The Sage of Ely tackles venture capitalism

Google sticks money into Lyft at a $10 billion valuation:

First, this is not a transportation company. Lyft, like Uber, does not run cabs. It runs a taxi rank.

Second, no taxi rank has ever been worth $10 billion.

And if someone thinks it is then they have four things at the forefront of their minds.

The first is driving the competition out of the market.

The second is then screwing the consumer.

The third is screwing their staff.

And the fourth is then presenting the regulator with a fait accompli as they’re hoping all other games will have been driven out of town and that way they’ll earn hyper rents from their rank activities.

That’s how you can make a fortune from a cab booking service.

And it stinks.

As to no cab rank ever being worth $10 billion, well, someone’s just paid at that valuation so it is worth that.

But rather more, should it be worth that much? Lyft operates in 300 US cities. No, dunno what the cab ranks in 300 US cities are worth. A lot though I would think. And Uber seems to be 30% more efficient than traditional taxis. Yes, that’s the Alan Krueger. What’s the value of a 30% efficiency gain in the taxi markets of 300 US cities?

It’s not bupkiss, is it?

16 thoughts on “The Sage of Ely tackles venture capitalism”

  1. “Lyft, like Uber, does not run cabs. It runs a taxi rank.”

    if Uber does not run cabs, why the fvck should a punter expect to get a VAT receipt from it for a journey taken in a cab as Murphy and Maugham believe?

  2. ” no taxi rank has ever been worth $10 billion”

    because no-one ever paid $1m for a medallion. For one yellow cab.

  3. The Pedant-General: yes, quite interestingly, New York City yellow cab licenses topped off at about $1 million in the early part of this decade, and there were a total of 13 347 of them. Meaning that the total price of licenses in just the one largest city in America was well north of $13 billion. And most of those medallions were owned by people who were not very involved in the actual running of the cabs, meaning they had to pay others to do that work – indeed, Lyft “runs taxis” much more that most medallion holders ever did. And yet it was still worth $13 billion.

  4. As the Pedant-General says, NYC cab medallions were costing north of $1m prior to Uber turning up and eating their lunch. There’s over 10k yellow cabs in NYC, so by my maths that was a pre-Uber valuation of the NYC yellow cab market of $10bn on its own…….

  5. Ha, beaten to it!

    But seriously, if a few seconds googling can come up with enough info to prove your argument is complete bollocks on stilts, how much of a moron do you have to be to publish it on the internet?

  6. Bask in the logic: someone just paid 10 B apparently to screw their consumers and their staff.

    In a highly competitive environment.

    I guess that makes sense if you live in a stump. But out here in the real world…..

    PS – Ritchie, sweetie, the Soviet propaganda version of capitalists was a fiction. Only stupid people believed it, and only the terminally dull still believe it.

  7. The first is driving the competition out of the market.
    The second is then screwing the consumer.

    Those first two sound exactly like TFL and the Black Cabs stitching up Uber, which the Tuber cheered.

  8. The excellent Jim

    ‘But seriously, if a few seconds googling can come up with enough info to prove your argument is complete bollocks on stilts, how much of a moron do you have to be to publish it on the internet?’

    One of the five most moronic commentators extant in Cyberspace today?

  9. Not to ignore the value of the New York taxi business as discussed above, but doesn’t the spud understand that this is an attempt to eventually secure a taxi rank (as if that’s all it is, but that’s a different argument) in every significant city on the planet?

  10. Bloke in North Dorset

    No, it doesn’t run a taxi rank, its the antithesis of a taxi rank, which is why it is popular.

    He’s so fucking ignorant he can’t even come up with a good analogy.

  11. I keep describing Uber as a taxi radio control centre, as that is effectively what they are, take a radio control centre and plug it into the interwebs.

    “Lyft is a taxi rank”? That makes me think of a strip of tarmac outside the railway station. No, I don’t think Lyft/Uber/etc are webbified taxi ranks. Particularly as taxi ranks are for stationary ply-for-hire, Uber/Lyft/etc are private hire, not hackneys, they are not allowed to use ranks.

    A rank is where you the customer get into whatever random hackney happens to be waiting, a stationary version of flagging down. Private hire is the customer booking through a booking office. It’s impossible to webbify a taxi rank as the whole principle of webbification is pre-good-delivery purchase agreement. As soon as there is any pre-delivery communication is ceases to be flagging and becomes pre-booking. You can’t do anything webby without communicating over a communication medium, so it is impossible for any webby taxi hire to not be pre-booking.

  12. Thoigh a thought occurs: do Americans actually have Private Hire, or is everything Hackneys? Thinking back to when I live in HK, there was only a single type of taxi there, which could ply or be booked, individual drivers chose what mix of operating methods to use. There was no such thing as “prebooked only” licenses, but they did have the nice HK concept of “shared light buses” which were legally 12-seater taxis that picked and dropped passengers wherever they were going.

  13. jgh,

    “I keep describing Uber as a taxi radio control centre, as that is effectively what they are, take a radio control centre and plug it into the interwebs.”

    Precisely. It’s ABC Cabs but on a massive scale. And scale matters. It’s what the commentariat don’t understand. It means you match drivers and passengers better, which means that drivers travel less distances and the time waiting for a car goes down.

  14. Dollar for anywhere when I was there. Sheeh, inflation! 🙂

    Note for non-HKers: One HK dollar is/was about 7.5 pee.

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