The AI boom has turned the standard profit margin model on its head, according to Apollo Chief Economist Torsten Slok—and it’s making the industry’s growth unsustainable.
At least in the USA, livery workers were required to have a “medallion”, which is essentially an onerously expensive license with the stated purpose of restricting competition to the point of profitability for those workers. There was no loophole, and it was ridgidly enforced.
Then, Uber came in and started violating that law so flagrantly that governments seemed stunned into inaction. The government corruption comes in where they then decided not to enforce those rules on Uber for some reason around the same time Uber aggressively contributed to political campaigns around the world.
I went down this line of discussion to point out that Uber is not a good example of organic business success that started out financially underwater. Their ethics or lack of them is an aside to the discussion, but agreed, they are unrepentant scumbags.
Got it, thanks. My memory of how Uber was able to gain a foothold was a little different, but my memory of it was patchy anyway. My recollection was that they essentially said that Uber was not a taxi service. They sold it as just regular people offering to “share” a ride with someone else to an area that they were going to anyway. I have no doubt that heavy political contributions were part of their arsenal in their attack on the taxi industry and regulations, so I agree that this was government corruption. But I also recall that they also had armies of lawyers fighting at every level of government around the world to ram through the idea that this wasn’t a taxi service and shouldn’t be subject to taxi regulations. Maybe my memory is more patchy than I thought, or perhaps both things were true - government corruption and a legal war allowed them flourish.
At least in the USA, livery workers were required to have a “medallion”, which is essentially an onerously expensive license with the stated purpose of restricting competition to the point of profitability for those workers. There was no loophole, and it was ridgidly enforced.
Then, Uber came in and started violating that law so flagrantly that governments seemed stunned into inaction. The government corruption comes in where they then decided not to enforce those rules on Uber for some reason around the same time Uber aggressively contributed to political campaigns around the world.
I went down this line of discussion to point out that Uber is not a good example of organic business success that started out financially underwater. Their ethics or lack of them is an aside to the discussion, but agreed, they are unrepentant scumbags.
Got it, thanks. My memory of how Uber was able to gain a foothold was a little different, but my memory of it was patchy anyway. My recollection was that they essentially said that Uber was not a taxi service. They sold it as just regular people offering to “share” a ride with someone else to an area that they were going to anyway. I have no doubt that heavy political contributions were part of their arsenal in their attack on the taxi industry and regulations, so I agree that this was government corruption. But I also recall that they also had armies of lawyers fighting at every level of government around the world to ram through the idea that this wasn’t a taxi service and shouldn’t be subject to taxi regulations. Maybe my memory is more patchy than I thought, or perhaps both things were true - government corruption and a legal war allowed them flourish.