The Economics of Uber

This video is sponsored by Skillshare. The first 200 people to use the link in the
description get their first two months free. Uber is the highest-valued private company
in the world, More than Airbnb, SpaceX, and Lyft combined. Every day, 15 million rides are taken across
600 cities in 78 countries – Everywhere from the Southern Tip of Africa
to the tiny town of Gridley, California – home of the Red Suspenders Festival, I’m sure
you’re familiar. Uber is so successful because it’s so convenient. Open the app and choose a ride – standard,
or luxury, or, in India, rickshaw. Soon, even flying taxi. Afterwards, you rate the driver, and they
rate you. 1 through 4 stars being the worst experience
of your life. And five stars, anywhere from Mostly Tolerable
to Absolutely amazing. I’m only slightly kidding: a 4.6 average
can get a driver deactivated. Still better than Netflix’s thumbs up or
down, which is 80% sure I’ll like The Emoji Movie, To which, I say: Finally, Uber calculates the price, it’s
really very simple: Start with the regular base fare, add the
per minute rate multiplied by time spent in car, plus distance times the per mile rate,
all of which depend on the city. A $40 ride in Tokyo costs $1.62 in Cairo. Then add the booking fee, and possibly airport,
toll, cancellation, cleaning, and lost item fees. UNLESS there are too many riders and not enough
drivers, in which case multiply by a surge price, 2, 3, or, on New Years Eve Two-Thousand-Eleven,
seven times the normal price. And as YoutUBERs have shown, algorithms can
be manipulated: If drivers log out at the same time, they
create a shortage and trigger a surge. Oh, it also uses machine learning to predict
how much you’re willing to pay based on route, so maybe don’t call an Uber from the Burj
Khalifa to The Bellagio, besides the fact that you… can’t. Even despite this, Uber is almost always cheaper,
faster, and easier. It took the most outdated, inefficient industry, sprinkled in something called “Technology” and completely reinvented the wheel. Oh, come on, you should know by now, there’s
always a twist… In the 1930’s, The Great Depression… happened. It wasn’t great, but it was depressing. Every fourth American was unemployed and desperate
for work. Especially low-skill, low barrier-to-entry
jobs, But, YouTube hadn’t been invented, so, they
drove taxis – lots and lots of taxis. Meanwhile, fewer people could afford a ride. And, as I was taught by a monopoly educating
me about the danger of monopolies, When this line goes up, and this ones goes down, prices
fall and drivers get angry. Like, violent protests in the street angry. So New York City wrote the Haas Act. Now, to legally operate a taxi, you’d need
one of 17,000 licenses called medallions. But 81 years later, with a million more people,
it’s only 13,000. You can see the problem. The number of medallions issued is more political
than it is practical. Before, extreme competition made prices unsustainably
low. Good for riders, bad for drivers. And then, the pendulum reversed – too little
competition made taxis expensive and inefficient – bad for riders, good for drivers. One medallion, the right to operate a single
taxi, was once worth over a million dollars. But advice like this hasn’t aged so well. Because: Uber happened. Its drivers flood the market by not requiring
medallions, draining their value. High competition, low prices, and angry calls
for regulation – Sound familiar? This time, we aren’t in an economic depression,
but many households are, which means lots of drivers. For you and I, Uber is revolutionary – the
low prices of last century plus the magic of these things. And for drivers, well, yes and no… If you ask Uber what the average driver makes
an hour, they point you to this study: $19.19. Another says 21. Not too bad – unless, you look under the hood. What they don’t include are the car, its
depreciation, maintenance, gas, and some of the insurance. Adjust for these and things aren’t so rosy
– This study estimates the median hourly profit
is eight fifty five before taxes, less than minimum wage for 54% of drivers. 8% actually lose money. You might say: But Uber is supplementary – a
quick way to make extra cash between jobs. And, that’s mostly true, about 60% have
another primary income. Plus, unlike taxis, who are even legally required
to wear black socks in LA, with Uber, you have some freedom. But the reason people don’t drive more might
only be they can’t. Because Uber considers its drivers not employees,
but independent contractors. Employees are entitled to minimum wage, gas
reimbursement, overtime, breaks, collective bargaining, paid leave, and health insurance, Which would cost the company about 4 billion
dollars a year. So they’re extremely careful to call drivers
“partners”, and itself, not a transportation company, but a “platform” – Simply connecting riders to drivers, who decide
when to work, what to wear, and so on. But, Uber controls the prices. And that’s the catch – if drivers are just
independent businesses, Uber setting their fares could be considered price fixing. So, which are they? That depends on who you ask and when, and
the answer will shape the future of the industry. But something doesn’t add up, The golden
age for drivers came from regulating competition, the same regulation Uber spends millions of
dollars fighting. Going back to the days of high competition
and low prices. But …why? If Uber takes a cut from drivers, their interests
should be the same. Regulation, of course, slows its growth, but
there’s also another reason: Drivers compete – but Uber makes the same
commission regardless of who picks you up. Uber makes more money with more drivers. But drivers want the opposite – less competition. They look like other platform-vendor relationships
– Amazon and its sellers, Apple and app developers, Both of which need their vendors – if YouTube
leaves the app store, Apple can’t replace it. But drivers are drivers – Uber needs them
– but no one in particular; they’re disposable. Something like 96% stop driving for the company
in their first year. The two seem economically intertwined, but
as long as Uber can find more drivers, they can keep fares unsustainably competitive with
rivals. The real winners of the Haas Act weren’t
cabdrivers, who couldn’t afford million dollar medallions, but their owners. Instead of drivers giving away their first
$100 a day to rent a medallion, now it’s 25% all day. For many drivers, it’s still a very welcome
and useful opportunity, but it isn’t quite the groundbreaking revolution promised. And it may not last… On paper, Uber has the perfect business model: Its huge network of drivers dominate the globe, but it need not buy a single car or gallon
of fuel. All perk, and no work. Something thousands of startups desperately
try to emulate. Most of which belong on Flopstarter, with
products like the TIMELESS watch, which… doesn’t tell the time. So how did Uber lose four and a half billion
dollars last year? That’s 12 million dollars a day! Many startups sacrifice profit for growth,
But Uber is nine years old. Facebook made money after two. The company’s biggest problem may not be
its legality, or controversy although there’s plenty of that, but basic holes in its business
model. The magic of so many companies is the network
effect. Every new customer makes it that much easier
to get another. You join Facebook because Steve is on it,
Kim joins Facebook because you are, and so on. For Uber though, this is only regional. More drivers in New York does nothing for
Beijing. In fact, it failed in all of China. Every city is a new chicken-and-egg problem: Drivers need riders before they’ll drive,
and riders need drivers before they’ll ride, I do not like them, Sam-I-Am. I do not like green eggs and – oh. This helps keep prices low, and profits, nonexistent. It’s inescapable and leaves only one path
for Uber: self-driving cars. Remove the driver, remove the money-eating
machine. But it means competing with the technology
of Google and the auto-expertise of GM. Either it’ll transform into one of the biggest
transportation companies in the world, or, it’ll be the end of the road. It plans to go public next year. which’ll be fascinating to watch, doubly
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Why Cuban cab drivers earn more than doctors

