"Digital" cooperatives using (optionally) open source platforms is an idea that should be much more explored imho.
The concept applies to so many verticals involving small companies or individual operators (from taxis, to hotels, to restaurants, to real estate agents, local bookstores, cinemas, to game developers etc. etc.)
The inability of large numbers of small entities to coordinate and cooperate in the digital era means they create the conditions for third parties to completely take over the intermediation with clients and use that leverage to extract unreasonably large rents.
In fact the extreme "taxes" small businesses and individuals have to pay to shrewd digital platform owners are multiples of the cost of development of the platforms themselves.
In other words, if a collection of independent entities cannot get they act together to codevelop digital infastructure (that will benefit all of them) somebody else will do it for them and will be eating their lunch.
This reclaiming of their market / ownership of digital tools might be challenging in conditions of rapid technical innovation. The autocracy of a top-down corporate structure is more effective than a democratic collective. Yet despite incessant marketing noise currently we are in a rather stagnating phase so there is a window of opportunity to reclaim some agency.
If there's a 3rd party aggregator (for taxis, restaurants or whatever), the final price that the customer pays would include both the aggregator's profits + the individual service provider's profits.
If the individual service providers all came together and made an app themselves, the aggregator-profits can be eliminated, resulting in potentially reduced prices for the customers.
I think (probably wrongly) one of the reasons they don't usually come together is because by making such an app they would effectively be helping their competitor(s), which they may not necessarily want to (because they don't see the bigger picture?).
In my city (in Asia) a subset of taxi drivers realized this and even made an app, but it didn't really work well due to poor marketing and because visitors to the city didn't want to set-up a new app just for 2 days etc.
On the other hand, if all the service-providers do co-operatively make an app for their services, what prevents a cartel from developing? The government?
I guess there should be a high baseline level of trust to make it work.
If every city has an app, you also lower the trust of the drivers because you don't have a way to know if the passengers are behaving well (good reviews) or not.
So much "this!". The hotel/booking is the most blatant example, because the bar for "good enough" wouldn't really be that far up.
The only moat they have is worldwide discoverability (a regional cooperative just won't reach people who visit once, cooperatives would have to start global, or at least be really, really good at federating) and that the threshold for critical mass in that market is winner takes all: at least when you are not looking for that one spot for a two-weeks getaway (you might even enjoy trawling multiple platforms) but going through serial booking for a road trip (doesn't even matter wether it's bulk ahead or on the go),
Depends on the vertical. I would not be real comfortable booking lodging on some random portal, especially if we're talking more of an AirBnB thing vs hotels.
> The autocracy of a top-down corporate structure is more effective than a democratic collective.
If that was the case then Soviet Union's central planning would be more efficient than Liberal democracy's market capitalism. The efficiency of corporations stems from unfair advantages states gives them like intellectual property rights or from socialising their losses and privatising their gains from public budget.
Not sure this a good counterexample. In fact we have plenty of proof that loose collectives dont perform well under rapid change conditions.
There is no reason why the ubers and bookings etc should not have been actually platforms developed and owned by the respective sectors using more or less the same technologies. In fact there are some examples.
The lag in responding to a risk of opportunity is intrinsic to a consensus system. The long term fitness is an entirely different matter.
Problem is that web3 tries to tie everything to a cryptocurrency token, not willing to accept the fact that as soon as something happens off-chain and in the real world, most/all advantages of using cryptocurrencies and blockchains go away.
Shout out to Namma Yatri [1] app in Bengaluru, India. It is developed by a payments startup called Juspay. It is endorsed by the Auto Rickshaw Drivers Union. It was launched in November of 2022 and has since done about 5m rides and drivers have earned 9m USD [2]. The entire app, backend and protocol is completely open source [3]. Seems like it uses a fair bit of Haskell and Nix!
> FOSS is a great path for workers to seize the means of production.
It's... not. Open Source is not a business model, nor a collective organizing principle, bargaining process, etc. It's just source code a couple of people have commit access to. I'm all in favor of everybody sharing source code too, but let's not pretend it's magic. Building and sustaining any kind of organization takes work, and has nothing to do with whether your source code is open or closed.
