus pass.

[@Sephiroth144]

I also think "Hollywood Accounting" is at play (insofar as the rideshae side companies); they take in a huge amount of revenue from the riders, while doling out a fraction to the drivers. Even accounting for employees on the back end, there seems to be a large amount of revenue that is left over. Unless, of course, costs are inflated, executives are well, WELL compensated, or money "disappears"... Things that make the COMPANY appear to be unprofitable, but explains the lavish lifestyles of the execs and bigwigs. After all, The Simpsons has never "officially" made a profit.

[@somethingwithbryan]

As an introverted person I have never taken a taxi. Uber on the other hand I have

[@ScottUlmer]

Another brilliant video. Two things that you could have brought up (but not needed) was historical times this happened such as with US Steel, or since your audience is not really old - maybe the current event that is We Work.

[@Whawpenshaw]

Yeah I mean even KZbin is in the same boat. The ad-pocolypse came from them trying to make money. The real I have question is, will the tech bubble eventually pop in spectacular fashion? I mean it's similar to the housing crisis but instead of bad mortgages that won't pay you back being sold, it's bad businesses that won't pay you back being sold.

[@letsburn00]

The adpocalypse was also a side effect of companies being afraid they would be seem as advertising on destructive content. Meanwhile, it was noticed that KZbin and Facebook specifically favoured untrue and extremist content. The same reason flat earthers go down the rabbit hole. If you are convinced that Flat earth or baby eating politicians are real, you will spend much more time on their platforms, consuming ads.

[@organizedchaos4559]

It's more that just that. There's a tech bubble that is being caused by the artificially low interest rates. Investors don't have places to put money to without losing money so they put it into companies like these to keep their money afloat.

[@tealcoconut]

Wow, I had no idea about this. Thanks for the video! Well done, as always.

[@lekamjune9391]

Here in Canada, taking the taxi is often cheaper than Uber

[@sionv2009]

When I worked in fast food, I was amazed that customers who lived very close would order via Deliveroo. I mean how lazy could you get? Food delivery is a luxury, for sure.

[@CaesarAugustus.]

“If you’re too young to remember the launch of ridesharing apps.” Bruh, that was only 7 years ago. Calm down. Don’t make us all feel unnecessarily old lol.

[@_JohnDoe]

8:00 "Wary" and "weary" are two different words with different meanigns.

[@aakksshhaayy]

lol it's the classic walmart play.. come in with low prices, drive everyone else out of business then when you're the only game in town start jacking up the prices. Tale as old as time..

[@samaraisnt]

WHERE were people paying $5 to go to the airport??? Uber has always been expensive to me tbh~

[@alexkooiman9854]

I was curious about the economics of these unprofitable companies. Super well-done video! Really interesting!

[@Striker50_]

Rideshare is DEFINITELY a sham. They're taking 50%+ of driving earnings. They're constantly manipulating earnings with no transparency.

[@black86coop]

Good video, it should be added that these apps did make ‘some’ innovations. Largely all of them were disrupters that helped democratize access to “luxuries” that should be considered closer to Normal goods. As an example, as a person that’s lived in several major metropolitan cities I know first had how cabs/taxis did not serve certain neighborhoods - Uber (likely inadvertently) upended those practices since hailing a cab largely became blind to the driver. As such, drivers just took the fare without judging/prejudicing the passenger or their destination for whatever reason. That’s not to absolve Uber or any of these tech products of their problem, just adding color to the history of how we got hear. FULL DISCLOSURE: I’ve worked in tech startups for a decade (including a couple mentioned) and have both negative and positive biases of the space as-a-whole.

[@blargl121]

It really says something that capital investors have so much excess money to invest that they're investing in companies that are losing money for years and years, yet many are barely living paycheck to paycheck...

[@honkhonk8009]

Tradesmen make as much as a programmer in my area. Their not a bad career path. Problem with living paycheck to paycheck isnt because of wallstreet mfs. Its because of the artificially rising cost of living

[@MBarberfan4life]

What it says is that the Federal Reserve is a one trick pony that only gooses up asset prices.

[@MrBavzA]

Great video, I have been a user of most of these apps however I never invested money in any of these players. This video just justifies why I decided not to put money into this tech unicorns. I am okay not taking part in the price rally of the stock prices, I just cant own things I cant justify the purchase.

[@Spiritfba]

I’m a house cleaner and I’m happy that cleaning has to be top quality or else people don’t want it. It prevents low wage contractors from taking my clients. Who is going to clean better, someone making $10/hr or someone making $35/hr?

[@emlonewolf]

Great video. And they nailed it at the end with the comment about monopolies.

[@JRud-sg1ru]

Also, no company likes to pay taxes. They have locations in other countries where they have to pay low taxes or no taxes. Like in Europe: Amazon, Facebook, and Google are having headquarters in Ireland to pay the lowest rate in Europe.

[@DailyProg]

You two are my favorite finance podcasters. I’d appreciate if you can also talk about using leverage for accelerating retirement assets

[@ConnieBTV]

This may seems odd, but this makes me realize that I can start a business and get all the investor money I WANT!!!

[@GoldbergDaBoss]

Love these videos! They are so informative and easy to follow! Please keep up the good work

[@nzuckman]

Do you like how none of these businesses give benefits to their "independent contractors"

[@Jose04537]

The Supreme Court of United Kingdom ruled they should be classified as workers. And California voted in a referendum to also classified them as workers, but of course Uber is suing about the last one. It just the beginning of the end for "independent contractors". You're not independent if you have a boss (even a digital one) or follow someone else rules (term of service).