[“A doctor ends up making about $40 a month. On my worst days driving taxi, I bring in
$60–In one day”] Did you catch that? This guy makes more in one day than a doctor
makes in a month. And he’s a taxi driver. He’s actually trained as an engineer but
engineers make even less than doctors. “I like being a taxi driver, not an engineer” Welcome to the Cuban economy. Right after the socialist revolution in 1959,
Fidel Castro’s government seized almost all private businesses and land. [You won’t have to worry about next year. The state will do your planning from now on.] Every restaurant, factory, hospital and home
was property of the government. The State set prices for everything and decided
how much people got paid. The private sector disappeared overnight. [The men in this world desperately need: economic
reform.] You can see the result of this when you go
looking for food in Havana. When I showed up, I was pretty excited to
see what street food was on offer. But all i could find was this. Everywhere I turned. This is a typical scene in a Cuban eatery:
too many employees in an empty establishment with empty shelves, just waiting for food
deliveries from the government, and putting in their eight hours so they can go home. They get paid the same whether they sell one
plate of food, or fifty. This model doesn’t work. Cuba survived for many years with subsidies
from the Soviet Union. But since its collapse, the economy been getting
worse every year. This lady is showing me her government ration
cards that she’s kept for decades. Cubans use these monthly cards to go the storage
house to get their monthly rations. The
government realized this in the 90s and has started giving out private licenses, fueling
a small but growing private sector. I stumbled upon a private restaurant in Havana
that was a totally different experience than the public ones. There was actually movement, and good service. The owners had to actually sell good food
if they wanted to stay in business. Which brings me back to the Taxi driver and
the doctor. The reason a taxi drivers make so much more
than doctors is because they have private licenses. Their salaries are not set by the state. And they can charge tourists high prices. I paid 25 dollars to get from the airport
into Havana. And inn that 30 minute drive, my driver made
more than the average monthly salary of a Cuban, which is $20. One of the problems with this is that you
have highly trained workers leaving their trade to go do remedial work in the private
sector. This guy is an engineer, but he’s cooking
in a private restaurant. These guys are accountants by trade but make
a killing driving around tourists on taxi bikes. This woman is a nurse, but she hasn’t been
in a hospital in years. This guy is an electrical engineer but opened
up a barber shop in his house and makes ten times more than he would in his field of study. Imagine trying to live on the Cuban average
of $20 per month. When you ask them how they do it, they all
have the same response. “Everyone has to do something in addition
to their official salary.” Just beneath the surface in Cuba is a bustling
informal market where Cuban’s make an additional income on top of their official salary, just
to survive. We tend to associate black markets with dangerous
activities. But in Cuba, people sell illegal popsicles,
or newspapers — not to get rich, but just to survive. But things are slowly changing. Since Fidel’s brother Raul took over in
2008, the number of private licenses has increased significantly every year. And now 20% of the economy is now private. Still, most Cubans are jaded by the decades
they have had to use illegal creativity just to survive. “There is one party. They control everything. What change could there possibly be?”

