Thread by @ErrataRob

1/ This article has no content. It deliberately misrepresents pretty much everything.
americanaffairsjournal.org/2019/05/ubers-…

2/ It claims that Uber isn't profitable, that it's just using investor's money to subsidize a loss making business. But it cites no evidence to back this up. I mean, what it does cite isn't evidence.

3/ Yes, Uber loses money. But that's because it has to. If investors have given it $20 billion, then it has to spend that money building the business. That's what investors gave it money to do. It doesn't take that money and stick it in the bank.

4/ Entry into each new market takes money, as Uber has to pay drivers to stick around when there aren't enough riders yet, and advertise to people in that city that Uber is available.

5/ This says nothing about whether existing markets or profitable. It's been in the Atlanta market for years now. If it's Atlanta operations still aren't profitable, then yes, Uber has a problem. But if Atlanta is profitable, then that means losses are discretionary.

6/ Uber has no market power. Everywhere I see Uber I see Lyft. On my evening walks around the neighborhood, I see a lot more cars with Lyft signs in their windshields than Uber.

7/ Uber's ability to exploit workers is overstated. We are at the top of the business cycle with extremely low unemployment. That means drivers have a lot of other option for gainful employment.

8/ Sure, they can exploit workers in the short term, as they might not realize how much maintenance and fuel costs. But here's the thing: Uber's drivers are overwhelmingly long term drivers, who have been doing Uber for years. They are apparently satisfied with the income.

9/ It truly is a "gig" economy. Sure, there are a lot of full-time drivers, but the majority of drivers I quiz do it part time, fitting in Uber rides in between other jobs.

10/ The professional singer in D.C. explaining how he and his partner are saving for a down payment on their own house. The transplant in Atlanta from California working in the exploding film industry here, driving between filming.

11/ A lot don't drive at night, where most of the profits are, because they don't have to. Overwhelmingly the stories are that they drive when they want, and don't drive when they don't want.

12/ that article may be right in all it's claims. The point is that they show no evidence of it. It's based on rhetoric, not data. They are missing the biggest data of all, that if Uber is somehow exploiting workers, then why do workers drive for Uber?

13/ Like most people, they fundamentally misunderstand "surge pricing", it's surge payments to the drivers, it means more money to drivers. It's not Uber "gouging" riders, it's the drivers gouging riders.

14/ But it's not "gouging". When drivers see nearby areas of town are "surging", they get an alert, and drive to that area of town to earn money. It's simply the law of supply-and-demand in action.

15/ If there are 10 riders and only 7 drivers, then 3 riders are not going to get a ride. How do you determine which 3 riders get screwed? With surge pricing, it's those who are willing to pay more.

16/ But that means 2 drivers who wouldn't otherwise now drive to that area to pick up the riders. So it's only 1 rider who gets screwed and has to take the bus instead. That's supply-and-demand.