>It's... not. Open Source is not a business model, nor a collective organizing principle, bargaining process, etc. It's just source code a couple of people have commit access to.
in fact that's one of the driving characteristic differences between open source and FOSS; one is accompanied with a set of guiding moral and ethical principals regarding fundamental user freedom.
FOSS absolutely does have an effect on how your movement is organized and if you depend on it it can be an accelerator.
But FOSS doesn't create some kind of socialist utopia as some people seem to believe. It does something much more mundane yet infinitely more valuable in our fractured modern world: it unites bitter enemies and gets them to collaborate.
Look at the contributors to the Linux kernel, which even includes Microsoft now. It's hard to imagine any other force which could unite all those people and businesses under a common cause. But thanks to the GPL, even as their wars with each other continue they are all contributing resources to the public good.
It's so popular these days to flame and dehumanize the other side of any debate but all that does is destroy. FOSS builds and extends humanity's common heritage. It won't win the war for you but it will redirect your energies into creation and ensure that you leave something good behind.
I'd like you to imagine a world where GNU and Linux never took off, where we'd probably all be paying for Windows Server licenses in order to run websites. One where you need to pay to download a compiler, and all you get is the binary.
That's hard to imagine, given the freedoms we enjoy now. I can download a world-class OS for free and distribute changes to it without any hinderance other than my own skill barriers. Same for DVCSes, video players, browsers, modelling software, desktop environments, compilers, and so on... That was not the case in the early 90s.
FOSS wasn't a complete nor a permanent revolution, but revolutions rarely are. Point is, it changed the world, it changed business, it changed developers' day to day experience, and it's disingenuous to pretend otherwise. We still rely on corporations to make software, but they are now socially pressured and incentivized to release the source of a large portion of what they make for free. Maybe we haven't seized the means, but we are right there with the big guys at the means, sharing power in a (relatively) new and exciting way.
There is no seizing here. FOSS is available to all, no one actually loses the means of production.
It’s “distributism” rather than “socialism”.
Anyway — FOSS can be crowdfunded by selling utility tokens to future customers. If you are worried about the SEC, then just use a broker-dealer like Rialto Markets to help you do Reg CF.
Unfortunately, seems like it hasn't been maintained for quite a while (https://github.com/ro31337/libretaxi/graphs/contributors), doesn't support credit/debit cards (cash only) and also doesn't seem to offer any safety features (any driver can sign up at any time without any sort of verification)
Scheduled rides are a neat strategy, but they're tough for consumers to use effectively. For one thing, if you're attempting to schedule a last mile ride after you get off the subway, your arrival at the pickup point could be subject to minor delays. But on the network side, a few minutes on each ride impacts efficiency in a major way.
Personally, my biggest (non ethical) issue with Uber/Lyft et al. is that they're unreliable. There are common rides you can request (e.g. leaving the urban core after work when drivers want to be heading in for bar service) that drivers simply don't want to do. I don't think there's a faster way to create negative user associations than walking an hour home in a heat wave because the pricing model failed.
The platforms care little about individual customers (as opposed to drivers, which are fewer and have higher onboarding costs) so they are reluctant to set up the right incentives to force drivers to be reliable.
A simple solution (in most gig economy markets - not just ridesharing) is that any accepted task costs you a deposit which gets returned on completion. This instantly makes it unprofitable to offer sub-par service or cancel, and provides stability to both customers and the system in general as any accepted task is more likely to be delivered (and tasks which are unprofitable to accept will not get accepted, so the surge pricing mechanism can do its job and raise prices until acceptance rates go up).
The problem is that this will only happen if there is either a legally-enforceable service-level-agreement (such as compensating passengers for unreliability or missed arrival times) or strong competition, which is not currently the case. Most gig economy markets are dominated by a handful of equally-mediocre players who have no incentive to out-compete each other.