[@honkhonk8009]

As long as these gig jobs retain their convenience in getting involved, I dont see any actual problem. If their required by law for me to submit a shit ton of info and wait a few years for a license to get approved to be a driver, its not gonna be worth it.

[@nzuckman]

@@honkhonk8009 the problem is that companies are employing people without having to provide them with any of the "extra" stuff traditional businesses have to provide, like health insurance. We live in a world where your ability to get medical help is largely determined by your employment status. The fact that employers are trying to get away with this, and have been for years, is a big fuckin problem

[@nzuckman]

@@Jose04537 exactly, it's just a bullshit buzzword invented by corporations to fuck with people's heads, like when BP invented the carbon footprint to shift the blame of CO2 emissions to consumers.

[@JJs_playground]

I don't understand how Uber / Lyft loses money? They don't own any of the capital (cars).

[@roguedogx]

1:25 and this is before you factor in the cost to the drivers, who often don't get paid enough to offset the wear on their vehicles (unless it's a 20 year old Corolla with 200k miles, then the cost is basically gone at that point)

[@roguedogx]

7:42 also that has it's own issues. While there are level 4 systems (no need for a driver in most cases) that work. That's only under very strict conditions. Any kind of bad weather, and the system basically can't function. Fine in San Francisco, but in sections of the country where snow makes lane markings impossible to see for months on end, not so much. Plus, the upfront cost of those cars are significant. Mass production might one day make this kind of system profitable, in very specific scenarios, but for now its still not viable.

[@showcase-me]

So glad that where I live there's "here now", which allows you go summon taxis instead. And the people working in them can make a comfortable living.

[@jimmypatton4982]

I will say Uber and other tech companies are utilizing the fact when there is excess there is waste. And they are trying to utilize that waste and turn a profit. The problem is when you consider people’s time is only worth $2 (after subtracting cost) do they also value it at that low. Example I work a 9 to 5 job with little prospect to getting employed at a fast food chain (can’t work the major working hours). I go home and sit around watching videos for about 3 hours then play some games online. Well since I already maintain my vehicle for work there is little additional stress from driving it more. Since I am board for those 3 hours maybe I pick up a hobby or I pick up a job that can pay me back some.

[@SamianHQuazi]

So I have a serious question for y'all! If you have to use a ridesharing service like Uber or Lyft, why not just network with the drivers during the ride? Maybe you both can cut the middleman out and offer the driver cash up front in exchange for regular rides. That way the driver gets paid, you save money, and both parties benefit by cutting out the ridesharing app.

[@BlueSky-kh8ue]

At the end of the day, it's still expensive as hell to pay someone to drive you without the subsidy. You are essentially paying for a private driver. Gas + Labor + car maintenance + Insurance = expensive

[@SamianHQuazi]

@@BlueSky-kh8ue It might be worth it if you're making more than enough to make up for it. I'm doing a travel nursing assignment in California and I didn't bring a car. Ridesharing is my only option. But why would I not tell the driver, "Here's my phone number, let's exchange and I can just pay you cash outright"?

[@BlueSky-kh8ue]

@@SamianHQuazi what I mean tho is it will be cheaper for you to just use the Uber app and get the subsidy that is currently available. The Uber driver may make more money from the deal but you will be having to pay more.

[@whimsy-chan1188]

Most people who use uber are infrequent/spontaneous users while in my experience uber drivers move like taxis all over the city. I don't want to call 20 people to find one near me and available.

[@sanakiddy2883]

@@SamianHQuazi your idea is not possible. Because without app, gps and smartphone tech and calculations by companies like uber, the local taxi driver will increase price, behave rudely, be dis honest in driving routes, non available in late night, not accepting to drive to some areas, more waiting time, non availability in rain and snow. The list of issues goes like that. Uber and lyft grew so fast because local taxi drivers wwere lazy, greedy and dishonest too.

[@WorldinRooView]

They're all MoviePass, but less transparently obvious in their pricing issues.

[@just_tin_tin6448]

At 1:51 it sounded like my computer was having electrical problems. Thanks for jump scare :D

[@Navostar1]

I appreciate the diversity in your cartoons.

[@lutfifawzy9561]

In my country, sharing economy is what keep our expense low, it actually benefit our economy at leasr for now.

[@brandong3409]

Nailed it! PLEASE do more videos like this.

[@varuntiwari8444]

One of the best videos I've watched in a long time.....thank you two cents!!!!

[@abdullahkhalid1997]

This is SCARY!!!

[@MrPlatipusbiru]

I had thought it over like 7 years ago.. that a sharing ride companies would suddenly collapes, and bring the economy with it, since we as the costumer have been very dependant on these tech apps

[@GentlemanlyOtter]

This is concerning what their secret motives are.

[@VarunAgw]

**Monopoly** That's exactly what these tech companies are doing. Kill all the competition with low prices, and then increase the prices ridiculously when customers are left with no other choice other than you. The second thing they want you is to get addicted to their service. Sure food delivery costs twice now. But you are addicted to ordering frequently that you will pay anyway now.

[@Katiez2399]

I noticed the pho I usually order on Uber and stuff increased the price by $2.50 on top of the existing increase of the price on the app/online from when you go in the actual restaurant

[@officer_baitlyn]

its such a classic that a new shiny company somehow offers amazing prices just to then have to adjust up to the same prices as the services they replaced its almost as if some established businesses have had pretty optimized prices already

[@33Jenesis]

Cab from my office to airport was $25 one way (3 miles). Lyft was $15. I haven’t the need to go to airport since Covid but I won’t be surprised if Lyft and Uber charge $35 each way.

[@bboyneon92]

Again, a great video! Love you guys! It's a visual treat to watch both your expressions. It lures me in to listen more carefully. And as always, great coordination!