XPost: rec.autos.driving, alt.politics.economics, alt.health.vir   
   s.cure.alternatives   
   XPost: sac.politics, alt.fan.rush-limbaugh, talk.politics.guns   
   From: democrat-criminals@mail.house.gov   
      
   https://sfstandard.com/technology/san-francisco-birthplace-of-ridehailing-   
   becomes-the-center-of-its-decline/   
      
   Starting next month, Uber customers in San Francisco will be able to use   
   the app to hail old-style taxis, long the company’s blood enemies—a   
   fitting coda, perhaps, for a company that exploded out of the city’s SoMa   
   district a little more than a decade ago as the vanguard of a new tech   
   boom, but has since proven mostly that too-good-to-be-true businesses are   
   just that.   
      
   Born in 2009 from co-founder Travis Kalanick’s frustrations with getting a   
   taxi in San Francisco, Uber has posted an astonishing $32 billion in   
   losses in its short life, $1.1 billion of that just in the first half of   
   this year.   
      
   The drop in ridership is of course partly due to the pandemic. But the   
   rising prices, along with continued issues over how the companies treat   
   their drivers, suggests that critics who have long doubted the ride-   
   hailing business model were largely correct. The trajectory of the firms,   
   and their impact on their hometown of San Francisco, also shows the   
   outsize effects of the extraordinary boom in venture financing that marked   
   the 2010s but is now in retreat.   
      
   In a recent sign of the rideshare pullback, Lyft said that as part of a   
   multi-city cost-cutting initiative, it plans to dump more than half of the   
   space at its San Francisco headquarters, which once held more than 2,000   
   employees. Uber instituted a hiring freeze in May in an effort to stem   
   losses.   
      
   “I just don’t see any way that Uber can pivot from a mass market, low fare   
   strategy to a high fare market strategy,” wrote Hubert Horan, a   
   transportation analyst and longtime rideshare critic, in an email. “They   
   are trying to provide the same lousy service that the Yellow Cab companies   
   offered 20 years ago…but charging 2-3X what Yellow Cab used to charge.”   
      
   Lyft declined to comment on criticisms of its business model, but said   
   most industry analysts are optimistic about the future of the rideshare   
   industry. Uber did not respond to requests for comment.   
      
   Once upon a time, Uber foresaw a future where autonomous vehicles would   
   allow it to cut drivers out of the equation, opening the door to fat   
   profits. But in 2020, Uber essentially waved the white flag on its   
   autonomous strategy after investing $1 billion into development and   
   selling its autonomous vehicle group to Aurora in exchange for a stake in   
   the startup.   
      
   Now, it’s self-driving vehicles from General Motors-owned Cruise, and from   
   Alphabet’s Waymo, that swarm San Francisco’s streets (albeit mostly   
   without passengers and with a “safety driver” at the wheel).   
      
   And Uber and Lyft are left juggling a two-sided marketplace in which they   
   must compete for both passengers and drivers. For drivers, that typically   
   takes the form of bonuses or other incentives; for passengers, lower   
   fares. But with investor pressure to cut quarterly losses, they are having   
   trouble pleasing either.   
      
   Rides are more expensive and less convenient, making the apps less a daily   
   utility and more a splurge for a night on the town, a trip to the airport   
   or your company’s expense account. Kind of like a taxi.   
      
   “I think I’m primarily motivated by cost at this point, basically whatever   
   is cheaper. The drivers are all basically identical at this point,” said   
   Dylan Crawford, a traveler from New Jersey who was waiting for a ride into   
   San Francisco at SFO.   
      
   Drivers are unhappy too. Dominique Smith, who has worked as a Bay Area   
   rideshare driver since 2017, said that driving for Uber feels like running   
   on “a hamster wheel” with no end in sight.   
      
   Smith said he used a portion of his Covid relief money to get a secured   
   credit card that allowed him to take part in an Uber program that allows   
   him to rent a vehicle to provide rides.   
      
   But the $300 in weekly payments for the vehicle—in addition to around $300   
   a week for gas— meant that for much of the pandemic he was forced to   
   regularly work 60-70 hours a week just to make ends meet. A good day was   
   working eight hours, but on average he was spending 10-12 hours driving.   
   The app automatically shuts off after 12 hours.   
      
   “You’re going to miss a lot of holidays, birthdays and events to basically   
   keep your head above water,” Smith said. “It may seem like it’s a lot of   
   money in hand, but that doesn’t account for gas, rental costs or the IRS.”   
      
   While Uber’s founders and early investors, notably VC firm Benchmark, made   
   billions on the company, people who have invested in Uber since it went   
   public haven’t fared well either: Its share price is down 30% since its   
   May 2019 IPO, compared to a 59% increase in the Nasdaq composite index   
   over the same period. Lyft shareholders have fared even worse.   
      
   Last month, a group of Uber shareholders were able to win class status in   
   a lawsuit against the company for allegedly hiding information from IPO   
   investors about its rising costs, stagnating growth and ineffective   
   business model.   
      
   Uber CEO Dara Khoslowshahi thinks he has some answers: In a memo to staff   
   in May, he laid out a leaner path that he said would improve cash flow and   
   reassure investors. The company’s strategy would be to focus on bringing   
   customers in through its transportation or Uber Eats businesses, and   
   selling those customers on $10 monthly Uber One memberships that offer   
   discounts and perks. Uber also operates a freight service in the U.S. and   
   Canada, but more than 80% of its revenue comes from rides and delivery.   
      
   But fresh challenges loom, too. Regulators, for one, are much more wary of   
   a company that made a virtue of rule-breaking.   
      
   “It's going to get a lot harder for these types of companies who have come   
   in assuming that the regulation will mold around them,” said George Maier,   
   an economist at the London School of Economics who researches digital   
   platforms. “The opposite is starting to happen now, whereby regulatory   
   systems are closing in on them and it's starting to squeeze them out.”   
      
   He pointed to a 2021 ruling from the U.K. Supreme Court that required Uber   
   to give drivers access to vacation pay, rest breaks and minimum wage while   
   using the app. That’s being followed by a legislative effort by European   
   Union officials to do the same across the continent.   
      
   A recent investigation into Uber's practices led by the International   
   Consortium of Investigative Journalists showed that a pattern of rampant   
   rule breaking and disregard for driver safety in its quest for global   
   expansion has only added ammunition for regulators.   
      
   There is also a growing body of research on the negative impact of   
   ridesharing on traffic gridlock, air pollution and transit ridership: In   
   San Francisco, the rise of Uber and Lyft increased traffic congestion and   
      
   [continued in next message]   
      
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