They could have a successful business that way, but I'm not sure it's one that can handle 9,000+ drivers like the article calls out with any sort of equitable scheduling. For context, that's more drivers than the entire city of San Francisco typically has at peak. Maybe I'm just vastly underestimating the size of the NYC airport market though.
Ignoring the details of this particular initiative, from a high-level view this is wonderful.
Similarly to how Tesla's future failure or success is irrelevant as they've already succeeded in the most important task of proving that EVs can work and thus driving the industry to produce them en masse, Uber and Lyft have driven a revolution.
They've shown that the old model for running a taxi service was horrendously outdated and customer-unfriendly (and also driver-unfriendly, in some cities) and now others can innovate and compete along the same lines, differentiating via areas that Uber and Lyft either can't or won't. I know it's essentially a meme on here to diminish Dropbox or Twitter to being basic services that one could easily replicate in an hour or a weekend, but it's similar for Uber and Lyft: the underlying concept and technology is relatively easily replicable - meaning their moat is pretty insecure. As time goes on, one can envisage them dying a slow death by a thousand cuts.
From a consumer's perspective, some sort of federation or interoperability would be needed between these competing apps. If it is necessary to research and download a different taxi app for every city --including going through the usual painful signup process each time-- it will drive people back to the common denominator of the big incumbents.
Uber and Lyft seem like a step back: less safety for drivers and passengers as cars are not company owned and inspected and there are no checks on drivers that a taxi company would do. Also the gig economy is overall probably a negative for society as working people do not have the safety of employment along with benefits. What risk or investment does e.g. Uber have that justifies taking a 20% cut?
From a consumers perspective there might be more choices and cheaper options, but that doesn't outweigh the issues it brings with it I think.
The worst taxi I've been in had a completely broken suspension that bottomed out on every bump and threw the car all over the road. My wife got car sick, and we were both afraid we'd crash due to how out of control it was.
The cigarette smell and broken AC were obligatory, of course. Don't forget the check engine light and squeaky brakes.
The taxi owners did not care about car quality whatsoever.
I've never been in an Uber or Lyft that was as bad.
> Also the gig economy is overall probably a negative for society as working people do not have the safety of employment along with benefits.
A lot of drivers paid to rent both cars and taxi medallions and started the day off in the red. Many were contractors and didn't get benefits.
Not sure if it's still there, but in Queens, NY you'd see lots of these taxi medallion and rental places in Long Island City.
> shown that the old model for running a taxi service was horrendously outdated and customer-unfriendly
Prior to Uber, you had to pick a taxi company, call them, wait between twenty minutes and the heat death of the universe for the taxi to show up, and then maybe have the driver claim that his POS machine is broken and please pay cash.
After Uber showed up, suddenly the largest taxi service came out with an app where you could order a cab, watch it approach in real time, and pay through the app.
Indeed - and these may be some of the areas that U/L can't or won't improve further, but new competition (like that in the article) can and might.
--
But U&L showed how awfully customer-unfriendly and antiquated the existing industry was. Introducing an app which can call a taxi in seconds to your GPS location, offering easy destination selection, seamless electronic payment, and a feedback system, were the innovations that the incumbent taxi and mini-cab industry was unable or unwilling to introduce, until competition forced them to. These innovations aren't linked to the employment model - that is something that U&L chose.
(Just like Tesla with the Model S, anyone could have done this first, but no-one did, until someone else did.)
> Also the gig economy is overall probably a negative for society as working people do not have the safety of employment along with benefits.
This is not exactly new with Uber/Lyft. I remember a ride with the local taxi company (before they came on the market) where the driver was actually boasting how some previous customer was complaining about him to the dispatch, but he's a contractor so he's safe from any repercussions.
In that situation, at least the 1-star review at Uber/Lyft has a measurable effect.
> Similarly to how Tesla's future failure or success is irrelevant as they've already succeeded in the most important task of proving that EVs can work
They’re still pushing forefronts. NACS and infrastructure roll-out. Iron-based battery chemistries. Cars versus only SUVs.