Coalition of Obsolete Industries Victorian Protest

the Coalition of obsolete industries needs your help we need to fight against progress stop progress from taking our jobs if we don't stop progress none of us will ever be able to have a job our children will never be able to have a job I'm a hard-working blacksmith I lost my job making horseshoes when the automobile and the tire were invented I used to be a candle maker electricity took my job you could be next if I lost my job as a town crier because of the newspaper and because of the pocket watch you could be next I lost my job as a teaching trainer because of the telegram it always starts innocently another bicycle some folks all of a sudden that electricity was turned on Edison made his light bulb and that was it my career was over once you give up that first step and let technology start to take over jobs there's literally no stopping of people there you see telegrams now and no one's using pigeons so if the taxing industry is going to get a two dollar surcharge applied to every taxi and uber ride to compensate them for what they've lost then why can't I get a two dollar surcharge on every newspaper and every blog post because welcome look what I've lost we just need to put a $2 tariff onto every single light bulb that ever gets songs that we should apply a surcharge to every single letter $2 is all it would take to be able to pay all of those people who have been put out of a job by technology I think two dollars should be added to the cost of every time so that well I can be compensated for the horseshoes I'm not selling so when you destruct progress we're fighting against progress today would you please just have a look none of us I'll have a job soon if this keeps up now if I can do it for the taxes then I can do it for the pigeons

Free Update Content with TwoDollarsTwenty | Cities: Skylines Industries Tutorial Part 7

g'day guys tell us 20 here and welcome back to City skylines industries this is gonna be the last tutorial from me and I'm gonna spend it looking at the new content that comes with the free updates I'm gonna start by checking out the new toll booths which will raise extra revenue for the city however will also create extra congestion on the roads so to avoid this only replacing them around the outskirts of the city you can find the toll booths in the road section under the very own tab and there's four to choose from I'm placing mine on a three lane highway so I'm gonna choose the four lane toll booth and place two going in either direction once I've done that I'm gonna waste my money placing down some trees and then I can actually change the price of the tickets when I click on the building and use the slider to decrease or increase the ticket price another cool feature with the free update is the ability to make buildings historical you can make a building historical by clicking on it and then clicking the historical building button and this would mean the building will continue to level up by won't actually change its appearance I'm gonna do this around my downtown to keep the skyline looking quite prominent and the rest of the buildings much lower down and I'm also gonna do this for buildings that I just like the look of and when I keep that look in the city the last feature I want to talk about is something that is quite interesting and allies within the map theme editor and this feature allows you to create custom name lists for your map theme the really cool thing about this is you can really customize the names of pretty much anything that spawns in your city ranging from industrial buildings to commercial buildings to people to districts you really have a lot of freedom making these names and I think it's going to make for some really interesting and unique map themes down the track but guys that is it for these tutorials I really had a lot of fun exploring the new industries DLC and I just want to say big thanks to Paradox Interactive for asking me to collaborate with them I hope these tutorials are been useful and I look forward to seeing your creations in the near future I'll see you later