"net loss of just $318,000 in 2022"
"earned $5.9 million in revenue from 162,294 successful trips — and $5.2 million of that went directly to driver wages"
Let's do the math: they earned $700K in net revenue and lost $318K - for a margin of -45.43%... sounds grim...
But... if they can double the net revenue to $1.4M while only growing costs 25% to 1.3M then voila they're breakeven/ramen-profitable...
I don't quite understand the logic here.. the 5.2MM wasn't fixed costs, that was costs of goods sold because they needed to provide the service to earn in income.
So as far as I can tell they lost 318K, but they don't need to grow gross revenue by very much to close the profitability gap.
Exactly: if they double total revenue then NET revenue (after driver payouts) only grows to $1.4M
Sounds awesome but currently the net revenue was 700k which means they spent ~$1mm on other stuff besides driver payouts. Some of that will grow with the business (e.g. customer service, server hosting costs), some is fixed (e.g. you only need one CEO).
If they can grow the revenue without also growing expenses then they'll hit breakeven by ~doubling revenue, maybe more, maybe less.
Interestingly, i just checked their prices to JFK and they're about the same as Uber. So if they grow beyond breakeven, then they could undercut Uber's current prices...
It says they took in $1.6M of crowd funding. Not sure what the repayment terms are but presumably less predatory than VC. That gives them a few years of runway. And this is a non-profit, so "ramen-profitable" is probably the end goal. Every penny past break even just goes into the cash reserves.
This is an interesting startup filling a need, but I don't think it is really competing with Uber and Lyft, because they are only doing prescheduled rides.
The killer feature for Uber/Lyft is being able to get a ride at any time on demand in a matter of minutes. It doesn't seem like this will be able to get there.
I have wondered if a pure market making app would work... let drivers and riders place bids... a driver can lower their bid to get hired faster and a rider can increase their bid to get picked up faster. The app would just take a fixed cut.
Someone who doesn't mind waiting at a friends house for a while longer could pay less, but the person in a rush could get a ride fast for a bit more. Similarly, some drivers might be ok only doing a few expensive rides.
I know Uber does something like this with surge pricing, but it is not transparent at all, and you can't change your bid.
> I have wondered if a pure market making app would work... let drivers and riders place bids... a driver can lower their bid to get hired faster and a rider can increase their bid to get picked up faster. The app would just take a fixed cut.
There’s a service in Ukraine called Uklon[0] that does pretty much exactly that. If you bid very low, it’d both take longer to find a ride, and the car/driver would usually not be great. Think a 25+ year old daewoo with no ac that smells like smoke on the lowest end vs. newish Camrys or other regular fleet cars on the mid-higher side.
> I have wondered if a pure market making app would work... let drivers and riders place bids... a driver can lower their bid to get hired faster and a rider can increase their bid to get picked up faster. The app would just take a fixed cut.
This is a good idea. But it's important to note that price is not the only relevant parameter here (as opposed to e.g. buying company shares, where two shares are exactly the same)
Other parameters:
1. Waiting time — how long is the driver and the passagner willing to wait?
2. Driver rating — the there a minimum rating a driver must have (and if passengers are rated, too, then vice versa)?
So there's the combination of, at least, these three parameters, which gets complicated. For example: as a passenger, would you rather ride with a 4.5 star rated driver with a 5 minute waiting time for $30; or a 4.0 star rated driver with a 2 minute waiting time for $26?
Could just offer it to the user. They might have said only drivers of 4.5 or greater. So the first one would be shown, but have the cheaper $26 one to the left and the $35 4.9 star one to the right. Let the user decide which they want.
I wonder whether they've considered the possibility of open-sourcing their apps and backend. Perhaps this is just Pollyannaism, but I tend to believe that workers' rights and open-source are the perfect match in a market like ridesharing. "Just goodenough" open source solutions have difficulty breaking through in consumer software (e.g. the mythical "year of the linux desktop"), but in a market like ridesharing, worker coordination could easily provide the push to critical mass.
Readit News
The concept applies to so many verticals involving small companies or individual operators (from taxis, to hotels, to restaurants, to real estate agents, local bookstores, cinemas, to game developers etc. etc.)
The inability of large numbers of small entities to coordinate and cooperate in the digital era means they create the conditions for third parties to completely take over the intermediation with clients and use that leverage to extract unreasonably large rents.
In fact the extreme "taxes" small businesses and individuals have to pay to shrewd digital platform owners are multiples of the cost of development of the platforms themselves.
In other words, if a collection of independent entities cannot get they act together to codevelop digital infastructure (that will benefit all of them) somebody else will do it for them and will be eating their lunch.
This reclaiming of their market / ownership of digital tools might be challenging in conditions of rapid technical innovation. The autocracy of a top-down corporate structure is more effective than a democratic collective. Yet despite incessant marketing noise currently we are in a rather stagnating phase so there is a window of opportunity to reclaim some agency.
If there's a 3rd party aggregator (for taxis, restaurants or whatever), the final price that the customer pays would include both the aggregator's profits + the individual service provider's profits.
If the individual service providers all came together and made an app themselves, the aggregator-profits can be eliminated, resulting in potentially reduced prices for the customers.
I think (probably wrongly) one of the reasons they don't usually come together is because by making such an app they would effectively be helping their competitor(s), which they may not necessarily want to (because they don't see the bigger picture?).
In my city (in Asia) a subset of taxi drivers realized this and even made an app, but it didn't really work well due to poor marketing and because visitors to the city didn't want to set-up a new app just for 2 days etc.
On the other hand, if all the service-providers do co-operatively make an app for their services, what prevents a cartel from developing? The government?
I guess there should be a high baseline level of trust to make it work.
I dont really mind installing a new app for a new city provided the onboarding is easy.
The part that bugs me the most is researching what app to use in what place. It's not straightforward.
The only moat they have is worldwide discoverability (a regional cooperative just won't reach people who visit once, cooperatives would have to start global, or at least be really, really good at federating) and that the threshold for critical mass in that market is winner takes all: at least when you are not looking for that one spot for a two-weeks getaway (you might even enjoy trawling multiple platforms) but going through serial booking for a road trip (doesn't even matter wether it's bulk ahead or on the go),
"Platform cooperative" is the term used in the literature.
https://en.wikipedia.org/wiki/Platform_cooperative
https://platform.coop/
I particularly like Nathan Schneider's writings:
https://nathanschneider.info/articles-list/
If that was the case then Soviet Union's central planning would be more efficient than Liberal democracy's market capitalism. The efficiency of corporations stems from unfair advantages states gives them like intellectual property rights or from socialising their losses and privatising their gains from public budget.
It wasn't.
It was layered in the same way a democracy is, just under different pre conditions and internal rules.
There is no reason why the ubers and bookings etc should not have been actually platforms developed and owned by the respective sectors using more or less the same technologies. In fact there are some examples.
The lag in responding to a risk of opportunity is intrinsic to a consensus system. The long term fitness is an entirely different matter.
[1] https://www.nammayatri.in
[2] https://www.nammayatri.in/open/
[3] https://github.com/nammayatri
Couldn't get funding and I don't have free time to write that much code.
Hope these folks are able to succeed.
FOSS is a great path for workers to seize the means of production.
It's... not. Open Source is not a business model, nor a collective organizing principle, bargaining process, etc. It's just source code a couple of people have commit access to. I'm all in favor of everybody sharing source code too, but let's not pretend it's magic. Building and sustaining any kind of organization takes work, and has nothing to do with whether your source code is open or closed.
It's... not. (just access to source)
https://www.gnu.org/philosophy/open-source-misses-the-point....
in fact that's one of the driving characteristic differences between open source and FOSS; one is accompanied with a set of guiding moral and ethical principals regarding fundamental user freedom.
But FOSS doesn't create some kind of socialist utopia as some people seem to believe. It does something much more mundane yet infinitely more valuable in our fractured modern world: it unites bitter enemies and gets them to collaborate.
Look at the contributors to the Linux kernel, which even includes Microsoft now. It's hard to imagine any other force which could unite all those people and businesses under a common cause. But thanks to the GPL, even as their wars with each other continue they are all contributing resources to the public good.
It's so popular these days to flame and dehumanize the other side of any debate but all that does is destroy. FOSS builds and extends humanity's common heritage. It won't win the war for you but it will redirect your energies into creation and ensure that you leave something good behind.
That's hard to imagine, given the freedoms we enjoy now. I can download a world-class OS for free and distribute changes to it without any hinderance other than my own skill barriers. Same for DVCSes, video players, browsers, modelling software, desktop environments, compilers, and so on... That was not the case in the early 90s.
FOSS wasn't a complete nor a permanent revolution, but revolutions rarely are. Point is, it changed the world, it changed business, it changed developers' day to day experience, and it's disingenuous to pretend otherwise. We still rely on corporations to make software, but they are now socially pressured and incentivized to release the source of a large portion of what they make for free. Maybe we haven't seized the means, but we are right there with the big guys at the means, sharing power in a (relatively) new and exciting way.
It’s “distributism” rather than “socialism”.
Anyway — FOSS can be crowdfunded by selling utility tokens to future customers. If you are worried about the SEC, then just use a broker-dealer like Rialto Markets to help you do Reg CF.
Can’t imagine why.
https://libretaxi.org/
Good for people who works for themselves but please can we stop implying they are doing this for pushing communist ideals?
Dead Comment
Personally, my biggest (non ethical) issue with Uber/Lyft et al. is that they're unreliable. There are common rides you can request (e.g. leaving the urban core after work when drivers want to be heading in for bar service) that drivers simply don't want to do. I don't think there's a faster way to create negative user associations than walking an hour home in a heat wave because the pricing model failed.
The platforms care little about individual customers (as opposed to drivers, which are fewer and have higher onboarding costs) so they are reluctant to set up the right incentives to force drivers to be reliable.
A simple solution (in most gig economy markets - not just ridesharing) is that any accepted task costs you a deposit which gets returned on completion. This instantly makes it unprofitable to offer sub-par service or cancel, and provides stability to both customers and the system in general as any accepted task is more likely to be delivered (and tasks which are unprofitable to accept will not get accepted, so the surge pricing mechanism can do its job and raise prices until acceptance rates go up).
The problem is that this will only happen if there is either a legally-enforceable service-level-agreement (such as compensating passengers for unreliability or missed arrival times) or strong competition, which is not currently the case. Most gig economy markets are dominated by a handful of equally-mediocre players who have no incentive to out-compete each other.
Similarly to how Tesla's future failure or success is irrelevant as they've already succeeded in the most important task of proving that EVs can work and thus driving the industry to produce them en masse, Uber and Lyft have driven a revolution.
They've shown that the old model for running a taxi service was horrendously outdated and customer-unfriendly (and also driver-unfriendly, in some cities) and now others can innovate and compete along the same lines, differentiating via areas that Uber and Lyft either can't or won't. I know it's essentially a meme on here to diminish Dropbox or Twitter to being basic services that one could easily replicate in an hour or a weekend, but it's similar for Uber and Lyft: the underlying concept and technology is relatively easily replicable - meaning their moat is pretty insecure. As time goes on, one can envisage them dying a slow death by a thousand cuts.
From a consumer's perspective, some sort of federation or interoperability would be needed between these competing apps. If it is necessary to research and download a different taxi app for every city --including going through the usual painful signup process each time-- it will drive people back to the common denominator of the big incumbents.
The worst taxi I've been in had a completely broken suspension that bottomed out on every bump and threw the car all over the road. My wife got car sick, and we were both afraid we'd crash due to how out of control it was.
The cigarette smell and broken AC were obligatory, of course. Don't forget the check engine light and squeaky brakes.
The taxi owners did not care about car quality whatsoever.
I've never been in an Uber or Lyft that was as bad.
> Also the gig economy is overall probably a negative for society as working people do not have the safety of employment along with benefits.
A lot of drivers paid to rent both cars and taxi medallions and started the day off in the red. Many were contractors and didn't get benefits.
Not sure if it's still there, but in Queens, NY you'd see lots of these taxi medallion and rental places in Long Island City.
> shown that the old model for running a taxi service was horrendously outdated and customer-unfriendly
Prior to Uber, you had to pick a taxi company, call them, wait between twenty minutes and the heat death of the universe for the taxi to show up, and then maybe have the driver claim that his POS machine is broken and please pay cash.
After Uber showed up, suddenly the largest taxi service came out with an app where you could order a cab, watch it approach in real time, and pay through the app.
--
But U&L showed how awfully customer-unfriendly and antiquated the existing industry was. Introducing an app which can call a taxi in seconds to your GPS location, offering easy destination selection, seamless electronic payment, and a feedback system, were the innovations that the incumbent taxi and mini-cab industry was unable or unwilling to introduce, until competition forced them to. These innovations aren't linked to the employment model - that is something that U&L chose.
(Just like Tesla with the Model S, anyone could have done this first, but no-one did, until someone else did.)
This is not exactly new with Uber/Lyft. I remember a ride with the local taxi company (before they came on the market) where the driver was actually boasting how some previous customer was complaining about him to the dispatch, but he's a contractor so he's safe from any repercussions.
In that situation, at least the 1-star review at Uber/Lyft has a measurable effect.
They’re still pushing forefronts. NACS and infrastructure roll-out. Iron-based battery chemistries. Cars versus only SUVs.
"net loss of just $318,000 in 2022" "earned $5.9 million in revenue from 162,294 successful trips — and $5.2 million of that went directly to driver wages"
Let's do the math: they earned $700K in net revenue and lost $318K - for a margin of -45.43%... sounds grim...
But... if they can double the net revenue to $1.4M while only growing costs 25% to 1.3M then voila they're breakeven/ramen-profitable...
So as far as I can tell they lost 318K, but they don't need to grow gross revenue by very much to close the profitability gap.
Sounds awesome but currently the net revenue was 700k which means they spent ~$1mm on other stuff besides driver payouts. Some of that will grow with the business (e.g. customer service, server hosting costs), some is fixed (e.g. you only need one CEO).
If they can grow the revenue without also growing expenses then they'll hit breakeven by ~doubling revenue, maybe more, maybe less.
Interestingly, i just checked their prices to JFK and they're about the same as Uber. So if they grow beyond breakeven, then they could undercut Uber's current prices...
The killer feature for Uber/Lyft is being able to get a ride at any time on demand in a matter of minutes. It doesn't seem like this will be able to get there.
I have wondered if a pure market making app would work... let drivers and riders place bids... a driver can lower their bid to get hired faster and a rider can increase their bid to get picked up faster. The app would just take a fixed cut.
Someone who doesn't mind waiting at a friends house for a while longer could pay less, but the person in a rush could get a ride fast for a bit more. Similarly, some drivers might be ok only doing a few expensive rides.
I know Uber does something like this with surge pricing, but it is not transparent at all, and you can't change your bid.
There’s a service in Ukraine called Uklon[0] that does pretty much exactly that. If you bid very low, it’d both take longer to find a ride, and the car/driver would usually not be great. Think a 25+ year old daewoo with no ac that smells like smoke on the lowest end vs. newish Camrys or other regular fleet cars on the mid-higher side.
[0] https://uklon.com.ua
Works well in my experience, though I think largely only popular in Latin America at the moment.
0: https://en.wikipedia.org/wiki/InDrive
This is a good idea. But it's important to note that price is not the only relevant parameter here (as opposed to e.g. buying company shares, where two shares are exactly the same)
Other parameters:
1. Waiting time — how long is the driver and the passagner willing to wait?
2. Driver rating — the there a minimum rating a driver must have (and if passengers are rated, too, then vice versa)?
So there's the combination of, at least, these three parameters, which gets complicated. For example: as a passenger, would you rather ride with a 4.5 star rated driver with a 5 minute waiting time for $30; or a 4.0 star rated driver with a 2 minute waiting time for $26?
https://github.com/driverscooperativehttps://libretaxi.org/